Small Business Human Resource Interview with Kelly Loudermilk of BuildHR – Small Business Show 114

The Small Business show, episode number 114 for Wednesday, April 12, 2017. Greetings, folks, and welcome to the Small Business show here at BusinessShow Co the show by, for and about small business owners here in Durham, New Hampshire, I'm Dave Hamilton.

And in Concord, California, I'm Shannon Jean. How are things on that side of the country there, sir?

Warm, but, you know, getting warmer. It's odd. It's like 80 degrees and we have, we still have snow on the ground, so, you know, that's how it goes. Yeah, it's fine.

That's crazy.

Yeah.

Good, good.

How about you? Good.

You know, we're, we're still powering through some rain out here in California. It's like the wettest winter ever.

That's a good thing, though.

Yeah, it's cool. I mean, it's good. I'm ready for summ. Yeah, but it'll be nice. It'll be good. Hey, you know, we've been covering lots of different things lately in, you know, revenue stack and different other aspects of small business ownership. And one of the things that always comes up that I wanted to talk about and we have a guest with us today to talk about more, is managing employees and HR stuff, human resource stuff always seems to be or can be an Achilles heel of, you know, many small business owners. Always. We kind of talk about it here a lot. So joining us today is Kelly Loudermilk. She's the founder of BuildHR. She's a human resource management firm. And Kelly's got a degree in management business law and a master's in employment and labor law. She's got years of HR management experience at other companies, and then she started build HR in 2010. So welcome to the show, Kelly.

Thank you. I'm excited to be here.

Yeah, we're really glad to have you. So let's talk. I've been up on your site at billjate@yourhrsource.com and looked around, but can you give our listeners some background about Build HR and what you guys do there?

Yeah, so we basically manage everything from actually outsourcing your entire HR process or you could hire us for small projects. Say you need a benefits package built since you're, you know, up and coming with more employees. We can do that small project for you and actually train internal employees to take over that process. We really just want to make sure that we fill in the gaps for businesses that need it when it comes to their people, since that, you know, as you grow, is the most important resource that you have. So we really just look to partner with you and everything when it comes to your employees.

That's great. I have a ton of questions about that.

Oh yeah, me too. Yeah, yeah, yeah, yeah. We could turn this into a consulting session real fast.

That's right, that's right, that's right. So, but let's talk. I also really, in addition to, you know, the HR stuff that you do, I want to talk about and make sure we allocate time to talk about your journey here that led you to starting, you know, build hr. So, so give us some background on, you know, what pushed to make the jump from corporate life to small business owner. How'd you get started?

It was actually just by chance. I was in Hilton International, which is a huge 13,000 person company, and I was approached by some people at a local networking event through Rotary International. I don't know how many small business owners out there are part of it, but it is an awesome, just opportunity to give back to the community. And they approached me with some questions after a presentation that I gave and it kind of just started from there. They were like, we need somebody to fix these problem areas at our company, but we can't bring them on full time. Would you consider consulting with us? And ever since then, I've been doing it full time or part time, depending on just the ebb and flow of clients and their needs. But it was really, truly just by chance and I've been doing it ever since and it's been a lot of fun.

You know, that's a, that's, that's something that entrepreneurs need to pay attention to is those little things when someone asks you, hey, what do you think about this? Or can you give me a little advice on that? Sometimes those are not just pivot points in your business, but pivot points in your life. It's like, wait a minute, I can capitalize, I can turn this into a thing. And there you went. Yeah.

Yeah. Wasn't easy though.

Oh no, of course not.

Yeah. But I think recognizing your expertise is always something that a lot of small business owners can have a tough time with. And so I commend you for, oh, hey, these people are coming. And thinking along that lines of, well, this could be something much bigger than it is.

And if you don't recognize your own expertise, listening to other people that do and believing them, like, hey, I could do that, of course. And then boom, you've got a business. That's awesome.

Yeah, that's great.

Is it just you at BuildHR? Do you have other people with you.

