How to part ways with a long time employee?

[hello5555]

I currently employ a mechanic and friend who has been with me for about 20 years. He was formerly a transmission rebuilder, but we have switched to mostly reman units and have no need for a rebuilder. His pay has remained the same despite his value declining. I am currently paying him roughly $100,000 a year. The problem i'm having is that his skill set is not near that pay level anymore. He does light diagnostic and basic managerial work, but I am not confident enough for him to run the shop for more than an hour. With the current state of the industry our numbers have gone down a bit over the last two years. While still being profitable, I can't help but think about the extra income that would be available by terminating this employee, I just dont know how to do it. Any advice on how to do this? I like him as a person and have known him a very long time, but I feel his is paid about twice as much as he is worth. Any help wouldbe greatly appreciated.

[Type S Zero]

Yikes !! that's one big problem !

i'm speechless ! i'm very curious to read what the others with more experience will have to say about this

[xrac]

Yikes! Tough situation. In the long run you have to make a business decision and do what is best for the business.

[CARMandP]

I have the same issue just reversed. I have a long time friend who is an excellent transmission builder but very slow when it comes to normal diagnostic or work. He is looking for a job closer to his home but I don't think that he would be a good fit. I feel your pain

[Joe Marconi]

This is a tough situation, because as a business owner you know what you should do, but your heart tells you otherwise. All of us face this challenge from time to time and I can tell you that’s its not easy, but you must do what's in the best interest of the shop, for you and for the other employees. I too had to fire a dear friend of mine a few years back, for similar reasons. Both of us knew it was the right move and we are still close friends today.

 

If you had a ball team and a player was no longer valuable, you would trade or cut the player. Business is business, no matter how tough the decision, friend or no friend. I am sure that you have thought this out and have tried all different scenarios to make the employee work out.

 

You need to sit him down and speak to him as a friend and as a business owner. Explain to him what you explained to us. In the end, you must do what your gut tells you, not your heart. I know it’s hard, but if you are draining the business because this employee’s pay does not match the level of production, then you need to act. The longer you wait, the worse it gets.

 

And, I have a feeling that he knows the situation too.

 

Good luck!

[Mario]

Explain to him the situation and offer a pay cut. Not many shop (none certainly in my area) are paying ANY skill level technicians $100k a year with this economy.

[Bill Cyr]

@hello5555, I would come up with an alternative pay solution for him. Sit down with him and just let him know what’s up. Ask if he would be willing to take a new salary. Explain to him that you value him but can no longer continue to pay his current salary with the lack of rebuilding he is doing. It’s a sign of the times.

[NCTransmission]

Goodness gracious, are you a business owner?  Do you run a "for profit" business?  There is a LOT unsaid here.

You have a rebuilder on premises, but have switched to mostly remanufactured units.  So either your ticket costs have raised dramatically or you're leaving profit out there.  Why did you switch?

It's not a popularity contest, it's not a friendship.  He's got it MADE and he is going to suck at your teat until you pull him off.  It's not personal, it's business.  You owe it to yourself, your family and every productive member of your team, AND YOURSELF to make that move.  

[hello5555]

NCTransmission, 

The original post was from 2012. The employee is still with us, we decided his loyalty was more important than a few extra dollars profit. Since then we have come up with a new role for him and although he is still overpaid by most standards I don’t regret keeping him. We’ve increased business by over $1.5 million per year since 2012 and his hard worked has helped us get to this position. I wouldn’t consider him someone that is “sucking at my teat”. I would consider him a loyal, lifetime employee that I’m proud to have on my team. Sometimes you just need to be creative and figure out how to switch things up with loyal, hard working people rather than cut them and move on to the next guy. 

[alfredauto]

I'm glad you kept him. I understand what running a business is about but people aren't tools that can be thrown away when they become obsolete. I'm sure your customers notice the same mechanic there for 20 years how would you explain it to them he stopped making you rich so you let him go. 

[xrac]

That is a great follow up post.