Imagine this—you’ve received complaints from customers about the same employee, or that person has missed several work days with no explanation. In these cases, it may be time to let them go. Firing an employee, even when done nicely, is a difficult and sensitive task.
As a small business owner, you may inevitably have to take action when employees aren’t performing well. When that happens, firing an employee the right way can prevent legal problems, protect your company’s reputation, and maintain team morale.
In this article, we’ll walk you through how to terminate an employee, what to say, and how to plan for the future.
DISCLAIMER: This content is for informational purposes only and shouldn’t be considered legal advice. To make sure you’re abiding by your area’s legislation, talk to an employment lawyer, speak with a local labor standards representative, or read up on termination laws in your country (including Canada, the United States, and the United Kingdom).
Prepare by identifying concerns early
With poor performance and behavior issues, give your employee time to change before you fire them (except for extreme situations, of course!).
Regardless of the reasons, getting fired shouldn’t be a surprise. Before starting the termination process, you may implement a performance improvement plan (PIP). Discuss the problem with your employee directly, give them feedback and the resources to fix it, and document (either on paper or within your HR management software) as many details as possible.
Still having trouble? The six clues below will help you decide what’s next when there’s no sign of change.
6 reasons it’s time to let an employee go
When problems with employees happen, it can be challenging to know what to do. You might ask yourself:
- Am I firing this person for the right reasons?
- Have they been given enough time to change?
- Is there another outcome that would be best for all parties?
REMEMBER: Just like when you’re hiring an employee, you can’t discriminate when you’re firing. This includes ethnicity, origin, religion, age, gender, sexual orientation, family or marital status, health, or appearance.
Use the following list of reasons to confidently decide that it’s time to let an employee go:
1. Low performance
Low performance takes many forms, including:
- An employee is always late for work or scheduled shifts
- A worker often takes long or over-extended breaks or mealtimes
- The employee does not follow standard operating procedures (even after training)
- An employee fails to complete their daily tasks on time
Sometimes you can address these problems as they happen, and it’s always important to use teachable moments to give employees a chance. For example, you can complete walkthroughs on a jobsite after a service visit, use alternative training methods, offer employee bonuses, or provide extra performance incentives.
If you’ve exhausted alternative training methods and an employee still shows no signs of growth, it’s time to take action. If you’re endlessly managing their performance and checking in, it could be time to part ways.
2. Poor professional conduct
Sometimes, an employee may not conduct themselves professionally. In practice, this looks like having a bad attitude, being disrespectful to clients, or generally behaving poorly.
In this scenario, your clients or another team member might report this behavior. Left unchecked, a lack of professionalism drains productivity and can easily damage the business reputation you’ve worked hard to build.
If poor conduct is habitual, know that you can’t risk your business for one employee’s attitude. It’s time to take further action.
3. Legal issues
Although no employer wants to experience a legal conflict, you could run into a situation that requires direct action. For example, you may have to fire an employee for violence, harassment, theft, forgery, sharing proprietary information, lying on a job application, or something more serious outside the scope of work.
Illegal behavior goes beyond poor conduct and could involve law enforcement. To make this kind of decision, you’ll need proof of an employee’s actions. Make sure to document everything before terminating the employee.
4. No-showing
When an employee no-shows, it means that they don’t arrive for work or fail to notify you that they’ll be absent for a given shift. In many cases, no-showing means that an employer is left scrambling to cover those assigned tasks for the day.
Unless there’s a valid reason for a no-show (like a family medical emergency), missed shifts can hurt your business. Habitual no-shows also communicate to other members of your team that they can do the same thing. As a result, this is one indication that an employee needs to be let go.
READ MORE: How to attract employees who stick around
5. Not the right fit
Even though it sounds tough, sometimes employees just aren’t the right fit for a particular team, role, or company. Maybe their professional skills don’t match up with what you need, or they have potential but simply can’t reach it with you—even after multiple training attempts.
In certain situations, it’s better for both sides to part ways sooner rather than later. Deliberate action often allows both parties to find a better match for a new opportunity.
Disclaimer: Inadequate job fit can be a subjective reason to let someone go, and it’s often harder to prove (when compared to a performance issue, no-showing, or other easily documented issues). We always recommend checking in with your personal legal counsel to ensure that you have proper cause to terminate and avoid legal issues for wrongful termination.
6. Not enough work
As a small business owner, you might find yourself in the tough situation of not having enough work or cash flow for the number of staff members you have. As a result, you need to let someone go (even if it’s not directly their fault).
