The Most Important Perspective Lesson You Must Learn as a Business Owner

The Risks of Keeping the Wrong Employees: A Cautionary Tale

Does this seem familiar? You hire a student or a student’s parent because they are kind and genuinely need the job. However, over time, you realize they are not a good fit. But, out of compassion, you keep them on because, “Sally is a good person and if we fire her, this, this, and this will happen to her.” What you fail to address is, “If we keep Sally on, this, this, and this may happen to our school.”

Let me share a story from a memorable lunch my wife, Janet, and I had on a beautiful spring day in Dunedin last year. We met up with my brother Jim and a long-distance student of his, Steve, who had a thriving business. Each year, Steve rewarded his top staff with a month-long trip to Florida, which included training with Jim. A nice perk.

During our lunch chat, Steve shared an employee strategy that he had used long before that Trump fellow’s TV show. Simply put, everyone on the staff knew that one person would be fired in October or November.

Regardless of the overall success of the team, one person was going to go, and everyone knew it—they just didn’t know who.

While I’m not advocating or disagreeing with this approach, it does keep the focus on the business's purpose: to remain profitable. The owner takes all the risks. It’s one thing to lose a job—people lose jobs all the time.

It’s a completely different experience to lose everything you’ve built and saved for because the owner has been sued into the ground for some infraction, real or imagined, committed by an employee.

I had multiple employees earning over $200,000 a year. Where are they now? Living their life, of course. Their risk was only that they might lose a job I created for them.

My risk was that their actions might spark a massive lawsuit, which is exactly what happened. There was no skin off their back, but mine was laid bare.

My point is simple: You can’t afford to carry someone whose only risk is finding a new job if you let them go versus you losing everything for their lapse of competence.