Here's How You Can Let Employees Go With Grace

The worst thing you have to do as a manager is letting somebody go. And I've done everything as a manager, entrepreneur, and the day you have to terminate an employee or you have to ask them to leave your company and no longer come into work, it is the absolute worst thing you have to do. So hopefully this video will share some of the things I've learned about how to do that well and make it suck less if possible. So here's a video about how to fire people. In this video, I'll go really through the 4 major steps around how to think about letting people go. Number 1, talk about legality. Mentality and reasoning and all that kind of stuff. Number 2, we'll talk about how to get ready for letting somebody go. Number 3, we'll talk about the actual meeting that you do when you have to let somebody go. And then number 4, we'll talk about what you do in the aftermath and hopefully do it all with a level of kindness and professionalism and love for people as they move on to find their next thing. I'm going through one of the playbooks from our company Scalepath. So it's a CEO peer network for small business owners, all virtual, all done in a modern way for folks that are doing business asynchronously and online and remotely. Part of Scalepath is we have these playbooks, and this one's titled How to Fire or How to Let Somebody Go. Topic number 1, talking about the basics of how to think about letting somebody go. Every country's rules and every state's rules here in the United States are different depending on how employment works. In most states and where I'm from, we have a thing called at-will employment that basically is just employment can be terminated for any reason and somebody can quit for any reason. That actually, I think, is something people don't have as much in other countries, but it turns out to be a really good thing here in the US because it allows us to be much more efficient in terms of finding the right thing for us, both as an employee and an employer. But even still, with that category of stuff, at-will employment doesn't mean you can be a jackass as an employer. And there's a bunch of rules that you may need to make sure you follow. And that's where your HR department and your lawyers are the ones you should trust on this, not some random guy wearing a pink shirt in a YouTube video. Make sure you follow the rules and all that kind of stuff. We'll do our best here in this video to talk through the rules as we know them, doing things the way is very important. You can get into a lot of trouble if you don't let people go correctly. So as I talked about before, most terminations fall into 3 categories. Poor performance on the job, which is often not necessarily the employee's fault. Perhaps the job has changed. Number 2 is misconduct or policy violations. So somebody steals something. I've had employees who've gotten into fistfights at the office, which is entirely entertaining. And then the last category is your business is restructuring or downsizing. I've had times where we've had to let people go just because we took a different strategic direction as a company and we just didn't need that person we didn't have a job that person could do. So it was time to help them find their next thing in another place. When you have an HR process and all that kind of stuff inside of your organization, whether you're using a PEO, a professional employer organization, which is basically outsourced HR, or you're doing some of the other type solutions to help you with managing your employee base, most of them will encourage you to start to document your termination and how you're going to be letting somebody go. In the case of the state of Texas where I am, you can let somebody go without documenting any of it. That does have some ramifications, which is they can file for unemployment benefits and they can get that type of benefit paid to them for being terminated. And that's something you as an employer end up paying for through your unemployment insurance premiums. But in the end, most of these systems, whatever you're using for payroll and HR, will encourage you to document what you're doing in terms of letting somebody go and going through a process. In our case, for a number of my businesses, we use a PEO and they have like a 15-page form that you fill out when you're terminating somebody. So however you're doing HR, that's something to really think about. Again, as a super tiny business, if you only have 3 or 4 or 5 employees, there's not a lot of paperwork right there, which is probably actually a good thing because being a small business is already hard enough without a bunch more paperwork. So this is where, as you start to document and think about like how you're going to let somebody go. So just make sure that your lawyer and your HR folks can walk you through that. They should know how to do this. And if they don't, you need to find new people that do, because every business has to let people go eventually. When you're going to let somebody go, it's super important to think about what you're going to do for them to help them move on to their next thing. If you're downsizing and the company's struggling, you may not have the ability to do much for folks in terms of severances. Personally, I love to do severance for people because no matter what happens, you want to try to leave with people on good terms and help set them up in a way that they're going to succeed in their next thing. It's very common to do 2, 4, 6, even longer number of weeks of severance for people. I recommend that, and it's a good gesture and it's good karma as well, but you don't have to do it, which leaves it up to you, your choice of what you want to do. Then you prepare the paperwork. So that's the next step. Most times you give people a termination letter that has dates of their final checklist, benefits information, severance agreement if applicable, retirement plan. It's very common for people to sign a severance agreement. You know, you give them excess payroll above and beyond what you owe them, and then they agree to certain stuff, say for example confidentiality or those sort of things. And those differ per state. You have to just go through and make sure your legal and HR coach you through it appropriately. And then there are different things in