In this scenario, you might have to consider the individuals who are the newest or lowest-performing on a team. Although it’s not meant to be personal, it’s also not practical to keep low-performers or less reliable workers when cash and payroll become tight.
Pursue trustworthy legal advice
As an employer, it’s always good practice to seek legal counsel before letting go of an employee. Taking time to have this conversation protects your business, and it ensures that you have a valid cause for termination.
Most small service businesses don’t have an official human resources (HR) department. As a result, might consider talking to an HR consulting firm or legal representative to ensure that you have the right documentation in place and are protected if and when a former employee pursues legal action for the decision.
What to say when firing someone
Before a meeting in which you have to let someone go, practice what you’ll say. Always keep it direct, professional, and compassionate.
Even when you’re making the right choice, it’s normal to feel a bit awkward. To help alleviate the stress of these tough conversations, we’ve written general guidelines you can use for your own company.
Try one of these scripts based on the following circumstances:
Script to fire someone nicely for poor performance
“I’m sorry to say this, but I have to let you go. Some of our clients have raised concerns about your attention to detail during visits.
You and I have already spoken about ways to improve, and your crew leader provided work checklists and extra training to ensure everything gets done. Unfortunately, I haven’t seen the changes needed to keep you on board.”
Script to fire someone for poor conduct
“I hoped it wouldn’t come to this, but this will be your last week working here. Your attitude toward me, your team, and your clients has been disrespectful, and I’m not able to trust how you conduct yourself. Unfortunately, I need to protect the image and standards of my business.”
Pro Tip: Create an employee handbook to lay out expectations around performance, attendance, and conduct. If an employee reads it and still isn’t meeting those expectations, it’s much easier to end the working relationship.
Script to fire someone for legal issues
“I’m firing you for your personal use of the company credit card. I have a statement from the card company showing that you made a purchase at a retail clothing shop. We have a company policy about personal use of company equipment in our handbook, and you signed the paperwork saying you read this policy when I hired you.
I made it clear what the consequences of breaking that policy would be. As a result, you’ll have to collect your belongings and leave.”
Script to fire someone for no-shows
After confirming they don’t have a legitimate emergency, like a sudden illness or accident, you can use a similar message to end a person’s employment.
“Today is now the third day you haven’t shown up for your scheduled work shift, so I have no choice but to fire you for regular non-attendance. You haven’t answered my calls, texts, or emails, and I don’t know where you are or when you intend to come back. This tells me that I can’t depend on you to do your job. You’re no longer employed by our company, and I’m sending your final paycheck for completed work.”
Script to fire someone who is not a good fit
“This isn’t working out, so I’m letting you go. I understand you have questions and are likely surprised, but we’re ending this employment relationship because we’ve witnessed that it’s not the best fit. The decision that we have made, while tough, is final.”
Script to fire someone when downsizing
“This is hard to say, but I have to let you go based on having much less work the past few months. We can’t afford to keep operating with such a large team. I can only keep a few of our highest-performing employees, so I’ve had to make a tough choice to eliminate your position.”
Next steps: 3 things to do after a firing event
No two firing situations are the same, and employees (both past and present) may respond in their own unique ways. Employers and business owners often need a little direction to bounce back after a firing event—and to set up the business for future growth.
Here are three things to do immediately after you’ve made the firing call.
Listen to what the former employee has to say
Offer the terminated employee the chance to voice their thoughts and feelings about the termination. Showing empathy and listening to your employee demonstrates that you respect them and value them as people.
You may also learn something about your management practices from your employee’s perspective and use that to improve in the future.
Depending on the situation, an employee can share their feedback on the spot or schedule an exit interview for later. Either way, hold the conversation in a private space, give the employee your full attention, and let them speak without interruption.
End the conversation on a positive note by thanking them for their time and contribution to the company. Always wish them the best in their future roles and endeavors.
Provide an employee termination letter
Delivering the termination decision in writing gives both you and the employee a clear, official record of why they can’t keep their job. It also helps avoid any confusion or legal disputes down the road.
A dismissal letter should include:
- The employee’s name, position, and date of termination
- Specific reasons for termination, including references to prior warnings
- Information about the final paycheck, including any owed vacation pay or severance pay (if applicable)
- A reminder of any ongoing confidentiality clauses (if applicable)
- Any legal or policy-related information, like non-competition clauses (if applicable)
- A space for the employee to sign, acknowledging they’ve received the letter
- Information about who the employee can contact for further questions
Plan for the future
Once the termination is over, reflect and consider what could’ve been done differently. Use the experience to improve your hiring practices or employee management strategies and update your HR policies or training programs.
