What do I do when a new hire is not working out?

Why this decision costs more in a boutique

The HR essay in the newer book opens with an old saying from professional services: all your problems walk around on two feet. It describes what a failed hire costs a small firm. The direct costs are recruiting spend, onboarding time, lost productivity and margin erosion. The indirect costs land on clients and on the team. When an employee leaves, context is lost, work changes hands midstream and clients sense instability, which the essay says shows up later as reduced scope, delayed renewals or churn that gets blamed on price or competition.

It also warns that turnover is contagious. When someone leaves, the people who remain ask whether they are missing something. As an inference, that cuts both ways with a struggling new hire: a quick, fair decision protects the team, and a long, visible decline teaches the team what the firm will tolerate.

First, find which stage failed

The HR essay describes an eight-stage talent supply chain: recruit, select, onboard, deploy, develop, retain, promote and succession. It says a breakdown at any stage cascades: poor selection slows onboarding, weak development increases turnover. Before deciding about the person, decide which stage produced the problem.

The onboarding answer on this site gives the first diagnostic: slow ramps across the board point at onboarding, while inconsistent ones point at selection. As an inference, add two more. If the new hire was deployed to work that did not match the role they were hired for, the problem is deployment. And if the role itself kept changing, the recruiting answer on this site warns that good hires usually fail through role corruption and pay rather than through selection.

The essay explains a common root cause. Without forward visibility of demand, firms hire under pressure, onboarding is compressed or skipped, and deployment fills gaps rather than matching skills. As an inference, a hire made in a rush and dropped into overloaded work deserves a closer look at the conditions before the person. The essay adds that selection errors are expensive and difficult to unwind, which is the argument for diagnosing carefully but not slowly: the longer a selection error stays in place, the more onboarding, deployment and client work it contaminates.

Test the person against a written standard

The replication chapter of the 2020 book describes certifying people on two capabilities, knowledge and skills, built from task-level breakdowns of recent engagements, and scoring them at junior, middle and expert levels. The performance review answer on this site recommends setting the expectation as demonstrated capability built backward from work actually delivered, so the person is compared to the work rather than to colleagues.

As an inference, if no written standard existed when the person was hired, write it now and share it, set a short and specific period to show the capability, and give the coaching and access they need. If they meet it, the problem was onboarding. If they do not, you have a fair and documented basis for the decision.

Decide on behavior and fit, not only output

The culture chapter of the 2020 book says who you hire, promote and fire determines how a culture scales, and that employees should be able to say which behaviors get people fired. It warns that scaling firms get lazy in their hiring and often overpay so-called A players, filling the firm with people who work for the money only. As an inference, a new hire who produces but violates how the firm does things is a selection failure too, and keeping them sends a louder message than any values statement.

Exit cleanly

The legal essay in the newer book lists what a firm should standardize: offer letters and employment agreements, confidentiality and invention assignment, handbooks and policies covering discipline and termination, wage-and-hour classification, termination and severance templates, and separation and release agreements. It calls people the highest legal risk in professional services and warns of expensive employee disputes and quick settlements pursued by plaintiff attorneys. It also describes what happens when the paperwork was never done: people leave and take clients, colleagues and intellectual property with them, and the founder discovers too late that the firm never legally owned its most valuable assets. Contractor misclassification and missing IP assignment from contractors make the same exposure worse.

Collective 54 is not a law firm and gives no employment law advice; rules vary by jurisdiction. As an inference, before any termination confirm the person was classified correctly, that IP and confidentiality agreements are signed, that expectations and feedback were documented, and use your standard separation documents. Where the facts are unusual or the risk is real, the legal essay is clear that this is when to pay for the best counsel.

As an inference, protect the clients the person touched: tell the client lead first, reassign the work with context, and say as much to the team as fairness to the departing person allows.

Fix the stage that failed

As an inference, the most useful thing to come out of a failed hire is the change that prevents the next one. If selection failed, tighten the role definition and the knowledge and skills screen. If onboarding failed, shorten time to productivity with the content and learning path the onboarding answer describes. If the role failed, stabilize it before hiring again. The HR essay describes the current-era version: AI tracking time to productivity by role and selection outcomes over time, so the firm learns which hires succeed rather than relying on memory.

What we do not prescribe

Collective 54 publishes no probation period, performance improvement plan format, severance amount or termination script, and gives no employment law advice. The published positions are the layered cost of a mis-hire and paying twice, the client cost of turnover, turnover as contagious, the eight-stage talent supply chain and its cascades, hiring under pressure without forward visibility, certification of knowledge and skills, hire, promote and fire as the drivers of culture, standardized employment, termination and separation documents, and elite counsel when the stakes justify it.

When this answer flips

If several recent hires are struggling at once, as an inference, the problem is almost certainly onboarding, deployment or capacity rather than any one person.

If the person is senior or client facing, the client and legal stakes rise and the transition needs more planning.

And if the struggle began after a change in role, manager or workload, treat it as a role problem first.

The short answer

Diagnose before you decide, then decide quickly, because the HR essay says a mis-hire costs a small firm twice and turnover is contagious. Work out which stage failed: slow ramps across several hires point at onboarding, one failure among good hires points at selection, and a changing role points at the role. Set a written standard of demonstrated knowledge and skills, give a short, specific period to meet it with real support, and document the outcome. Judge behavior and fit as well as output, since the 2020 book says who you hire, promote and fire shapes the culture. If the answer is to part ways, use standard termination and separation documents, check classification and IP agreements, take legal advice where the risk is real, protect the affected clients, and fix the stage that failed.