But no matter how bad it seems, it’s even worse for those being dismissed. The news you are about to deliver is likely to stick with your former employees forever; it will affect their sense of self worth and confidence in moving forward with their careers. Their colleagues and friends all know that someone assessed their value to the team and found it lacking. And after the humiliation at work, they have to go home and tell their families.
We’ve all heard the mantra “hire slow, fire fast.” As I’ve written in my previous posts, I’ve made lots of recruitment mistakes, but one thing I’ve always been good at is knowing when to let people go. I recognize that when someone doesn’t work out, it’s my fault for hiring them, and I try to make the process as pleasant as possible. I don’t want people running around saying what a nasty person I am, and I do feel responsible.
When entrepreneurs get together, we always seem to talk about how, if, and when to fire people. It amazes me how poorly most leaders handle the situation. They either procrastinate and hope people change (they never do), or they let them go in a way that leaves them feeling upset and confused.
Getting this wrong can have disastrous consequences for your business. A friend has a media agency in California. He hired too many people too quickly and ended up with office politics and unproductive employees. He made a bold move by letting 40 percent of the team go at the same time. He called them into his office one by one, outlined why it wasn’t working and asked them to pack their things and leave immediately.
The employees gathered at a bar that afternoon to commiserate. They were angry and hurt. Alcohol-fueled tensions exploded, and they plotted revenge. Several contacted friends in the press and made sexual harassment allegations against the company. My friend’s reputation took a battering, clients jumped ship, and it took months before he could get the business back on track.
He could have avoided this by hiring the right number of the right people, and if some didn’t work out, he could have let them go with more empathy. At my first company, I made all of the classic mistakes, including at least 20 hiring errors. That meant it gave me a lot of opportunities to practice what I have learned about letting people go with dignity.
I have gotten better. I’m not aware of anyone leaving Posse feeling disgruntled, and almost all of our former employees remain supportive of the company, come to our events and continue to advocate for the product. This is never an easy process, but here is some of what I’ve learned.
Let them save face.
Whenever I sit down with people, I make it as obvious as I can what’s about to come. I ask them how they think their role is working out. I never make it about their personal contribution; it’s always about the role and how it fits into the organization. I lead them toward seeing that, in a small company like ours, their role isn’t quite what we need. I ask them what they enjoy working on and where they see themselves going in the future.
By this time, they know they’re about to be let go. I try to make sure they don’t feel as if it’s because they’ve failed, and I focus on getting them to think about what they would rather be doing. I think Posse is a great place to work, but we all have our own career dreams.
You may think it’s dishonest not to be upfront and tell them exactly why they haven’t worked out. But by the time we reach this point, we will already have had several conversations about what’s not working and how they can improve. This conversation is about making a tough moment easier and helping ensure they have the confidence to move on with their life.
Once I had a senior employee who wasn’t right for Posse. I could see he was cracking with the workload and felt frustrated with the lack of clear role-definitions that he had been used to in more corporate roles. When I sat down with him, it was obvious he was exhausted. “Is this really what you want to be doing?” I asked.
After a 10-minute conversation about his actual dream job (not here!), he decided to quit. He also asked if he could leave straight away and not work out his notice. This was a fantastic result. He felt happy and saved face with his colleagues, and I avoided the appearance of being a mean boss who just fired a member of the family, which always affects the remaining team. And we saved the four weeks notice I had expected to pay.
I remember the first few times I thought about letting someone go in my first business. I contemplated the decision for months, hoping things would improve. I put new reporting processes in place, tried new management techniques and wound up frustrated, procrastinating over what I knew deep down had to happen.
Other employees would be affected too. There’s nothing more demotivating for a team than to have people not pulling their weight and spreading negativity — and a boss who won’t do anything about it. In the lead-up to the big event, I would toss and turn in bed imagining how the conversation would go, how would I word it. When the day finally arrived, I’d be so burned out and angry that I’d fumble my words.
I’ve discovered that when I think someone won’t work out, they won’t. I can recognize when I’ve made a recruitment mistake within the first three months, and I’ll let them go within a week of the realization. I’ve found that the longer I leave it, the more they bond with the team and the worse the impact. It gives the person and the company the opportunity to move on.
Stick to any agreements. When in doubt, be generous.
All of our employment agreements have probationary periods of three months. If the person is let go in that time, we pay one week’s notice. It’s important that there be no doubt about what the person should be paid. If there’s ever a question, I err on the generous side. It’s not good to look stingy, and I’ve learned that it’s important to do whatever I can to make the person leaving as happy as possible.
Be clear about what happens next and help them as much as you can.
At the end of our conversation, I lay out the next steps. They’ll usually agree to go back to the office and hand over anything important to another team member, and we agree on how to explain the departure. They always finish up that day – it never works to have someone serve out their notice.
We then talk about their plan to find another job. I ask if they’d like introductions to my contacts, and I offer to write them a glowing (but honest) reference. I wouldn’t write anything that’s untrue, but it’s always possible to find positive attributes to fill out the letter and help the person find a more appropriate job.
Announce it to the team together and let them say goodbye.
We go back to the office and call the team together for the announcement. We almost always paint it as the employee’s decision. I just stand there while the person explains. I thank them for their contributions, and we all go out for a drink. The drinks are usually a bit awkward, but it’s important to let the remaining team members grieve. They’ll all go out and drink together anyway, and I’d rather be there than not.
Letting someone go is one of the toughest and most important things entrepreneurs have to do. We know that the business will succeed or fail on the strength of the team, and a team is only as strong as its weakest member.