How To Cope As A Small Business Owner When You Have To Let an Employee Go (Podcast) | Episode #129

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The decision to terminate an employee is never an easy one and with the various professional details that need to be settled prior to letting them go, the process is bound to take an extensive toll on you as the owner of your small business. So, how do you protect yourself on a professional and emotional level while navigating this tricky situation? In episode #129, Gene Marks and Elizabeth Larkin offer the most effective strategies for coping with the challenges of firing an employee.

Executive Summary

0:34—Today’s Topic: How Can Small Business Owners Cope With Letting an Employee Go?

2:07—The first step you need to take when firing an employee is to consult an attorney and make sure that you’ve covered all your grounds legally.

2:34—Always take the high road when you terminate someone’s employment; not only do you need to protect your professional reputation, but you’ll never know when you need to utilize that particular business connection.

3:39—It’s ultimately up to you whether you want to provide them with a professional reference. (This decision will most likely depend on your reasons for firing them.)

5:52—If you are firing the family member of another employee, you need to be aware of how this might affect your relationship with that particular employee.

8:24—Do not let a problematic employee’s popularity deter you from letting them go because chances are your other staff members recognize his poor performance. Also, do not let your emotions affect your decision because too many people depend on your business for their livelihood.

10:49—Gene discusses how Windows ’95 is now available in app form for anyone who feels nostalgic for the original program.

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Transcript

Elizabeth: Welcome back to the Small Biz Ahead podcast. This episode is gonna touch on a sticky subject for a lot of small business owners, so I’m pretty much gonna let Gene do all the talking here today.

Gene: This is like letting people go.

Elizabeth: This is all about how to cope as a small business owner when you have to let an employee go. I would think it’s harder for the employee than the small business owner, but since we actually do this podcast for small business owners, we’re gonna focus on what it’s like for you to have to let someone go. And you’ll get some tips from Gene along the way. We’ll be right back after we hear from our sponsor.

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QUESTION: How Can You Cope When You Have to Let an Employee Go?

Elizabeth: We’ve done a podcast before, which we’ll link to in the show notes, on how to fire an employee. Very early on, we did this podcast, but-

Gene: Always a topic worth talking about again. And it’s funny to talk about that topic now, Elizabeth, where we’re all busy trying to find good employees, let alone … You’ve got to be in a pretty bad situation if you’ve got to let somebody go, particularly … This is not a recession where you’re cutting back. It’s got to be a tough situation, but it happens. People hire-

Elizabeth: Well, you hire the wrong person or whatever. Your business is changing.

Gene: They’re not working out. You feel that they’re not good in the workplace. They’re disappointing you. You can do better. I mean, our people are our biggest asset. We want to make sure that we’re having the best assets possible in our business.

Elizabeth: So, we really want to focus in this episode on how does the employer cope with this? I would think the first step you’re gonna do, and we covered this in the last episode, is you’re gonna talk to your attorney and figure out what you can say, what you can’t say, what kind of package you need to give the person. But then when it comes right down to it, you’re the one who’s gonna have to sit there, look them in the eye. In your case for your business, you’d probably Skype them really.

Gene: No, we do look you in the eyes. But I have a lot of clients that go through this as well. For starters, this is what I’ve learned from clients that have been through this many times. They do it the right way. Number one is you absolutely want to take the high road. The last thing you want to do is you want to leave anything, animosity between you and the employee. I think it’s important that you end things on amicable terms. I’ve found, I don’t are what city you live, whether it’s Hartford, Connecticut or Los Angeles, California, it’s a small world. You’re gonna be bumping into either that employee or people that know that employee or family member. It’s gonna happen again. And you just don’t want to have to cringe when that time comes along.

So again, you want it to … now it doesn’t necessarily mean that the employee is gonna take the high road or act in the best way possible. You want to be looking back years later and say to yourself, “You know what, I behaved professionally in the right way and was as nice a person as I could possibly be. I have no regrets.” Just keep that forefront in your mind when you have the impulse to reach out and strangle somebody or get really angry. Try to keep that inside and take the high road with your employees. That’s one big thing.

