9 Signs That Your Employer is Going Bankrupt
An employer going bankrupt is an all too common situation in a tough economy. Even good businesses go stale, and their markets can’t support them. Some employers, unfortunately, struggle on until they can’t survive. That creates serious problems for their employees, who may find themselves without pay or other benefits. The employee’s best defense is to learn how to read the signs of a business going under, and take appropriate action.
Reading the employer
Fortunately, some signs of a business in trouble are easy to spot in their early stages. The best and most reliable indicators are business and workplace-based, and can’t be hidden from view.
The business signs:
- New orders slowing down: New business drops or stops entirely.
- Less work from regular customers: A sure sign the market is running down.
- Cost cutting for no stated reason: This is damage control, and it’s an indicator of overheads starting to make a serious impact.
- Upgrades of plant and equipment or office systems stops: If necessary upgrades aren’t happening.
- Reduced amenities like parking or other big ticket expenses: Another form of cost cutting, sometimes in done in advance by alert employers trying to cut outlays. Of itself, this may be good business sense, but it’s always an indicator of cashflow issues.
- Customers going out of business: If a big customer crashes, they can take their suppliers with them.
In the workplace:
- Stagnant work environment: Less work, and no apparent efforts to do much more than go through the motions. This means nothing is happening in terms of the business. This is a particularly bad sign.
- Total silence from management: In active businesses, management produces regular new information. In a business going bankrupt, the preoccupation with the financial situation tends to blot out all other issues. No new information is provided.
- Who’s leaving: The experienced people will jump ship first, particularly those in management and accounts. Sales people are naturally mobile, but in a business in trouble, they may leave in large numbers as well. Sales people can see the trouble coming because they work at the business end, and take evasive action. Some may stay on until they can become sales managers, then leave with “Sales Manager” on their resumes.