I was at an event with other small business owners speaking about the myriad of issues nearly every business owner faces. I attend a lot of these types of events and can almost guarantee that at every one of them a business owner will have a horror story about an employee. Whether it is a horrible hire, a horrible fire, or just a horrible day, it’s always (in their mind) the result of a horrible employee. On this particular day, the story came from a woman who started a company and within two short years had grown it into a business with 20 employees. She had hired someone even though her gut told her they were not right for the position. They were with the company nearly 6 weeks when it became clear they were never going to fit the role. This employee was such a poor fit for the role that simply interacting with him put the business owner in a bad mood. Another attendee quickly responded with the old adage, “Hire slowly, fire swiftly.”
In many ways, that phrase is right on. It is much less expensive to make a great hire than to keep on a bad employee or let them go. Taking longer to ensure you get the right person in the right position is strongly advised, however, hiring slowly for slows sake is just procrastinating. Similarly, firing swiftly is a good idea when you really have the wrong person in the wrong position. However, being too hasty is not always the smartest move.
First, no matter how long you take to hire, hiring a great employee can raise a number of legal questions: Is the position exempt (because paying a salary does not make it so)? Do we need a non-compete? Do we need a confidentiality agreement? Are we making any unintentional guarantees in our offer letter?
Second, firing too swiftly can make you overlook potential liabilities associated with the termination. Not every terminated employee sees it the same way as the employer. Before terminating an employee, consider the following: Have we documented concerns about this employee’s performance? Does the employee have any potential claims? Do we want to pay severance in exchange for a release so we know the relationship is truly over?
Third, most small business owners aspire for growth and, hiring a dynamic team allows companies to move towards achieving that goal. Knowing the landmines ahead that might impede growth helps accelerate achievement with fewer painful experiences. Maybe the adage should really be, “Know the role. Know the employee. Know your risks.”