When a company retains its employees rather than firing them, it can often save time and money.
Whenever a firm hires a new employee, it must train that employee to do his or her job. Both the hiring process and the training process take time and money. The employee does not typically get "up to speed" for some time after starting work. This makes the firm less efficient. This is why retaining employees, even if they are less than perfect, can be worthwhile. By retaining the employee, the firm avoids the costs in time and money that are associated with the hiring and training processes. For this reason, an organization might choose to refrain from firing an employee who is doing poorly.