How can I tell if my employer is about to be sold?

I spent decades rooting out the story in company accounts so you don’t have to

When employers change hands, there is great instability. Staff are sacked, there is big-bang process change and the culture can metamorphose, often in ways that make incumbents feel less welcome. Unless you thrive in this environment (and some do), it’s a good idea to develop a canary-like sense of when change is coming. The answer is often in the infrastructure.

If your backer is investing consistently in infrastructure: ie the talent and support staff, the software, systems and processes and all the other things that ready a business to handle growth, then they are taking a long view. They are putting money in now based on their faith that they will recoup later when things expand.

If your backer is pursuing deeper margin while simultaneously building infrastructure, they are taking a medium view: they want to drive efficiency so that the maximum value of a well-run business can be delivered to shareholders this year, not in five years. So far so good.

If your backer is aggressively pursuing the bottom line while cutting infrastructure they are taking a short view. This is a sign the market has peaked and the paper value of the business is being artificially inflated by cutting the cost of essential services. The business can’t run like this for very long, so that’s a strong sign the business is being readied for a sale. The infrastructure problems will be a headache for the new owner, once they are discovered, but for now they can be papered over.

Need more proof? Use PESTEL analysis. Look around: has something changed in your market that might drive consolidation? Has the market matured, has the sector become more heavily regulated or has the cost of entry increased? Are bit-players exiting? Are larger players looking acquisitive? If you can answer yes to these last few, it might be time to jump.