How Can You Tell if the Company You Work For is Going Under?
Posted March 20, 2009 by Bernz
It’s a sign of the times. Companies of all sizes and in all industries are fighting to stay afloat in today’s rough economic waters. Employee layoffs are at an all-time high and companies are closing up shop at an alarming rate.
The illusion of job security is just that- an illusion. Employees are finding that keeping the resume dusted off is their only defense strategy against a sudden layoff. Losing a job in the current economy is a triple threat. There is less likelihood that there are other suitable jobs out there, the employee loses company-sponsored health care at a time when he or she is least likely to be able to pick up the tab, and unemployment means less money for skills upgrading or education.
As the old saying goes, the best defense is offense. Preparing ahead of time for a layoff puts you in a stronger position in case it actually happens. The first line of offense is looking for the writing on the wall. Knowing that the company you work for is struggling to survive is the first warning that imminent unemployment may be lurking on the horizon. How can you tell that your company is on shaky ground? Here are three signs to watch for.
1) Cutbacks in discretionary spending. These are often thought of as the “fun” things in the workplace, such as Friday donuts in the break room and company lunches. If you see an immediate end to these “perks”, it may signal financial trouble.
2) Attrition. The first step before company-wide layoffs is often not filling vacant positions. If many workers are leaving the company and not being replaced, it may signal the company’s need to shave down the payroll.
3) Delinquencies on government tax remittances. Companies collect payroll and sales taxes on behalf of the government and remit them on a regular basis, usually either monthly or quarterly. If you notice that the company is getting farther behind on its remittances, it may indicate that the cash is being diverted to other purposes.
Being prepared for layoff doesn’t soften the blow when it actually comes, but it does give you a head start on picking up the pieces and moving on.
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