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Handling agency employee terminations the right way

This SAGA Member Webinar is available only to individuals with active memberships. Login or join to gain access.
Webinar presented live on March 1, 2023

Whether you are letting someone go because of performance or because the business no longer can support their role, there are things that you need to consider to make it as smooth and painless as possible.

In this webinar, Chip Griffin shares his experiences to help you understand the best practices – as well as when you may want to consider enlisting outside help before you take action.

As Chip always says, if you’re willing to hire then you need to be willing to fire. This webinar will guide you when that difficult day arrives.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Hello, and welcome to today’s webinar on handling agency employee terminations the right way. I’m Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and we’ll be covering this topic today because it’s one of those conversations that none of us wants to have. We don’t want to think about it, and yet it’s a necessary thing that many of us face as business owners.

So before we jump into the meat of the topic, I do want to talk about a few housekeeping items, as I always do at the top of these webinars. First of all, you’ll have a full webinar replay available to you in the SAGA Pro members replay library, and so you can find that right on the SAGA website. You can use the q and a function on your computer.

It should be at the bottom of your screen in most cases, to ask your question. Feel free to ask them throughout the course of today’s webinar, and I will have a q and a session for all live attendees at the [00:01:00] end. If you’re watching this on replay or if you have a question that you don’t want to share publicly.

Feel free just to drop me an email at chip@smallagencygrowth.com and I’ll be happy to try to answer it in a timely fashion. If you want to talk about this webinar on social media, just use the hashtag agency leadership. And finally, if you’d like to learn more about SAGA and explore all of the resources that we have to offer, including lots of webinars and templates and workbooks and articles and all sorts of stuff, just go to smallagencygrowth.com.

Okay, so with that bureaucratic housekeeping stuff out of the way, let’s talk about what we’re going to be covering over the course of today’s webinar. First of all, we’ll talk about how you decide that it’s the right time to let someone go, and this is not an easy decision to arrive at, and we’re not gonna go through all of the details because most of this is really focused on what to do once you’ve made that decision.

but some of how you make that decision does impact how [00:02:00] the rest of the process goes. So I wanna make sure that we touch on it. We’ll talk about the actual timing of the conversation that you’re having with the employee that you’re letting go. We’ll talk about how you need to prepare for it, what groundwork you need to lay.

We’ll talk about having the difficult conversation itself. In other words, go right inside the room where you’re having the conversation and letting the individual know the bad news. We’ll talk about how to handle that correctly. We’ll talk about how to follow up after that conversation properly to make sure that you’re doing everything right, that you’re communicating to your team and to clients and all of that.

And then finally, we’ll touch on how to handle any aftermath, because I think this is one of the things that a lot of owners, managers are afraid of when they let someone go. What, what stuff is gonna happen that I need to deal with after the fact. So we’ll touch on some of that. But the, the first step that you have to overcome here is decide, okay, I’m gonna let this person go. And [00:03:00] there are different types of terminations. So how you decide that the time is right to, to pull the trigger and let the individual go depends in large part on what the reasoning for it is. So let’s take a look at the three main reasons that you would let an employee go. First of all, for cause, in other words, they did something so egregious that they just need to go.

And so typically those are fairly immediate and they’re rare. For cause terminations are, are fairly unusual for most agencies. They do happen. Usually it’s an instance where, let’s say you have one of these well-publicized cases where an agency employee posts something horrible on a client’s Twitter account or something like that.

That could be a for cause termination, you could have a for cause termination because someone is not abiding by their agreements with regard to confidentiality. I’ve had for cause terminations where someone is using company resources [00:04:00] for their own freelance clients. There’s a lot of those kinds of things that that could crop up, but again, very, very rare.

But in those cases, the timing is almost immediate. You learn about the violation and you’re taking action. So your hand is sort of forced on the timing for those. It doesn’t mean you don’t need to go through all the steps we’ll talk about in the the rest of this presentation, but your timing is not as much in your own hands.

Individual performance. This is the one where it is most in your hands. And this is the one where most agency owners, in my view, drag their feet. I have rarely had anyone come to me and say they acted too soon to let a, an employee go for poor performance. But I’ve had many cases where they say, geez, I wish I had done this much sooner.

