One of the most heartbreaking realities in agencies today is what I call stale employees. These are employees that usually have been on your staff a long time and were a wonderful fit for your agency back in the day.  But today, they really aren’t pulling their weight, their attitude is slipping or you just don’t have as much use for their skill set as you used to. The other unfortunate byproduct of this type of employee is that the rest of your staff is either working around the stale employee’s lack of skills or they are resentful of them because they have slacked off but are still getting paid a pretty penny. Neither helps your agency be the best it can be.  

It’s a tough, emotional situation. These are people who have been loyal to you for a long time. But the truth is, they aren’t worth what you are paying them. In this solocast, I give you some tangible steps to move that stale employee either out the door or back to becoming a productive part of your team again. What you can learn in this solocast:

  • Stale employees: how to recognize them and why they’re holding your agency back
  • Can these employees be saved? It’s a firm maybe
  • How to have the necessary conversation with stale employees — you owe them honesty
  • The kinds of goals to set to see measurable change and growth before determining their place inside your agency
  • The costs to you as an agency owner for working with stale employees to up their game
  • How to recognize if you really do have to let the employee go
  • How to make a decision while realizing that you aren’t the only person it affects

Drew McLellan is the Top Dog at Agency Management Institute. He has also owned and operated his own agency over the last 20-years. And all through the year, he straddles the fence of working in his agency and working with 250+ small- to mid-size agencies in a variety of ways. He works with agency owners in peer network groups, teaches workshops for owners and their leadership teams, teaches AE bootcamps, and does a lot of consulting. Because he works with a lot of agencies every year — he has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written two books and been featured in The New York Times, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”

To listen – you can visit the Build A Better Agency site ( and grab either the iTunes or Stitcher files or just listen to it from the web.  

If you’d rather just read the conversation, the transcript is below:

Table of Contents (Jump Straight to It!)

I.     Stale Employees: What They Are

II.    How to Deal with Stale Employees

III.   Setting SMART Goals with the Employee

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Build a Better Agency where we show you how to build an agency that can scale and grow with better clients, invested employees, and best of all, more money to the bottom line. Bringing his 25 plus years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew: Hey everybody, Drew McLellan here with another episode of Build a Better Agency. Today’s episode is one of my solocasts. So no guest, just you and me chatting about something that I think needs to be on your radar screen. So settle in and let’s have, what I believe for many of you, will be a little bit of an uncomfortable conversation.


Stale Employees: What They Are

As I spend time with agency owners all over the globe, one of the trends that I am really seeing over the last year or so is what I have deemed stale employees. And what a stale employee is, is it’s somebody who’s been on your staff for a very long time and somebody who used to be amazing. They were awesome. They were your go-to employee. And you used to count on them all the time. Odds are they’ve been with you five or more years, they’re incredibly loyal to you and the agency, or at least they were. That may be weaning a little bit now. But you know what? They have not kept up and they have not kept their skills or their attitude in line with where your agency is going.

Not always, but often these people end up in the creative department. And for whatever reason, they decided somewhere along the way that they had learned everything that they needed to learn and they were done. And so they have been behaving and performing at the same level for the last several years without learning anything new, without adding any skill to their repertoire and without really moving in the direction that your agency is moving.

They’re very stuck in their own ways. And in fact, they’re so stuck in their own ways that whether you know it or not, your staff has workarounds when this person is involved. So they know that they have to work around this employee. So let’s say that this employee’s name is Bill. They have a “Bill workaround” that allows them to get work done by basically doing an end run around Bill because he’s such a problem. He’s such an obstacle now that they can’t really get the work done at the level they want it done when he’s involved.  

And so whether you know that or not, that’s going on inside your shop. And part of the problem is, whatever this person used to be great at, it’s not that they have lost skills. They’re still good at what they used to be good at. The problem is what they’re great at, you don’t really sell very much anymore. And so part of all of this, understand, is them longing for the good old days, them wishing that their skills were more in demand. But the reality is they are now much less productive and much less profitable for you.

They’re also probably one of your more expensive employees. They’ve been around for a long time. You rewarded them generously for their loyalty early on. And so odds are, if you look at your payroll, they’re in the top 30% of your payroll. So they’re very, very expensive for you. And they’re even more expensive because they aren’t really productive and profitable for you. They’re not helping you build the agency anymore.

They’re actually an anchor that’s keeping your agency from growing as quickly and as strong as possible. And the real conundrum of this for all of you is…and I can hear you wincing as you’re starting to recognize the person in your shop that I’m talking about, is this is a very emotional issue for you. And it’s very emotional because this person has stuck by you. They were probably with you when things were a little tight in their early years. They have been a huge advocate for you and the agency. Sometimes they work really long hours, and part of that is they just don’t really know how to get anything done efficiently anymore. But you think of them with great fondness. They’ve been a part of your world for a very long time, and so the idea of dealing with this employee issue is really emotionally laden for you and it’s very difficult.