Now, some people ask me about references afterwards. Say you let that employee go. Do you give a reference afterwards? What do you think? Say you let somebody go from your department and then they were looking for a job, and then their next employer asks for a reference.

Elizabeth: I don’t want to give an it depends answer, but I’m gonna give an it depends. Let’s say you’re letting someone go. You had to lay off some people when your company, you know during the recession. I’m sure a lot of small business owners had to do that.

Gene: One or two, yep.

Elizabeth: So, you might lay someone off because let’s say the focus of your business changes and you just don’t need that skill anymore. But if they’re a good employee, then why wouldn’t you give them a good reference?

Gene: I agree, but what if it’s the other way around? What if you did let them go.

Elizabeth: What if it’s the other way around.

Gene: You always come in with that question. You did, and it was … you gave that employee … My point-of-view on this is I try to think about my fellow business owner. I don’t think, I wouldn’t want somebody doing that to me.

Elizabeth: Have you been asked to give a reference?

Gene: I have. It’s happened to me numerous times where I’ve been asked to give … I’ve had people that we parted ways with because it just wasn’t working out or they weren’t good. I’ve got actually somebody working for me right now that [inaudible] the thought’s crossed my mind. And when it comes time to give a reference, first of all, I act cowardly. I avoid giving the reference. I try not to even respond to the request, but if I’m cornered and I have to do it because sometimes people can be persistent. I will never give a bad reference. I’ve never had to give a bad reference, but I’ll give a pretty lukewarm reference that you could read it. You could read what I’m saying, do you know what I mean? It’s certainly not glowing and I keep it short and sweet.

Elizabeth: What about just saying, “I can’t give a reference for you.”

Gene: It’s a good answer, and I think that that’s fine. What I at least try to do is give a short and sweet, well this is what this person did good, but we had problems with this area, and just leave it like that. Then you can make the decisions based on that. So, references are definitely important. Now, some other issues when you let people go, just because these things come up. Sometimes there are family members that work in a company. How do you handle a situation where you want to let mom go, but the daughter is also working there? How would you handle that? Go.

Elizabeth: This is why I’m not a small business owner. I work for a large company and I don’t have to worry about these things.

Gene: Because that happens a lot. If you are running a small business, I have a lot of clients. I don’t personally, but I have a lot of clients where I don’t know. I mean, when you find good employees, the best source of new employees is you ask your existing employees and a lot of times existing employees will be like, “Oh, my son does this or my daughter,” whatever.

Elizabeth: Cousin, yeah.

Gene: First of all for starters, try not to let yourself get in that situation. I really think that hiring family members is a slippery slope.

Elizabeth: Yeah, I think it’s usually a bad idea.

Gene: But sometimes you don’t have a choice, man. It’s hard to find good people and this person’s willing to come in, and they can drive in together. Maybe you do have the dad that’s looking after the kid. So, there’s benefits to that. But if you have to fire one without the other, it’s never an easy thing to do. I have found, now we can go in all different ways, but a lot of times it’s the younger person that gets fired. I don’t know why that is. Dad’s doing fine. He’s been the long term employee, but the daughter who was hired to work in the warehouse isn’t working out. Now what do you do then? Whenever that’s happened, I’ve seen clients actually discuss it with the other family member, depending on their relationship. If they’re cousins, that’s a different story.

Elizabeth: First?

Gene: Believe it or not, yeah. They brought the family members into the conversation.

Elizabeth: I think that makes sense.

Gene: It’s one of the advantages of running a small business is that you don’t have to deal with corporate bureaucracy and rules. You know what. Let me just bring in dad and daughter into the office and let’s talk about them. You know what I mean. This is the problem that we’re having. Can we find a way to work this out? Do you know what I mean? At least that way there’s no surprises. So, if in the end you’ve got to let, you know.

Elizabeth: I’m sure if it’s the parent in there, like if you were working with one of your kids at someone else’s company-

Gene: You’d want to know.

Elizabeth: And they were doing a bad job, you’d probably already know, right?

