Sometimes, the biggest threat to growth isn't who you haven't hired; it's who you're afraid to let go. Every small business leader I've ever worked with has faced it—that employee who's not bad, they're just not right anymore. They've been loyal; maybe they were there from day one, but lately the work's slipping, the energy's off, and your gut knows something has changed. You tell yourself we'll coach them again, you convince yourself we can't afford to lose them right now, and before you know it, six months have passed and your whole team is quietly carrying the weight of one person you're too hesitant to move on from. I'm Sabrina Baker, founder of Acacia HR Solutions, host of the HR Connection podcast, and today we're going to talk about what happens when small businesses avoid the hardest part of growth through people—knowing when it's time to let someone go and doing it the right way. Welcome to the HR Connection, the podcast proving that small business growth happens through people, and HR is how you make it happen. I'm your host, Sabrina Baker, CEO of Acacia HR Solutions. After more than a decade helping small employers build people strategies that actually drive results, I've seen one truth hold steady: growth doesn't start with your business plan; it starts with your people. Every week we unpack how HR, when done right, becomes the engine behind every great small business. So whether you're the one-person HR department, a founder figuring it out, or someone who just got HR added to your job description, this show is for you. Small businesses cannot hide people problems. In a 20-person company, one disengaged employee is 5% of your workforce. If that person's work touches others, the ripple effect doubles: productivity drops, deadlines slip, morale dips, and suddenly you've got a performance problem and a retention problem. We once worked with a 50-employee client whose operations lead had simply outgrown the job. She was loyal and well-liked, but she resisted every system upgrade. Her team tiptoed around her, and projects stalled. It wasn't until she left on good terms that the CEO realized how much she'd been holding the company back. And here's the kicker: avoiding that decision had cost him nearly $120,000 in delays and rework over the previous year. So let's reframe this. Letting someone go isn't failure; it's a business decision to remove the barriers to growth for both the organization and the individual. Before you can take any action, though, you do need clarity. Let's use three filters for that. The first one is skill. Can they do the work the business needs now? Sometimes roles evolve faster than people. If you've grown, automated, or specialized, yesterday's skill set might not fit tomorrow's demands. The second one is will. Do they want to do the work? Burnout, boredom, or misalignment can masquerade as underperformance. Ask yourself, are they still bought into the mission? And the third one is fit. Do they still align with the company's direction, values, and pace? This one is the silent killer. A players who can't adapt to new structures or leadership will slow your progress more than they're ever going to help it. If you're unsure about these filters, you don't start with termination; you start with a role reset conversation. It's a candid sit-down that clarifies expectations, gaps, and next steps. You can download the template for that at the link in today's show notes. It walks you through how to reestablish alignment before deciding whether to coach, reassign, or part ways. In that, you're basically going to be asking three questions: What's working for you in this role right now? Where are you feeling stuck or frustrated? And what do you think success looks like over the next 90 days? If they respond with energy and ownership, you have a coaching path. If they're defensive, vague, or resistant, you probably have your answer. There's a common misconception that legal and compassionate are opposites, and they're not; they are partners. So before you do decide to terminate or have that conversation, make sure that you've documented performance concerns consistently, that you have communicated those expectations clearly, and that you have given them ample time to improve. And then, when it's time, handle the meeting with humanity. Here are a few guidelines for that. Keep it brief and direct. This is not the time for debate. You can say, "We've reviewed the expectations we set together, and despite efforts on both sides, the role isn't meeting what the business requires. Today will be your last day." Don't over-explain. Over-explaining sounds like guilt and invites argument. Be clear, be kind, and stop talking. Also, you need to have your logistics ready: final pay, benefits continuation, return of property—all of those should be handled smoothly. Confusion adds stress. Finally, protect their dignity. No walk of shame. Let them pack privately or mail their items later. And for anyone listening who worries this will hurt morale, I'll tell you that the opposite happens. When handled with clarity and compassion, your remaining employees exhale. They see accountability, they see fairness, and they trust leadership more. Letting someone go isn't just an ending; it's a signal to your team and to yourself that you're serious about the employee experience you say you want. Every time I've seen a small business finally make that tough call, two things happen. The team reengages almost instantly. They stop whispering about what everyone knew and start producing again. And then finally, the leader's energy returns because nothing drains you like trying to motivate someone who doesn't want to be there. And sometimes, the person you let go thrives elsewhere. That's growth too. You're not the villain in their story; you're the turning point. Small business growth happens through people, through the right people in the right seats moving in the same direction. And sometimes proving that means having the courage to say, "This isn't working anymore." If you're in that gray area right now, I'm not sure if it's a coaching moment or a cut ties moment, start with that role reset conversation. That template is linked below. It is going to help you structure a really honest talk that could either realign the role or confirm it's time to move on. You could also check out this week's blog, "How Do You Know When It's Time to Let Someone Go?" Marie breaks down specific signals and metrics you can track. And then finally, if you want to see how your HR systems stack up to support these kinds of decisions, grab the HR Readiness Scorecard. It's the quickest way to see whether your people practices are built to grow with your business. Remember, leadership isn't about avoiding hard calls. It's about making the right ones for the right reasons at the right time. I hope you found this helpful. If you did and you would like to like, subscribe, follow, connect with us across any of our platforms, we would love this. Maybe even send it to a fellow small business practitioner who might need this information as well. Thanks so much for being here.