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Learn From the Recession: Choose a Strong Company

Alexandra Levit | Water Cooler Wisdom

August 10, 2010

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Countless individuals were laid off or fired in the last two years due to their companies’ dire financial situations. Whether you are currently unemployed or employed but thinking of working somewhere else, you should know how to avoid this scenario in the future.

Your safest bet is to select a new company with a high profitability ratio. In short, companies with high profitability ratios take in more income per unit sold than businesses with lower ratios. Businesses that have stayed profitable over the long-term will continue to make money even in unfavorable conditions because they know how to limit costs and maximize profit potential.

If a company of interest is public, monitor its stock price, forecasts, executive turnover, and paperwork submitted to the Securities and Exchange Commission (SEC). You can also do a Google search for recent financial news, and read the releases on the company’s investor relations website.

Additionally, your organization should allow for rapid income growth, so determine whether it has profit-sharing and stock purchase plans for employees, whether you would be eligible for performance bonuses, and whether the company will match your contributions to your retirement fund. Those of you who are startup-minded should not jump into a job situation without a healthy knowledge of the company’s business plans and the market demand for its products or services.

Finally, consider the geographic location of the company. Organizations based in expensive urban cities like New York and Los Angeles are the hardest hit when the economy takes a nosedive. If you are willing and able, work for a company in a more affordable area where skyrocketing rents and other forms of overhead won’t crush the bottom line.

This article was originally published on Water Cooler Wisdom.

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Featured Author: Alexandra Levit
‬ ‪A current columnist for the Wall Street Journal and Metro US, Alexandra has authored several books, including the popular They Don’t Teach Corporate in College (Career Press 2004 and 2009), How’d You Score That Gig? (Random House/Ballantine, 2008), Success for Hire (ASTD Press, 2008), MillennialTweet (SuperStar, 2009), and New Job, New You (Random House/Ballantine, 2010). Please learn more at AlexandraLevit.com.