There may be signs that things are not going well with an employer - warning signs that may give you an opportunity to lay the groundwork for protecting your assets and finding a job with a new employer.
Signs of Potential Trouble Pending
Sometimes you can see the layoff coming, but it can be very difficult to figure out. Using Google, with Google Alerts sent to your personal (not work!) email account can help you see signs of trouble ahead - read Using Google for Layoff Avoidance..
Many companies teeter on the edge of disaster for a long time. Others, seemingly on top of the world (e.g., Lehman Brothers), disolve very quickly. Even apparently very financially healthy companies (e.g. Google) have layoffs.
- What's happening inside the company?
Listen to the company gossip (within reason) and watch for changes in the company procedures with a focus on saving money, company budgets being squeezed too tightly, travel and/or hiring freezes, "key employees" leaving, abrupt senior management departures, management known to be seeking a buyer for the company or parts of it, outplacement firms asked to submit proposals, etc.
Tighter finances may only mean a temporary cash-flow problem, or it could indicate bigger problems, depending on what else is going on.
- What does the outside world think is happening?
Pay attention to the news about your employer. Is there speculation about dropping sales, management misbehavior, serious problems with current or pending products or services, low profitability, etc. Check out the "Layoff Early Warning: 50 Google Searches to Avoid Layoffs," and set up a Google Alert on your employer's name, and watch what is being written.
- What do the company financial reports show?
In the U.S., the Securities and Exchanged Commission (SEC) requires reporting from a publicly-held company (one with shares of stock sold on one of the public stock exchanges).
Quarterly financial reports ("10-Q reports" in SEC-speak) and an annual report ("10-K reports") are published on a regular schedule. Get access at your public library, the SEC Website (via EDGAR), or commercial Websites like AnnualReports.com
Annual reports are audited by an outside accounting firm, but quarterly reports are not usually audited by outsiders. Look at the profits and read the footnotes. See what the executives are being paid, and how much of the company's stock that they hold are they selling. Low profits, and the executives (more than 1 or 2!) dumping all or most of their stock are bad signs.
Pay attention to the dates covered by the reports you are reviewing! These reports document past performance which may, or may NOT, be a good indicator of the future.
- What is happening to the stock price of a publicly-held company?
If the stock price consistently keeps dropping over many months (or years!), that's not a good sign. The stock market may be wrong, but it may be right...
- Is the company "on the market" or being acquired by another company?
Often, even with prosperous companies, layoffs may be triggered when a company (or division/section of a company) is purchased by another company. When 2 companies are combined, some job functions are duplicated - 2 HR staffs, 2 financial staffs, 2 sales organizations, etc. Both sets of staffs are not usually needed, and, typically, the company which was acquired is the one in which people lose their jobs.
- Is there a WARNing?
In the US, companies meeting certain specifications are required to provide 60 days notice to affected workers and local governments in advance of plant closings and "mass layoffs." This is a requirement of the WARN (Worker Adjustment and Retraining Notification) Act. A WARN notification is required if more than 500 people (or 33% of the "active workforce") are being laid off. Check your state's Department of Labor (or whatever it is called in your state) to see the notices that have been filed by employees in your state.
So, those are the signs. Read Preparing for a Layoff for tips on what you can do for yourself.
© Copyright, 1998 - 2012, Susan P. Joyce. All rights reserved.
About the author...
Online job search expert Susan P. Joyce has been observing the online job search world and teaching online job search skills since 1995. Susan is a two-time layoff "graduate" who has worked in human resources at Harvard University and in a compensation consulting firm. In 1998, her company, NETability, Inc. purchased Job-Hunt.org, and Susan has been editor and publisher of Job-Hunt since then. Follow Susan on Twitter at @jobhuntorg and on Google+.
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