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Hiring is one of those things that everyone wants to get right. We spend so much time finding the perfect fit for our team and training this new person, but sometimes things just don’t go as planned. The tough truth is, hiring and firing go hand in hand.
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It’s not the fun part, but it is necessary to keep your team and your business running smoothly. Maybe you’ve had this happen before. You’ve got someone on your team who’s been helping you out with a project or has taken over a certain role, and things just aren’t working out.
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Maybe they’re missing deadlines. Their work quality isn’t up to par. You’re finding yourself having to do more work to fix the things they missed. Maybe their communication isn’t so great, and you’re feeling a little ghosted. If any of that sounds familiar, then you’re not alone.
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It is a tough situation to be in, but sometimes the best move is to end the contract with that independent contractor, or to fire that employee. In this episode, I am going to walk you through how to end a contract gracefully, how to protect your business and maintain professionalism and hopefully end things on a good note with the person that you have to let go.
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Are you a digital product, or course, creator, selling on platforms like Teachers Pay Teachers, Etsy, or your own website? Ready to grow your business, but not into the kind of constant hustle that leads straight to burnout? Then you’re in the right place.
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Welcome to The Savvy Seller. I’m Kristen Doyle, and I’m here to give you no fluff, tools and strategies that move the needle for your business without burning you out in the process. Thingshings like SEO, no stress marketing, email list building, automations and so much more. Let’s get started ya’ll.yall!
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Before we dive into this episode, all about how to end a contract with an independent contractor, a quickuick disclaimer, I am not an attorney, so this definitely isn’t legal advice. You should always consult a legal professional and make sure you’re following employment laws in your area before you do anything.
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This is even more important if you have to fire an employee rather than end a contract with an independent contractor. Keep in mind that the rest of this episode will mostly focus on ending an independent contractor contract not firing an employee, because at this point in my business, the only employees are myself and my two kiddos, and fortunately, I have not had to fire them.
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So I have experience with ending contracts with independent contractors who I have worked with, whether I have hired them through their business and they’ve created a contract, or whether I hired individual people and I wrote the contract for them. So that’s the experience that I am bringing to the table here. But I have had to end contracts with multiple people and for a wide variety of reasons.
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So how do you know when it’s time to pull the plug? There are a couple signs that raise red flags and let you know that maybe we’re getting to that point. The first one is constantly missed deadlines.
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If you are constantly having to chase that person down to get things done, or you’re finding maybe they are responsible for customer service, and you’re finding customers whose questions haven’t been replied to, this is a major warning sign that something is going wrong.
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Secondly, if the quality of work just is not where it needs to be, and you’ve already given them feedback and tried to fix the problem, that’s another clue it might be time to move on, because contractors that are part of our team are no good if we’re spending as much time correcting their work as we would be to do it ourselves.
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So make sure you’re giving them time to adjust. Make sure you’re giving that feedback. But if the quality of work just isn’t improving, then it might be time to end that contract.
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Third, and this is a big one, a lack of communication or sometimes complete unresponsiveness. If you’re feeling ghosted by a team member and you’re feeling like you are in the dark about what they’re doing and where they are, that can be a huge problem, especially if you’re depending on them for really important parts of your business.
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Sometimes these warning signs aren’t about them doing a bad job. Sometimes you need to train them a little more. Sometimes you need to put systems in place so that they can be more successful. Sometimes your business needs to shift. And maybe that team member just isn’t the right fit anymore.
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Whatever it is, make sure that you are giving this person a chance before you let them go. You’re trying to make it work. This also serves as a way to kind of give them a heads up that things aren’t going well.
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In an ideal world, unless you are having to end a contract for purely financial business reasons, the people on your team who are kind of on that fence need to know that their performance isn’t up to par before you end that contract.
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They should have a heads up. You should be having some discussions with them, whether it’s on Zoom meetings or you’re chatting in Slack. You should be letting them know that their work isn’t up to par right now, so that when you do terminate that contract, it’s not coming out of the blue.
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I had a situation years ago where a contractor I had hired to do some work finishing out a product line I had started was making so many mistakes in the work that I was having to hire an editor to go back and check it.
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And the mistakes that were being made a lot of times weren’t things that a proofreader would even notice. It was things like leaving the wrong grade levels content in and a proofreader may not be familiar with the grade level content and may not notice that it’s different words or different information.
