Human Resources - How to decide who to fire

How to decide who to fire. So I got a great question from one of my Zuga customers who bought the guide. His name is Dieter. He's also been a loyal YouTube follower, and he's basically asking, how do I decide for companies who to fire when it's a downturn? So here's what he wrote in. Evan, while you're away in Malaysia, I thought about a question. When the company faces tough times, internal crisis or worldwide crisis, I must make a downsizing. How do we choose who leaves the company? Usually the downsides end up being money, but sometimes the best people are the ones with the best paychecks. Should I fire 1 person per day or 20 people per day? As you said before, first I should keep the people who have a passion about my business and then check the payroll and make a decision. What do you think? I feel so glad if you can answer me via email or YouTube. If you think this question could help more entrepreneurs, I'm a consultant for small business companies in Mexico. I understand a lot of what you do because it's what I do every day. I help people to reach their goals and at the same time I'm searching for my goals. I'm working so hard every day to create and establish my company because I feel I'm going to be world-class at something else one day. So that's why I ask you a lot. I know I can change the world. I really appreciate all your help. I began with nothing, only my chemical engineering degree and my passion. No money, no powerful friends, no family business, no mentors. But what I can tell, pretty sure, is that I'm going to be a massive success. Thank you for everything. Saludos, Dieter. Great email. Thank you so much. And I'm glad that you've loved the videos and the Zuga guides. That's a— it's a tough question, okay? Laying off people, letting people go is never an easy thing to do. So here are a few suggestions for you, okay? Number 1: Think lifetime. So whenever I create a position in my company, I'm always thinking about having this role, having this person be part of my business forever, for my whole life. Now obviously that will change, you know, that person may move on, I may decide that this isn't the right path for us anymore, but I always go in with the intention of having somebody in that role, having this person who comes on be a part of my team forever. I try to create a family. So when I created this job, for example, for a video editor, you know, I knew I wanted to make videos. I hired Christina, you know, I want Christina with me for the end, until the rest of our days. That may not happen, you know, Christina may move on move on. She may find something else she loves more than doing videos. She may get tired of it. I may decide, you know what, videos, man, I'm so tired of these videos, I'm not gonna do videos anymore, and I may move on, right? But I'm going in with the intention of having that person with me for the rest of my life. And I think too many times companies start off and they don't respect the lives of the employees enough, and they say, well, I'm gonna hire somebody for 6 months and see if it works out or not, and trying out this project, or It's just, it's not enough respect. And so I would encourage you to consult with the clients that you're working with to make sure that when they're hiring, that they really think like, this is the position that we're going to need for the rest of our life, and we're really going to value the employees that we bring on. Number 2: Take the first cut yourself. Whenever there is a downturn, and it's going to happen in every business, it should be the, the owner's job, I think, to take the first pay cut themselves. Again, I think of everybody as my family. I want them with me forever. I want them to be passionate about what they're doing. And I think about the people who've been with me the longest. I've never asked anybody to take a pay cut, and I've never fired anybody for, for financial reasons. I've never fired a good person because there was a downturn. I've always found a way to keep people on board. I've never asked people to take a pay cut, but I've taken cuts. You know, like, I've had this business for, for, I don't know, 10, 11, 12 years, something like that. And I've— my income has gone up and down. I've taken huge cuts, but I've never asked people on my team to take a cut because I feel bad, you know, like they're part of my family. I know they rely on me for their livelihood. And I guess the worst-case scenario would be that, that if I really couldn't afford it, maybe everybody goes down to like 4 days a week instead of 5 days a week, something like that. But, but again, you have to feel the pain, right? Like, the owner should love their business so much and care about their staff so much, and they're willing to take the first cut themselves before they cut other people's salaries. And the number 3 you know, final option plan when all else fails is, you know, decide where you're going. If your business is not able to financially support the people on your team anymore, it's because there's something wrong with your business, right? The market has gone down, people aren't buying anymore. You have to save your company and you have to figure out who has to go, but more importantly what the direction your business is going to be, because you can't just keep doing the same things anymore, right? That's not working. You're in a downturn, you're losing customers, you're not providing enough value anymore. Your business is not working and you need to save it. So you have to figure out— before you just figure out who to fire and you look at their salaries, think about what is the new direction that your company is going to take. How are you going to get through this downturn? What new products, services, value-add are you going to provide to your customers, or what are you going to take away because it's just not working? And once you figure out your direction, then you can figure out who do I need on my team to make this happen, right? And if you're saying that, you know, some things are not as important anymore— so if I was doing this, right, for example, if I looked at my business, I might say, you know what, these videos, they take up too much of my time, I'm not making enough money from them anymore, and I need to cut, I need to cut the videos, right? If that was part of my plan going forward, then Christina would be a casualty, right, of that. Sorry, Christina, I don't want to cut the videos, but she would be a casualty, not because she's not great, but because I made a strategic decision not to do videos anymore. So I think that's the better approach for the companies, is not to look at, well, who makes the most money and how can I make the most savings? It's thinking about what projects are we going to keep on board What's the future direction of our business? And then who do we need on our current team to help us get there? And who, who, you know, hopefully move on to better things with their lives. So it's kind of a crappy topic to talk about, man. Got me a little depressed talking about firing people. But hopefully those, those ideas helped you and can help your clients make better decisions. Believe. For everybody watching, you like the video, please give it a thumbs up below. Let me know what you think. Leave a comment. You have a question for me? Leave a comment below, I'll make a video response. 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