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How to part ways with a long time employee?


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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.

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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 :(

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  • 7 years later...

@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.

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  • 1 month later...

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.  

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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. 

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  • 3 weeks later...

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. 

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  • Have you checked out Joe's Latest Blog?

         4 comments
      A recent study, done by Harvard Business School, concluded that the real problem with attracting and retaining employees has more to do with the workplace environment, not pay or benefits. While the study did find that an adequate pay plan and offering an attractive benefits package did help with recruiting and retention, it’s not enough to satisfy the needs of employees, especially those of front-line workers.
      The study also stated that in 2021, many companies were convinced that giving raises, sign-on bonuses, and other perks would solve the worker shortage problem and prevent people from quitting. However, this strategy did not work. So, what does work regarding attracting quality people and keeping them employed?
      Essentially, it all comes down to the culture of your company.  Management: do all it can to consider the individual needs of your employees. Your employees want to feel that they have a voice, that their opinion counts, and that their role in your company is both respected and recognized. Yes, pay and a great benefits package will go a long way toward making your employees feel secure, but that’s only financial security. People want more than money.
      To attract and keep top talent requires creating a company that people feel proud to work for. You need to reach the hearts and minds of your employees. Become a leader that people are enthusiastic about working for. You want your employees bragging to their friends and family that your shop is a great place to work!
      Step one to attracting and retaining quality employees: Create an amazing workplace environment for your employees!  Trust me, happy employees make happy shop owners too!
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