Are you thinking about letting someone go from your sales team? Perhaps they are consistently underperforming? Or you need to reduce the size of your team. Regardless of the reasons, it’s not a decision you should take lightly. In my two decades as a sales recruiter, I’ve seen far too many firings that companies later regret.

There are so many potential things that you should consider before you decide to let anyone go. Remember, your decision could have far-reaching effects. It will impact more than just the people let go. It can affect your sales team, performance, culture, and even have a financial impact. 

Below, I’ve used my experience leading a team of sales recruiters, to outline some of the things you should consider before you let a salesperson go from your team. We’ll discuss:

• 6 direct costs of letting a person go
• 9 indirect costs of laying off a salesperson on your team
• A list of 8 questions you need to ask yourself before reaching a final decision. 

6 direct costs of letting a salesperson go

Removing a salesperson from your team can have a direct impact on company expenses. This is a key thing to consider. Are these added direct costs worth it to remove a team member and potentially recruit their replacement? Here are some of the direct costs you need to consider:

1. Severance pay: Paying out severance or accrued time off.

2. Benefits: Terminating benefits, such as health insurance.

3. Temporary employees: Paying for temporary employees to cover the employee’s work.

4. Overtime: Paying overtime for remaining staff to cover the employee’s work.

5. Recruitment: Time spent interviewing and searching for new candidates.

6. Onboarding: Training costs for new employees.

9 indirect costs of letting a salesperson go from your team

There are many indirect costs that sales managers need to think about before removing a sales team member. These indirect costs can affect other employees, morale, performance and how the team functions as a unit. Here are some indirect costs to think about:

7. Morale: Hurting morale of remaining staff

8. Productivity: Slowing down the productivity of the remaining staff

9. Reputation: Damaging the organization’s reputation

10. Relationships: Damaging relationships with clients

11. Institutional knowledge: Losing institutional knowledge

12. Team performance: Damaging team performance

13. Work environment: Affecting the work environment

14. Customer service: Affecting customer service

15. Problem-solving: Affecting problem-solving

8 Questions To Think About Before You Let That Salesperson Go

Letting a salesperson go is a significant decision that can impact your team’s morale, revenue, and overall business. Before taking this step, it’s essential to evaluate the situation thoroughly. Here are some key questions to ask yourself:

16. Have You Identified the Root Cause of the Problem?

Evaluate the reasons for underperformance or challenges. Is the issue due to:

• Lack of Skills? Could additional training or coaching improve their performance?
• Unclear Expectations? Were their goals and responsibilities clearly defined?
• External Factors? Are market conditions, pricing strategies, or other company challenges affecting their results?

Understanding the root cause helps determine whether the problem is fixable.

17. Has The Salesperson Received Proper Support?

Salespeople need tools, training, and support to succeed. Ask yourself:

• Did they receive adequate onboarding and mentorship?
• Do they have access to CRM tools, marketing materials, or leads to do their job effectively?
• Are they supported by other departments, such as marketing or operations?

Sometimes performance issues stem from systemic problems, not individual shortcomings.

18. Have You Set Clear and Achievable Goals For Your Salespeople?

Review the salesperson’s targets and KPIs. Were they:

• Realistic based on their territory, industry, or client base?
• Adjusted for changing circumstances, such as economic downturns or shifts in the market?
• Communicated clearly and regularly?

Unrealistic or ambiguous goals can lead to frustration and poor performance.

19. Have You Provided Effective and Ongoing Feedback and Coaching?

• Constructive Feedback: Has the salesperson received regular feedback about their performance?
• Performance Reviews: Have there been documented discussions about areas for improvement and progress?
• Coaching Opportunities: Did you or other leaders actively help them address weaknesses?

Some employees can turn around their performance with the right guidance.

20. Are They a Cultural Fit?

While skills can be developed, a lack of alignment with company values or team culture is harder to fix. Ask:

• Do they collaborate well with others?
• Do they contribute positively to the team environment?
• Are they aligned with your company’s mission and values?

If their behaviour negatively impacts the team, it may be a valid reason to let them go.

21. Have You Explored A Role Modification?

Not all salespeople excel in the same roles. Consider:

• Territory Changes: Would they perform better in a different market or with a different client segment?
• Role Adjustments: Could their skills be better utilized in another capacity, such as account management or inside sales?

Sometimes a reassignment can be a win-win solution.

22. Have You Documented Everything?

Before making the final decision, ensure you have:

• Records of performance metrics, feedback sessions, and improvement plans.
• Documentation of any warnings, coaching efforts, and corrective actions.
• Clear evidence that their performance issues have persisted despite support.

This is crucial for transparency and to protect your company legally.

23. Have You Explored Every Alternative?

Before letting them go, consider alternatives such as:

• A performance improvement plan (PIP) with clear goals and timelines.
• Additional training or mentorship.
• A temporary probation period to reassess their potential.

Taking these steps shows that you’ve given them a fair chance to improve.

A Final Word On Considerations Before Letting Salespeople Go

As sales headhunters, you’d think we’d want companies to let salespeople go but, we believe, letting a salesperson go should be a last resort after evaluating all factors and providing ample opportunities for improvement. By carefully considering these aspects, you can make a well-informed decision that aligns with your business goals and values.

More Sales Recruitment and Retention Advice From Our Experts

Want to Know Why Your Best Salespeople Quit? 6 of the Most Likely Reasons

6 Strategies To Ensure Your New Star Sales Employee Doesn’t Quit

Want to Keep Your Top Sales Employees? Let Them Do What They Do Best