terms of how that package can be used that you give to the employee when you actually meet with them, which is the next conversation, which Sucks. And we move on to the absolute worst thing you do as a manager, which is having a termination conversation with somebody. And I've done these a number of times. It's just the way it works and they suck. It just totally sucks. I recommend just being straight with people. You schedule a meeting with them and you try to do it face to face if you possibly can, to show people the respect that they deserve when you're letting them go. I've done it in the past where I've flown up someplace to meet with them in person to show them the respect that I would want if I was being let go. These meetings, when you meet with them, it's easy and natural to want to do them is these big, dense, long meetings and talk about all the details and stuff like that. The reality is that most people, when they're let go, are in a state of shock and hurt and they don't hear much more of what you say beyond, hey, we're letting you go. And that's where having the document that you prepared before in terms of the leave behind for them to understand and be able to read later after the shock kind of wears off is a really good thing. And it's just on you to approach that meeting in a very professional and caring way to make sure that termination goes as smoothly as possible. So key things to run this meeting when you talk to somebody and let them go. Don't mince words and be firm. Absolutely. Open by stating this will be a difficult conversation. So set expectations there. You want to be very clear that you're letting them go and the decision is not changeable. Some folks at this point think that maybe they can argue or change things, but by the time you're having this meeting, the decision's already been made. I think you lay everything out, explain why this is happening. If they violated a policy, tell them what they did, that sort of thing. I think there's a level of candor that's appreciated with folks. I think this is where you can choose your words really carefully in terms of both explaining to them the why of what's happening, but secondarily, like, not doing it in a hateful or a mean way. So I think direct but kind is the thing I would recommend when you visit with people. If you haven't done one of these meetings before, you can practice it with another manager, ask them to roleplay it a little bit, and you can get coaching and feedback around that. And you can clearly state to them through this meeting that their last day is today and that they need to move on. It's a difficult situation. And answer any questions for them. Um, you go through the paperwork, tell them when they'll receive their final paycheck, explain their severance package, if applicable, and then work with them on next steps to return any company property. If there's a termination agreement as part of this, which typically there is, and that was prepared by your lawyer, HR folks, you ask them to sign it. Of course, you don't want to pressure anybody to sign something under duress, so they should have the opportunity to sign it. And most times your HR policy will give 24 hours or 48 hours for the people to respond. After this gets done, like, go buy yourself a drink or do whatever you do, go for a long walk. It's hard, right? I remember Once when I was a manager and the company was downsizing and I had to let go of 8 people in a morning. That afternoon we went— I went with the other managers and went bowling just because it was just that type of stressful type thing. So make sure you're taking care of yourself because letting people go is a nightmare. One of the things we really recommend, don't badmouth the employees you're letting go. Take the high road every time. This is an emotional situation for everybody, and especially if you, you have an employee who you feel has wronged the company or let you down. It's easy to take the low road. I just don't do it. Just take the high road and be kind to them. Moving on to step number 4, you've let the person go. Now you have to announce it to your team. This totally depends upon what type of culture you have and what type of environment, who the employee was. If it was somebody that was there for a long time and potentially impacted a lot of people, then you probably do need to have a meeting and let folks know, or at least send an email to update folks. What people want to know in these announcements is what happened, what's the impact on them, and what are the next steps, right? And the more you can just be calm and collected about that and explain all of that, the better. The team's going to respond to somebody being let go. So you have to just really customize it based on what you need. And I think important in this is it's never just the employee's fault, or it's never just the manager's fault that something didn't work out. I think this is where you have an opportunity to be real and impact that on your culture by sharing, hey, like, there's some stuff that could have gone differently. And then the last thing is dealing with the housekeeping. There's a bunch of things that have to be done whenever an employee leaves. Announcing that in the announcement meeting, if you have one, or in the email, just should let people know what to expect, who's going to be covering those duties, and then what's the longer-term plan for filling that role, if at all? Because you may be letting somebody go and there may be no replacement for that particular person. That is the most depressing video I think I've ever made. But nobody talks about this stuff, right? It's an essential part of being a business owner, entrepreneur, and a manager. But nobody really wants to talk about this because, well, it's not as much fun as hiring or getting a big sale. But doing this stuff right is essential to, I think, just being a good person. You want to treat the people around you the way you want to be treated. You want to treat them with love and kindness. This termination process where you have to let somebody go can be done that way. And ultimately you keep doing that year after year and hopefully you end up with folks that are positive about their experience working with you. So anything I missed, anything I got wrong, let me know in the comments below. Thanks for watching.