So, something to think about as you are contemplating it. And when I have someone come to me and say, Hey, you know, I’m, I’m thinking about letting this employee go. [00:05:00] I’d like to talk about it. And usually what I’ll say to them is, you should let them go. And they say, but I haven’t even told you anything about the situation.

The reality is that most of the time when we start to think, Hey, maybe it’s time, we’re already past that time. Again there’s never a hundred percent certainty around these things, but if you’re thinking about it, chances are it’s time to, to map out,a future for your business and for that employee where you’re not together.

Finally, there’s agency needs, and this would be where you would put things like layoffs or maybe you decide to get out of a certain line of business. So it, it could be, you know, due to the financial performance of the agency, losing a big client. It could be because of a recession, you just need to pull back on your total expenses.

It could be that you decided no longer to offer this service or that service. Those are the kinds of things that go into the agency needs bucket, and this falls in between the urgency of for cause and the dragging your [00:06:00] feet of individual performance. This one is really one of those ones where it’s partially triggered by some sort of an external event, like losing a big client.

But it’s also something where you still need to figure out when is the time right. And again, my experience is that particularly when it comes to layoffs, because you’re, you’re, you’ve hit troubled times financially as an agency. Most agency owners wait too long. And the reason why is because they rely too much on emotion. That this is an employee that they loyal to, they feel like they truly are part of the family. They want to try to make things work. They have a feeling like things are going to turn around. We’ll get that new client. The economy will turn around the, you know, whatever it is. All of those things play into it. And so oftentimes agency owners are very slow to let people go when it has to do with the agency no longer needing that resource.

So you want to make sure that [00:07:00] you’re focused on the facts. Are you able to keep this employee busy doing profitable work? Do you have the cash flow to sustain your current payroll at your current revenue generation rate? If the answer is no, you need to address that sooner rather than later. So all of these things go into how you factor in, whether it’s time to part ways with an individual employee.

But it doesn’t get into some of the next steps, which will be when do you actually do it? Because you’ve made the decision. But now there’s still the actual timing of the conversation. So we’ll talk about that in just a moment. And as you’re thinking about when to actually have the conversation with the individual, the first thing to remember is that there is never a good time to do it.

And so I get asked regularly by agency owners, you know, when should I let someone go? What, what time of day, what day of week? All of those kinds of things. And, and the reality is, There is no good time. There’s always a potential issue. If you do it [00:08:00] in the morning, then geez, you know, you’ve got everybody having to hang around all day and you know, not feel good about it.

If you do it at the end of the day, then there’s no time for people to react if you do it before a weekend or before or after a holiday. All of these different things complicate it, but we’ll talk about those in just a moment. But the, the key thing is to remember that there is no good time. It’s not good for you, it’s not good for the employee, and so it, it’s going to be difficult to find an ideal time.

But what you need to do is you need to factor in those things that might make it worse for you, your team, the employee or your clients. So let’s take those individually in reverse order. So let’s start with the clients. Obviously, you don’t want to let an employee go the day before they’re due to give a, a big presentation to a client or there’s a large deliverable, or the client has some event. So you want to factor that in because it may be, you know, better not to have that disruption leading into it.

Even if not having that employee around for that event or presentation might not make a [00:09:00] difference. It just creates unnecessary distraction, disruption for your team. It becomes something that you maybe need to explain to the client at an inopportune moment, why so and so isn’t there. So my encouragement is to start with the clients and just make sure that whatever your timing is, unless it’s for cause and you can’t avoid it, try to schedule it around things that might make it more visible or more impactful for your client.

Now let’s look at the employee. What might make it a worse time for the employee? Obviously, some of the things that you want to think about from a timing perspective are, you know, you don’t want to do it on the employee’s birthday. If you can avoid it again, if it’s for cause you don’t have a choice, but, most of you have your employee’s birth dates on your calendar or in your HR system.

Just check and make sure that you’re not doing something silly like that, because that can compound what’s already a, a difficult situation and not really be a necessity if it’s purely for performance or something like that. So take those things [00:10:00] into consideration. Take into account that you don’t want to do it right before a long weekend when or, or just before an employee’s vacation potentially.

Those are the kinds of things you want to think about and factor in. It doesn’t mean you shouldn’t absolutely do it. There’s no hard and fast rule, but factor it in to your thinking. Think about your team as well. Again, if your team has a big deliverable and this other person may not be performing as well as you would like, but maybe they are eating up hours, that would help to get the job done.

