In my last post I took a critical look at the emplyee – employer dynamic from the employees perspective. I investigated what you as an employee can do to make the ‘work’ part of your life more rewarding and presented a simple, yet powerful shift in mindset to make this happen. Now that you have taken your side of the bargain into account, lets take a look at what makes an employer a good one so you can tell apart good companies from the bad ones.
1. Does the Company Have a Legitimate Business Case?
The very first question you have to ask yourself when looking at a company is whether the company really has a legitimate business case or if it may as well be shut down. This sounds harsh, but it is true. Companies that are not actually doing anything worthwile should simply call it a day.
Companies that do it right
So what do I mean by legitimate business case? Simply put, a company needs to add something useful to the world. That is what a company is supposed to do at its core. Companies that do that are usually in a good place. Since they are offering something that people really want and need, those people will gladly pay for that. This gives the company stable cash flows, which means they can hire and keep around good people and give them a decent work-life-balance. Good people have smart ways of doing things which adds to the overall culture of the company. Working at these type of companies is a very satisfying experience. Peoples moods are generally better, the work itself feels more fulfilling and the work-life-balance is usually better. All of this is based on the fact that the company is doing what a company is supposed to do: Adding something to the world that makes the world a better place.
Companies that get it wrong
Contrary to that, there are companies that dont really add anything valuable to the world. Usually these companies were initially created with the main ambition of making some money. The objective of adding something of value to the world is secondary at best, but usually non-existent. This type of companies are founded in order to extract value without giving something in return.
But why would you as an employee care about this? The main thing is they are able to pay you your salary right?
Ofcourse it is not that simple. The fact that these companies have no real value to give creates certain dynamics in the workplace that you as an employee will definitely notice in a very unpleasent way. Since the company doesnt have something inherently valuable to offer, people will be less willing to spend money for it. This means the company is constantly short on cash which puts it in a modus operandi of constantly scrapping for money. In order to cut costs it will employ as few employees as it can and pay them as little as possible. This means for you that on top of having low pay, you will be doing multiple peoples job and thus be more stressed out.
The work itself will feel very unfulfilling too. Since people don’t have good reasons to buy their products or services, the company has to give them bad reasons to do so. They will bombard them with marketing and sales campaigns to try and get them to buy something they don’t really need. If possible, they will also try to lock the customers into long running contracts, occasionally using shady schemes.
Think about it like this: If there is no inherently good reason for customers to pay for a companies services, then on some level the company has to trick customers into doing just that. This type of work is not fun. Every person in the office will at least subconsciously sense this, making the atmosphere generally dull.
And trust me, you do not want to waist your time getting bad pay for a stressful job where you are busy trying to trick people into paying for something they really shouldnt pay for, while being surrounded by discontentful people every day.
2. Consider the Industry
I will touch on this point fairly briefly as it is quite simple. Some industries are new, exciting and growing with a lot of money being thrown around. This makes working more fun, since there are more opportunities and people are more willing to spend money on them. A good example is the tech industry. This industry is thriving, so companies are generally speaking in a better position financially and can offer a good work environment whether you are a developer or work in marketing or HR.
Contrary to this, imagine working in an industry that is on its way out. Companies will generally speaking be in a worse place, which creates many of the unfavorable workplace dynamics mentioned earlier.
As a last point, different industries will usually attract different type of people. The automotive industry will attract people that are into cars to at least some degree, while the beauty industry will attract its own type of people. If you want to work along like minded people, join an industry that you have an intrinsic interest in if possible.
3. Company Types
Now that you are aware of workplace dynamics created by the state of a particular industry and whether or not the company has a legitimate business case or not, lets look at different types of companies so you can decide which will be best for you.
Startups and NGOs
Describing these types of companies in one sentence one might call them ‘purpose-driven but chaotic, as well as full of opportunities’. They are companies in their purest form, built to solve a concrete issue that currently exists in the world. Both startups and NGOs have similar characteristics which are usually driven by the facts that a) they are reliant on outside money that is mostly short and b) their cause is to solve real problems that actually need fixing.
