Over the past few years, I have read countless stories about what job seekers should be looking for in their next employer. In what Alan Greenspan may have dubbed an irrationally exuberant jobs market, most of these articles rightly focused on ensuring a cultural match—how-to’s for assessing your next manager, and your peers—when considering that next position. After all, the compensation and job security were likely greater and stronger given the state of the market.
But the times are a-changin’. At the very least, perception of the current moment and moment ahead has created great uncertainty. It’s suddenly hard to tell what you’re walking into, especially for those early on in their careers. Startups and big companies alike are facing funding challenges, laying people off as business moderates and, in some cases, bracing for the worst as many experts believe a recession is upon us. At the same time, other companies are reporting strong earnings and hiring in droves. We are clearly no longer in a “rising tide lifts all boats” world.
In this environment, a job seeker only gets to realize that cultural match if they are at a job long enough to get to know the culture. In an uncertain economy, job seekers need to really kick the financial tires of their next employer, lest they risk a blowout in the form of being last in, first out. As a recent job seeker who just took on the CFO role at Trusted Health, here’s my advice on how any job seeker can effectively check the pulse of a company and feel secure (financially that is) when accepting their next job offer.
I’d advise prospective job switchers to push on uncovering what lies beneath the surface of culture, with an eye toward a company’s financial stability and growth. Startups aren’t always willing to give specific numbers, but in the interview process, you should still be able to ask about ranges, such as revenue, year-over-year growth, cash runway, customer retention, and strategy that guides key business indicators to get comfortable with the strength of a business before accepting a position. These are the three key questions:
- What’s the company’s revenue and year-over-year growth rate this year?
- Is this company profitable? If not, what is the company’s burn multiple and when will it become profitable?
- When will it run out of cash?
Naturally, you want to join a growing company if you’re entering the world of startups. Ideally, you want the companies you’re considering to be growing at least 50% year over year, especially if their annual revenue is under $100 million. If their annual revenue is above, still look for companies that are growing at least 25% year over year. That growth rate indicates a company making real inroads in their industry and will more likely require an expanding team to support its business growth. When you combine that with a burn multiple of <1.5, 18 plus at least months of cash runway, you're looking an organization with a strong financial foundation that's more likely to weather uncertainty. < span>1.5,>
Do your research
You might also consider asking about recent historical layoffs and how the company handled that process. If you ask all the questions above and still can’t be certain of a company’s financial standing, but still want to make the leap, you should still understand how companies treat their employees under those circumstances. If the hiring manager can’t answer your questions, you might inquire if there is someone within the business function that you might speak with or contact over email to discuss. I, for one, would appreciate candidates who want to understand the business.
The more general advice “do your research” and “try the product/service” still stands, too. With internet searches, you can confirm market size via various sources found on the web; growth opportunities; and any macro trends related to the industry that could hold impact. I also like to try the product to gain a sense of the current customer experience and the technical aspects of how they interact with the company.
For me, one of the first, basic questions I researched about my new employer was the market size and whether there was sufficient room for growth. There is a huge demand for what Trusted offers in the world of healthcare staffing, both because of long-term care needs of the baby boomer population, and more immediately as hospitals and health systems work through the pressures of COVID. The US Bureau of Labor Statistics projects 194,500 average annual openings for registered nurses between 2020 and 2030, with employment projected to grow 9%. I found there was a huge, growing market for a company to solve an essential issue in our health system. Beyond that:
- Read customer reviews. Are they good? Bad? What do reviewers call out? Are there complaints about product/service functionality or customer service?
- Determine the competitors. Who are they and how does your target company differentiate itself from them?
- Consider the mission: What do they stand for and does it align with my values?
- Examine culture/leadership: Who will I be working with and are they strong leaders with a clear vision? Are they pleasant people to work with/for? Will I learn from them?
The job market remains strong, and the economy remains a tough read. Still, it’s clear we are entering a phase where more due diligence is again required when job prospecting. Some say culture is king and I agree that it is essential. But sufficient capital and financial discipline enable that company you are considering to navigate a tough economy, so in some ways that financial security is a kingmaker. Get out there and start kicking those tires!