So it really depends on the need. Right now it's just me, but I've gone from employees or contractors down to just me. Again, it really just depends on the ebb and flow again at the client need. But I'm looking to hopefully grow when I get a more permanent baseline, I guess of clientele, but we're just not there yet.

Sure, sure. So, so who is your target client? I mean, is it a specific demographic that you go after or.

So my ideal client is going to be a small business that has less than 100 employees, ideally in that 50 plus range because that's when a lot of the laws change, especially when it comes to healthcare or those employees are those groups that are coming up from 10 plus employees and they're looking to grow. So once you hit 15 employees, a lot of different EEO, which is equal opportunity employment type stuff, that's going to be applicable to you then as well. Really just companies that are growing under 100 ideally. But again, since we do focus on project based work as well as the full outsourcing, we're pretty flexible. But that's going to be the most target market that we work with.

Yeah, that's great.

Have you found with your clients that when they add things, I mean, I know of course when you get to 50 employees you have to add, you have to offer health care and there's that stuff that hits even 15 employees. But have you found that people, even in that, you know, kind of under 50 range that you've worked with have found better retention rates and that sort of thing when they start offering some of this stuff that, that you know, might only be necessary if they were to get larger?

Oh, of course it always it one, it does retain talent. It attracts better talent as well when it comes to recruiting because you have that upstart lifestyle, that small business lifestyle, but you're offering what I like to call like the Cadillac package. You know, essentially you get the benefits of to the big company as well as it allows you to grow a lot quicker because you're already prepared for it. So I had a company out in Texas that I worked with for three months. They only had 12 employees when I started there and by the time that I was done with my contract, I grew them to over 25 employees. And one of the first things we did was create a benefits package and then work with a local broker to outsource the actual enrollment piece of it. We are very different from other people and other companies that do outsourcing hr because I don't like to scam companies. I see so many different companies that, you know, charge you $500 for a template that you could get for free online essentially, but it's just not the right template. And we really cut out a lot of those high prices because it's not worth worth it in my opinion, when you can get a partner in the process that understands what you're going through versus like some big company conglomerate that's just looking to an extra penny on the side. So we really try to, you know, partner with them and work with them and give them the right advice regardless, even if it means to give it to an internal employee after so long or like I said with this client in Texas to a broker to help with the enrollment piece of it.

Yep, yep, that makes sense.

Yeah, because you know, you want them to, especially in contract stuff, they're going to come dip back in and out when they need your help and certain things. And you want that loyalty, which that's how you get it. That's great. So let's talk about how you market your business. What has worked for you to gain new customers. You mentioned Rotary and public speaking before that, which is phenomenal. What stuff do you do to get your name out there?

I do a lot of Facebook ads. I like them because it's a lot of bang for your buck, essentially just making sure that your social media outlets are full of content. I'm lacking a little bit in that right now, so I'm going to have to pick that up. Another one is network. Network Network chambers. Local chambers are a huge one, especially for small businesses because you get to network with them, they get to see what you offer as well as it gets your name out there a little bit more and completely honest. Also is Reddit just joining conversations on Reddit and helping people out when they need it. Just advice wise and sometimes that can lead to a client down the road. So it's just networking and collaborating as much as I can. And then sooner or later down the road we'll probably go to maybe like print advertisements when it comes to magazines for small businesses. But it's just, you know, those things are pricey so I stick to the cheaper options.

But yeah, I like the idea of offering help, like valuable help as a way of marketing people or marketing to people and then, you know, potentially bringing them in. The door is paying clients. Yeah. It builds trust real fast.

Yeah. You're showing them that you're somebody's problem. Yeah, yeah. You're a resource. Right. And you're not just Looking out to send them a bill. You actually want to be a resource.

Yeah, exactly.

That's cool. So a couple weeks ago we had a bookkeeping outsourcing business owner on the show and it seems to be like accounting and bookkeeping. HR is one of those things that a lot of small business owners, they don't know much about and you mentioned compliance and things like that. What would you say, you know, is the most important thing for small business owners to look out for when they're starting to hire and they're ramping things up? You know, what have you seen? What are some of the pitfalls?

