Why hiring and firing doesn't make business sense

I have seen corporate leaders boasting about their culture of “hiring and firing” as if speed of hiring as well as ego boost in firing seems a virtue in itself. Hiring quickly seems like efficiency while firing is seen as a weeding out of incompetent (which may be partly true). However, I am not a huge proponent of haste in either for over the long haul, I realise the folly behind such temptations.

There is unanimity among all industry leaders that hiring the best is desirable and getting them onboard quickly is good. However the firing part is where I beg to differ.

If you have to fire employees consistently, either one of the 4 possibilities exists none of which bodes well for your company

1. Hiring decisions are flawed

The fact that incompetent people who later had to be fired for the same got through should set alarm bells in your HR department. The higher the number of firings due to incompetence, the more concerned you should be about hiring policy. A hiring policy attuned towards rigourous standards may filter out a lot of people but will ultimately work towards decreasing the possibility of incompetence

2. Firing decisions are wrong

It is plausible that HR did its job well but concerned departments wrongly fired competent persons who could have delivered results for your business. Often HR takes the blame when the problem underlying maybe the manager in concerned department which failed to make the best use of talented individuals.

3. Company is seeing a meltdown

If you are firing, it is likely because your company isn’t doing that well forcing a layoff or it is grossly mismanaged prompting hopelessness and resignations. Whether you company faces the prospect of a meltdown in line with industry or whether it is gross mismanagement and office politics driving the firing decisions, the conditions are not favourable for business growth and needs to be addressed.

4. Work culture

Often what goes by the name of firing is just employees dumping you which is not a good sign at all. A good work culture goes a long way in business success just like a bad work culture encourages attrition. A positive work culture not only improves productivity but also brings down attrition rates significantly. Additionally, a good culture also tends to make the organisation a magnet for talented individuals wanting to make a career with the company.

Regardless of which of the four things afflicts whenever someone is fired, its the company which stands to lose in terms of training overheads and regular instability in operational aspects.

Hire and fire seems attractive from a point of view of wielding authority or showcase power. But if your intent is not power but wealth creation, hire and fire should stop.

To be sure, there are enough giant businesses in India who realise this and after decades of existence flaunt their first few employees. Maybe part of the reason they are giant enterprises today owes the same to this culture of valuing and retaining people.

Be smart.

Fire carefully so that you don’t mistakenly weed out good talents.

Hire the best so that they need not be fired.

ABW series.