“Not a Good Fit”: Why Firing an Employee May Make Business Sense

This video and blog is part of my ongoing series covering business ownership, entrepreneurship, human resources and leadership. If you’ve ever been curious on what it takes to be an independent insurance agent or even just a small business owner, these are definitely the blogs for you.

Tony Vlog 8-27 number 5

Why the termination process doesn’t have to be scary

I'd like to talk to you for just a minute about something really exciting. What's that, you ask? Firing people.

"Wait, Tony, firing people is unpleasant. Firing people is awful," is what you're thinking. I know that's true. And here's Tony saying, "It's exciting."

Here’s why I think terminating an employee can actually be a good opportunity. Jack Welch was the CEO of General Electric in the 80s and 90s when it experienced its greatest growth. One of the things that he insisted that his managers do was grow their business by 20% a year if they wanted to keep their jobs. The other thing he insisted that they do was get rid of poor-performing employees. And I think that's really important.

When you have the wrong people in a spot, you need to do something about it.

It’s not just about their job performance

My observation has been that small business people are willing to accept chronic pain almost forever. What do I mean by that?

They have people that don't fit their business. They don't fit the role they're in. They don't work as hard as the business owners think they should.

And yet, they're the “only person in that role we've got,” so we don't want to go through the inconvenience of replacing them. That kind of thinking holds the business back. That thinking prevents that business from doing what Jack Welch's companies always did, which was to grow and grow very strongly.

Going beyond the performance improvement plan

Keeping an employee in an ill-suited role is also not good for that employee. Nobody can come to work every day knowing that they aren't very good at their job and actually be motivated and excited about being there. They can't feel like they're doing great things with their life.

When you have somebody in the wrong position and you're the one that put them there, you're hurting them as well as the business.

When you can recognize that, do what really successful companies like General Electric do. They suffer acute pain, not chronic pain. They rip the band-aid off, get the problem over with, deal with the inconvenience and grow.

Dismissing employees — the reality

Firing people really isn't exciting and I was just kidding earlier when I said that. It's actually a really serious matter because, let's face it, you're making a fundamental important change in your business.
You're also messing with people's lives. You want to do it seriously, thoughtfully and humanely.

You can also help your terminated employee find the place they need to be. Just because that employee is not successful on your team, doesn’t mean that person wouldn’t be a wonderful employee for somebody else.

If you take the approach that you're going to do right by your business, by having great people in the spots that you have to fill, you're going to also do well for your business community. That’s because you're going to help people get to where they need to be.

So letting somebody go does not have to be unpleasant, but it's always going to be a little painful. You do have to decide, are you going to suffer forever? Or are you going to rip the bandaid off?

My advice is, you won't get to where you want to be and you won't get there as fast as you want to go until you deal with the issue. It's just unfortunate. You hired the wrong person. You put them in the wrong spot. Fix it.

If you'll do that, you'll be well down the road to the success that you've always dreamed of.

Download the free "How to Grow an Independent Insurance Agency" guide from OAA.

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