Be slow to hire and quick to fire
It’s the first piece of advice that almost anyone who has been in business for a while will tell you when you ask for advice about recruiting staff.
But as the owner or manager in an SME, it’s not that simple. The work needs to be done, and when everyone is working crazy hours to get client work out of the door, it can be tempting to hire the first person that looks like they might be a good fit to help you out of your predicament.
Then your business grows again, and your team is back to working crazy hours to get the work done. Not only are you looking for a new recruit, but the person you hired in the last busy period isn’t working out how you hoped. They aren’t causing complete carnage, and there are glimmers of hope, so there is no way you are going to fire them when you’re this busy.
Sure, your team are moaning to you about them and you can see they’re not the right fit long term, but surely some help is better than no help at all?
I understand the cycle. I’ve been through the cycle. They say that the definition of insanity is doing the same thing again and again and expecting different results. I have hired too fast too often. And I have been too slow to let people go - almost without exception. This, is one of the biggest mistakes I have made in business.
How making the hiring decision easier, helps you make better hires.
If only it was easy to predict exactly when you will be busy and exactly what skillsets you will need. You win a new contract for 50 events / year and now you need an extra project manager. You win a demanding but profitable dry hire client who are spending upwards of £100k / year with you. It’s tipped your warehouse team over the edge and you need another pair of hands.
In an ideal world you would hire the people you need before you get too busy. But you don’t necessarily know what you need until the work lands. And you don’t want to be spending out on unnecessary staff when you could be investing that money into marketing, new rental stock, a warehouse upgrade, or better systems.
At the same time, hiring in a panic can lead to some terrible decisions. We were working primarily in the corporate market so were typically busy from February until mid July, and mid September until mid December. At the other times of the year we were somewhere between laid-back and completely dead.
It was mid-November (the middle of our busiest season) and I realised I needed to fire our warehouse manager. But I was terrified that I wouldn’t find someone to replace him. Our first and only applicant was someone who was highly respected by almost all of our freelancers and worked for a much larger (read 10 times larger) competitor running their warehouse.
He interviewed OK, my team were excited about him, but something was niggling me. I couldn’t quite put my finger on what it was but I wasn’t 100% sure.
But we were in a bind, he seemed like a massive “upgrade” on the person I’d just let go, and he could start quickly. He turned out to be a disaster along with the majority of people that I hired in a similarly panicked sate.
So in an ideal world you will make your hires during quieter periods, and you will have more than a handful of options of people to hire if you need someone urgently during the busy periods. Here are the top things that I learned that helped me to achieve this:
1. Build a talent pipeline
During the quiet periods (when you are less likely to be confident about taking on new staff) make sure you are building a network of potential candidates for when you ARE ready to hire. You spend time going to trade shows like PLASA and demoing equipment before deciding what to buy. Put the same amount of efforts into building your pool of candidates so that when an opportunity comes up, you are not scrambling to find ANYONE who will take the job.
2. Forecast your workload & plan your cashflow
It’s easier to make a hire if you are confident that you have enough business to be able to afford them. This might mean saving a little more during the busy season. Or it might mean sitting down for an evening and working out your cashflow based on projected revenue over the next 6-12 months. You can do this using a weighted sales pipeline, and combining this with historic data to make assumptions about your likely workload and revenue.
3. Talk the decision through
Seriously, it IS lonely at the top. It’s often hard to talk to your team about sensitive topics (although I was lucky to have an incredible Operations Manager who I could talk pretty openly with). Get a coach. Find some other people to talk to. Heck, reach out to me. I get it. It’s hard. And taking on staff (especially the first few times you do it) is a big decision.
4. Hire an HR expert
HR law is a minefield and you need to get the process right. I’d strongly recommend retaining HR advisors. Ours cost about £70 / month and were worth every penny. They reviewed our job descriptions, created all of our policies and procedures, produced on boarding and off boarding letters, and consulted with us when we had tricky issues like disciplinaries or when we had to let people go. If you are hiring during a busy period, the last thing you want to be thinking about is HR compliance for your on boarding process!
5. Make a “niggle” rule
If someone has a niggle that someone might not be right for the business (that means one person out of your whole team having a niggle that they can’t quite put their finger on) don’t hire that person. In my experience, if there’s a niggle, it rarely works out.
Don’t be scared to ask people you think would never work for you whether they would be interested.
We were looking for a new warehouse manager (again …….. are you seeing a pattern yet?)
