The best method to determine your job security

Most employees across the world care about job security as it has a far-reaching impact on so many decisions in life.

Three good reasons to care about it

Its direct impact is three-fold:

  1. 1. If you don’t have a secure job, it may be risky to make long-term investment decisions like taking out a mortgage, for example. If this uncertainty drags on for too long, it will become frustrating and costly.
  2. 2. If you suspect that you may get laid off soon, taking action and trying to move on to a new employer proactively may increase your chances of not becoming unemployed at all, as opposed to waiting until the bitter end. This is particularly important if a mass layoff into an already crowded job market is likely to happen.
  3. 3. If you’re looking for a new job, you want to avoid accepting an offer of a position that you may not be able to keep for the foreseeable future. Regardless of the reason, having lost a new job quickly again will make your next job search harder.

The best way to determine the grade of your job security

In my opinion, the most reliable approach to evaluating job security as correctly as possible is to research it as if you were a potential investor in the company in general or in its relevant business segment as applicable.
Here are some guiding tips for it:

  • If you wouldn’t be willing to invest your hard-earned money with confidence in the company for reasons relating to insider knowledge you have as an employee, you should treat that reservation of yours as a clear warning signal.
  • If you know or discover that the company’s management is not invested in it, in other words, that they are also just employees but no stakeholders although they had the option to invest, you should assume that there is a good reason for it.
  • Use materials offering advice on value investing to learn what business aspects play a significant role in a fair evaluation of a company’s prospects in truth.
  • If your findings are not in favor of the security of the position in question, do not let the fact that nothing bad has happened so far mislead you into believing otherwise. Decisions to lay off staff are usually kept secret for a while or they are made too late, thus often preventing formerly still viable parts of the business from surviving.

Usually, such an analysis is not too difficult to reach a helpful conclusion regarding your job security. It’s less about technical perfection but about the will to face the truth.