When to Fire an Employee

One of the most painful parts of leading is firing people, especially the ones you actually like. It is hard for many reasons. The employee may love working with you and for your company. They may be someone you are friends with outside of work. They might simply be a good person who is doing everything they can. Firing anyone is difficult. Firing someone you like is especially hard. Instead of facing it, many managers avoid the decision until it is too late.

Knowing when it is time

There are countless reasons to let someone go, and plenty of signals worth watching. One question clients often ask me when they have people problems is: “How long should I give an employee to improve performance?” There is no fixed rulebook. One factor that does matter is how long the person has been with your company. Loyalty counts. Give someone who has served you well for several years a few months to close their performance gaps.

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If it is a salesperson, for example, I have run this in several of my own businesses. We use a clear contract that gives them three months to open X number of accounts and hit X dollars in sales. If they miss it, they are out. On the other side, if someone has been with us for a long time, has delivered results in the past, and is now in a soft stretch where they cannot seem to grow their market, we sit down with them, dig into the root of the problems, and give them time to turn it around.

For assistants, logistics staff, webmasters, and other office roles, we do not offer open-ended contracts until someone has completed a first year without major issues. A year is more than enough to know whether you want to work with that person long term. If they fail to meet their responsibilities (or more), or if they start creating problems, you already know they are on the way out.

Key warning signs

1- Their results are mediocre: I have always said it: the numbers do not lie. If you are not seeing growth, that person is not solving the problem you hired them to solve. It is easy to blame external factors, but at the end of the day you need results. If your conversations keep circling around every reason they cannot deliver, step back. Those are excuses, not ownership and problem-solving. You have the wrong person. To paraphrase Jim Collins, the enemy of “great” is “good enough.”

2- You find yourself doing their job: You hire people so you can delegate. If you end up doing their work, they are the ones delegating to you. You are lightening their load and increasing yours. It feels easier to just do it yourself. It usually starts subtly, but eventually you are doing the job you hired them for. Stating the obvious: one of you is redundant.

3- Their actions do not reflect your values: Values define how you want people to behave. If someone acts in ways that clash with your values, they will damage your brand with both employees and customers. Early in my career I had employees who could never show up on time. Living in Mexico City, everyone knows traffic is real, and yet I have never been late to an appointment (even with less than a year in the city). They, for some reason, arrived 10 to 50 minutes late, sometimes more, even though they had known the city since childhood. I tolerated it for a few months until I put a zero-tolerance policy in place. We let go of 100% of that staff, and a few months later we built a team that matched our values. Not one of them has been late.

4- They cannot adapt to change: Change is inevitable, especially in a fast-moving, growing company. Employees need to be comfortable with change and eager to upgrade their skills. The team’s skills have to grow at the same pace as the company. This can be hard when you have a hardworking, responsible employee who fits the culture. Unfortunately, if they can no longer perform at a high level because the pace is too fast for them, it is time to replace them with someone who can.

5- Argumentative or unpredictable: I am not saying employees who disagree with how you see or do things are a problem. I am the first to encourage my people to tell me when they disagree, as long as it is constructive and pushes us to improve. Ask any of my employees: they will tell you we have had long, deep conversations where they won the argument, and that is fine. Owning the company does not mean I know everything. On the contrary, I hire people who can help me improve myself and the business. What we are talking about here is the kind of person who creates useless conflict. If you have someone who is always starting arguments with you, their colleagues, or even customers, that is a strong signal they are capable of a major blow-up. That behavior is not only scary; it also creates an uncomfortable workplace for everyone else. That person needs to go before things turn openly hostile.

6- They are not trying to improve: How many times do I have to write and say this: if you stop growing, you die. Your company can only grow and improve if your employees grow and improve. Say you have an employee who is always late or is afraid of public speaking. Instead of making an effort to arrive earlier or taking classes to speak in public, they make no effort to fix their mistakes or improve their situation. In that case, it is probably best for you to let them go.

7- They are a “placeholder”: A placeholder is someone sitting in a role because you could not find anyone better, or could not afford anyone better, when you launched the project. Now that things are working, they do not have the skills to handle the seat. In many cases these are friends or family. Firing them is hard but necessary. Do it in a way that helps them understand your position, and hope they grasp that replacing them is required if the business is going to grow.

8- Customers and suppliers complain: Believe it or not, this happens. We all know rule number one in business is to keep positive relationships with your commercial partners (customers and suppliers). Any hit to those relationships can kill your business, or at least cost you a lot. And yet some employees do not understand that, or cannot control themselves. It may come from a lack of education, a lack of emotional intelligence, or some other reason, but it is unforgivable.

Did you know that 86% of customers will stop doing business with a company after a bad customer service experience? Even more concerning: an unhappy customer will tell between 9 and 15 people about it. In other words, you have to keep your customers happy.

If you are getting complaints about an employee from customers because of poor service, you have to let them go. The same can happen on the supplier side: who wants to do business with an organization that has rude or apathetic employees?

In life, you get what you tolerate. That is why, for example, if I give you a time to arrive, showing up at that exact time already means you are late, and I will not see you. Some candidates for executive roles have arrived anywhere from two minutes to almost an hour late to the interview. I did not receive them and sent them home. Zero tolerance is the only number that will get you to success.

Do not delay firing someone

The longer you wait, the worse it gets. When I started CPF Francia, I hired someone who did not deliver results in the time we set. I was new to the market, short on resources to grow the business, and short on time to manage everything (I was still operating instead of owning my own business, a mistake you should not make). Despite my partner’s complaints, I did not want to fire the salesperson we had. I liked her, and she took a load off my shoulders, but she was not selling. It took me a year to decide enough was enough. We lost a full year with no sales, plus prospecting costs, salaries, Christmas bonuses she did not earn, operating expenses, product samples that never closed deals, and more.

When you run the numbers, it is worth firing fast and moving on. Waiting will cost you far more money.