If the reason for termination was anything other than downsizing, determine whether you’ll need to hire a replacement, write a job posting, and revisit your employee referral program.
How to update your remaining team members
After you fire an employee, it’s natural for the rest of your team to feel worried or startled. Fears of losing a job can greatly affect morale and productivity.
Depending on who you fired and why, other remaining employees may leave on their own.
Your team will ask questions. To get ahead, it’s best to call a quick meeting or send out an email to provide answers instead of letting your remaining staff speculate and wonder.
Be transparent and stick to the facts, but don’t go into detail. Reassure your team that they still have jobs and that this decision was made to protect or grow the business.
What to say to your team after firing a problem employee
Use the following scripts to clarify questions, reassure your staff, and provide next steps:
“Unfortunately, I need to share with you all that Jane will no longer be part of our team. It’s important to keep our clients happy, and performance played a role in the choice. If you’re satisfying your job duties, there’s no need to be fearful.”
“None of your jobs are in danger, and the business is doing well. I value your contributions and hope you’ll continue working here. If you have any questions, I’m happy to answer them now.”
You might be worried about how a termination will affect your team, but firing may actually protect and support your team in the long run.
When you fire an employee with respect and professionalism, your other staff will see that you’re a fair employer who values good work and sets reasonable expectations.
What to say to your team after layoffs
Laying off workers as a result of finances can make everyone feel unsure and nervous. Be direct, and inform your team about steps you’re taking to grow and expand. You can say something like:
“I had to make the difficult decision to lay off Jane, John, and Alan. As I’ve mentioned in past team meetings, we’ve had less work to do over the last quarter. Although difficult, this choice provided extra breathing room in the budget, and I’m confident we can keep you on staff.
I’ve also dedicated some of that budget toward marketing so we can get more money coming in. I understand if this still feels uncertain to you, and I’m always available for questions.”
Pro Tip: Tell your clients about the change in staffing if it affects them—for example, if someone new will be cleaning their home each week. Just say, “John is no longer with the company, so Steven will be cleaning your home. I’m confident you’ll be happy with his work.”
READ MORE: Try these expert tips for engaging employees
Best practices for firing or terminating an employee
It’s important to fire someone with kindness. Put yourself in the employee’s shoes and imagine how significant of a life change it can be to no longer have a job.
It’s very important to keep the conversation respectful and provide evidence as to why you made the decision you made.
Remember—risking your company’s reputation isn’t worth a poor firing event. Sites like Glassdoor allow employees to leave company reviews, and negative reviews can affect whether future candidates will apply for your job postings.
You can fire someone nicely using these best practices:
- Give yourself time. Set aside 15 minutes to tell an employee about their termination. Some employers prefer to fire at the end of the day on Friday for added privacy.
- Practice the conversation. Rehearse what you’re going to say ahead of time, especially the reason why you’re firing the employee. This isn’t a conversation you can improvise, especially since saying the wrong thing could put your company at risk. Practicing also reduces any anxiety you feel.
- Bring a witness. Don’t fire your employee in front of the entire team, but bring a senior employee or manager into the meeting. A neutral third party helps when or if the conversation gets heated.
- Be clear. Tell the employee that you’re firing them and why, without using a lot of extra words or small talk. Make it clear that the working relationship is over, explain next steps, and provide the necessary paperwork.
- Be firm. The employee might get upset or ask for another chance—after all, nobody thinks they should be fired. Don’t let yourself be swayed once you’ve decided. Repeat the decision, and offer outside support (like HR) if the person has more questions.
- Avoid emotional responses. Avoid platitudes, cliches, and apologies. These words aren’t very comforting to someone who’s experienced new job loss.
- Allow a goodbye. You can decide if you want to give the former employee the chance to say goodbye to their coworkers, depending on how the termination meeting went. (If it went badly, they might see this as an opportunity to bad-mouth you to the rest of the team.) They may or may not take that opportunity, and that’s okay.
- Reflect on the termination. Ask yourself why the employee didn’t work out. Is it time to reassess your interview process? Do you need better policies or training? Remember that firing is an uncomfortable yet expected part of being an employer.
Learn from the service pros
Get more best practices from Christine Hodge from Clearview Washing.
Terminating an employee isn’t easy, but it’s a reality of running a business. Knowing how to fire someone nicely can at least help you handle this uncomfortable task in a compassionate way, doing what’s best for your company and your team.
Originally published in March 2017. Last updated on August 8, 2024.