You may want to hold off until the timing is a little bit better. Be careful that you don’t talk yourself into that being open-ended and indefinite. I’m talking here when we’re thinking about how to time these things we’re talking about it you know, days, perhaps weeks, but not more than that. This is not something that should cause you to hold off for months on pulling the trigger once you’ve decided that this is a difficult decision that has to be made. You need to think about how your team will react to the individual. And in many cases, when it’s [00:11:00] for performance, your team already agrees that that individual is not performing up to par. And so you’re in a situation where they’ll actually feel good about your decision to part company because the longer you stick with a, with an underperforming employee, the the less respect your team will typically have for you because they say either you’re so tuned out, you don’t notice it, or you don’t care that this person is making their jobs harder because they’re not performing as well as they should.

And then finally, obviously think about yourself. You need to consider if there are things in your own life, on your own schedule that might make it more stressful, more difficult at a particular time. So again, don’t do it on your own birthday if you can avoid it, because most people don’t look forward to these conversations.

So why put yourself through that stress if that’s not something that is absolutely necessary on that date? But now let’s talk about some of the theories around what day of the week and what time of day. And so in general, I would advocate against things [00:12:00] like a Friday afternoon termination. I know there are people who are fans of it because they feel like it’s the end of the week.

We’ll just make a clean break and start fresh the following week. The problem from my perspective, and in my experience for Friday terminations and particularly Friday afternoon terminations, is you don’t have an opportunity for the team to have a conversation with you to digest the information. You’re giving them a lot of time over the course of the weekend to, to stew about it and mull about it and what does it mean.

And so you don’t want to allow them to have a lot of time for their imaginations to run wild. You want to give them an opportunity to, to follow up with you about any concerns that they may have, and we’ll talk about how you communicate it to, to your entire team when you’ve taken one of these decisions.

But in general, you want to make sure that they’re having an opportunity to communicate with you. You also wanna make sure that you’re thinking about it in terms of what day of the week works in order to fit in with [00:13:00] other things that are going on in your agency. So, for example, if you’ve got a situation where, your agency has a weekly team meeting on a particular day.

I would try to avoid doing it after the team meeting, but instead try to make sure that you’ve taken care of business before the team meeting so that you can use that as a natural communications point. You want to try to do it early enough in the day that the employee has some time to to, to go and, you know, start to absorb the information on their own. Because you should not expect that you’re gonna terminate someone and they’re gonna stick around in the office. You want to put them in a place where they are able to, to move on, and, and go on with their lives and start. You know, figuring out what their next steps are.

And so if you’re able to, to have the conversation with them in the morning, they then have the afternoon to absorb it, but then maybe start doing something constructive. Maybe they reach out for unemployment [00:14:00] insurance or those kinds of things that, that can make them feel like they’re taking proactive, positive steps in addressing their own situation.

So in general, my, my advice would be time it around other things that you’re doing. I would err on earlier in the day rather than later. And definitely try to avoid right before major holidays, long weekends, short weekends, anything like that. And also in general, I would say if you can avoid December that’s generally a good thing. Sometimes it’s unavoidable for whatever reason, and like I said, you don’t wanna delay things by months, but if you can avoid a termination that’s not urgent, avoid doing that during the holiday season. That can certainly be helpful. Alright, so now we’ve talked about the, the general timing.

Now we need to think about, okay, how do we prepare for this conversation? And so you start by trying to figure out is this a low risk or a high risk termination? So how do you figure out what the difference is? [00:15:00] So, some of the things that, that go into this calculation, and I’m talking not so much about the risk to client relationships or the team.

Yes, that needs to be factored in, but I’m talking about legally a high or low risk, and this is why you want to make sure that you’re talking with your professional advisors. You want to talk with your HR consultant if you have one. If you’ve got in-house HR or however you’re dealing with that, you want to make sure that you’re addressing that with them so that you understand high or low risk.

But some of the things that go into high or low risk from that perspective are things like, is the employee part of any kind of protected class? Are they over the age of 40? Are they pregnant? Are there any things, any special circumstances that might come into play that could put you at broader legal risk?

You know, have they been out on medical leave recently? Those kinds of things. You want to make sure that you’re aware of those because it may change how you approach it and it may in particular change some of the [00:16:00] paperwork that you’re trying to put in place. So these are, these are things you want to evaluate with your professional advisors who can help you.

