17 Apr How to spot employer credibility trouble
CHICAGO – Just as investors are scrutinizing the finances of companies before buying stocks, job seekers may also be forced to look at potential employers more closely in the wake of the economic collapse.
While the extra scrutiny could slow the employment search, job seekers and many employed workers might want to take steps to avoid the fate of employees whose companies went under and lost both jobs and retirement savings when their companies unraveled.
Employer credibility is likely to be a crucial asset in attracting and retaining talented workers in the coming months as companies position themselves for growth in a recovering economy. Many workers are taking a closer look at their employers and potential employers to determine if they are next.
For job seekers, investigating a company’s credibility can be a difficult task. Asking questions in early round interviews could be perceived as inappropriate or otherwise place the interviewer in an uncomfortable position. This could end the process right there.
However, the dilemma facing job seekers could be turned to an advantage by proactive companies that are willing to alter their hiring process and take measures to establish credibility promptly with job candidates.
Building a solid reputation with job seekers would have long-lasting benefits particularly when the economy resumes running on all cylinders and it becomes more competitive to find the most qualified workers.
Some companies may consider providing the employee handbook and recent reports to stockholders with candidates early in the interview process. Establishing such an open-book policy would send a strong message to existing workers as well as prospective employees that the company can be trusted and stands behind its reputation, policies and standards.
Even if companies do take the initiative in establishing credibility, job seekers and workers would be well advised to examine more closely the operations and policies that companies maintain in order to avoid future Enrons.
The following advice is for job seekers as well as employees on ways to spot trouble and protect their assets.
Before Being Hired (Job Seekers)
1. Look for news of regulatory inquiries or investigations and ask the interviewer what they are all about.
2. Check the financial news and other sources to learn if any analysts or outside parties have called into question the company’s operating and/or accounting procedures.
3. Examine quarterly reports to investors. One sign that there may be trouble is if the accounting firm that reviews the company’s financial data changes frequently. Another clue is if earnings remain steady while cash flow decreases significantly.
4. If there is a reason to be skittish, consider asking for an employment contract.
After Becoming Employed (Current Workers)
1. Make sure your 401(k) retirement savings plan is diversified. Don’t invest more than 4 percent of your 401(k) contributions in company stock.
2. Watch to see if the CEO and other top-level executives suddenly begin selling large shares of their own company stock. Such insider transactions by top management are routinely reported in the Wall Street Journal and are available from the SEC.
3. If you survive a round of layoffs, draw up a financial plan for you and your family as if you hadn’t survived. More cuts could follow and it’s better to be financially prepared going into a jobless situation. Additionally, downsizing often precedes other cutbacks that could reduce or eliminate bonuses, pay raises, 401(k) matching contributions and health insurance.
4. Have an independent financial advisor (not an employer-paid advisor) review your investment portfolio.
If You Become Unemployed (Ex-Employees of Tainted Companies)
1. Try to get the interview without a resume. Get in the door using your network of contacts. Yes, have a copy of your resume for the interview, but hold onto it until it’s requested. Don’t give employers a reason to screen you out before hand.
2. Throughout the job-search process and especially in the interview, don’t try to hide the fact that you worked for a particular company with a poor reputation.
Most hiring authorities understand that most employees (and particularly rank-and-file workers) are far removed from the level where wrongdoing is most likely to originate. An unwillingness to name the former employer could give the impression that you presently have something to hide.
3. While it’s important that you not hide the identity of your former employer, you may want to deemphasize the connection to your former employer by focusing solely on your attributes in terms of your position or job function. Instead of saying “I was responsible for [blank] at XYZ Company,” use phrases like this: “As a marketing manager, I was responsible for…”
Recent columns by James Challenger
- James Challenger: Slow hiring of college graduates: non-profits to benefit – Part 1
- James Challenger: Transferring skills the key to new work in today’s economy
- James Challenger: Expanding job market predicted to shatter glass ceiling
- James Challenger: Forget the money; Get the offer
This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.