Any entrepreneur struggling with this situation surely cringes at the thought of sacking a team member, even if that employee is messing up everything they touch. It’s a tough decision, but the business must come first, or it could suffer irreparable damage. So, the question becomes, is it smart to hire a replacement and then separate the underperformer, or would it be better to offload the problem and then bring in someone competent to fill the gap? Well, it’s not easy to answer and arguably even more difficult to execute.

Should I Subtly Bring in a Replacement Before Firing a Bad Employee?

Small-business owners hate this question because the answer feels sleazy. You’ve got an underperformer draining payroll, killing morale, and costing you customers. Do you quietly line up their replacement first, or do you fire them cold and pray the role doesn’t sit empty for weeks?

Yes, it’s okay. In fact, for most small businesses, it’s the responsible move.

What You Should Know about Hiring Before Firing

Forty-nine states have “at-will” employment. That means you can terminate someone for any non-illegal reason without notice. Nothing in federal law forbids interviewing or even hiring their replacement while they’re still on the clock. Courts have repeatedly upheld the practice. The only real legal traps are (1) retaliation claims if the employee recently complained about discrimination, wages, or safety, or (2) breaching an actual employment contract that requires notice. For 95 % of small-business employees, neither applies.

How to Hire Before You Fire

The practical case is even stronger. When you fire first and hunt later, you lose institutional knowledge, customer relationships, and revenue—sometimes for months. One missed payroll cycle or a single missed deadline can sink a five-person shop. Hiring discreetly lets you keep the lights on and the workflow running. The new person starts the Monday after the old one leaves. Zero gap, zero drama for customers.

But here’s where owners screw it up and turn a smart move into a lawsuit magnet.

• Don’t let the current employee catch wind. That means no sloppy reference checks using company email, no “we’re growing the team” hints in staff meetings, and definitely no onboarding the new hire in the same office while the old one is still punching in. Use personal phones, conduct off-site interviews, and use a simple NDA if the role involves handling sensitive data.
• Document everything before you even start the search. Performance notes, customer complaints, missed deadlines—keep them factual and dated. That paperwork is your best friend if the fired employee claims they were “ambushed.”
• And be humane on the way out. Give a clean severance if you can afford it, offer a neutral reference, and let them keep their laptop for the afternoon to clear personal files. Treating people with basic dignity costs almost nothing and slashes the odds they’ll badmouth you on Glassdoor or sue just to feel heard.

The real alternative—waiting until you have a signed offer letter—is what actually destroys small businesses. You limp along with dead weight for six weeks while you “search,” productivity tanks, good employees quit, and you end up paying two salaries for the overlap anyway.

All of this means that hiring the replacement first isn’t backstabbing. It’s running a business. Your job is to protect the company, the customers, and the other employees who actually show up and deliver. Pretending otherwise is just expensive virtue-signaling.

Want to Accomplish More?

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We can make that dream a reality. Give us 30 minutes, and we will show you how to get your life back. Skeptical? Good! Put us to the test.

You can call us for your free appointment at 480-636-1720, or, if you prefer, Waters Business Consulting Group to learn more about us and the services we offer.