If it’s high risk, then you probably want to talk not only to an HR consultant, but potentially to an employment lawyer so that you can really make sure that you’re crossing your t’s and dotting your i’s. These difficult conversations go much better, the better prepared you are going into them. So understand what the rules are, get the proper advice, and then you start putting the paperwork together.

And depending upon whether it is a low or high risk termination, some of the paperwork will be different. Some of the, what you include in it will be different, but there may be also differences in how much time you have to give an individual to review those documents. So we’ll touch on that a little bit, but I encourage you that’s something you really want to get based on your own local state rules and regulations from your professional advisors who can help guide you on what specifically applies in your situation, because it’s going to be different based on where you’re located, the number of employees you have, [00:17:00] the status of that individual employee and all sorts of other things.

But you want to make sure that you have all of this paperwork ready, so you should have ready to go anything that you want the employee to sign upon departure. And so typically you would have a separation agreement that would lay out what their responsibilities are and would specify what compensation in the form of severance that you’re gonna provide to them.

And you should be providing severance, not just because it’s the right thing to do, but also because it helps to make that agreement enforceable. And even if it is a relatively amicable termination, maybe the employee knows that the, the business is struggling. And so you know, they’re approaching it in a friendly way, at least as friendly as anyone can when they’re losing their job, you still want to make sure that you’re having them sign a document that acknowledges what their ongoing responsibilities are. So that might be non-disclosure or non-solicitation requirements. It could be that they, [00:18:00] they agree not to sue the agency for anything after the fact.

Things like that you want to include in the paperwork. You wanna make sure that you’re very clear about what you are or are not covering in terms of benefits. And again, there are requirements here in the US and elsewhere as far as what you must do. And so you want to specify all of that in the paperwork.

So it’s all laid out before and you’ve got this ready before the conversation. The challenge that a lot of agency owners run into is that they have the conversation with the employee and then backtrack and try to deal with the paperwork after the fact, and it may or may not match up with what they’ve said during that meeting.

So have it already. Have it if you’re meeting in person, and I encourage you to try to do this in person if you can, we’ll talk more about that in a minute. Have it printed out and right there and ready so that you can share it with the employee and point out the key things that they need to be aware of in it.

And this goes to how you’re planning out this conversation. You should script it. If you’ve never had a termination before, be really [00:19:00] clear about exactly how you’re gonna sit down and what the, how you’re gonna walk through the conversation with the individual and the key points that you want to make.

Because the more prepared you are for this, the easier the conversation becomes. And so this also means making sure that you’re talking with your advisors and others to think about what are the basic questions that you might be asked, and make sure that you either can answer them, you can refer them to the paperwork, or you can refer them to someone else who can give them the answer.

And so typically questions you will get from an employee upon termination will be the basics. How much severance do I get? How, when do my benefits run out? How will you handle unused vacation or other leave? What happens to my retirement plan? Those kinds of things. And again, you may not be able to answer them all concretely in the meeting, but as long as you can answer them as much as possible and you can let them know who can give them the direct answer that they need, all the better.

And then finally, you want to make sure that you are scheduling well. And [00:20:00] this is not the actual timing of it, but this is how you set up the meeting with you. You want to be careful that you are not telegraphing the purpose of the meeting, if at all possible. And sometimes it’s simply not. Sometimes employees just see it coming and as soon as they see the meeting on their schedule, they know what it’s about.

But you generally speaking, want to avoid it. You don’t want the termination to be a total surprise, particularly if it’s performance. They should know that you’ve been unhappy with their performance. That shouldn’t be coming out of left field. But at the same time, you don’t necessarily want to give people an opportunity to know that this is the specific conversation that’s going to take place right now because that then hits you where you, you have some challenges with regard to some of the things you have to do as far as turning off their access to accounts. Because if they know before you tell them, then you’ve no longer protected the firm or the individual by disabling their access to key accounts. So make sure that you’re thinking about that.

And so try to find if you can do it at a regularly scheduled [00:21:00] meeting that you have with the individual, or there’s some other way that you can get the, the meeting on the calendar without, you know, putting a big red flashing light on it that says this is a termination conversation, you’ll be in better shape. So get all your paperwork, all your planning in in line and it will make the conversation go much easier.

