When to Fire an Employee: The Hidden Cost of Keeping the Wrong Person
Letting someone go is not an easy decision.
At least it shouldn't be.
You're making a decision that affects someone's income, family, routine, and future. And if you've invested time in that person, developed them, coached them, or worked beside them for years, it can be even harder.
I want people to succeed.
When I put someone in a position, I want them to win in that position. I want to give them the tools, expectations, support, and opportunity to do well.
I've also learned something the hard way:
Sometimes wanting someone to succeed can keep you trying to make something work that isn't going to work.
I've kept the wrong person too long.
I've moved someone into another position because I hoped the problem was the seat instead of the person.
And I've watched what can happen throughout a company when a personnel decision gets delayed.
That's what makes deciding when to fire an employee so difficult.
You can clearly see what letting them go will cost you.
What you may not see is what keeping them is already costing everyone else.
“I Know, But I Can't Afford to Lose Them Right Now”
This is where a lot of owners get stuck.
You know something isn't working.
But if that person leaves, their work doesn't disappear.
Someone has to take it on.
Maybe that's another employee.
Maybe it's a manager who's already overloaded.
Or maybe it's you.
Now you're thinking about recruiting, interviewing, training, overtime, customers, schedules, unfinished work, and everything else that comes with losing someone.
So you wait.
Maybe they'll turn it around.
Let's give it another month.
I'll deal with it after the busy season.
Maybe I can move them somewhere else.
I just can't take on their work right now.
I understand that calculation because I've made it myself.
The problem is that we're usually calculating only one side of the decision.
The Cost of Letting Them Go Is Easy to See
If you let someone go, you may have to:
Pick up their workload.
Pay overtime.
Recruit and interview.
Train someone new.
Temporarily reduce capacity.
Reassign customers or responsibilities.
Step back into work you thought you were finally out of.
Those consequences are immediate.
You know they're coming.
The cost of keeping the wrong person is different.
It gets scattered throughout the company.
A strong employee quietly picks up their slack.
A manager spends hours dealing with the same issue.
Coworkers create workarounds.
Standards become inconsistent.
People become frustrated.
Employees stop bringing things up because nothing changes.
Customers experience mistakes.
Someone good starts disengaging.
Eventually, someone you wanted to keep leaves.
Nobody hands you a report showing exactly what one personnel decision cost the company.
That's what makes the hidden cost so dangerous.
The Wrong Person Doesn't Only Affect Their Own Job
We tend to evaluate employees individually.
Are they getting their work done?
Are they producing?
Are they showing up?
Can they technically perform the job?
Those things matter.
But they aren't the whole picture.
An employee can produce good numbers and still create significant damage around them.
Or they can underperform while other employees quietly compensate so well that leadership doesn't realize how much help they're receiving.
That's why I think it's important to look beyond the employee.
Look at the wake behind them.
Who's picking up their work?
Who's constantly dealing with their mistakes?
How much management time do they consume?
What happens to the team when they're there?
What happens when they're not?
Have multiple people raised similar concerns?
Are standards being changed or ignored to accommodate them?
The wrong person doesn't only cost you what they fail to do. They can affect what everyone around them is able, or willing to do.
Your Best Employees May Be Absorbing the Cost
Strong employees have a tendency to make bad situations look more functional than they really are.
They handle it.
They redo the work.
They answer the customer.
They cover the shift.
They fix the mistake.
They avoid the argument.
They keep the business moving.
From the owner's perspective, things may appear manageable.
But someone is absorbing the cost.
And eventually that employee may start wondering:
Why am I working this hard when this keeps being allowed?
That's when the decision to keep one employee can begin affecting the employees you most want to keep.
Sometimes good employees get quieter before they leave.
Sometimes they stop raising concerns.
Sometimes they simply decide they're done.
And by the time turnover shows up, the original personnel problem may have been affecting the business for months.
Moving Someone to Another Position Can Be the Right Decision
I don't believe every struggling employee should be fired.
Sometimes the person really is in the wrong seat.
I've seen people struggle in one position and thrive in another.
