Do poor Glassdoor reviews turn you off?

June 13, 2024

by a searcher from Harvard University - Harvard Business School in Toronto, ON, Canada

I am looking for SaaS / tech services businesses. Sometimes I come across businesses with great financials and sticky customers, but their Glassdoor reviews suggest everyone is underpaid and overworked, and/or the owner is abusive/sexist/racist. It turns me off. Personally, I don't want to inherit disgruntled employees. Additionally, if I were to buy a company like that, I would like to improve the culture. However, there is a good chance that a core reason of their success is underpaying/overworking, and making it more humane for the employees may cause it to lose the financial edge.

How do others see it? Any positive spins?

Reply by a searcher
from North Carolina State University in Raleigh, NC, USA

Would certainly be a yellow flag and something to better understand...how old are the reviews, have the issues been resolved, what were the underlying causes, etc. The team you inherit is so important to the ongoing success, you want to understand the nuances there. If they put up with 'less than' conditions for quite a while, also understanding why....are these team members who feel trapped in this role for some reason? That could mean their skills are less than the market desires or that they may be more apt for burn out, etc. To end on a positive note, it could also be an opportunity here...if they are good at their jobs and have the potential to be great team members...by helping make them a part of the solution, you could remotivate them to be great long term assets. You should model in some higher labor costs though as part of your dd. Good luck!

Reply by a searcher
from The University of Chicago in Santa Cruz, CA, USA

Yes - it absolutely a concern. Even if the owner is a decent person, it could indicate bad business conditions that incent bad behavior. I'd like to think I could turnaround a culture, but not going to bet a PG on it.

Not directly related to this, but a similar turn off for me is when a company has great customer reviews but almost every review mentions the owner by name.

+2 more replies.

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