So when I go to visit an agency, for example, and I’m spending a couple of days with them, it’s pretty easy for me to pick out who that stale employee is. And when I talk to the agency owner about it, you all sheepishly acknowledge you know that this person isn’t as good as you need them to be, or isn’t as good as they used to be for the agency. But you’ve been dodging this issue for a super long time. So when I push the issue, the question that I get asked is, “Can they be saved?”

And I will tell you that I have a great answer for you, and that is it’s a firm maybe. I will tell you about 75% of the time, the answer is no. And the reason the answer is no most of the time is because that employee is mentally done. They believe that they’ve paid their dues and they do not want to acknowledge or recognize their own obsolescence.  

The other reason why it doesn’t work most of the time is because it would require a huge time investment on your part to really hold the line and to keep pushing them to get better, and most of you will not actually invest the time. You’ve let this go for so long and you’ve let them get away with it for so long that the idea of addressing this issue is painful to you. And so at the end of the day, they don’t want to invest the time and in most cases, you don’t want to invest the time either.

So I would say 75% of the time, no. That this employee is not going to get better and you have a very difficult decision to make. But that is not to say I don’t think you shouldn’t try. I do think that you should try to save this employee. I think you owe them that. But part of what you owe them is candor. You owe them the honesty of acknowledging that they are no longer as valuable to the agency as they used to be, and that this cannot continue for the long run. That you have got to do something different. So, either they’re going to have to get different or better, or you’re going to have to let them go.


How to Deal with Stale Employees

So let’s say that you are committed to having this conversation with them. Here’s the way I would play that out. First, I would schedule it away from the office. I would allow for a couple of hours and I would brace yourself for a difficult conversation. I’d start the conversation by acknowledging the history that you share together in the agency and the incredible value that they have brought the agency over time. So I think you need to give them credit for what they have done and meant to you and to the agency. But from there, you need to have a very candid conversation that talks about where you’re at today. And you want to back up that conversation with facts, so I would do a little bit of homework in terms of time sheets and billable ratios, and all of those sort of things. How long it takes for them to get work done, all of those kinds of things.

And also not only facts, but truths. And the difference between a fact and a truth is a fact, I can lay a piece of paper down on the table and show you what I’m talking about. And the truth is sort of, “Here’s what’s happening culturally inside the shop. Here’s how people are feeling. Here’s how people are reacting.” Those are truths, but they’re not really something you can prove in black and white.  

So I’d have that candid conversation with them with both facts and truths woven into that conversation. And then I would say to them, “You know what? For the good of the agency, I cannot allow this to continue. So I want to have a conversation with you today, Bill, about whether or not you are willing to grow and change for the betterment of the agency, or if you would rather I help you find another job somewhere else. Because one of those two things needs to happen. I need you to step up your game because I’m paying you X thousands of dollars and I need you to be worth that much money to the agency. Or I’m okay if you say, ‘You know what? I just don’t have the gas in my tank to learn something new, or I don’t believe in that, or I don’t agree with the direction we’re going, and so you know what? I do need to find a different job.’”

But allowing them to continue with the same behavior or in the same skill set is not an option. So I’ll tell you what. Whether they actually are willing to do the work or not, they’re going to say that they are. One, because that you’ve caught them off guard. And two, because even if they’re in the back of their head thinking you are a son of a bitch and they’re going to quit, they want to be paid while they look for a new job. So, 99% of the time, they’re going to say, “Yes, I am willing to do the work.” And you need to accept that on face value regardless of whether or not you think it’s true. And together the two of you need to define what needs to change. And you need to do that with SMART goals.


Setting SMART Goals with the Employee

So you all know that SMART stands for specific and measurable, attainable, relevant, and time sensitive. So, you need to set goals that you can measure against in a very objective way, and you also need to set what I would call baby goals. So if one of the goals is that they have to learn how to code websites and they don’t know how to do that at all. They’re traditional, our director has to say, you need to set goals between today and being able to code that allows you to measure progress along the way. Why? Because you don’t want this to drag on for six months or a year.