But that’s not to say it isn’t a difficult conversation. It is. And I know most of you have no desire to have these conversations. I get it. And I’m not gonna tell you, you should enjoy it. But you need to be prepared and you need to, to walk into the meeting and you need to say to, to say to yourself I need to do this.

It’s the right thing for me. It’s the right thing for the employee. You need to stay focused and keep it brief. And I always tell people, I can generally tell how well a termination conversation went based on how long the door is closed. And if you are in a situation where the meeting is going on and on, chances are it’s going sideways in [00:22:00] some fashion.

So you need to go in with the idea that this is going to be a very brief conversation. And I’ve done a fair number of terminations for myself or for clients over the years. Most of them don’t last more than three to five minutes. There’s no reason for these to go on for long periods of time because you simply go in and you rip off the bandage.

So your script should, should be devoid of any euphemisms or small talk, and it’s really just sitting down and you say, we’re about to have a difficult conversation here. We’ve made the decision that it’s best for you and best for the agency if we move on and go in a different direction. So we’re going to be letting you go, here’s the paperwork, here are the terms of it, and you should then explain what the, the terms of the separation are.

The big brushstroke things, again, the key things that people want to know. How much money am I getting? Do I, am I leaving right now? And generally speaking, I would say yes, they should. You should have them leave immediately. Don’t have [00:23:00] them linger around. It protects you and it protects them if they’re no longer in the office or having access to your systems after you’ve terminated them, even if it’s, again, relatively amicable.

There is a slight exception in the case of layoffs where you perhaps have a little bit more wiggle room, but just keep in mind that if you’ve got people hanging out who are no longer going to be gainfully employed in the next week or two than the chances of them, being as effective are not very high.

And the, the risk of not necessarily misbehavior, but… mischief, let’s put it that way, could be too high. And so it’s better for you and for them not to have that. So explain exactly what they’re getting, explain how it works, explain how much time they have to review it, and encourage them to review it.

You don’t want to be in a situation where you’re pressuring them. I need your signature right now. If you don’t give me your signature, I, you know, we’re, we’re not gonna give it to you or something like that. You need to make sure, both for legal reasons and just, you know, general fairness, that you’re giving them a chance to [00:24:00] review the paperwork.

Depending upon what the rules are where you are, you may need to have a final paycheck prepared for them that you hand to them in this meeting, whether they sign or not. There are some requirements for whether you can prorate that final paycheck depending upon what your jurisdiction is. So make sure that you understand that, whether that’s from your HR consultant, your lawyer, your payroll folks, whoever it is, just make sure that you understand what that is.

And that is typically separate from whatever check they would get for severance. That they’re getting in exchange for their signature on that document. So you, you would not provide the severance piece without the signature on whatever documents you’re asking them to sign, but you would still have to pay them the final paycheck and probably unused vacation days in any case.

So just make sure that you have all that together and with you, and you’re complying with the law there because you don’t want to stumble over something silly like you didn’t realize you needed to have that check available. And so you want to [00:25:00] make sure that you’re taking care of that. And again, your advisors can really help you on what the local rules are here.

Next. Really make sure that you’re staying on message. You’re just, you’re there to deliver the bad news and explain to them what the next steps are and what severance looks like. You’re not, this is not Festivus. That’s what I always tell people. This is not your opportunity to air all your grievances with the employee that, and complain about their performance and all that.

You certainly shouldn’t do it proactively and you don’t want to do it if they ask. Why, you know, well, what’s wrong with my performance? Why are you doing this? Why? You know, because it’s, it’s a natural instinct for employees to want to ask why. The reality is, if you’re having good communication with them, you’re having regular one-on-ones, you’re sharing performance feedback over the course of time. This should not be coming out of left field if it’s performance based. If it’s for cause, then you can state what that cause is. Again, make sure you consult with your lawyer and HR consultant to, to make sure you’re framing it properly. I will say that I have generally become not [00:26:00] a fan of for cause terminations, true for cause terminations, where you wouldn’t even offer severance.

I think you’re better off in most cases, just sucking it up and letting them go and having the paperwork signed and not getting into the fact that this is for a particular cause. If your advisors tell you that you need to go a different direction for some reason, that’s fine, but in general, err on just making it as amicable as possible because there’s no need to get into a war with an employee who is headed out the door one way or the other.

