Small Business Owners: A Guide To Firing Someone



May 29 2024, Published 8:10 a.m. ET

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Whether you’re a new or seasoned business owner, firing an employee can feel tough for anyone no matter the reason. Not to mention that there are several factors that go into letting go of someone from a company. In fact, if there is any wrongdoing in a termination, an employee may be entitled to conducting legal action. 

According to Work Stream, one employee lawsuit can cost a company upwards of $100,000. To ensure this doesn’t happen, we’ve rounded up best practices to take into consideration when firing someone from a business.  

1. Review contracts and documentation.

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Source: Pexels

2. Prepare for news delivery.

“Whether you’re terminating an employee or laying them off, it’s important that you deliver the news with empathy, respect, and professionalism,” said Amanda Augustine, TopResume’s career expert. This is achieved by looking at which parties are directly involved, the time of day, location, and professional communication. 

For instance, the conversation should only directly involve the employee, a direct supervisor, and an HR representative. This will not only keep the matter private, but it will also give the employee any support needed. It’s also best to have this conversation in a private setting at the end of the day to keep any disruption at a minimum. 

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When the conversation does take place, it’s vital to only provide factual evidence and reasoning instead of opinions to support the decision made to part ways with the employee. “Be sure to highlight the employee’s contributions and dedication to their role. Be sure to include appropriate context like organizational changes or business related reasons to avoid unnecessary speculation and controversy. Most importantly, offer support and be open to questions and feedback,” said Kristina Wilson, Talent Acquisition Leader.  

Once the conversation is had, it’s also essential to professionally notify relevant team members of the employee’s departure. This will negate any potential rumors or gossip that could be harmful to the potential employee.

3. Provide support in their transition.

“How an organization treats former employees is a defining moment that significantly impacts its work culture. Demonstrating care for an individual’s success beyond the organization creates a lasting, meaningful impact and reflects the company’s values,” said Wilson. 

This can be achieved when companies are able to provide support such as references, recommendations, outplacement services, extended health benefits, or severance packages. Depending on the company, situation, and length of employment, different support items may assist more than others. 

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4. Coordinate with HR and IT teams.

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To ensure that firing an employee is handled in the best manner, it’s essential to loop in HR and IT. The teams will be able to facilitate logging them out of sensitive company information and provide offboarding support.  

“[The teams] should arrange for the return of any company property, such as a laptop or headset, in a respectful manner. HR may also offer to set up a follow-up meeting with the terminated employee to answer any additional questions the employee may have after the initial shock has subsided,” said Augustine.

5. Consider preventative measures.

“Preventing situations that might lead to termination involves creating a positive work environment, providing clear expectations and support, and fostering open communication,” said Wilson. Prior to hiring, it will benefit both the company and employee in the long run when the job roles and responsibilities are clearly explained from the beginning. 

Preventative measures don’t stop once the employee has been hired either. “If an employer schedules a conversation to discuss an employee’s performance, especially if that individual is already on a performance improvement plan (PIP), then, ideally, the employee shouldn’t be blindsided by their termination,” said Augustine.

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By: Taylor Bushey

A New Yorker turned Londoner, Taylor Bushey is a motivated business professional who has worn several career hats over the last few years. After leaving her most recent employment journey in the financial industry, she has re-engaged with her roots of writing, marketing, and content creation. She’s now a full-time freelance writer and content creator. Taylor covers lifestyle, careers, fashion, beauty, home, and wellness. Her work has been featured on CNN Underscored, Cosmopolitan, FinanceBuzz, Apartment Therapy, The Kitchn, and more. If she's not sipping an iced latte and writing away in a local coffee shop, she's most likely thrift shopping for a cool, rare find or planning out her next travel itinerary.

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