It’s true that most questions I am asked as a part time CFO are financial in nature, but there is one non-financial question I do get question very often because of its very tricky nature.
“What do I do with inferior employees when the market for their skill set is so small and unskilled, if I’m lucky enough to find a replacement, they’ll probably be even worse than who I have now?” And this is in a situation where the employees are not stealing or otherwise underhanded, but are simply incompetent due to lack of talent or ambition.
Most people would hear this question probably say to just bite the bullet and fire the incompetent employee/s. That’s a legitimate response, and would probably even work out a lot of the time when the job market is not as sparse as the employer had originally feared. Unfortunately, there are many more instances where the job market is, in fact, just as bad as it had seemed—and not only that, but the loss of the fired employee results in a loss of business, and the training for the replacement (if you managed to find one) is extremely expensive.
In businesses that I have owned, I have faced these types of situations personally. Contrary to what those who think getting rid of the inferior employee is a no-brainer believe, an employee market can be thinly populated and thinly talented, however, in the end, those people have the right idea. I recall two specific situations that I, as the business owner, held on to inferior employees. The results were extremely negative both times, so even though you may really lose a lot by letting the inferior employee(s) go, it’s still worth the consequences to get them away from your business.
Your other, more talented and ambitious employees will be brought down by your one less than stellar employee. They’re like the proverbial “bad apple” in your basket that spoils your whole bunch. The way these inferior employees drag everyone down with them can jeopardize the effectiveness of entire operations, which is a disservice to your customers, the most important cog in your machine.
Cutting the cord isn’t easy, I know that first hand. You are going to lose business because there are no replacements in that skimpy job market. You yourself are going to have to work more hours, no matter how crazy your hours already are. You are going to spend many sleepless nights agonizing over this decision, and then because you made this decision and have to work way overtime you will spend many more sleepless nights. It’s one of those unfortunate necessities of running a business-you’re definitely going to come across this situation, and the right decision-letting inferior employees go despite the consequences you are guaranteed to face- is the tough one.
Taking every precaution you can to not get stuck with an inferior employee during the hiring process and during your new hire’s first 90 days working for you is the key to avoiding the situation altogether. It isn’t fool proof, but the more attentive you are during the hiring process, the less often you’ll find yourself in this difficult situation.
This is a rare non-financial challenge for a CFO, but even so it’s important they guide their clients through and, if they have business ownership experience, offer their real-life insight to help.