How to tell if your company is in trouble. And it is not by what you think.

By Scot Herrick | Job Skills

Aug 08

Compared to the Great Recession, the economy is in pretty good shape. Employment is as well. That doesn’t mean the layoffs have stopped. Nor does it mean that outsourcing doesn’t continue. That global thing is real.

But companies — or parts of companies — can still be in trouble. Bad things happening to employees are just calendar days down the road. But how can you tell? It’s not like management is going to tell you bad times are coming and you better buckle up.

And most people working in cubicles tend to keep their heads down — and are too overworked — to be in the know anyway.

Traditional research is not the answer

Pundits will tell you to look at the finances of the company for clues, and I suppose that is something to look at. Whenever I look at the financial reports of companies, though, what I see is that “without these one-time charges” that seem to happen every quarter, we’d all be making a trillion bucks.

Stock prices don’t seem to indicate the health of the company either, although, again, that is something to consider. Stocks tend to foreshadow trouble. The problem is when some industry gets hit by something happening to one company, or to the economy, there isn’t a whole lot of clear thinking and discriminate selling. No, if something bad happens to one company — regardless of how well your’s is doing — your company’s stock gets plastered right along with everyone else.

Even layoffs — which you need to watch — doesn’t really tell you if the department or company is in trouble. It’s something to really watch, especially when the layoff is done to see how the work gets removed or redistributed.

No, there is something more fundamental that can be watched. And if this happens, all of your alarm bells should go off.

When good people in the know leave, you know you’re in trouble

Most of us don’t have an open pathway to what is coming down the pike. We just do our jobs.

But when you see someone who you know performs well and that person leaves for greener pastures, it’s time to pay attention. And if another one leaves, it’s time to go on full alert.

Sure, some of it is for greater challenges (read: career advancement and pay). You’d have to evaluate if that was the reason the person left. But if it looks anything like bailing before the ship/company/department/division goes under, you’ll want to evaluate how long your position will last. Like right now. Then again in a couple of weeks. Then again a couple weeks after that.

One of the principles I have from all of the time I’ve spent in companies is this: we owe the company our work. We don’t owe our loyalty.

Companies, through their management, will lay you off in a New York minute whether you’re ready for it or not. And even though there can be great personal loyalty within the company, if your manager’s manager says that you’re gone, well, you’re gone.

People who perform well are desired by other companies

Good performing people — those who live for Employment Security — can find a job with another company. They have the job skills, performance, networking, job search skills and finances to stay employed. They don’t wait to get laid off — they leave. Because they can.

Sure, pay attention to the traditional advice — the finances and all that. More importantly, know who is leaving the company and, if you can, why they are leaving.

When good people leave a company, it is time to take stock of your job. Before it is too late.

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About the Author

Scot Herrick is the author of “I’ve Landed My Dream Job–Now What???” and owner of Cube Rules, LLC. Scot has a long history of management and individual contribution in multiple Fortune 100 corporations.