Someone can be great at doing the work but terrible at managing people.
Someone can struggle with administrative responsibilities and be exceptional with customers.
Someone can be promoted beyond their current capabilities.
Someone may have strengths the company simply isn't using.
If the issue is the position, moving them can absolutely be the right answer.
That's part of leadership.
I want someone to have the opportunity to succeed in a position that fits them.
But I've also learned there is another question that has to be answered.
Are They the Wrong Person for the Position—or the Wrong Person for the Company?
Those aren't the same problem.
If the issue is skill, experience, capacity, or role fit, another position may change everything.
But what if the issue is:
Repeatedly refusing accountability?
Undermining other people?
Breaking trust?
Treating coworkers poorly?
Ignoring clear expectations?
Creating conflict everywhere they go?
Being unwilling to change?
Moving that person doesn't necessarily solve anything.
You changed their seat. You didn't change the problem.
I've learned this one the hard way too.
A demotion can feel like the middle ground.
You don't have to let the person go, and maybe removing some responsibility will fix the situation.
Sometimes it does.
Sometimes you've simply moved the same problem to another part of the business.
That's why the decision shouldn't be based only on:
Can they do this job?
It also needs to include:
Are they someone who should continue being part of this company?
Wanting Someone to Succeed Doesn't Mean It Has to Be Here
This may be the hardest part.
You can care about someone and still recognize that the relationship isn't working.
You can see someone's strengths and still recognize they aren't the strengths your business needs.
You can appreciate what someone has contributed and still decide it's time to separate.
You can hope they succeed and recognize that their success may not be with your company.
Sometimes a person is in the wrong environment.
Sometimes they need a different type of manager.
Sometimes they need a role you don't have.
Sometimes the expectations of your business simply aren't a fit for them.
And sometimes staying in a position where they continually struggle isn't particularly good for them either.
Letting someone go doesn't automatically mean:
You're a bad employee.
Sometimes it means:
This isn't working here.
Those are very different messages.
When to Fire an Employee—and When to Keep Developing Them
There isn't a formula that tells you exactly when to fire an employee.
People deserve an opportunity to understand what's expected and correct problems when that's reasonable.
Before deciding someone isn't going to work, ask:
Do they clearly understand the expectation?
Have you specifically explained what's not working?
Have they received the training they need?
Do they have the tools and authority to succeed?
Is their manager contributing to the problem?
Is this one incident or a pattern?
Do they take responsibility for their part?
Do they respond to coaching?
Are they improving?
And an important one:
Do they actually want to succeed in this position?
You can coach someone who doesn't know how.
It's much harder to coach someone who knows what's expected and repeatedly chooses not to do it.
Don't Confuse More Chances With More Support
Giving someone an opportunity to improve is one thing.
Having the same conversation over and over is another.
I've done this.
You want the person to get it.
You explain it differently.
You coach again.
You give another chance.
You adjust the position.
You wait.
Sometimes persistence pays off and someone turns it around.
That's great.
But eventually you have to ask:
Is anything actually changing?
If the answer is no, another chance may not be helping the employee succeed.
It may simply be postponing a decision.
Meanwhile, everyone around that person continues living with the consequences.
Sometimes Letting Them Go Makes Your Job Harder
This is the part I don't think gets talked about enough.
Making the right personnel decision doesn't always make your life immediately easier.
Sometimes it makes it significantly harder.
Now you're answering the phone.
Running the schedule.
Managing customers.
Doing estimates.
Covering jobs.
Working longer hours.
Trying to hire.
Training someone new.
That's real.
There have been times when I've known that removing someone meant I would be the person picking up the work.
That can make keeping them feel like the practical decision.
But I've learned to ask a different question:
Am I keeping this person because it's best for the business, or because letting them go will make my job harder?
Those aren't always the same thing.
Sometimes letting someone go makes your job harder today.
Keeping them can make the entire company's job harder tomorrow.
The Rest of the Company Lives With the Decision Too
There's nothing wrong with an owner deciding what they are and aren't willing to do.
