How to Research the Financial Stability of your Employer

A recent college grad I know was excited about starting her first job, especially since it was in the field she’d studied, and in the city she wanted to relocate to. But after just three months — right before the holidays — she was told the company would be closing at year’s end. Her situation made me wonder how someone in the job market can research the financial stability of a company they’re applying to, especially if it is a relatively small company that likely doesn’t have a lot of financial information available to the public.

“Situations like the one described above unfortunately are not uncommon to recent graduates. That is the hard part about being a recent graduate working for a start-up company,” says Lindsey Marx, a content strategist who manages the college and career blog at

That’s why it’s important to do some pre-hiring homework, stresses Michele Reynolds, career expert and frequent contributor to the Harvard Business School Online blog.

“Approach a job search as you would a research project for school,” Reynolds says. “Once you find a position you’re interested in, do your homework about the organization. Don’t just rely on the information given to you by the company you are exploring.”

So just how can you research the financial stability of a company you’ve applied to?

Marx and Reynolds offer the following tips:

–Connect with current employees. Both pros say this is the most important thing you can do, and they stress that LinkedIn is a great place to start. “Check your network on LinkedIn to see if you know anyone affiliated with the organization and ask them for honest insights about the company’s financial state,” Reynolds advises.

In person meetings and messaging with current employees are other proactive approaches, Marx says. “They currently work there and have the best view of the company and know what is going on. Not only that, but they also have great input to see if the company is a good fit for you.”

–Ask questions during the interview. Marx emphasizes that inquiring about the company’s financial position isn’t being nosy — it shows the interviewer that you are doing your homework and are genuinely interested in the company, she says.

Reynolds agrees. “When you interview, don’t be afraid to ask about the funding, revenue, and the financial health of the business. It’s perfectly reasonable to inquire about such things to make sure you’re making a prudent choice,” she adds.

–Seek out published reports. “Find out what is published and what is being said about the company in the news, on social media, in articles,” Marx suggests.

Reynolds says doing an internet search about the company and its leadership team is key.

“Look for funding announcements. Crunchbase often reports when a business receives venture capital investing. If it’s publicly traded, you should be able to find financial information through the Securities and Exchange Commission or on one of the popular newswires, like Business Wire or PR Newswire,” she notes. “Be sure to look up the company on Glassdoor to see how past and present employees feel about the venture and its CEO.”

And there’s one last thing to turn to when you’ve done all the research you can do: “At the end of the day, rely on your intuition,” Reynolds concludes. “If something seems too good to be true or doesn’t feel quite right, it’s probably not!”

(Article written by Kathleen Furore)