Economic drivers are certainly forcing businesses to reduce costs and layoffs are one way of saving money.Ideally, layoffs should target non-performers rather than cutting staff across the board.It is never easy to lay off
people.The emotional aspects often overshadow the needs of the business.And quite frankly, laying off sales
people is particularly tricky.I recently worked with a client who was preparing to lay off sales people.My
advice to the client was before you pull that trigger, you need to conduct a “sales risk assessment”.The sales risk
assessment will uncover all of your areas of vulnerability, should the terminated employee decide to “pay you back” for setting them
free. There are specific actions you should take to protect your company not just from legal challenges but also to protect your
“sales intellectual property”. Remember, terminating a sales person is vastly more complicated than terminating
others in the company—sales people are the direct connection to your most important asset, your customers!
According to Heather Edelman, President of Strategies For Growth, a
Human Resources consulting firm in Newton, “the first element of the risk assessment is to clearly define why this person is being let go,
review the facts to support your position, especially what’s in writing, then do a cost/benefit analysis to understand the upside and downside
of the action you’re about to take”.
I asked Heather to work with me to develop an Employee
Termination Checklist with detailed actions you can and should take to protect you, your company and your clients.Lawsuits and revenue sabotage can be prevented.You will find the complete Employee Termination Checklist at these
The full checklist includes actions for each department and / or aspect
of your business and is applicable regardless of the position or person you are terminating.
The highlights of the checklist are below.Failing to plan and think carefully before terminating anyone but especially sales people, is very likely to cost you money,
time and serious angst.
What must be done to protect your files, databases and CRM
System? When will you change passwords etc?
Customer / Client Communication
What effect if any will the termination have on your company’s
reputation?On your clients? How will you communicate the change to your clients?
Do you have a plan for smoothly transitioning accounts to another sales
person?What is involved?
If you are going to replace the sales person, do you have a recruitment
strategy in place before you terminate the current person?
What financial aspects must be considered as a result of the
termination?Who is vulnerable? The company?The terminated employee?
How will other employees be affected by this termination?What should be done to support them?To maintain productivity?
What are the legal and associated financial risks?What steps will be taken, in advance, to mitigate them?If the company is sued, can you defend your
Will severance be paid?How will it be
calculated?Will a signed release be required?
What information must be covered?How will the
employee react?Are contingencies needed to deal with extreme emotions or potential violence?What are the
company’s legal obligations at termination?
How will you communicate the change to coworkers?Managers?What questions do you anticipate and how will you answer them?
Abraham Lincoln is famous for saying “Give me six hours to chop down a tree, and I will spend the first four hours sharpening the
axe.”It is all too easy to see the act of terminating an employee as a singular action that requires only minimal
conversation and thus little preparation.If managers plan for anything, it is usually how to handle an emotional situation and
once that has been addressed, well the rest is easy.Wrong, and especially, wrong when terminating a sales person.Fail to plan in this situation and you are truly planning to fail!
Call Catalytic Management today
for sales skills assessments and assistance with building or reconfgiuring your sales team.
Strategies For Growth is a Human Resources consulting firm helping small to
midsize companies get the best return on their investment in people. Growing businesses rely on them to help create high-performance organizations,
minimize employer risk and manage their ongoing HR needs.
Articles for Managers:
"Sales Managers Cheat Sheet to Sales Comp Plans" click
"Reducing Your Company’s Risk With An Employee Handbook" click
"Are you Dependent on Just a Few Cients? 50/30 Alarm System Can Help"
Catalytic Management specializes in business performance and growth
including sales effectiveness, customer service and business
process improvement for companies
in New England and the Northeast.