What to Do When You Make A Bad Hire at Your Small Business

Gene Marks

I’ve interviewed many prospective employees over the 20+ years of running my own business. I’ve received lots of advice on how to hire an employee. I’ve researched the methods that large companies use And I’ve discovered something. No one really knows.

In the end, hiring a person is, like everything else in life, just a bet. You can minimize your risks through testing, interviewing and background checks. You do your research, you talk to references, you think long and hard. But when it comes down to the final decision, you’ll be doing the same thing that everyone else who hires a new employee does, regardless of their experience and the size of the company they work for. You’ll be making a guess. Hopefully, an educated guess. But a guess.

So what happens if you guess wrong? What if, even after all that due diligence, the choice you made wasn’t the right choice? Are you stuck? No. But you’ll need to take action.

For starters, you need to act fast. 

The longer you wait, the harder it will be to make a change. To act fast means that you’ll have to keep a very close eye on the new employee. Just because you made the hire doesn’t mean the job is over. There are many reasons why the new person may not be up to standard – from not getting along with others to performing sub-par work. Whatever the reason, you have to know about it as soon as possible. So make sure, especially during the first 90 days, that you are keeping a very close eye on your new hire. Get feedback from others. Check in with them frequently. Take a look at the work they’re doing. Watch for any potential red flags. For a new hire to be successful, an extra level of TLC will be needed at the very beginning.

Gather evidence. 

At the first sign of any problems, make sure to start building a file. Keep a diary of anything you hear, good or bad (but especially bad). Interview other employees and document your conversations. Where possible, gather copies of paperwork or take photos of work done poorly. Keep a list of every issue that you encounter. Your “hunches” and “intuition” will not be enough. You will need written evidence to back up the claim that the new employee isn’t working out well.

Provide immediate feedback. 

As you gather your evidence, don’t operate in a vacuum. Talk to the new employee and communicate any issues or problems. Get their side of the story. Explain why it’s a problem and decide together how to fix it. Then go back to your notes and document the results of your conversation. If a problem is serious enough (according to the company’s rules or employee handbook), a formal write-up may be required. The most important thing is that the new employee is fully aware of all issues as they happen. There should be no surprises.

Involve someone else. 

It might be your HR Manager, or your controller or maybe the employee’s direct supervisor if you’re not the one. But you need a partner. That person can validate any issues and provide a third party perspective. They’re a witness to any encounters or meetings you have with the employee. They should also be an objective party in case your judgment is called into question. They should be signing off on any documentation and be available to attest to any decisions you ultimately make.

Cover yourself. 

If the writing is on the wall and you know that you’re going to have let the employee go, then try to minimize the damage. Run the documentation and your decision by your attorney (preferably an attorney that specializes in labor law) and make sure you’ve done what you need to do legally in order to avoid any problems down the road. And, while you still have time, do your best to resume your search for a replacement – reach back out to some of the people you rejected previously and meet with them offsite. See if you can secure another person to step in soon after you’ve let your employee go in order to minimize disruption.

Look, you made a bad hire. It happens to everyone. We are all doing our best to minimize the likelihood of this happening. But no matter what best practices we apply, it’s still a hunch. And sometimes it just doesn’t work out. Move on.

Join writer and small business owner Gene Marks each Wednesday on the Small Biz Ahead podcast. You can submit a question for Gene to answer on the podcast.

Leave a Reply

Your email address will not be published. Required fields are marked *