Cons
Lets start with the cons these dynamics create. Being dependent on outside money usually also means being low on cash, so salaries are typically lower. This means businesses usually don’t have the luxury to hire every employee they need, so existing employees might be doing one and a half peoples jobs which creates the occasional (or permanent) need to work overtime. The chaotic and fast-paced environment that is created by needing to reach goals to attract new money is also not for everybody. Lastly, there is always the risk of eventually running out of business, especially in the early stages.
Pros
While these cons sound alarming, working in a startup or NGO will not come without its benefits ofcourse. You will be surrounded by inspiring and purpose driven people who place more value on actually improving the world over simply making money. The amount of things you will learn is also way higher, since you will be forced to wear many different hats and at times slip into different roles. You will have the possibility to reach more senior positions a lot sooner compared to traditional companies, so it can be a good way to kickstart your career. The atmosphere around work will be more exciting since everybody knows that you are currently either attempting something that has never been done before, or you are working together to face a serious environmental or social issue. In a startup the thrill of potentially becoming rich can add another level of excitment to your daily work-life.
While there is never a bad time to join a startup or NGO, it makes particular sense if you are young, eager to learn a lot and make a change in the world, without yet having the responsibility of raising a family. Also, if you ever aspire to become an entrepreneur, joining a startup will give you hands on experience.
Established Companies
Once a company has managed to fufill its purpose and establish its place in the world, the workplace dynamics change a lot. Money is no longer an issue, but the original purpose of the company has already been fulfilled, so now what?
Companies in this phase no longer have the mission to create something new and exciting. Now it’s about defending it’s position in the market against competitors that want a piece of the cake which the company itself has initially created. It’s about adapting to changes in the world in order to keep the company working. So the day to day work at an established company will be inherently different from a startup or an NGO.
Cons
First of, there will simply be a different feel around the company. The vibrancy and excitment of the startup phase will be gone. The company will have become a lot more structured and less dynamic. People will have more clearly defined roles and jobs will be less multidimensional. Leadership positions will be harder to come by since the company is not growing as quickly so new positions are no longer created and filled on the fly. People wanting to make a move upward frequently have to wait for the position above them to become available. Also, in case the company is still determined to grow even further after fulfilling its cause, it might have to get ‘creative’ in order to do so since the original challenge is already solved. This can lead to work that feels a lot less purpose driven and more like you are trying to create growth just for the sake of it, not because you are solving an important issue. If employees are frequently complaining about senseless tasks and are wandering about why the company decides to do certain things, it is usually stuck in this mode. Contrary to that the why is never unclear in a startup or NGO.
Pros
The flipside to these cons is that there will be a lot more security. The company will be making steady income from the product or service it has created, so it will usually not be in scrap mode anymore trying to make ends meat. High pressure and overtime will subsequently be less frequent. The company can afford to hire most people it needs and pay them higher salaries. It can offer more perks to attract higher quality employees. Overall, these places can offer a better work-life-balance and a more stable work environment.
Due to these characteristics established companies attract people who love security and stability and want to enjoy a good work-life-balance. While established companies usually also have good development programs for young people to join their company, doing so is especially sensible if you are looking to settle down and start a family.
Consultancies
The third type of company that we are going to look at are consultancies. They are fundamentally different from the prior company types. They don’t have an actual cause or product to improve the world and make a difference. Instead, they specialize in specific skills and expertise which they offer to support other companies with. As such, when you join a consultancy you don’t necessary identify with a certain cause or product, but rather with a certain skill or field of knowledge. You will be seen as an expert in what you do and companies will call on you to help them improve certain areas of your business.
Since consultancies don’t actually have a product to sell, they effectively sell human labour or in other words, the amount of hours that you as a consultant are staffed on a client project.
Pros
The good news is that by working at a consulting firm you will get the opportunity to really sharpen your skills. Since the firm is selling your work directly to the customer, they will be very keen to train you so you yourself become a valuable product. This is not only restricted to hard skills either. Soft skills play a huge role in a consultants job. You have to be able to present yourself well and communicate clearly in order to maintain good client relationships. On top of that, consultancies usually get their work through project pitches, so their consultants have to be extremely good at convincing other people. Obviously not everybody is great at this from the get go, so consultancies will train their new people up on these soft skills too.