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And so what happened then is, even though I had hired a contractor to finish out the product line, I’d hired a proofreader to check over it and make sure everything looked good, I was still getting customer questions and complaints because they were noticing repeats of things from past products or grade levels that were not correct, things like that.
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And so in this case, I had gone back to the contractor who wasn’t really responding to the feedback I was giving. The work was not improving, and I was spending so much of my personal time going back in and editing the products this person had created that I just had to end that contract.
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It was time to cut ties and move on, because this particular team member just wasn’t saving me time anymore. It was actually costing me money and also costing me more time.
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So once you’ve decided that it is time to end a contract with someone, what do you do before you officially send that email that ends the contract? It is really important to take some steps before you terminate this contract, to make sure you are protecting your business.
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First things first read over the contract that you have with them. Every contract is a little different. It’s easy to forget some of the little details that are in there. So review the terms of your contract to find out what notice period is required. Are there any conditions for termination that are spelled out in the contract, or any other clauses that you need to be aware of?
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Use that contract to guide you to make sure you are following the correct procedure and you’re doing things the right way. For example, my typical contract with an independent contractor, if I’m the one who writes and sends out the contract, says that either party can terminate this contract without cause.
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That means we don’t have to have a reason without cause with 30 days notice. So what that means is, if I have someone I want to end a contract with, I have to give them 30 day notice before their contract officially ends. And so what that means is I need to pay them for 30 more days of work after the day that I notify them. Other contracts may include longer or shorter periods.
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There are sometimes specifics around when you can and can’t terminate, what causes might have to be there. So make sure you’re reading your contract very carefully before you take any action at all.
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Next, take a look at outstanding work. Anything that this person has started and not finished, anything you’ve asked them to create, that maybe they created on their own personal computer and haven’t sent to you yet. You want to discuss getting those deliverables from them before you end the contract.
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And the reason for that is simple, as much as we try to end contracts gracefully and we try to end things on a positive note, where everyone is okay with the way that it ended, sometimes you will end a contract and someone will be really upset about it. I have had it happen two times in the 10 years that I’ve been in business, and both were very stressful situations.
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Fortunately, I had mentors to help me figure out how to navigate those situations, and I was able to take some of these steps beforehand to make sure that it was going to end up being okay for my business, even if the contractor wasn’t happy.
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So make sure that you’re having, that those conversations, you’re getting, those final deliverables before you end things. And that can look as simple as. Hey, remember, you know, last month when I asked you to create that SOP? I don’t see it anywhere. Can you spend some time this week make sure all of the SOPs are in our SOP folder?
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And yes, this might give them a little bit of a heads up that something is coming. But if you phrase this the right way, honestly, it is just something you should be doing throughout your business anyway. Anytime they create something for you, it should be going into your Google Drive folders or your Canva account, wherever it is that you’re keeping the different types of things that they’re creating.
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So make it a habit to have that type of conversation on a regular basis, so that if you do have to do this to end a contract, it doesn’t seem out of the blue, and it doesn’t create alarm or raise red flags.
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The next thing you want to look at before you end the contract is what this contractor has access to. Dothey have access to your Google Drive? Have you added their personal accounts to your Google Drive? Have you added them to project management tools like clickup or Monday? Have you shared passwords with them in something like one password?
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Go through and do a little audit of everything they have access to, and make yourself a plan to revoke that access. You don’t want them lingering in your business systems after they’re gone. Now, in most cases, when we end a contract with people, they are professionals, and they would never do anything to sabotage you, but in the event that someone does get upset, this is a good way to protect yourself, is to make sure that access is removed before they are terminated within your team.
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All right, let’s talk about the actual process of ending the contract. On the day that you are ready to end your contract, the first thing you are going to do is not send them that contract termination notice. The first thing you do is go back to your list that you made of all the things they have access to and remove their access first.
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This means unsharing files in Dropbox or Google Drive. It means changing passwords if you need to. Removing them from your password sharing tool. If you have shared accounts, for example, I give most of my contractors access to a support email account. So if you have multiple people who may be signing into that account, then you’ll want to log everyone out of that shared account so that when you remove this individual’s access, they’re no longer still logged in.
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They’re no longer able to get into your information and your systems, and yes, it means the other people will have to log back in. It’s a little bit of a an extra step, a little bit of a headache, but it is really important to just take these steps to secure your system.
