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Why Good HR People are Compliance Experts & Talent Consultants
Joey V. Price is a recent SHRM Top 30 Under 30 Awardee and the CEO of Jumpstart:HR, a leading human resources outsourcing and consulting agency for U.S.-based small businesses and startups. We recently had a chance to speak with Joey about the current state of the HR arena and what companies must do to get the most out of their HR departments and/or personnel.
What are Some of the Recent Compliance Issues That are Causing Small Businesses to Alter Their HR Practices and Procedures?
The false-start on overtime compliance regulation changes, potential minimum wage hikes, and the national conversation on immigration reform have small business HR experts on the edge of our seats trying to strategize for what comes next. The false-start around overtime compliance caused a ton of headaches since employers invested time and resources into telling staff members about drastic federal policy changes that ultimately never happened – and it made companies evaluate their business practices. Those business practices that were impacted by the threat of overtime rule changes include: employee scheduling, accessing email while off-the-clock, greater emphasis on ROI from a 40-hour workweek, and job misclassification for employees in roles such as administrative assistant and non-managerial corporate employees.
Minimum wage hikes will cause employers to adjust pay scales from the ground up. Some retail and fast food companies are moving towards chatbots and artificial intelligence to manage customer order taking/tracking and reduce labor related expenses. Immigration reform is a huge agenda item for our current president. It’s resulted in a cutback on corporate travel for foreign-born and naturalized citizens, a push for unity and stronger corporate D&I stances, and a look at hiring practices for STEM careers (positions often dominated in the H-1B visa application process). It will be interesting to see how each of these challenges plays out because they all represent external forces that impact the way small businesses conduct themselves.
If a startup business owner were to say to you, “I don’t need to worry about workforce planning for the future. I’ll just hire on more people as I need them,” how might you respond? I’d simply tell them about the old saying “failure to plan is a plan to fail!” You have to visualize and plan for what a successful organization looks like, or you’ll be driven to change based on the flavor or fire of the day. Practically speaking, workforce planning while in the startup phase is the best thing you can do to chart a course for where you want a company to be and what values you want it to reflect. This is critical because it allows you to have clarity regarding the right person to attract to your organization and how to support them once they arrive.
This exercise adds value in the following measurable ways:
- Workforce planning efforts become the basis of KPIs and goals for your staff to reach within a specified timeframe.
- Hiring becomes less of a frantic, anxiety-driven exercise because you’ve already identified the kind of person who will work well in your company – and possibly even have developed a passive talent pool to draw from when you’re ready.
- Workforce planning can also be the basis for career development within your organization and result in better retention and engagement for driven employees. Research shows that internal promotions done right are the best win-win situation for organizational growth.
What do you think is the trait or quality of job candidates or applicants that is the most undervalued by companies and business owners?
While it might not be the most tangible quality from an ROI perspective, enthusiasm about your mission and/or customer is a highly undervalued trait. The trait is so undervalued that it’s hardly brought up in the interview process! Imagine two candidates are interviewing for a sales position in your company. Both have equal experience and education, but one researched your company and the other did not. One can tell you a personal story about why they are so fascinated with your business and product and the other cannot. One asks questions about the company, when it was founded, why was it started, etc., and the other does not. Are you noticing a trend here?
The first applicant is highly engaged and motivated, while the other makes it seem like he is doing you a favor by granting him an interview. Engaged employees ask questions. Curious employees find new problems to solve. Active employees become brand ambassadors and will find new ways to promote your company at networking events, their kid’s soccer games, and on the subway. So when talent is equal, choose the person that’s done some research and is excited about your organization!
At what point in a startup’s or new business’s growth cycle should the owner surrender the task of personally hiring all new employees and let an HR person/department take over?
That’s a trick question. HR should never “take over” hiring employees, but rather competently facilitate the hiring process. HR’s role in hiring employees is not to be the final say, but to weed out applicants that aren’t a good fit and to prepare hiring managers (owners or department heads) to competently participate in the hiring process in order to obtain an effective hire. Implying that HR takes over the hiring process abdicates the hiring manager from his or her responsibility to serve as a “subject matter expert” in the talent evaluation process. There should be a close relationship between HR and the hiring manager throughout the recruitment process.