So what you’re going to say to them is, “I want to see measurable change and growth within 90 days. And if I do not see measurable change and growth within 90 days, then you are going to have a choice. I will give you the opportunity to resign or I’m going to fire you.” So that’s the deal. And then you need to set the goals and you need to have a very firm deadline for closure one way or the other. Again, 90 days, 60 days. I would not go out more than two months, two or three months at the most. So 90 days, 120 at the very farthest out, but I think that’s too far. 90 days is plenty of time for you to see whether or not they’re going to have some progress. And you need to have that in writing. “So you know what, Bill, when we get back to the office, I’m going to write up these goals that we’ve set, and I am going to put the deadline in writing and you and I are both going to sign that document, okay?” And Bill is going to say okay.

So Bill says okay. You guys have set the goals. Now what is it going to take? And here are the costs to you as an agency owner. The first cost is simply your time. You need to meet with this person every single week to measure against the goals. If they are not your direct report, if they have a supervisor below you, then you and that supervisor and they need to meet every week. Because they need to understand that this is critical for you, and that you are willing to invest the time to get this right.  

And you need to know you’re going to have a lot more candid conversations. This is not the time to go back to that passive-aggressive hinting at things. You need to be very clear about when they hit the mark and when they miss the mark. So you’ve got a lot of time invested in these weekly meetings. You also are going to have to invest time in coaching and mentoring them. You’re asking them to make some pretty big changes, and so they are going to need you alongside helping them figure out what they need to learn and how to learn it. And then also catching them doing it well and right so that they are encouraged to keep pushing forward if they actually make any effort.

An additional cost for you are some hard costs. So in many cases, they’re going to need some education, some classes, some workshops. They may need other resources, they may need software, they may need books, they may need an online course. And maybe the biggest expense to you is while they are learning these new skills, they’re going to be even less productive than they are today. So, you also have to know that you’re going to have to be giving up billable time and their time on client work for them to grow into this new role that you want them to grow into.

In many cases, this 30, 60, 90 days is really about buying yourself and them time to recognize the truths. And in most cases, the truth is that they have outlived their usefulness to the agency. And I know that’s harsh and I know it’s painful, but you need to understand the truth about your agency and your employees. At the end of the day, you can decide to let them go or not. But at least you’re making a conscious decision. But I am telling you for the salary that you’re paying them, you are literally taking that out of your family’s pocket and out of your pocket and giving it to them. Because they are being unproductive, they are hurting your culture, and you’re allowing that to happen. You’re actually paying them to do that to your agency. And you need to recognize that. I know this is a difficult topic, and I know that you want everybody to be happy and great and deliver on time and on budget, killer work. But the truth is that most agencies have a stale employee or two that we have just avoided working with.

Now, I will also tell you that sometimes this has a happy ending. This happened to me many years ago and I had a very candid conversation with an employee who turned out to be one of my best employees for many years. So, you can have a happy ending. But it requires both of you being willing to come to the party and change and grow and invest the time and the effort, and the need for great honesty between the two of you. And if you can pull that off, then great. You’ve saved a great employee who’s going to bring new skills. Otherwise, you’re giving someone else the dignity of recognizing that they are no longer adding value and you’re going to help them in a very respectful way find something new.

I want you to think about this for a little bit, and I want you to recognize what the stale employees are costing you and your agency, and the risks that you’re putting your best employees at by keeping a stale employee. No one wants to work someplace where they’re giving 110% and somebody who’s making twice as much money as they are is putting in 60% or 70% and no one is saying a word.  

So you really do, you take great risk by leaving this person unchecked inside your agency. So, I want you to recognize the cost and then make a decision, and make a decision once and for all. Either, “I’m going to tolerate this person being on my payroll and delivering a half-ass effort for as long as they want to work here, or I’m going to address this problem and fix the problem for my agency’s good health.” But either way, I want you to recognize the cost and make a decision so you can move forward.

That’s it. That’s my conversation for today. I know this is a tough topic. I have spent many a phone call and shared many a drink with a lot of you over this topic. And I know that it is a very difficult one to face. But I’m telling you, for the health of your agency, for the financial health of your family, this is an issue that you cannot allow to go on and on without addressing it.  

So thanks so much for being with us. Again, I appreciate your continuing to listen to the podcast. Thanks for all the great feedback. If you are loving the podcast and you haven’t gone over to iTunes or Stitcher yet and left a review, I would greatly appreciate it if you would do that. I hope you have subscribed so that you don’t miss a single episode. And I will be back next week with a guest to help you build a better agency.

In the meantime, if you need me, you know how to reach me. I’m [email protected], and I will talk to you soon.

That’s all for this episode of Build a Better Agency on how to deal with stale employees. Be sure to visit to learn more about our workshops and other ways we serve small to mid-sized agencies. While you’re there, sign up for our e-newsletter or grab our free eBook and check out the blog. Growing a bigger, better agency that makes more money, attracts bigger clients, and doesn’t consume your life is possible here on Build a Better Agency.