When you’re heading up a business and you see a problem, or you’re simply not getting the profits you’d like to, the first inclination can often be to fire someone—or many someones.
What’s important to remember is that firing may not always be the best option—not just from an emotional standpoint, but also from a financial perspective.
The Costs of Firing
Consider this – when you decide to fire an employee it’s not as simple as sending them on their way. You’re going to have to pay, and sometimes in a big way.
When you fire someone there can be any number of associated costs, from paying overtime to your current employees, to paying your managers to train a new employee. Additionally, there’s going to be time required on the part of nearly everyone in an organization to get things in order after a firing, and that’s not even including how much it costs to recruit, hire and train a new employee.
When you’re in the process of training a new employee, it can mean your other employees’ attention is divided, resulting in a reduction of productivity.
These are all costs that assume you’re even able to fill the newly opened position—research shows that for every position open in a company for three months, it costs that company tens of thousands of dollars.
If you are able to find a new employee to fill a position, what happens if they don’t work out? You’re then right back in the same position.
So what’s the solution? Before you fire anyone, gauge whether or not your organization would benefit most from their firing, or instead from a focus on retraining that employee.
Retraining Instead of Firing
If you’re willing to retrain a problem employee, you may find there are tremendous benefits in terms of cost.
Yes, you have to invest in the training, but you don’t have to pay the costs, both time and money, that are required to recruit and hire a completely new employee.
Learning management systems provide a tremendous opportunity to retrain an employee in a way that’s time and cost-efficient.
You can also utilize an LMS to track the training process, so that you can determine, in a few weeks’ or months’ time whether or not the training has had an impact on the performance of that employee. When you’re willing to put in this kind of time and effort you can reduce your turnover, your associated costs, and you may find you have a loyal long-term employee who feels like you were willing to put in the time and effort to help him or her succeed and thrive.
How to Know Whether You Should Fire or Retrain
With all of the above being said, there are some situations that simply warrant a firing. Not every employee is going to succeed, even with comprehensive re-training. So how do you know what the right decision is?
Generally, if you have an employee who’s willing to make changes and takes responsibility for his or her own shortcomings, training and developing may be the best option. Many times employees who are willing to make improvements and acknowledge what’s gone wrong have the desire to succeed, and they just may have lacked the property training from the beginning.
On the other hand, if you have an employee who seems unwilling to acknowledge his or her gaps in knowledge or skills, refuses to take responsibility in a general sense or needs to be heavily pushed into making changes, it may be time to fire that person. Additionally, even if a person is willing to make improvements but the problems they have lay in things that are hard to teach, such as poor integrity, there may not be any amount of training or development that can make them an asset to your company. Download a free report of Bridging the Skills Gap.
How do you decide between hiring and retraining when you face a problem or concern with employees?