Your Employee Quit to Become a Contractor – Now What?

Your employee quit – now what?! After years of teaching, training and now your biggest fear, he has decided he can build just as well or better than you and is going out on his own. Has was pushing a broom when you gave him a chance and grew to become an asset and team member. Should you be pissed off, yes, but not at him. You are the boss, people quit bosses not jobs, is your company growing and providing your team with new challenges and career growth? What was lacking in your firm that prompted him to look to new challenges?

With that running through your head, how do you turn this around, a crippling loss for a small company but can it be an asset? Let’s look at the situation in detail:

1. He thinks he can go it on his own, he has carpentry skills and can get his contractor’s license, but he knows nothing about running a business. Use this to your advantage.

a. Support his new endeavor and offer to mentor him

b. Better to teach him then have him out there using his experience and underpricing you just because he does not understand business.

c. Help him understand all the business hurdles and expenses.

d. Recommend help with you contact, lawyer’s accountants etc.

e. Hire him back fast, not as an employee but as a consultant

  • Hire him to do the same job he just left but under his new business name.
  • Let him hire and manage a few subcontractors so he can learn the process and hard work involved. He is not just a carpenter anymore.
  • If he becomes successful, keep him on as a subcontractor but running all or a majority of the project. Partner with him so he manages the job and field operations while you cover the overhead portion for a percentage.

2. If his business continues to grow at the very least you will have an equal competitor in the market instead of a carpenter bidding against you to make the wages you were paying him with no understanding of overhead and profit.

3. If all of this is too much for him, he may bail and come back to work for you, you have retained an asset and shown him support and he has grown to understand a bit more of what is truly required to run a business.

You can be pissed off that your employee quit or turn this potential liability into an asset. If played right, your ex-employee can enjoy his new status as an entrepreneur and you can continue to utilize his skills while expanding your company. This bad day is now a win-win. Much cheaper to keep him in the fold than train and promote the current guy pushing the broom. Give it a thought Why can’t your lead carpenter be your lead subcontractor?

If you need a business coach that specializes in working with contractors, give me a call – I would love to help you build your business!