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A former, more experienced colleague, told me this after he quit because of a new job. Our smallish employer(< 50 employees, legally it is a GmbH, something like an LLC) is very chaotic and dysfunctional, with a high turn-over rate. But it has been growing at double-digit rates for the past few years, delivering nice profits I assume.

So, in his opinion, this company is a great jumping board, because prospective employees don't see the chaos that is driving away the people (our glassdoor rating is abysmal, so it shouldn't be that much of a secret). They just assume that if you are leaving a successful company, you must be a high performer, ergo, they are more likely to hire you.

Difference between him and me: He had some sort of administrative function, probably an accountant, with many more years active in the workforce, while I am a Junior SW developer.

My question is: Is profitability and growth rate of the last employer a relevant factor when evaluating candidates for an opening? Is it sometimes? Is this information that is accessible through formal or informal ways?

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  • Your former colleague was trying to put lipstick on a pig. Why would someone leave a successful growing company? It sounds to me like such an employee couldn't cut it for some reason. Do you see how easy to reframe such a topic? Honestly, I'm not even sure why you're even asking this question. It's not like you can change the past. – Stephan Branczyk Jan 15 at 6:11
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Disclaimer: I don't work in HR or was involved with any hiring decisions in the past. This being said my two cents regarding your question are as follows.

I think in generally it might be true that if you work/have worked in a successful company some of that mojo rubs off to you and might make you more appealing to other employers.

However I think this is only the case if it is a big well-known company or a smaller company which has a lot of media-exposure. Researching the growth and profitability of a small unknown company sounds like a lot of work, even if those data are available somewhere. So probably nobody reading your CV will bother doing this.

Summarized, if your company is not well-know I don't think you will derive status for working/having worked at a quite successful company.

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Is profitability and growth rate of the last employer a relevant factor when evaluating candidates for an opening?

It depends. Did you do a job where you were directly involved in that profitability and growth?

As a software engineer, you were not. You were hired to build a piece of software, and whether the company had a good business model and sells products the market needs is really out of your hands. Even if the software is the product, it's not your software. You did not decide the vision, features, price or anything like that. You built it for someone and they sold it or used it to make money. Profitability and growth are the domain of those people.

Now obviously it's better to be remembered as the applicant from that cool, popular company, than the guy from the company nobody ever heard of because it went bankrupt over the unsuccessful product last year. But it's just a superficial fact. Like whether your shoes are polished or whether it was a nice day outside when you arrived. It helps the mood, it makes me happy thinking about our interview. But in the end, I will hire the guy who I think can help me solve my software problems.

Now if you were interviewing for director of marketing or head of product development, that might be a different story. I would also be cautious hiring the accountant of the company I know is under investigation for bankruptcy fraud for obvious reasons.

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    I understand your answer as if a software developer as no impact whatsoever on the success of a product. That means that you should always employ the cheapest developer available since they don't had any value in making a product. – JayZ Jan 14 at 10:44
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    As a software developer, you can certainly fail a product. Matter of fact, not even that, only the owner can fail the product by not firing and replacing the developer. But you cannot make a product succeed on your own. You can write the best app there could possibly technically be, but if there is no market for the product you built or your boss prices it to high, it will fail, without anything you could do about that. – nvoigt Jan 14 at 10:49
  • Sometimes reputation is not just superficial. For example, I would tend to trust any developer coming from Google on their technical skills, not just because Google is successful, but also because they're known to have high standards, so there's probably less chance that this candidate is a very low performer if they was hired there – Laurent S. Jan 15 at 12:58
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Is profitability and growth rate of the last employer a relevant factor when evaluating candidates for an opening

It is if you can relate it to you activities while working for the employer. So the overall growth rate and profitability of the employer may not be the correct indicator, but growth rate and profitability of the service you work in or the products you worked on is a better one.

For example is the growth comes from a product on which you work on it is in your interest to write about it on your CV and list your personal achievement that contributed to this growth or the product success on general.

Ex: "Improved quality of software development by introducing [rules, concept, tools] which allowed the product to be release in time".

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Is it helpful if the former employer is very profitable when looking for a new job

Yes. It's better than working for a struggling company.

The default assumption is that almost anyone wants to work for successful company. So if you are not, you should be prepared to explain why you chose a unsuccessful company in the first place and why did you stick around there.

Bonus opportunity: if you can tie some of that success to your own contribution or you can show that you learned something about how to be successful, this will help even more.

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