Letting a Valued Employee Go

What does a manager do when a job has outgrown the employee? In this age of rapid growth, often the job a person was hired to do is no longer what the organisation needs. In a large organisation there may be some other positions to move someone into.

In the view of an increasing number of people, companies no longer show loyalty to their employees. Nowadays it’s all about profits. Show a minor weakness and bang!–you’re cut from the rolls. And heaven forbid that a company’s needs should change and now your skill set no longer fits the company’s need set. Bye bye.

The sensitive human inside us cries that this seemingly cavalier attitude is bad and wrong. If employees demonstrate their loyalty by giving it their best effort, then a company should be equally loyal. In fact, that was how successful companies used to recruit and maintain their loyal staff. They offered lifetime employment and received incredible loyalty in return. Shouldn’t we continue to do the same?

Let me deal with a couple of false assumptions. First, the idea that a company needs to offer lifetime employment is not only wrong, it’s dangerous. If people no longer fit and can’t be retooled to fit, they add unnecessary costs, putting everyone at risk. I once consulted with a company that was so dedicated to keeping everyone around that people constantly complained of “dead wood.” Either people had become obsolete and simply couldn’t carry their load or were burned out and WOULDN’T carry their load. In either case, people tired of carrying them on their payroll and found it very difficult to keep their costs competitive. This issue alone very nearly bankrupted the company.

Second, the assumption that companies need to provide people with a safe harbor can be patronising and insulting. If we’re scared to death of letting people go for what we might consider to be humanitarian reasons, then we’re assuming that the person will not be able to find an equally good job and we need to care for them. In truth, in some cases, let go is the best thing that can happen to an employee. People now find a job to which their talents are better suited, they make a stronger contribution, feel better about themselves, and often are financially benefited. When I’ve seen people get let go I’ve always felt bad about the loss of the relationship but have assumed that they will land on their feet.

I know this can sound like I’m turning a blind eye to disaster, but let’s imagine that the person does find a job but with lesser pay–as is sometimes the case. Now how should we feel? Nobody wants to see a friend suffer, but creating circumstances where people are now in jobs that better suit their talents is always superior from a work perspective. And when it comes to the money, companies can ill afford to play the role of humanitarian or government services. At some point you have to return to the strict business model and ask what best serves all of your stakeholders–from other employees to customers to share owners. The needs of the many outweigh the needs of the few.

Now, let’s move to the more practical side. If people do become functionally obsolete for any of a dozen different reasons, it does make sense to do your best to help them find a position either by matching them to a better job within the company or helping them retool. Frankly, most companies put more energy into trying to help people find an internal position than they do in trying to help them retool. If you want to look at the limit case, I once worked on a project with engineers and scientists who had spent their careers studying magnetics only to learn that lasers were their company’s future solution. They were then given two years to come up to speed on lasers. The company executives were so amazingly gracious because they had a fifteen year relationship with these talented scientists and were willing to invest in them and reward their loyalty. Over the long haul, it also made financial sense.

If you can neither find an internal position nor help people retool (or maybe they don’t want to retool) then it’s important that you do your best in sponsoring them outside the company. Find out how to best formulate a letter of recommendation or serve as a reference. Allow them access to your resources where possible. Provide flex time as they work their final few weeks. And finally, show them their due respect by assuming that they’ll eventually find a match and land on their feet. As long as you’re doing your level best to give your employees a chance to fit and you consistently treat them with dignity, there is no reason to feel unethical or harsh solely on the basis of the fact that you had to let someone go.

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