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Avoid Getting Caught On Sinking Ship Mark Swartz, M.B.A. M.Ed.

About the Author

Mark Swartz, MBA, M.Ed., is Canada's Career Activist. His insights reach millions yearly as the Workopolis.com Career Advisor, as author of the best seller "Get Wired, You're Hired," also as a professional speaker and coach on career/work issues. A former Toronto Star careers columnist, Mark's advice is forthright and practical. For Canada's biggest directory of free career articles, and for personalized coaching, please visit www.CareerActivist.com.

Jetsgo. You've likely heard it's the Canadian airline that shut its doors without warning on the very first day of March break this year. 1,350 employees were suddenly jobless as part of the ugly outcome. The scuttlebutt is no one saw it coming. If that's true, is there any hope for job seekers or staff concerned about an employers' viability?

When you're busy with work day to day or anxious to find new employment, the last thing you want to think about is a company's survival prospects. Just ask the tens of thousands of ex-Nortel and Eaton personnel.

But ignoring potential bad news could be personally disastrous. Take Maria Scalliona (not her real name). At 42 she had a great job at a company she'd been with for close to 10 years. A major competitor began gradually wooing Maria. They enticed her with promises of a 15% raise and the Director title she coveted. Eventually they interviewed her with a series of probing questions, checked her references, even confirmed her degrees and credentials with the issuing institutions. Then they made the offer, which she jumped on.

Now fast forward seven months. Her new employer declared bankruptcy and Maria, shocked and panicky, received zero severance.

Could she have foreseen this outcome? Not entirely. Maybe not at all. But there are ways to minimize your risk of working for a failing company, whether you're a current or aspiring employee there. In the world of corporate deal making it's called 'doing your due diligence.' And when you think about it, that's exactly what the employer did in terms of Maria before hiring her.

How then do you begin? For financial information you can start by visiting the company's website. If it's publicly traded it ought to give you all sorts of relevant information. This includes an annual report and quarterly financial statements, plus press releases about significant transactions the firm is involved in. Additional details affecting the company's operations can be found by visiting the Canadian Securities Administrators website, called SEDAR (System for Electronic Document Analysis and Retrieval). It's at sedar.com, while the American equivalent is at edgar.com.

Not that you have to be a CA to decipher financial statements. You can readily see if sales and profits are going up or down. But that doesn't tell the whole story. What about days outstanding of receivables? And have inventory levels risen alarmingly? For a deeper analysis, let an accountant take a look at the financials and give you their opinion. Think of it as paying for an insurance policy that covers at least part of the risk.

No need to stop at published data though. You might decide to talk to some of the employer's key suppliers themselves. Are they getting paid on time? Has the company substantially altered it purchasing habits recently?

If this seems like a lot of work, or if the company is privately owned, you still have recourse. Consider surfing over to D&B Canada (www.dnb.ca, formerly Dun & Bradstreet). From $22.50 per company you can learn about a firm's credit worthiness, see if it's headed for trouble and learn about suits, liens and judgments against it. Or do an insolvency (bankruptcy) name search at Industry Canada's strategis.gc.ca, $8 for batch of 10 matches or less.

For job seekers in particular there are additional sources of valuable information. For instance, check with the local Better Business Bureau (http://lookup.bbb.org) and government agencies such as the Ontario Ministry of Consumer and Business Services (www.cbs.gov.on.ca) for complaints or law suits against a company.

Or do an article search to see if a company was in the press over the last year or two, and if so for what reason. For this you can head to your local library and log in to their free databases such as E-Library, which covers many newspapers, magazines and TV/radio transcripts. Also check out relevant trade publications while there.

Your network is another venue for information gathering. See if anyone you know, or people they know, can offer insights into a particular employer's true corporate culture and vitality. Better yet, if you can find someone who's worked there before get the scoop directly from them. Be cautious, however, of their personal bias. They may be less charitable if they were downsized than if they left voluntarily.

Other places to go for intelligence? Ask recruiters you trust for their opinions. See if they've heard of any leaks or rumours. Then speak to your local chamber of commerce: Have they had dealings with the employers you're considering? Any murmurings positive or negative? Beyond that there are industry associations and advocacy organizations as well.

Employees have their own ways of gauging their establishment's ongoing health. The more obvious warning signs of an impending downturn include unexpected layoffs, salary or hiring freezes, losses of major clients or accounts, a change in the workplace climate from easy going to anxious and frenzied, repeatedly missed sales targets or the cutoff of funding from outside sources.

All of this is not to say you won't get caught flat footed in the end. Jetsgo's abrupt demise surprised many a savvy industry watcher. My advice is not to knock yourself out searching for the ultimate stable employer. Things can change quickly and the past is no guarantee of future performance. Having said that, it does make sense to take a few precautions when signs of trouble may be a few clicks or phone calls. Better a bit of Sherlock Holmes today than to be caught unawares tomorrow.

The opinions and positions expressed in the above article represent the views of the author and are provided with no legal obligation and liability on the part of either the author or the publisher of this article, and with no implied or stated guarantees. The publisher of this article and the author are exempt from any liability for events resulting directly or indirectly from the use of this article. Copyrights over the article published on this page are owned in full by the article's author. It is prohibited to reproduce this article in parts or in full without the expressed permission of the author.