And if someone keeps asking why, just stick on message. I’ve had terminations where I’ve had someone go round and around with me for 30 minutes just continuing to ask questions, and I will just always revert back to, this decision is final. We need to move on. And you just keep saying that and eventually they wear themselves out and, and they move on.

And so you want to make sure that your goal is to get out in as reasonable a timeframe as possible. And you don’t need to rush them and, and push them back. If they have questions, [00:27:00] go ahead and entertain them, particularly if it’s about the documents and how it works. Absolutely. Help them with that. You want to make this a smooth process.

We’re humans. We want to try to help other people. We certainly want to try to avoid problems. And so the, the more cordial we can be in this process, the better. But this get out piece also requires you to think about something in this more hybrid work environment we’re in because, if you are, for example, doing this conversation in a coffee shop or some other public space, which I have had to do in the past because I’ve run virtual businesses for a long time.

It can be awkward. And so you need to figure out what’s your exit strategy? How are you gonna get yourself out of that? Because obviously, if it’s in your own office or conference room, it’s very easy to end that conversation. If you’re somewhere where you’re meeting someone at a coffee shop and they’ve already gotten a coffee, you know it, it makes it a little bit more awkward.

So just make sure you thought through, okay, how am I going to extract myself from this? And it might be as simple [00:28:00] as you decide. Okay. When the conversation has run its course, you’re just going to, you know, stand up and say, you know, thanks, ask me, you know, if you’ve got any questions, feel free to reach out, shake their hand, and, and then you exit.

You need to make sure that you’re very clear about these plans so that you’re not sitting there and saying, Hmm, what do I do now? This is awkward. So, plan, plan, plan, and you’ll be in much better shape.

Now following up. Obviously you have the difficult conversation, but that’s not the end. You need to make sure that you are, you have pre-planned for some of this follow up activity, particularly making sure, as I’ve mentioned a few times now, remove access. If they’ve got access to your project management tool, to an intranet, to an email account, to your social media accounts, anything that they’ve got access to.

Make sure you’ve made a list in advance. And you remove their access. Ideally you’ve got someone removing their access while you’re having the conversation. And again, this is to protect the business, but [00:29:00] it’s as much to protect the individual because by taking away their access, they can’t be accused of anything that might happen afterwards, even if it’s inadvertent. Even if your account gets hacked by truly hacked and not, you know, one of these celebrity, oh, I got hacked because I got drunk and said something stupid on Twitter.

You actually get hacked. You don’t want to be in a situation where you’re even wondering if it’s that employee who did it, because they should have had their access removed. And so it protects you and them in those cases. So make sure that you’ve built up that list and you remove that access. If you’ve got a physical office, you need to make sure that you are getting the key back. You may think about changing your locks. Not necessarily every termination requires changing your locks if you’ve got a physical key. Certainly if you’ve got electronic access, make sure you or your landlord or whoever controls that, removes their access immediately so that you don’t, again, have a situation where something happens and you wonder if it was that individual.

Make sure that that’s not even something that could come to mind. Make sure that you have a plan for [00:30:00] collecting your agency’s property. So if you’ve given them a cell phone or a laptop or printer or other device that they can use, make sure that you are collecting that back or make sure that you’re clear with them in the termination conversation that they can keep their laptop, for example, or they can keep their laptop for a nominal fee. Think those things through, because that’s, again, the laptop question is one that I have gotten a lot over the years from employees because employees often use their work laptops for personal purposes as well, so they don’t have to carry two around, and so you want to make sure that you know what’s going to happen to that laptop.

In general, I’m an advocate of trying to find a way for them to have it, whether it’s just outright giving it to them or charging a phenomenal fee to keep it, it’s often the, the smoothest and easiest approach. But now beyond that individual employee, you need to think about how do you communicate with the rest of the team?

How do you let them know what has happened? And so ideally, you want to have a pre-scheduled team [00:31:00] meeting that takes place. Not too long after you have this conversation with the individual. It shouldn’t be backed up immediately because you need to have a little bit of a window of time for taking care of things. You may want to give the individual an opportunity to say goodbye themselves.

You don’t necessarily need to to go to the point where you just march someone out from your office straight out the door. That depends a little bit on how the conversation goes and, and also you know, what the risk level of that individual is based on your experience with them. But, you know, think about those things and think about how you’re going to handle that interim period.

