321: How to properly fire an employee

One of the most uncomfortable tasks in business is firing employees, and doing it the right way. This is true whether you’re managing a team in an office job or if you’re an entrepreneur with a workforce that relies on you for income. I was on the phone a week ago with a team member, and it was a really hard call. Business is slow, and my team has too much capacity, so we have to let some folks go. I explained that it was my fault, that I didn’t deliver on the opportunity that I promised when I hired him. 

This was my first time having to fire somebody who was a good person and a valuable asset, just because we have more team members than we can support right now. I sent off a Tweet about this talented and driven 25-year-old that I had to let go and had about 15 companies reach out interested in hiring him. I’m glad that I was able to use my platform to make things a bit better for him.

Your job as the owner of a company is to keep the company healthy. If you’re not doing that, you’re putting yourself, your family, and your employees at risk. When business slows down, it’s hard that you have to lay people off, but it’s a normal part of both being a business owner and an employee.

Unless business conditions force you to lay off good people, most employees should be let go for one of two reasons: they are either not competent in their role, or they don’t have the best interest of the team in mind. The moment that you think in your head that an employee isn’t doing a good job, it’s almost always correct, and they need to be let go at that very moment. Many times the business isn’t in a position to let this person go, and too many owners will be too slow to fire. It may create more work for you in the short term, but firing fast will be a weight off your shoulders and create a better culture for your team.

In my opinion, most people are not A players, or 10X-ers, as I like to call them. Maybe 5% of employees are, and you need to hold on to them for dear life. You can’t surround 10X-ers with low-caliber employees, it drags down the office environment. This is why you need to fire fast.

When firing, you almost never want to say anything negative. Instead of insulting the person, lead with grace. Apologize that you have to let them go and that you didn’t set them up for success. If they probe, you can talk about their performance being a factor. Be compassionate, give them more severance than you feel comfortable with, and treat them the way you would want to be treated. Make it quick, and don’t delay. Hire fast, fire fast, and move your business forward.

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I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.