The biggest thing when it comes to small owners is just know what you can and cannot ask when you're hiring. That is a big one. Just be knowledgeable of how you interact with your employees. Making sure that you research on your local state laws online of what applies to you. Because state laws are different. For instance, California, your state laws vary tremendously when it comes to employees versus other states. Find out if you're an at will state or not. That's a really big one too. You just have to make sure that you address all aspects of it just by doing your research. That's the biggest pitfall that I see because it gets them in trouble at the end of it. Also making sure that you figure out do you need a full time employee or would would you rather have a contractor, what's going to be best for you on your legality side and also your liability side. If you hire a contractor, you want to make sure that they have liability insurance in case something happens there. So it's making sure you know exactly what you need and you know how to approach it and research is going to be the best way to do it. Or hire a third party recruiter that actually works with you and doesn't charge you a ton over asking prices because especially in the Colorado area, sometimes you're getting a 30% markup cost on those recruiters and they know what they're doing and it's, you know, you're paying for that service. But that's one thing that we offer as well is recruiting. But we do it on a contract basis to where you're going to be paying us over time, not a one time fee. So you got to be able to look out for those options as well so that you know what you're doing and training yourself on how to hire. That's a big one. Because sure, if you ask somebody what they like to do outside of work or anything personal on that level it can be a lawsuit waiting to happen depending on how you ask it in the context and the question. So it is, it is mushy, mushy water. New York just passed a law. You can't ask about, you know, current salary anymore.

What.

So I'm sure that that's going to trickle down as well. So it's just. It's our most recent court case that was announced. I didn't look too much into it, just completely honest, because I'm not in New York, but I've been seeing in my newsfeed, in a sense it's something that's changing in the recruiting world about asking current salary requirements is a no, no in most places. And you just gotta make sure you ask what they're looking for instead of what they're currently making because it varies so differently from company to company.

Yeah, I can see where that makes sense. Yeah. Yeah. Okay. When you put it that way. Yep.

Yeah. Hiring, I mean, especially for, you know, businesses getting started without a lot of experience, I mean, you know, having someone there to help you can be critically important.

I think it's a great question. I have a question and I'm actually going to ask. I mean, really, this is to Kelly, but I'm going to ask you, Shannon, do you have an employee manual at your business?

Yes, yes, we do.

That's good.

Yes. But we also like. So one of the things I really liked about Kelly about your website is all the templates that are up there that small business owners can download. And one of them, everything from, from an employee handbook template to personal device at work policy handbook, those are fantastic resources. And do you know, I mean, really, it's a nominal fee to get those. And so you've also kind of mixed in this E commerce element on your website. Talk about that a little bit and how it helps your business.

It's really just one of those things that is less work on my side because a lot of companies that are in the HR space offer templates to their customers and they may not have that instant download availability just given how they work. And so this actually plays a role of giving clients what they need without the interaction. If they don't need the interaction. There could be clients that just need one thing like an employee handbook, but they don't want to deal with somebody telling them what to do. They don't want to pay a ton of money for a consultation fee or anything like that. And this gives them the opportunity to make a purchase. They, you know, I always follow up afterwards just making sure that everything's good to go and maybe offer them to customize a template for them, which is always an option as well because it's a word document that comes with little text boxes and stuff for them to customize certain areas. And those are actually highlighted of, you know, good areas to maybe delete or change, depending on where you're at. But overall, it's just, you know, very generic templates that are very widely applicable. But it's a great opportunity for people to get what they need and get out, essentially. So it's kind of like a gas station part of my company, I guess you could say.

Yeah. Well, I don't have an employee handbook for my employees. And I've been thinking over the last month, it's just one of those things I need to make sure I do this year. So I think you've got a new customer. So there you go.

Yeah, so. Well, Dave, most of your folks are contractors, right?

I have a lot of contractors, but I do have have several full time employees with both businesses. So yeah, I need it. I mean, it'll protect me down the road.

