How should I ask prospective employer about declining revenues?

Question

I have been interviewing with a very small size public company here in the US and I am in the final stages of the interview process. I have one more round with the hiring manager and I would like his/her own view as to why the revenues have been steadily decreasing over last 4 years and whether he/she expects the company will turn around in couple of years.

More info:

It is not a start-up and is in business for over couple of decades. I already reviewed 10-K and 8-K reports but I am still not able to connect dots. For example, based on what was mentioned in the latest reports, they should already be seeing increase in revenue in last three quarters. In short they are only helpful to a certain extent.

Question: Without sounding offending or jeopardizing my chances of getting the position, how should I ask him/her to address this specific concern of mine?

Answer 1

Yes you should absolutely ask about this at the interview.

As I'm sure you understand from your question, interviews are a two way process. You should be evaluating whether you want to work for the company as well as persuading them they want you to work for them.

An important part of whether you want to work for them is whether they have long term viability. Falling revenues could mean that the company may be going bankrupt soon, or that layoffs are coming. Both of these decrease the desirability of working for the company. As a secondary benefit, asking the question shows that you have been researching the company, taking an interest in its performance, and that you have some business skills. All of these should increase your prospects with the company.

An appropriate questions might be: "I've been looking at your financials, and it looks to me as if your revenue is falling. Is the company doing something to address that?"

Having said that, you may not get much of an answer. It's true that a low-level manager isn't able to influence the revenue of the company, other than by doing his job well. However in a good company some things should have been communicated to employees about the situation. Answers like "I didn't know about the falling revenues" or "We don't concern ourselves with things like that" mean that either the company isn't good about communicating this stuff, or that the team isn't interested in them. (By the way, I work for a company of 10,000 and this stuff is communicated to every employee).

It's likely that any steps being taken to address this are confidential, so you aren't going to get details. But an answer like "There are some steps being put in place, but I can't tell you what they are" should at least be somewhat reassuring. You might explicitly ask about layoffs.

Answer 2

Depending on where in the company you are applying and what the hiring manager's duties include, while I can acknowledge this could be a good question it is also a tricky question. You could phrase your question like, "I was reviewing the organization's financial statements and noticed this trend. What are your thoughts on the organization's ability to overcome this?" Where the idea is to ask an open-ended question from the perspective of, "What do you think about this?" though recognize that depending on the manager's role there may not be much to be said here.

A key point here is that while you may want answers about this, consider that the hiring manager may have a limited view of the corporate strategy and access to executives to know the turn around plan, especially if the manager is in the middle level of a company with 10-100 employees where the top brass may well keep their future plans close to the vest but tell analysts and followers of the stock that there is a turn around plan that they hope will be successful.

Answer 3

Short answer: You don't.

First, a manager is not in charge of determining corporate strategy. They are in charge of making sure employees implement it. Strategy is done at the senior executive level (CEO, Pres, VP's) and implementation is done at the director level.

Second, whatever your manager shared with you that wasn't public knowledge would be considered "Insider information" and if you were to trade on it (rather than accepting a job), it would subject both you and them to a whole boatload of hurt from regulating authorities.

If you're concerned about the company's short and long-term plans, go find their last 8K or 10K filing's press call (usually available in the "Investor Relations" section of their website) and listen to what the senior execs told the financial analysts and press. That's the only place you're going to get a valid answer to that question.

EDIT: Follow-up to question edits

Not wanting to get to pedantic about corporate financials, but are you certain you're looking at revenues, and not profits? The "bottom line" number could be misleading as they may be amortizing capital expenditures, or other issues. The number I would recommend looking at quarter-over-quarter is EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). In the end, though, there are only two questions that really matter:

1. Is my position secure?
2. Will my paycheck clear the bank?

Number 1 is always a toss-up. A merger, buyout, or corporate restructuring can cut you even in the most successful of companies.

Number 2 is not going to be a problem in a publicly traded company. You may get laid off suddenly, but stiffed on pay (almost) never happens.