Having a hard time trying to figure out if you should fire an employee? This video provides pointers to help you think through this difficult decision.
“How do I decide if I should keep a current employee that is now going to cost me quite a bit more money versus hiring a new employee? This winter I bought a second vehicle and planned to promote a guy to run the second truck as a two man crew. I’d run solo until I reach capacity to hire a helper in my truck. This employee that was going to take over the second truck, lost his license which is now going to cost the owner $600 to help that guy reinstate his driver’s license. Plus, he needs personal car insurance to make it to work and our commercial insurance at the company will increase as well.”
The takeaway is that, the old employee is going to cost $450 a year extra versus hiring a new employee. Should he go ahead and hire a new employee, or should he retain the current one? What kind of cost is around training and labor? This is a good question because it could be applied to all kinds of different scenarios.
My opinion on this is, you have to ask yourself what the very best situation is for the business. The dilemma as a business owner, especially dealing with employees, is you’re caught up with the emotional aspect of this guy that messed up. He’s going to cost you money and you wonder if he deserves the promotion or if he needs to learn a lesson. There are all these things that come to mind about why they should or shouldn’t get something or you should or shouldn’t do something for them that are all emotional based.
If you can look at it in this scenario as an outsider, it’s easier to answer the question. What is best for your small business? Your business is you and a crew. You’re not trying to take a big step towards two crews, that’s a big deal. What could derail you from adding this second truck? Exactly this. If you don’t have anybody to run it then you go one more year with only one truck. You’ve delayed your big jump for it by a year and if you’ve listened to any number of my videos, you know that I believe on the absolute most important things in business is getting out of the field to be the guy that runs the business. You don’t want to be the guy that works in the business.
This could delay you maybe a year. I don’t know the answer to that. In my mind, your choice is a proven guy that you like and trust or an unknown guy that may or may not work out, and if it’s only going to cost you about $500 extra a year to keep the proven guy, I’d keep the proven guy. At least with him, you somewhat have a known thing. You know you have a track record. Also, I’m inferring that he’s put himself into a predicament here that may make him a little more difficult to hire with other employers.
That doesn’t mean there aren’t plenty that will hire him because everybody needs labor. But, it’s going to make it a little bit more challenging for him. My opinion here is you make the best decision for the business. It sounds to me the best decision for the business is to keep the guy you have because you like and trust him. A lot of people do make mistakes so one thing you do have to ask yourself though is, “Is he going to do something that could jeopardize your business?” I don’t know what the reason here is for the drivers license loss, but is there a track record or something you need to be concerned about where he could do something dangerous driving your vehicle? Is this an example of poor behavior on his part that is a lifestyle problem that you can’t fix that you’re somewhat ignoring because he’s a good employee?
I don’t know that any of that’s the case, but ask yourself that. If there’s nothing like that and you don’t believe that this will be a problem again and it’s only going to cost you $500 extra dollars to keep this guy, then I think you do that.
Now, on a side note, how can you have this guy have a little skin in the game?
For example, he screwed it all up, and if you let him go, he’s got to immediately go find other employment. He still has a problem. Is there a scenario here where you don’t pay for all of this? Instead, what you do is take some amount of it out of his check so that he pays you back. Off the cuff, what if you even gave him a dollar an hour raise, and then you deducted some portion of that as a way for him to pay you back? Or, you could make a deal with him to give him an extra dollar or two an hour to become a driver, showing him that you see him as a key part of the company and are giving him more authority?
What you do is, basically you are out of pocket $2,760 to help him out. You can have him pay you back 75% of that. What you do is, continue giving him the $12 and apply the extra $2 to payoff this debt.
That further locks him in. That gives him more motivation. He seems to have potential in the company. He’s taking on more authority and he makes more money. You really don’t have any additional money out of pocket because you have only two options here. Either you pay the entire bill yourself or you pay the entire bill yourself and get repaid some portion. By giving him a bump and then not actually giving him any of the additional money, it creates sort of a win-win scenario. It was going to be throwaway money anyway. Now, you’re at least increasing his salary and making him feel better. If you want to, you’re teaching him a lesson here. I feel that if this guy is going to eventually run a truck and be that critical, you’re going to eventually want to pay him more anyway and lock him in.
You don’t want him to leave if he’s really as good as I perceived you’re saying yes. Consider that as a possibility. But, the takeaway here is that when we’re making employee decisions, we have to make employee decisions that are best for the company. Sometimes we have bad employees that we absolutely cannot let go now for whatever reason, but we’ll be able to in the future. Strategically, we keep them for just a little bit longer. That does happen. That’s an absolute consideration. You cannot get emotional about this stuff and make a rush decision. Those rush employee decisions are what often hinder businesses and guys wake up one day and they think the whole world’s against them.
We need to be, as business owners, as best we can. We need to look at our business from a business perspective and keep as much emotion out of it as possible. Good luck.
