Is it just me, but does it not seem downsizing is more prevalent this year than during the post-pandemic years following the 2008 recession? I say this because, for the past six months, I frequently receive emails from readers telling me they started a new job only to be laid off months later. Several readers have told me they’ve been laid off twice, sometime three times, in the last five years.
It surprises me how few candidates vet my employer during an interview; I’m rarely asked the hard questions.
I realize that thoroughly vetting an employer when whatever savings you have is rapidly shrinking and financial pressures are mounting is easier said than done. Most job seekers just want to get on a payroll, so they don’t ask questions that might raise red flags. On the other hand, your diligence may result in you dodging a bullet.
Examples of financial questions I’d ask my interviewer and/or founders at a start-up company:
- Is the company profitable? If not, when do you project it will be?
- What does the company’s runway look like? (Amount of time before they run out of money.)
- Is the company raising capital? If yes, what is the amount and how much is committed?
For public companies, a great deal of financial information is public and most likely on their website; therefore, I’d look at:
- The company’s “SEDAR” (System for Electric Document Analysis and Retrieval). All employees of a publicly traded company and job seekers seeking employment with such a company should be familiar with SEDAR, a database maintained by the Canadian Securities Administrators (CSA). SEDAR is comparable to the U.S. SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database. You can access SEADR at www.sedar.com.
- Recent quarterly earnings reports.
- Recent letters to shareholders from the CEO.
Reviewing this financial information will inform me of any economic headwinds the company is experiencing and what they anticipate for the future. I am looking for growth, profitability, and capital on hand.
Note asking the ‘hard’ questions doesn’t guarantee you’ll get honest answers. Prepare for a deep dive into all aspects of the company, including speaking with current employees. Always verify the information you’re given. Google is a job seeker’s best friend.
As a corporate world survival tip, keep in mind that no matter how careful you are, there are always unknown variables (e.g., a pandemic) that can affect your job’s existence. So, heed my advice, whether you’re an active job seeker or a long-term employee—always be looking. The days an employer could offer lifelong employment ended in the mid-80s.
To mitigate the risk of being laid off from a new job, job seekers should consider the following two things, regardless of what their due diligence reveals.
- Seek revenue-generating roles that contribute directly to the business’s profitability.
In most cases, cost-center positions are the first to be cut when cuts need to be made. Such job cuts will have little impact on sales; hence, avoid taking on a cost-center position.
A revenue-generating employee is less likely to be laid off than a cost-centre employee, who is a distraction (READ: liability) to the company’s profitability. It’s a cold business reality that employees who bring in the money have more value than those employees who can’t point to adding dollars to the bottom line. In tough times, businesses need folks who can ring up sales.
I’m not privy to Elon Musk’s strategy with Twitter, but I find it interesting that he can let go 50% of Twitter’s employees, have 20% more walk out, and the platform, as I write this, continues to function. What does this say about the value of the work most Twitter employees were doing?
Before pursuing a job opportunity, ask yourself: How would the company’s bottom line be affected if this position suddenly disappeared?
- Ask for a healthy compensation structure, but not so high that you become unaffordable at the slightest downturn.
All the self-proclaiming career experts are selling the warm and fuzzy narrative to seek your worth. Yes, getting a big salary feels good. However, “big salaries” come with strings, one being more is expected from you. (An employee’s compensation needs to be justifiable from a business ROI perspective.) The other is that you may make yourself unaffordable should the business need to cut costs.
My advice to jobseekers is to negotiate a base salary they can live with. Then, as applicable, negotiate a commission or bonus structure, profit sharing, RRSP matching, additional benefits, and perks as part of their overall compensation package. Accounting-wise, it makes moresense for a company to lay off an employee making $85K a year as opposed to an employee earning $45K plus 5% commission, even though their combined base salary and commission may be more than $85K.
Now’s not the time to be greedy.
Finally, when you start a new job, make it your mission to show your new employer that you fit in, that you’re willing and able to contribute to the company’s success, and that hiring you was a good business decision and always be looking.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send Nick your questions at firstname.lastname@example.org.