Giving them an opportunity to, to pack up. Sometimes you want to, to let them go and have them come back the next day to collect personal items and that sort of stuff so they have a chance to let off steam. You really need to figure out what’s gonna work in your particular situation, and how you want to handle it. In general I think giving them an opportunity to, to clean things out, they should be monitored, again, for their protection as much as yours so that if [00:32:00] something goes missing, There’s, there’s no concern about, you know, where it went because they were being watched while they were cleaning things out and, and couldn’t just walk away with an extra laptop or, you know, some other valuable piece of property or client files.

Right? Because you also need to make sure that you’re collecting back any client files or client data that they may have in hand. Obviously these days, most of that is electronic, and so there’s not a whole lot of paper records that most agencies have, but you need to make sure that you are getting that back from them in a timely fashion, whether that’s immediately or in the coming days before you issue the severance check for them. So think about how you’re informing the team when you’re informing the team. Don’t share a lot of details. You know, short, sweet to the point. You don’t want to be in a position where you’re airing your grievances about the former employee to your current team.

Simply let them know that this individual is no longer with the team, and let them know what the plan is going forward. Who’s gonna pick up their work? What’s the impact on everybody else? Because people are worried about the individual, but [00:33:00] they’re just as much worried about themselves. If this is a layoff, if this is not a performance termination or a cause termination, in those cases, then you want to make sure that you’re being clear about what it means for the business as a whole.

So I always encourage you, if you feel like you need to lay people off because you don’t have the financial resources, you’ve lost a big client, the economy has turned, whatever it is, make sure that you are trying to to to do all of your layoffs at once. Try to avoid piecemeal approaches where you let one person go this week and another next week because then it’s that drip, drip, drip and your team just starts sitting there and panicking, am I next?

So ideally, you want to try to figure out what kind of reduction in force you need, make it all at once, and then sit down with the team and say, we believe this is all we need to do. We don’t foresee any other substantial changes. Obviously, nobody knows exactly what the future holds, but if you can give them that assurance, all the better.

If it is just one individual leaving, you [00:34:00] know who’s gonna pick up their responsibility is an important question, and you need to be prepared to answer that. That’s part of the planning process, but then it’s part of the communication with your team after the fact. Same goes for clients. If this individual is client facing, you need to communicate it with clients.

If they’re not client facing, you may not need to share it with any clients. Again, you don’t need to share a lot of detail. Just let them know that, that they’ve left the agency have moved on, and here’s your plan of action going forward. You want to make sure that you know anything that takes place in that termination conversation you’ve properly documented. Particularly if anything out of the ordinary happens. You want to make sure that you’re collecting all of the paperwork that you’ve given them for signature, particularly if they don’t sign it right there and then. If they’re returning it to you, make sure that you are following up and getting all of that taken care of. You want to cross your Ts and dot your i’s.

So now let’s finally, as we, as we start to wrap up this conversation, let’s think about those conversations that have gone [00:35:00] sideways or they go sideways after fact. Someone feels aggrieved by the fact that they’ve been let go and so they, you know, they can react in a number of different ways.

And I, and what I will tell you is this, my experience having done a lot of terminations, again for myself or for clients over the years, they, the ones that you think are going to go poorly, don’t. The ones that you think will be easy as pie aren’t. So don’t bother trying to guess too much going in. Just make sure you’re following the same process and, and, and abiding by good practices in each case.

And then if something does happen, then you need to figure out how to address it based on what actually happens. And, and the things that I have seen, there have certainly been situations where you will have terminated employees who will, try to stir the pot with other team members, they may try to stir the pot on occasion with clients.

I’ve seen that a lot less often, but, but certainly with other team members I’ve seen on a not [00:36:00] irregular basis. On rare occasions, they may talk to an attorney or something like that. Again, I think that’s incredibly rare. It does happen, but you know, if that’s, if that happens, then you make sure that you’re conferring with your own legal counsel to figure out how to handle it best in those cases.

And the general advice that I give anytime you’re dealing with a difficult situation is the same advice that, that we used to give when I was a trainer of new baseball empires. And that is pause, read, react. In other words, take a deep breath, understand what’s happening, and then figure out what your plan is.

Don’t respond in the moment and, and in that emotional way that we often will, if we hear, you know, that so-and-so has, has been stirring the pot with current employees. Don’t immediately jump to you know, World War III and we’ve gotta send nasty letters and all that kind of stuff. It may be necessary.

