Lots of effort goes into looking for a new job. You’ll need to take a sharp pen to your resume, prepare cover letters, undergo the interview process, and potentially take a few tests. Ideally, you’re searching for a company offering a role in your desired career path that also provides an excellent benefits package.
However, applicants often get so caught up in finding the proper role that they fail to perform their due diligence on the company they’re seeking to work for. Just as you’re subject to lots of scrutiny before receiving an invite to join a new organization, you should analyze the company to ensure it’s the right fit for you.
Joining an unstable company can potentially harm your long-term career prospects. You may find yourself laid off unexpectedly and repeating the job search process much sooner than expected. You may also be miserable if the workplace isn’t welcoming.
It’s easiest to investigate public companies for financial instability since they have financial reporting requirements they must comply with every quarter. If you know what to look for, you can identify red flags before stepping into a job that could harm your career or pocketbook.
Before you accept a new job, take the following actions to gain a broader understanding of the company’s history and current standing.
Earnings statements are often giant press releases that praise the positive aspects of a company’s performance but don’t dig too far into the negatives. Think of an earnings statement as the white picket fence of a company. It may look pretty, but it can hide some weeds if you don’t dig further.
Rather than concentrating on the headlines and introductory paragraphs, check out the quarterly supporting report. Quarterly reports are publicly available to everyone on the SEC’s website. Ideally, you’ll want to pull up the company’s current quarterly report as well as a few from prior years.
Look for specific financial details, like revenues and profits. If revenues and profits steadily decline over several periods, try to find out why. The company may be battling significant competition in its market or its products and services may be inferior.
Whatever the reason, declining revenues and profits are rarely a positive signal. You’ll want to tread carefully.
If the trend is relatively new, the company may be changing its business processes or products. Or the decline may be due to macroeconomic factors, like a rise in inflation or a political event.
Usually, companies will provide guidance for their future revenues. If the future paints a rosier picture, the problems may be short-term and nothing to worry about.
A 10-K report is an annual report all public companies must file with the SEC. The 10-K report should include all the potential risks the organization faces.
Usually, 10-K reports are heavy with legal terminology and may be pretty arduous to read. However, putting forth the effort can alert you to potential issues that may impact your role if you join the organization.
For instance, the 10-K report may list large amounts of debt maturing soon. If the company doesn’t have the cash necessary to pay off the debt, it may need to refinance it. If the company can’t refinance the debt, it may need to make significant organizational changes, like laying off staff or divesting certain product lines.
Another risk you should look out for is competitors. Public companies competing in a challenging environment often fall prey to acquisitions when they can’t hold their own in the market. If the company you’re seeking to join has larger competitors, those competitors may seek to acquire the company you’re applying to.
Be aware of that risk and do a little reconnaissance to see if there’s been talk in news reports of a potential acquisition.
Several sites, including LinkedIn, Indeed, and Glassdoor, allow former employees to post about their experience working for the company. If many individuals post negative reviews, it’s worth taking a moment to read through them.
While everyone will have their own opinion of their former workplace, and some will post derogatory messages out of spite, you should still give some credence to their comments. If people regularly complain about a hostile workplace, long working hours, or problems with pay, there may be systemic issues that the company needs to resolve.
Of course, balance what you read with your observations of the people you spoke with during the hiring process. Large public companies typically have multiple locations and hundreds (if not thousands) of employees. The people you meet may be in entirely different departments or regions than the prior employees who posted reviews.
Sometimes, checking out the competition can give you better insight into the company. If its competitors have many positive things going on, you may be better off looking for other opportunities.
For instance, if a competitor company offers much better benefits than the company you’re interviewing with, that should raise a cautionary flag. Your company may not place as much value on retaining its employees or have the funds available to support extensive benefits.
See if you know anyone in your area with ties to the company. You may have a friend who knows someone who previously worked for the organization. If your friend is willing to connect the two of you, you can ask questions about their experience and obtain some valuable information to help in your decision.
By investigating a company, you’re in a better position to decide whether the job is still an opportunity worth exploring. You don’t want to find yourself in a company facing severe financial headwinds that they may not overcome. You should also be careful if there are many negative reviews from prior employees.
Ultimately, the decision to take the job rests with you. You can accept it, despite its potential risks. You may find it’s the proper role for you, and your concerns may never come to fruition. However, remain conscientious in your decision-making process.
At Cowen Partners, our HR executive recruiters are exceptionally skilled at delivering in-demand candidates, no matter the need and across all industries. Backed by a proven executive recruiting process, we have been the partner of choice for startups, corporations, small businesses, non-profits, and more, meeting unique and critical recruitment needs across the entire C-suite, including CEOs, CFOs, COOs, CMOs, CIOs, CTOs, CHROs, VPs of sales, other VPs, directors, and several other leadership roles.
With our executive recruiters, you get senior partner-led searches, due diligence-run networking, meticulous candidate vetting, and so much more, all geared towards one goal — placing the very best talent as soon as possible, all while ensuring a seamless fit with your company culture, your big-picture objectives, and other factors. Plus, we have one of the highest candidate retention rates in the industry while consistently delivering world-class talent faster than the competition.
That’s how Cowen Partners has become a leading executive search firm nationwide, and it’s why our executive recruiters have a reputation for excellence and success.
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