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Ask HN: As an employee of a company, how do you assess its health?

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Re: Ask HN: As an employee of a company, how do you assess its health?

#11

Post by jasode »

Availability of information to analyze will depend on whether it's a public vs private company.

If it's a public company, an employee can look at the health in many of the same ways that Warren Buffet would look at it. Look at it's profit & loss statements for the last few years. If it took on debt, try to find out what the debt was used for. Look at the credit agencies' bond rating for the company. If it's not AAA, research why. Look at the company's major customers. Is it a growing marketplace?

If it's a private company, intelligence gathering is going to be harder and you often won't have good info until you actually work there. You can try to synthesize information from glassdoor, Google News (e.g. lawsuits, settlements, etc), and other sources.

>I mainly meant "startup" (i.e. not Fortune 500)

In this case, I would ask the hiring manager (often the founder) if the company is cash-flow positive. If not, ask how much "runway" is left before the company runs out of money. Some founders may push back with "I can't disclose financials, yada yada" ... maybe because of his paranoia about competitor espionage. You then have to ask yourself if you're willing to join a company with limited information. You can join a not-yet-profitable company because sometimes, it all works out. That said, the idea of concrete financial dialogue is to make the risks transparent to the employee.

Re: Ask HN: As an employee of a company, how do you assess its health?

#12

Post by UseofWeapons1 »

The easist method is by trend in employee count. If headcount is rising, that's a good indicator, if it's falling, that's generally bad. Stable can be perfectly fine, or bad, depending on the company. You may have concerns about the magnitude of growth, or claim lay-offs were justified or turnover is natural, but the trend generally holds.

You should also pay attention to other employees; ask yourself why folks who leave are leaving. This seems easy, but I know one start-up well where a small trickle of occasional high-level departures turned into an eventual flood and bankruptcy.

Beyond that, it's the usual. Anything you can tell about sales growth, competitive intensity, leadership, etc. are all helpful and good data points.

Re: Ask HN: As an employee of a company, how do you assess its health?

#14

Post by tiredwired »

They suddenly decide to inventory equipment (determine company value or collateral). Cutting back on benefits like 401k matching. Delays buying new equipment. People quitting and not being replaced. Senior management having all-day private meetings. They request your background information as if to determine if you are qualified for current or new positions (if company is discussing being acquired). Hackathons with a theme completely off target from current products. Multiple sets of men in suits touring the office. Managers stop downloading latest version of the beta-test app. Managers stop showing up for meetings. Managers stop caring about product quality. You look up from your desk and realize the office is empty when it should be busy - either those people are being terminated or you are being terminated.

Re: Ask HN: As an employee of a company, how do you assess its health?

#16

Post by blowski »

It's a bit subjective, and the more general the statement, the less meaning it would have.

Say a company is becoming corporate and dull, but at the same time becoming more profitable. Are they in good or bad health? As a short-term shareholder you might see them in good health, but as an employee you might see them in bad health.

That said, my experience is to look at team meetings. If they are full of conflict that is resolved respectfully by the end of the meeting, that's usually a good sign. If the same person is dominating and everyone else is quiet, that's a bad sign. If the same arguments keep repeating themselves, that's a bad sign. If there is no conflict at all, and people just stare out of the window while others are talking, that's a bad sign.

At bad companies, everyone knows the real story, but nobody says it out loud. Good people leave, bad people stay, and the problem gets worse.

Re: Ask HN: As an employee of a company, how do you assess its health?

#17

Post by hammock »

robhunter wrote: post #5

"Company" is a broad word, and can include a wide variety of different types of organizations - but if you're talking specifically about startups, look at the following: Cash in the Bank / Burn Rate - How much cash does the company have? How much of that cash is it spending each month? How long until the company reaches profitability? Could the company be profitable now if it wanted to be? Headcount - LinkedIn actual…

Benefit of being an employee in this scenario is that you have access to info outsiders don't. So take some of your metrics like headcount and unit economics and make them forward-looking: open job reqs and contract expirations perhaps.

Other things like grit of the founders can't really be controlled. That will never change for the life of a company.

Re: Ask HN: As an employee of a company, how do you assess its health?

#18

Post by pgt »

Cutting of catered lunches is a strong signal that the company is in a cash crunch. You can try to propose a weekly catered lunch at your company to "encourage communication" and watch it is a signal. In the past I instituted weekly catered lunches at a company, which were halved from weekly to bi-weekly the moment finance knew there was trouble.

Other indicators: delayed salary reviews, senior staff leaving (and not being replaced, because money) or minority shareholders trying to sell their stakes.

Re: Ask HN: As an employee of a company, how do you assess its health?

#19

Post by arethuza »

tiredwired wrote: post #14

They suddenly decide to inventory equipment (determine company value or collateral). Cutting back on benefits like 401k matching. Delays buying new equipment. People quitting and not being replaced. Senior management having all-day private meetings. They request your background information as if to determine if you are qualified for current or new positions (if company is discussing being acquired). Hackathons with a…

"Multiple sets of men in suits touring the office"

New tenants being shown round the office you are in can be a bit worrying...

Re: Ask HN: As an employee of a company, how do you assess its health?

#20

Post by blowski »

UseofWeapons1 wrote: post #12

The easist method is by trend in employee count. If headcount is rising, that's a good indicator, if it's falling, that's generally bad. Stable can be perfectly fine, or bad, depending on the company. You may have concerns about the magnitude of growth, or claim lay-offs were justified or turnover is natural, but the trend generally holds. You should also pay attention to other employees; ask yourself why folks who l…

Rising headcount is not necessarily a good sign. To the contrary, it's often a sign that the company is haemorrhaging cash, hoping that if they hire enough staff something magic will happen before time runs out.
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