Besides gaining skills, you wil have the opportunity to gain a lot of very varied work experience. You will be in touch with many different clients from different industries, without having to commit to one specific one. So in a relatively short period of time you can learn a lot of skills and really broaden your knowledge.
These traits make consultancies a very interesting option when you are fresh out of university and are eager to learn valuable skills and better your understanding of the working world. There will be a lot of youngsters joining for these reasons so chances are you will be around plenty of like-minded people.
Additionally, consulting can be a viable choice for mid and later stages of your career, not just for the early ones. At least if you work for mainly financial reasons that is. Whether there is room for you to eventually be promoted into higher positions is dependent on whether or not you you can bring in new business in the form of projects or clients. This is something you yourself can influence directly. You might have to work hard and build a solid network of potential leads, but you are not condemned to wait for a leadership position to become available as is the case in conventional companies.
Cons
These pros come at a cost ofcourse. The biggest one being the one thing that consultancies are most known for: Long working hours. Your work is what the company sells, so the more hours you work the more hours the company can charge for and the more profit it makes.
Work is not only long but also stressfull. In order to convince a client to pay for the consulting firms services, they frequently promise a lot of results in a short period of time. Results that can only be achieved through huge efforts by the consultants themselves. Furthermore, clients don’t want to pay for inefficient consultants, so you really are under pressure to perform at your best consistently. In a traditional company, if you have a day without anything todo, the company will still be selling their products. But in consulting, if you are not working on a client project, you are costing the firm money without bringing in any. So every single consultant is under constant pressure to either work or bring in new projects to staff other consultants on.
Lastly, consulting firms don’t have a real cause they fulfill as a company. So there is nothing to identify with outside of skill, prestigue and money. In junior positions people join for skills and experience. But once you have passed this stage, which usually happens in the first 2-5 years, the only thing left to work for is money and prestigue. People who stay on after this point are usually primarily self absorbed. Their reason to work is usually strictly financial or the need to prove themselves and gain social status.
Its not wrong at all to work for these reasons, but they are mainly selfish. So keep in mind that if you are looking for a work experience that gives you the joy of being part of something greater than yourself, consulting is usually not it. If you are looking to achieve purely individual accolades that translate to a lot of money, this might be the way to go.
All in all, joining a consulting firm is a good choice at a young age, when you are eager to learn and gain heaps of experience. If you notice that you miss the feeling of identifying with a cause or you are not willing to tolerate long working hours anymore, it is time to leave. The good news is that due to your usually well regarded work experience as a consultant, you should have little difficulties finding a job to your liking. And if you place a large emphasis on money and prestigue, you can always (re-)enter consulting at a later point in your career.
Private Equity owned companies
The last type of companies that are worth briefly touching on are private equity owned companies. These are usually companies that are struggling or underperforming in some way and are subsequently acquired by a private equity firm. The private equity firm does so with the goal of increasing the acquired companies profitability through targeted investments and then selling it at a higher price. In short, they buy a struggling company at a low price, make some adjustments to it and sell it at a profit. It is important to know that the private equity firm owning the company has no real interest in the company itself, or its people or the cause that it stands for. They literally only want to buy and sell it to make a quick buck.
This makes them a tricky place to work at, becasue similar to startups they have outside pressure to consistently grow so the investors can get their money back. Contrary to startups however, they have not set out to offer a groundbraking new product to the world. So these companies can usually not grow through purpose-driven innovation but often have to rely on cutting costs or driving more revenue through marketing gimmicks. Contrary to established, well running companies they also can’t choose to simply work on keeping market position and rely on their already existing revenues.
In my opinion, working in a private equity owned company is not advisable. Exceptions to this rule exist ofcourse. A company might have potential to become a legitimate, well running business but is simply mismanaged at the time. In these cases a private equity firm can help in restructuring the business and improve management processes. But in most cases, these firms will simply not have a solid business case but still have to enforce growth in order for their investors to make a quick buck.
Conclusion
So whether you are young and looking for your first job or you are at a later stage in your career looking for a change, it is important to understand the factors that will lead to a work experience you can perceive as satisfactory. Luckily there are plenty of options out there and if you go about it strategically, chances are you will find a company that suits your goals and ambitions in the current stage of your life.