Employers who are reading…raise hands if you have a toxic mess on your plate.

It can be so hard to justify keeping long term, yet toxic, employees for the simple fact that we have policies, procedures, and most importantly we have legal framework that can make it difficult.

What a lot of employees don’t know is that to prove Just Cause, things have to either be egregious beyond belief or disciplinary issues have to be consistently and thoroughly applied. A Just Cause dismissal can sometimes take a year or more to work on!

However, there lies the rub.

Some employers are so committed to proving Just Cause with longer term employees because they think it costs less in the long run. Why? Because they’ve taken a look at the cost of a Without Cause severance and thought “oh, that’s too much”. The problem is that these employees always know exactly when to behave and how to bully others and commit reprisals bad enough that no one else will want to come forward. As the cycle continues, employers become victims of the sunk cost fallacy.

Sunk Cost Fallacy - the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.

We’re here to tell employers everywhere that sometimes, you’re better off cutting them loose and not falling prey to that sunk cost. Why? Here are some financial risks you could experience in keeping your toxic employee around.
 
Loss of Customers

As the story goes, if you have one of these people on your team chances are they might be treating clients similarly. Calculate that loss and potential loss against that severance. Even if they’re a darling to their customers, the service can still suffer if this person treats colleagues badly. By extending that poor treatment to others, they’re wasting precious service time and enthusiasm – but we’ll get to that in a bit.

Turnover

One of the biggest expenses for any company is turnover. If you’re lucky, it’s $10,000 per person. Work in a specialized field that’s harder to get staff or higher wage? Count for 20% of the leaving person’s salary as your turnover cost.

Loss of Productivity

Here’s a not-so-fun project to try. If you asked the affected staff how many hours a day they have to spend defending themselves against this person, shoving other clients down the queue because of this person, and even just having to step away and take a breather after a condescending interaction, you can calculate the total hours a year spent on this one staff member, divide the staff’s salary into hourly, and put them together. So, let’s say a 6-person team has to deal with person 7 for two hours a day and they all make around $40,000. You’re looking at $87,600 a year alone that’s wasted.

Legal Issues

Now, this is the nuclear “what if” but it’s important. Ask yourself if you want your company to be in the news because someone filed a Human Rights complaint against it – or if anyone decided to litigate the company in a civil case because they felt that the company’s inaction led to health issues and loss of income. It only takes one willing employee to do this. Your legal fees alone would make you cringe, but imagine losing the case. For the Human Rights Tribunal, look at what the maximum remedies are in your area. Now, even if your company wins or it doesn’t get very far you’re still losing money and reputation over one person.

Good Luck Hiring in the Future

Don’t we love Indeed, Glassdoor, Google, etc? The charming reviews that can go up and honestly, you can’t really do much about. It can actually sink your prospects with hiring talent. The only thing that is a brighter red flag than low pay to potential staff is the work environment. This doesn’t even count word-of-mouth feedback. You know for a fact that all those workers feeling small are telling all their friends about it and next thing you know, there’s an entire whisper network of people saying “don’t work there”. Savvy candidates will pass on you and will join your competitors instead.

So…how’s that severance package REALLY looking now?

In the end, run yourself a cost analysis and ask yourself… is this really worth keeping the workplace bully around just in the hopes to catch them enough for Just Cause? More often than not, the answer is no.

Protect your staff and brand using this one easy step…pay them out and show them the door.