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How can you mitigate the risk of LIFO (Last In, First Out) as a newcomer during this cycle of economic uncertainty?

You can do the following:

Know your future employer’s current financial health

If your future employer is a public listed company, the financial information about the company is widely available in the internet. As a start, you can visit the company’s website to download or read about the company profit & loss (P&L) account, balance sheet and cashflow account. For those who are not familiar with these financial jargons, I’ll briefly explain them here in layman term:

• Profit & loss (P&L) account: From the P&L, you will know how much revenue was generated either quarterly or yearly and how much of that revenue was spent as company expenses. The bottom line in the P&L is how much profit was generated from the revenue.
• Balance sheet: You will know how much money was spent on assets and where the money was generated to buy the assets. From the name itself, the money generated must be the same as the money spent on the assets i.e. the money transaction must be balaced.
• Cash flow: The most important financial report where you will know how much of the profit that was generated from the P&L is actually available in cash to sustain the company’s operation for the coming future. 

In summary, these financial reports will give you an idea on the financial health of the company. If the company is not generated much cash from their business, then it is a clear indication that the company will not be able to sustain their operation for a certain period of time. So you might want to consider to reject the offer but discuss with the hiring manager before you finalize the decision. You can ask about the future actions that the company is taking to generate more cash either by increasing revenue or reducing the expenses. You can also ask about the projected order trend for the next 3-6 months. This will give you some idea on the projected sales and revenue that will be generated. On top of that, if you know someone else that you can trust currently working in that company, you can also ask that person about the insider information about the company. Make sure you have sufficient information before making the decision to accept or reject the job offer.

Understand your benefits as an employee

I wrote this article in Oct last year about assessing the benefits with your needs. In this article you will be able to find some guidelines on how to assess your needs with the benefits that your future employer will give if you decided to accept the job offer. 

In addition to that, in today’s article, I would like to share about termination benefit. With reference to Malaysia’s labour law, employer is responsible to provide termination benefit if the employer terminates the service contract of an employee for whatever reason except termination due to misconduct, retirement & voluntary resignation. The minimum amount of the termination benefits depend on the duration of the employee’s service as follow:

• 10 days wages for each year of service if employed less than 2 years.
• 15 days wages for each year of service if employed less than 5 years but more than 2 years.
• 20 days wages for each year of service if employed more than 5 years.
• For those have served less than a year, the benefit will be based on pro rate to the nearest month.

The payment must be made within 7 days after the termination date. The details of the benefits must be in written and copies must be given to the effected employee.

With this knowledge, if the unavoidable happens, then you already know your rights on what you deserved. But I hope this will not happen to you.   

Please share your thoughts about this article especially from your experience in the comments below. Feel free to share this article with friend or family who are lucky enough to get a job offer during this economy uncertainty.

Regards

Yusoff

Read: Part 1