Pre-Hire Stability Status (PHSS) is a simple framework for assessing an employee’s circumstances before joining—whether they were gainfully employed or in transition. This distinction shapes how a company approaches terminations. If someone left a stable role for you, there’s a greater moral obligation to help them land on their feet. If they were already between jobs, the obligation is different. PHSS ensures offboarding decisions consider not just business needs, but the human impact of displacement.

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When a company talks about terminations, the conversation usually centers on performance, cultural fit, or strategic shifts. Rarely does anyone stop to ask the most revealing question in the process: “Was this person better off before we hired them?”

That question matters more than most leaders realize.

If someone left a stable, gainful role to join us and within months we eliminate their position—whether because of restructuring, strategy changes, or hiring miscalculations—we didn’t just part ways. We disrupted a life. We pulled them from a secure situation into uncertainty.

I call this factor Pre-Hire Stability Status (PHSS). It’s a simple classification that answers: What was this person’s employment stability before we brought them on? There are two main categories:

1. Gainfully Employed (GE) – The individual held a stable, ongoing role when we hired them. Terminating them likely leaves them worse off than before.
2. Transitional or Unemployed (TU) – The individual was between jobs, freelancing sporadically, or in otherwise unstable employment before joining. Termination typically returns them to that same baseline.

This isn’t about avoiding hard decisions. Businesses evolve, strategies pivot, and sometimes the people we hire—through no fault of their own—no longer fit the path forward. But PHSS changes how we act once that decision is made.

When PHSS is high (Gainfully Employed), we assume more responsibility. That could mean severance, personal introductions, or even temporary support until they secure a new role. It’s our way of acknowledging, “We brought you out of stability, and we owe you a bridge back to it.”

When PHSS is low (Transitional/Unemployed), the calculus shifts. We’re still mindful and respectful, but the obligation is different—we haven’t pulled them from stability, only ended an arrangement that may have temporarily improved it.

I recently faced this situation. We hired someone, and within a month our strategy changed in a way that made their role obsolete. They became a casualty of the shift. My first question to HR wasn’t about notice periods or paperwork—it was to establish their PHSS. Were they gainfully employed before joining? The answer was no—they were in between roles. Knowing that, I didn’t feel guilty about ending things quickly without a bridge package. Had it been the opposite, I would have taken steps to soften the landing, regardless of legal requirements.

In India, there’s no statute demanding this distinction. But we choose to make it anyway. Because the way you treat people on their way out speaks volumes—not just to them, but to every current and future member of your team.

PHSS isn’t a complicated policy. It’s a lens—a quick check that makes sure we see the human impact beyond the paperwork. And in my experience, it turns what could be a cold business transaction into a measured, principled decision.

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