As for when these two roles of “subject matter expert” and “process facilitator” should branch off into being completed by two people, that answer is “as soon as the owner can afford to hire someone to manage this process.” The owner (or hiring manager) should be the subject matter expert early on in the company’s lifecycle, but as roles in the organization come into focus and become more defined, the person managing the new hire should take on the responsibility of partnering with HR or your HR consultant/recruiter.
Finish this sentence: “The biggest problem that I commonly see in entrepreneurs or startup owners who have to oversee/supervise employees for the first time in their careers is…”
Not knowing when to call for help. People management is a highly evolved discipline, and many founders start an organization because they are experts at their “one thing” (which could be tech, PR, marketing, etc.). The challenge most founders don’t know that they have is that their blind spots in personnel management can be so glaring but ignorance (and naivety) is bliss. Trusting your gut and Google is not a people management strategy, and there are nuances to your organization, the people in it, and the geographic location of your company that often requires expert support.
Sure, a startup founder can be coach and mentor when it comes to developing technical proficiency, but what about mediating workplace squabbles? Is the founder well-versed on compensation and benefits that are fair and competitive for the people under his/her employ? Do employees feel like they can speak freely about their issues with the company, even though the only person who can fix the problem might be the one causing it? Many entrepreneurs learn through trial and error that it makes sense to hire or consult with an established HR professional who can lead or advise on HR and people management strategies and tactics within the organization.
What management qualities are more important for leaders of companies with around 100 employees than for leaders of companies with ten or fewer workers?
While there are more similarities between growth-focused management at any stage of the process, the key focus for larger firms should be assessment rather than assembly. It’s the pivot from “what are we doing?” to “how are we doing?” Companies approaching 100 or more employees should really be focusing on system efficiency and scalability, whereas smaller companies need to focus on system creation and establishing important KPIs.
At 100 employees, you’ve got to be confident in the team around you that something is going right, but you need to focus on process refinement and be open to potential blind spots in leadership, accountability, personnel development, and employee morale. Failing to solicit and embrace feedback can be dangerous. When you’re larger, redundancies and process errors have a huge ripple effect that can slow down growth, demotivate employees, and have a negative impact on your bottom line. Even the most high-performing team will have breakdowns over time, and each new day presents an opportunity to document and improve upon the day before.
What do you Anticipate Will be Some of the Major HR Challenges for Business Leaders in the Future?
The future is full of opportunities to embrace future waves of innovation and change in the way we do HR! Business leaders will need to embrace the role that HR tech will play in complementing business strategy and reevaluate the focus and utility of the HR professionals under their employ. Artificial intelligence will play an increasing role in HR customer service and create cost-effective training environments for employees seeking to learn more skills and practice customer service.
As HR Tech gets smarter and becomes easier to use, you will also see less of a need to retain administrative HR professionals and a greater need for HR consultants and partners who can strategize for the growth-oriented startup. These companies will no longer need someone to approve and count vacation days, but will desperately need a strategic partner who can advise on how to compete with aggressive competitors to attract and retain top talent.
Tech in HR will be important to incorporate, but so will an adaptable mindset when it comes to the diverse needs of our global workforce. High-performing organizations will need to figure out how to master the demands of a further stratified multigenerational workforce, what to do with millennials in management, how to address an increased demand in conscious capitalism by these same millennials, how to deal with increased instances of permanently remote workers, how to incorporate diversity and inclusion initiatives, how to leverage the gig economy, what the political implications of immigration reform are, and more. If you had to Google search anything on this list, then you’re already behind!
As a result, human resources must continue its charge towards a level of importance and influence in smaller organizations beyond purely administrative functions. HR – or talent management – will truly become both a strategic and tactical advantage, and the brightest minds in HR leadership will be who C-level leaders look to for what’s next. If the HR leader in your organization does not have a “seat at the table,” your C-level executives should at least be grabbing drinks and talking strategy with an HR leader they respect.