My Operations Manager approached the Warehouse Manager at one of our largest local competitors and asked him whether he knew anyone that would be interested in filling our vacancy. He turned around and said that he would love to do it himself.
His motives were unexpected. He wanted the autonomy to build his own team and run the warehouse how he thought best.
And that’s exactly what we were looking for. Someone who would take ownership of our (pretty dysfunctional) warehouse and make it work. We weren’t that concerned about how they did it. We didn’t want to micromanage. We wanted them to look at the problem, propose a solution, and crack on with it. That’s exactly what he did for us and he is one of the best hires I have ever made.
Well, I say he was one of the best hires that I made. That’s not strictly true. He only joined us because our Operations Manager asked him. It turns out that our Operations Manager was one of the best hires I ever made. And I’d had my eye on him for a while before he joined our team.
When the right thing to do is not the easy thing to do
One of my biggest regrets in business is not firing people fast enough. Sometimes you quickly get a sense that things aren’t working. Sometimes it takes a few months (new hires can only be on their best behaviour for so long!)
If you are concerned that your new hire is not the right fit, you need to take action fast. Even if you don’t think you will end up having to let them go, you should discuss the situation with your HR legal advisors as soon as you have concerns. They will advise you on the correct procedures to follow to ensure that as many options as possible are open to you should you need to ask the person to leave at some point down the road.
Once you have spoken to your HR advisors:
1. Bring up your concerns as soon as possible
It’s easy to wait and keep giving your team member the benefit of the doubt. (And it’s easy to use “the benefit of the doubt” as an excuse to delay having the awkward conversation.) But if you are going to nip the undesirable behaviour in the bud, you need to do it whilst it’s still just a bud! Worst case, the undesirable behaviour negatively impacts your whole team and if it isn’t resolved fast, relationships within the team can be irreparably damaged. If that happens it becomes almost inevitable that your new hire will leave the business.
2. Ask them to leave as soon as you no longer believe they can change to become a good fit for your business
If, after you have brought up your concerns, the behaviour doesn’t change (and change for good!) this person needs to leave the business. Fast. The sooner the better. (Again, in my experience “the benefit of the doubt” is generally just an easy way to justify delaying the inevitable.)
Why you owe it to someone to ask them to leave
When I have asked someone to leave, without exception, both parties have ended up happier. When someone is underperforming it’s often because they are not happy in the role. They may realise it or they may not. But each time I have let someone go they have moved onto something or somewhere that they are much happier. And my business improved as a result of them leaving.
Here are some examples.
Firing someone in my network of friends
The first person I had to let go was a friend of almost all my friends and well respected in the group. But he clearly hated coming to work and was bringing down team morale. He was in a business critical role but the quality of his work was heading downhill fast. This type of person is what we call a terrorist - someone who is a poor cultural fit and is producing bad work. These people have a terrible effect on morale and can lose you clients quickly. You need to get rid of them fast.
I won’t pretend the meeting when I asked him to leave was easy. It was certainly awkward. By my HR consultant had provided me with the details of what I needed to say and my business coach at the time encouraged me to write down exactly what I was going to say, word-for-word.
When I delivered the news, he was expecting it and left immediately with no fuss. He’s gone on to join a very different company in a role that he seems much happier in. It turned out to be the best decision for both of us.
Firing someone who really wanted to leave
The second person I let go had been underperforming for a while. He was great to have around and was a fantastic technician. He just wasn’t performing in the role that we had offered him. When we met to discuss it, he was relieved. It turns out he had wanted to leave for ages but couldn’t bring himself to do it out of loyalty to the team. He was one of our most regular freelancers and continues to work for the company to this day.
This also happened again more recently. I was in a final disciplinary hearing. I asked her “Is this job still something you want to do?” Her response, “suppose”. She has also moved onto a different role in the industry and, from what I can see, seems to be much happier in that role.
Remember - your responsibility is to your business and team, not to individuals
You are responsible for your business. If you let the wrong people stay, that puts your business in jeopardy along with the jobs of the whole of the rest of the team.
Would you rather let someone go who is not performing, or would you prefer your best people to leave because of a poor performer or negative team member? Would you rather make your whole team redundant because your business failed, or would you prefer to let someone go who is not delivering the results? That is the reality of the choices you have to make as a business owner.
And the sooner you realise your responsibility is to the businsss and your team as a whole, and not to one particular individual, your perspective on firing changes. It doesn’t make it less awkward. It doesn’t make it easier. But it does mean you stop questioning whether you are a good human being!