Gene: Absolutely right. Absolutely right. From that standpoint, I’ve seen people get the family involved that way. Now if it’s the other way around, that’s a different story. What if it’s the dad that’s off on a bender and the daughter’s doing well? I don’t think I’ve ever actually seen that situation. That doesn’t mean it couldn’t happen. I just haven’t seen it. Now having said that, if there are more distant relatives, like cousins, no. They’re all separate. You treat them completely separately. So, those are some of the issues when you’re letting an employee go.

The other thing to consider also is if the employee was a popular employee in your company, how do you communicate that to the rest of the staff because that’s also a potential issue. What I have found is that even for the most popular employees, if they’re being let go, none of the staff is likely surprised.

Elizabeth: Really, okay?

Gene: The fact that they’re being let go. I mean, if they’re popular, people know them and they probably know what they’re up to or their antics, whatever they might be. So I don’t think any communication to the rest of the staff is warranted in any way. It’s between you and the former employee. It’s that person’s business and if they want to tell their friends in the company, they can do that. You can keep that completely separate. You’ve got to do what you’ve got to do when you’ve got a business to run. In the end, whatever emotions that you feel about your employees, letting them go and whatever, you’ve got a business to run and it’s not about that employee. It’s about everybody else in your company that depends on your company for their livelihoods. So, that’s what you always have to keep in the forefront of your mind.

Elizabeth: I think that’s actually really good advice to think, this isn’t about me. This is about everyone else.

Gene: That’s right.

Elizabeth: I have to do this. And if you are on the up-and-up, and you have some grace when you’re taking care of this, then you can look back and be like, “You know what, I made the right decision.”

Gene: That’s right. And even if it’s an emotional decision, sometimes people, it’s personal. Like, “I don’t like this guy. I don’t know what it is. There’s something about this guy I don’t like and I just think we have to part,” or whatever. Even if you can’t even justify, the fact that you don’t like the person and it’s making that unpleasant for to come to your job and run your company, that affects everybody else because everybody else that you employ wants you to be productive and enjoy in running the company well. So, don’t feel bad about it. You’ve got to do what you’ve got to do, and that’s why you get paid the big bucks.

Elizabeth: All right. We’ll be right back with Gene’s word of brilliance.

WORD OF BRILLIANCE: Windows ’95

Gene: Oh yeah. Mine’s a fun one today. My word of brilliance, Elizabeth, is Windows ’95.

Elizabeth: What?

Gene: Right? Windows ’95? I mean, come on, this is 2018. Well for all of you people like me, who are in your 40s and 50s and maybe I guess older, who actually remember Windows ’95 and the excitement of Windows ’95. I think when Microsoft introduced Windows ’95, the Rolling Stones, it was part of their launch party because you see, Elizabeth, they had a start button. You get it? The Mick Jagger song Start Me Up. You know, that was the whole … get it? Anyway, it was a big deal.

Elizabeth: Wait, what year was that?

Gene: It’s Windows ’95, Elizabeth.

Elizabeth: Oh my god.

Gene: Right. Here’s the thing though, Windows ’95 is long gone. For the most part, that’s a good thing. But you know what, if you’re nostalgic and you would like to get a copy of Windows ’95, this developer … Now I found this and I wrote about it recently, but it’s on a site called Soft Tonic, and it’s a developer. This guy, his name is Felix [Reissberg]. He developed a version of Windows ’95 that you can download onto your PC.

Elizabeth: Why would anybody want to do that?

Gene: Because it’s fun. Because you can go back to all the old days.

Elizabeth: Oh, it’s so fun.

Gene: I can think about the days when I had hair, when my kids were younger, when I had energy, when I was actually good in sports, and play little Minesweeper, a little Word Pad. Get some enjoyment out of that and then close it down and then go back to work as well.

Elizabeth: That’s so funny.

Gene: Windows ’95 still lives for anybody that wants to give it a shot and still use it. If for anything, nostalgic purposes.

Elizabeth: Nice.

Gene: That’s my word of the day.

Elizabeth: All right. We’ll be back in a couple days with our next episode.

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