There are certainly cases where I’ve had terminations that that went [00:37:00] bad places. I had one many years ago where the employee was trying to hack into our computer system after he had been terminated, and we did end up having to have a lawyer send a a nasty letter to him. It immediately stopped. As soon as he got that it, it now makes for an interesting war story. In the moment it was not that, but fortunately I was working with good professional advisors who helped me navigate that in a way that didn’t make the situation worse. So make sure that you’re really taking the time to, to think clearly about what your reaction to any of this is going to be, and don’t overreact because that’s going to tend to make these things worse than they already are.

And finally, you need to make sure that you are moving on. And so what that means is that once you’ve ripped off this bandaid and taken care of the difficult conversation and gotten the paperwork done, You may still feel some resentment that you had to deal with the situation. Either because you, you were upset that you had lost [00:38:00] the business that required you to lay someone off, or you were upset that someone was not performing up to par and you had to let them go, or they did something to betray your trust and so you had to let them go for cause.

All of those things can boil up within you and be really frustrating, and I understand that, I’ve been there, but you need to try to move on yourself because if you are still stewing over it, festering about it, it will eat you up and it will put you in a position where you might do something that isn’t wise.

And so one of the things that you need to remember is if you’ve terminated somebody, you want to be very careful if you’re ever called for an employment reference on that individual. And again, your advisors can give you some, some probably more legally proper advice. But my general advice to you is if you were called about someone who was terminated, be very careful about any kind of reference that you might give. And typically my advice on references overall is to simply decline to provide them that you can confirm employment. But I would [00:39:00] avoid anything where you’re in a position to characterize someone’s performance as an employee, because the risks these days are relatively high for that kind of thing.

And so try to avoid falling into that trap. Obviously, hopefully, folks aren’t using you as a reference if you’ve terminated them, particularly if it’s for cause or for performance. But I’ve seen it. I, I had an employee I terminated for cause and I got a reference check on them a couple of years later. I was dumbfounded.

I didn’t understand why I would’ve been listed as a reference based on the way that that relationship ended, but, it is what it is. So, hopefully it doesn’t happen to you, but if it does be really cautious about what you might say there, you really need to move on. If they haven’t, that’s something that they have to deal with in their own lives and you shouldn’t be wrapped up in it.

So with that, that brings us to the, the wrap up period of this conversation. And so the, the key points, I think to take away when you’re doing employee terminations, you want to make sure that you’re really looking at the facts to figure out if this is [00:40:00] the right decision for your agency right now. You need to be thinking about how you’re communicating.

You need to plan ahead. For the conversation, for the paperwork. And if you’ve got all your ducks in a row and you time the conversation well, and you sit down and you keep it short, sweet, and to the point, you will be in a pretty good position to, to minimize any potential risk and maximize the, the benefit to the agency and frankly to the individual.

Because, you know, I, and I’ve mentioned it a couple of times today, if you’re parting company with an employee, particularly if it’s for performance, they’re better off somewhere else and they will not think about that in the moment. But the reality is, if they’re not fitting in with what you need, it’s not going to get better over time because you’ve, chances are you’ve already given it a lot of an opportunity to work.

And so it’s better off for them to find an opportunity where they are a better fit because they will be happier. You’ll be happier and it works out better for everyone involved. [00:41:00] Make sure that you’re prepared. Have that plan. Make sure that you’re getting the proper advice so that you’re doing this in compliance with all of the laws and regulations that matter to your business, wherever you’re located.

And then go forward, do it, follow up correctly, communicate effectively to the rest of your team and your clients. And if things happen, handle them as they come, but do so as unemotionally as possible. And so with that, I will unemotionally bring us to an end of this particular webinar. For those of you who are here live, we’ll be moving on to q and a after this.

For those of you who are watching on replay, this will draw to an end the formal presentation. If you do have questions though, and you’re watching on replay, you can email me at chip@smallagencygrowth.com, or you can join the SAGA community on Slack and ask your questions there where I can chime in.

Other agency owners and leaders can chime in and we’d be happy to try to help guide you through these difficult conversations and [00:42:00] difficult decisions, frankly, that we unfortunately have to make from time to time. So, again, thank you for watching and, I’ll grab a sip of water here and we’ll dive into the q and a in just a moment.

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