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Not the right fit? 10 signs it’s time to let an employee go

Having the right people in the right positions is vital to a company’s success. As an employer, it’s your job to provide a workplace and environment in which your employees can be productive – and it’s an employee’s job to be productive. Layoffs are never fun, however letting people go is a part of building a great team and executing your startup’s vision.

Since the team you build is the company you build, hiring and firing is a normal part of a CEO’s job. In fact, Avi Meir, co-founder and CEO of TravelPerk, says that he spends 60% of his time hiring. However, no matter how careful you are in your selection process, employee issues or layoffs will eventually come up, and it’s ultimately your responsibility to deal with them. Whether firing people for a good reason or laying employees off through no fault of their own, it’s difficult to let people go, and when making that decision you must consider a variety of factors including skills, performance, expectations, tenure, compensation, and culture.

In any case, issues should be addressed before firing an employee. And if you believe in second chances, hope to make things work by having difficult conversations and taking measures to make the workplace a healthier and more supportive environment.

So, when is it time to let an employee go? Here are 10 giveaways signs:

1. Lack of integrity While you want your employees to be smart and passionate, the most important quality a person can have is integrity. Lack of integrity is non-negotiable as no one wants to work with someone who doesn’t have it. If small lies or misrepresentations come up, you can be sure that there will be more coming. If you can’t trust a person, you should not have them on your team. Integrity is one of the main things Max Niederhorfer from Sunstone Capital is looking for when he’s investing in a startup.

2. They have not been performing well for a while – If you have given the employee proper guidance to help improve their performance, and they’re still not meeting expectations, you have a valid reason to terminate their employment. Their bad performance is likely to affect the work of others, so you must recognize that a decision to fire them may be necessary.

3. Team morale is hurt because of him – It’s an acceptable reason to let an employee go to avoid damaging the office morale or client relationships, and ultimately your business’s bottom line. If the employee is not trying to improve, or they always seem bored, team morale may be hurt more by them staying rather than going. On the other hand, great employees are often hard to find and keep, so as a CEO you need to constantly work on ways to take the office life to the next level and keep employees motivated

4. You can’t picture the employee being great one day – As a CEO or manager, your job is to create an environment in which team members can become great at what they do. One key sign you should let an employee go is when you can’t honestly envision that person being great at his job or within the company. If you have doubts about a person, or the work just doesn’t come naturally to them, there shouldn’t be much doubt about letting that person go.

5. Unreliable – This is the employee who constantly misses deadlines, is constantly late or doesn’t show up, and violates trust across the board. Although there are ways to deal with unreliable employees and in time they can become great employees, if the matter has been addressed and the employee’s behaviour hasn’t improved over time, it is probably time to find someone new to fill that position.

6. ‘Stirs the pot’ – Negative behavior is much more devastating to an organization that people realize. This employee is also known as the instigator, they pit people against each other and thrives on drama. Wherever they go, conflict follows, inevitably infecting your workplace. They use gossip and negativity to get what they want. Whenever you have an employee who is interfering with the performance of others or has an overall negative attitude, more often than not, that person needs to be let go.

7. Lack of loyalty – An employee who is not loyal will not work hard for you, and they will not do their best, either. He will not put the company’s interest ahead of his own. He will tell you what you want to hear, not what’s best overall. He doesn’t treat you as a person, you’re just his boss. He will criticize you and disagree with you in front of others but not in private with you. This employee doesn’t support your decisions or you in public.

8. The focus of the company has changed – Things often just change, and if the employee doesn’t have the skills or experience to help you take the business to the next level, then they’ve become a placeholder. Also, there are times when your business needs to pivot or close doors. But because this has nothing to do with the employee’s work ethic or personality, it can be extremely tough to let the employee go. Hopefully they’ll understand that it’s an essential move to help the business grow, or even to save the company, and you can send them along with a good recommendation.

9. Unreasonable demands – The employee will start asking for things that aren’t realistic when he becomes dissatisfied with his job, the workplace, or the environment. When confronted with this situation, it’s important for you to evaluate the environment to make sure it’s not conducive to such behavior. Take responsibility and see what you can improve, but if their requests are  unreasonable, it may be a sign that the job isn’t a good fit for them and that you should let them go.

10. You failed to properly vet them in the first place – Sometimes an employee just doesn’t fit in. Maybe the employee wasn’t convinced about the position or culture to begin with, or maybe they were just desperate for a paycheck. In any case, you failed to make sure they were compatible with the team. You failed to make sure they could actually do the job properly, not setting the right expectations or putting talent in the right place. Perhaps you missed some of the other signs listed in this article, such as the person having a lack of integrity, being unreliable or not being interested enough in the job. Recognize that it is your fault and let the person go. Or consider that perhaps, you have failed to create a culture that attracts and keeps great talent

Keep in mind that there will be instances when you need to wait before letting someone go, like when you are hitting a major milestone or during the release of a new or updated product, again, be very mindful about this. If an employee is non-productive, crazy, or acts in unethical ways, and you’ve assessed or made adequate attempts to address the problem and haven’t seen any improvements, you should let them go and move on.

One key question to consider is the impact letting someone go will have on your company. Plan it out and execute it with precision. When an employee does not work out, for whatever reason, it is necessary to hire or promote a replacement. That means you have to fire quickly to provide room for the newly hired. 

Marte Martin
Marte Martin
Marte Martin is a Madrid-based Venture Associate doing business as Marte Martin Venture Agency, where he focuses on entrepreneurial finance and accounting. You can usually find Marte around the entrepreneurial district of Arganzuela in Madrid or taking part in startup events around the city.


  1. Agreed. But how many of these negative employee actions are fostered from a flawed managerial system, with some combination of lack of clarity of goals, transparency or fairness in compensation? If the flawed managerial system remains, more negative employee actions and consequent turnover will continue.
    These Forbes and Harvard Business Review articles provide background on how industry leaders reduce turnover and improve performance based on superior managerial systems: https://hbr.org/2018/01/more-than-a-paycheck http://www.forbes.com/sites/fotschcase/2016/05/31/engage-your-employees-in-making-money/

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