You know, the employee manual thing is it's interesting. I definitely see the value in it, but I also, you know, I'm such kind of an anti lawyerly.

That's not even a word, you know what I mean?

This legalese stuff drives me kind of crazy.

Until you fire somebody and then you have a problem.

Exactly right. So you have to protect yourself. But I really like Kelly, your points about modifying things to reflect your business. I think that's really important to put that personal spin on it because your employee manual I think can also. It talks to your culture in your company and it shouldn't always just be about protecting CYA type thing for the employer.

What I like here is like you said, this is not just so people know an employee handbook. The version that Kelly's talking About here is $24.95 on the website. $24.95, not $2,500, right? $25. So to me, I thought about it exactly the same way you did, Shannon. Like, okay, Great, I'll pay 25 bucks. I'll download this thing and then I can start to modify it for the things that make sense to me. But at least I have this baseline to go with. And if I do run into trouble, well, I know the person that wrote it and I know that I can hire Kelly to help me through some of the nuts and bolts.

So yeah, yeah, Kelly, I think it's brilliant and I think It's a great thing to promote in all those different areas. I don't know if you do that, if you promote those on Facebook or on Reddit and that kind of thing, but it's such a great way to get in the door. I like that.

And the biggest thing about it, I've actually had a small business owner on Reddit contact me about my prices saying, like, they're so low. What's going on here? Because, you know, he had to pay $500 for an employee handbook. And it's because these things, you know, for everyone listening, these templates are available online. You can Google and you can research and you can find different organizations that do offer templates that are similar online for free. It's perfectly normal to do so. So why charge somebody $500 for something that you can get for free? And I don't think that that's fair. So. So the prices on the templates are very, you know, it depends on how many pages they are. You know, the less Pages, like my one page ones are usually only like $10 because it's one page. Like, why do you need to spend, you know, $300 on one page?

So ask my attorney. Yeah.

And you know, they do have more specialized skill sets, so rightfully so, you know, a jd, I would charge money too, but you know, like custom orders, they start at 39.95. Where basically I will create it from scratch for you or customize it for you. You can download multiples at the same time for a little bit more. But this is just so that, you know, it's really helping those people that, you know, don't have that kind of budget, because when you're starting out or if you want to have these things just in case, then you're not going to have that kind of money to spend. And having fairer prices is one reason why we target the smaller businesses, because we're really trying to partner with them and, you know, be really good resource for them and not gouge them when it's not necessary. So that's, that's one of the reasons why these prices are a lot more affordable than some other ones. And the prices on the services might change a little bit coming forward because we're going to be offering some online courses for managers and employees for just compliance reasons. Like you said earlier, the biggest thing about employee handbooks are to cover your geester, essentially when it comes to legal issues. And that's one thing HR really is. It's just making sure all the I's are Dotted and the T's are crossed so you are okay at the end of the day.

Yeah, that's great. I think that's a. Yeah, it's very cool. That's a huge success. But we're not going to let you get out of here without talking about your mistakes because we all make them. And part of the reason Dave and I started this show a couple years ago was like, hey, you know, we need to share all this stuff and talk about how we've screwed up and still succeeded and this and that, the other thing. So, so, so let's, let's talk about the mist. You know, we'll hold you to just one. You know, what, what I always call on the show, you know, the best mistake you've ever made, in other words. But you know, also, what mistake taught you the most with your business?