Sometimes an owner looks at what continuing the business will require and decides they don't want to do it anymore.
They may sell.
They may close.
They may restructure.
They may choose a completely different direction.
That's a business decision.
But if the decision is to continue building the company, then avoiding a personnel decision doesn't eliminate the consequences.
The rest of the company lives with that decision too.
Employees live with it.
Managers live with it.
Customers may experience it.
And eventually the numbers can reflect it.
That's why this isn't about firing people faster.
It's about understanding the true cost of the decision you're making.
Before You Decide When to Fire an Employee, Look at the Whole Picture
If you're trying to decide when to fire an employee, don't look only at the employee.
Look at what's happening around them.
Are expectations clear?
Have they been given a reasonable opportunity to improve?
Is management contributing to the problem?
Are other employees compensating for them?
Are standards being bent?
Is the same problem happening repeatedly?
What happens after they're coached?
What does the team experience that you may not see?
And ask yourself this:
If you were hiring today and knew everything you know now, would you hire this person again?
If your immediate answer is no, don't automatically fire them.
But don't ignore the answer either.
Find out why.
Because sometimes you have someone who needs support.
Sometimes you have the right person in the wrong position.
And sometimes you have someone who may be capable of being very successful.
Just not here.
Frequently Asked Questions About When to Fire an Employee
How do you know when to fire an employee?
There isn't one universal sign that determines when to fire an employee. Look for patterns.
If expectations are clear, problems have been specifically communicated, appropriate training and support have been provided, the employee has had a reasonable opportunity to improve, and the same issues continue, it may be time to evaluate whether keeping them is right for the business.
Also look beyond individual performance. Consider their effect on coworkers, managers, customers, workload, accountability, and trust.
Should I fire an employee or give them another chance?
Ask what another chance is expected to accomplish.
If expectations haven't been clear or the employee hasn't received appropriate feedback, training, or support, another opportunity may be reasonable.
If you've repeatedly addressed the same issue and nothing changes, another chance may simply delay the decision.
Is it better to demote an employee than fire them?
Sometimes.
If someone is a good fit for the company but their skills or strengths don't match their current position, another role may allow them to succeed.
But first determine whether the problem is the position or the person.
If the underlying issue involves trust, accountability, behavior, integrity, or unwillingness to meet expectations, a demotion may simply move the problem somewhere else.
What does keeping the wrong employee cost a business?
The cost can go far beyond salary or individual productivity.
Other employees may compensate for their work, managers may spend excessive time dealing with problems, standards may become inconsistent, customers can be affected, resentment can grow, and strong employees may disengage or leave.
Many of these costs are difficult for an owner to see until the damage has already spread.
Can the wrong employee cause good employees to leave?
Yes, particularly when strong employees repeatedly compensate for someone else or believe damaging behavior is being tolerated.
However, turnover rarely has only one possible cause. If good employees are leaving, look for patterns rather than automatically assuming one person is responsible.
What if an employee is a good person but isn't a good fit?
Someone can be a good person and still not be right for a particular position or company.
If another role genuinely fits their strengths and the needs of the business, reassignment may make sense.
If not, separating may ultimately give both the company and the employee the opportunity to move forward.
Wanting someone to succeed doesn't mean their success has to happen in your company.
Before You Make the Decision, Make Sure You Can See the Whole Picture
Sometimes you know you have the wrong person.
Sometimes you're not sure.
And sometimes the employee who appears to be the problem is only one part of what's actually happening.
A Workplace Reality Assessment gives you an outside look at what's happening inside your business—from what leadership sees to what employees experience day to day.
You may discover someone needs better support.
You may have the right person in the wrong position.
You may uncover a management, process, or accountability issue.
Or you may confirm what you've suspected for a while:
You've kept the wrong person too long.
The goal isn't to find a reason to fire someone.
It's to understand the real problem well enough to make the right decision for the business and the people in it.
And if you're wondering what keeping the wrong person may already be costing the company, see What It's Costing You.
Find the real problem before you fix the wrong one.
Learn more about The Workplace Reality Assessment
Comments