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Once you’ve done that, then it’s time to send them that formal communication, terminating their contract, even if you always chat on Voxer or over texts. This is the time to switch it to email, because you want to have a record of everything that you have said and everything that they have said back, just in case you ever need it.
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Keep this email short, keep it polite, and just be to the point if your contract requires a reason for termination, then provide one for them. But if not something like, I feel it’s best to end our contract at this time. Works just fine. Mention the last date of their contract. Mention any final steps, like outstanding work that you need to have delivered. Definitely cover anything that needs to be covered, about their final pay that will be coming from you.
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And then turn on read receipts, if you can, so that you will know that they’ve seen this email. Remember to keep these emails kind and polite and professional, depending on the situation. If you feel like you can maybe you want to thank them for all the things that they’ve done.
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If this is ending a contract due to no fault of their own, you may want to clarify that for them, let them know that you really appreciate what they’ve done. But either you feel like the job is finished now and it’s time to end the contract, or maybe something in your business has changed and you just need to end this contract. It is always good for people to get that feedback that okay, it’s not my fault. This is a business decision if that happens to be the case.
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Now, on the flip side, if it is due to some issues with their work, they’ve had, you know, times where they have goes to do those sorts of things, then that may be a slightly different email. But be careful not to make claims that aren’t really true. Say less instead of more when it comes to that email.
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One mistake I made in one of the contract terminations that I mentioned earlier that didn’t go so well. A mistake I made in the email I sent was that I said way too much about why I was terminating them. I felt like I needed to justify it, and I wanted them to understand that I wasn’t just, you know, willy nilly firing everyone, but I said too much.
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And so then their response back to me, instead of just accepting the termination of the contract and figuring out how we’re going to move forward, their response back was very defensive, and that made me feel like I needed to be defensive. And so now we’ve got this long series of emails going back and forth, when the first email said the contract was terminated, and that really is the end of that discussion.
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So keep in mind, even if you are sharing some information about why a contract is being terminated, that saying less is often better because you’re not leaving as much room for them to debate back.
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All right, so the contract is officially over. You have sent that email. What now? Make sure you are documenting this process. You’re keeping a record of all the communications and the actions that you took when you terminated this contract. This is first of all for your peace of mind. But it also can be really important if any issues arise later on. Maybe someone gets upset about this termination and tries to come back with, you know, some kind of issues about how you ended the contract and things like that. Keep those records so that you’ll have all of that information.
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The other thing that keeping these records will do is it will give you an SOP for the next time you have to end a contract. Because remember I said in the beginning, hiring and firing go hand in hand, you will need to end contracts at some point, and not even always, for bad reasons.
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In fact, I just recently hired a friend, which I think we probably all know is bad business in most cases, you don’t hire friends, you don’t hire family, right? But I have recently hired a friend because this person was the perfect fit for the position that I had, because I’ve worked with this person before, and I know that we are both professionals, and we just set it up from the beginning, saying this is not permanent.
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We know this isn’t permanent, but this is a really great fit for both of us right now. And so when it is time to end this contract, we will do it professionally. We outlined the notice that will be required, and we will end this contract and still be friends at the end of it.
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And so keep in mind, even in the best of situations, you will need to end contract in your business. So save all of the steps you’ve taken, keep those communications that you’ve sent, because it will make the next one that much easier to do.
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Now, after everything is said and done, take a minute to reflect and find some lessons you can learn and some changes you can make to your business moving forward. What went wrong? Could terminating this person have been prevented if you had had more training up front or better communication or clearer expectations?
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A lot of times once we get to this point, no amount of fixing the communication or the training or the expectations is going to change that person’s work on your team because they’ve gotten into this habit of poor work quality. But if you make adjustments to your hiring process or the way you’re managing your team, a lot of times, you can take what you learned from terminating this person to avoid similar issues with the next person that you hire.
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And remember, it is okay to end a contract if it’s not working out. It’s all about finding the right fit for your business and for the contractor, it’s about them finding the right position that fits into their life. All right, that is it for today’s episode. I know ending a contract or firing someone is never fun.
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In fact, it is my least favorite thing about having a team, but with a clear process in place, you can handle it professionally, protect your business in the process, and hopefully end things on if not a positive note, at least an okay note with that person that you had to end the contract with.
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If you found this episode helpful, I would love for you to share it with someone else who might need it, and don’t forget to follow the show so you don’t miss the next episode in our hiring series. Thanks for listening, and I’ll talk to you soon.