One of the biggest mistakes I made was with a client, the same one in Texas with three months. I, I guess I misspoke out of my place to the client, the CEO, directly, and it ended up causing me to lose that contract, unfortunately. But it made me learn that I could probably be a little bit abrasive approaching people and that I have to know that my place is always as a consultant and try not to. I tend to get really passionate about this. I'm a big HR nerd. People are the most unpredictable commodity on the planet. And that's what got me into this because there's always different things to work with. But what I ended up doing is working with them on a performance review system and policy that we were creating. And they were wanting to go with an OKR system, which is objective key results that was made very popular by Google. And it's basically setting goals from the company level down to your management level down to individual level. So everyone has goals to approach on a quarterly or weekly basis, depending on how you set it up. And that's how you grade their performance over time. I misspoke because I got them all set up on one particular company for an actual system to help them keep that management review in place. The CEO decided to go with another company that was a startup over Europe, which still had a lot of kinks to work out. Good idea. But it just was still in the early phases. And, you know, I really did voice my, my dislike of it and how I don't think it was going to serve their, their true needs. And it just wasn't the right approach to take as a consultant. You know, they're your customer, so it's just, you know, Sometimes people, you know, enjoy that kind of back and forth and they know, like, okay, I know that you're doing it for the best reasons, but it's, you know, I want this for X, Y and Z. And it just made me realize that I have to be smarter when I approach my customer base because they could really have something else in mind than what you think.

Well, that's, that's the hardest part about being a consultant is you're paid for your expertise and then oftentimes you're also paid to do the implementation. And those two things are separate. Right. So, you know, separating those in your own mind and saying, okay, here's. If this were my company, here's what I do, and then letting the client decide, making sure they're informed, and then letting the client decide and they say, great, you would choose plan A, I'm going to choose plan B. Please implement plan B for me. You know, and that, that's a hard thing to learn. Right? So yeah.

Yes, it is, because I get so involved with my clients and I'm basically an extension of their company. And, you know, I love their vision as much as, you know, my own. And so I get really excited and I want things to really work out, be successful. But like you said, I have to learn to separate that a little bit because I am only a consultant and a resource. I'm not a part of that company essentially, and it's not my place to, you know, necessarily speak out against what a client may want if I think, you know, so that's one of the biggest mistakes that I've made in my career. And it was a really big learning thing. And quite honestly, it knocked me down a few pegs, you know, each ego wise. And it was a really good thing to do because you have to stay humble when you're growing. And I, you know, it made me wake up and be like, wow, okay, that's, you know, a really good learning experience.

You learn, you learn how to present the data in a certain way to where it's, you know, not, you know, us or them type thing and let them choose. Like, like Dave is saying. I think that's, that's a really good lesson. That's cool. That's why mistakes are so powerful. Yeah.

You can build a business on your mistakes. That's right.

That's, that's for sure. We've all made them.

I was just gonna say, yeah, if you, if you, if you don't think you've made mistakes, that's your first mistake right there.

So there you go, yes.

Yeah, we've yet to have someone on the show that said they haven't but I'm.

That's true.

Someday there'll some, you know, I haven't made it yet. So.

Okay.

Yeah.

So watch your six. Yeah, yeah, that's right, that's right.

So, okay, so going back, you know, since you've been working, you know, on Build HR since 2010 and if you could look back now and, and give yourself some advice when you were first started, what would you tell yourself back then? You know, that when you were just.

Getting going that, that it's going to be a journey and not a destination and that it's gonna have its ups and downs. You know, when the times are a little bit down. I do work a full time job on the side because you know, I completely honest, I'm a single mother, I'm a solo parent. So the ebb and flow of business is very constricting to healthy lifestyle. I work a full time job and what I would probably tell myself getting started is that there's going to be cycles. It is going to be an ebb and flow and it's going to be about the journey and not the destination. And sooner or later you'll get to that point where you can do it full time and be successful in it, but you just have to, to keep going at it and not give up so easily. So it's really just kind of a pep talk I would probably give myself. Yeah, that's good.

Well that, you know that, that, that's such great advice. In the ebbs and flows and the ups and downs, I mean most people and especially people on the outside of the business world think, you know, things just keep kind of going up, up, up, up, up. And it doesn't always happen that way. And powering through it is a critical skill.

Yes, it is very difficult, but you gotta just keep going.

Yep.

Yeah, we talk on the show a lot about creating your own reality and even if you have to do, you know, talk to yourself in your head and create that, that can be what, you know, kind of drags you along to eventual success. And you know, we're big fans of starting out small and bootstrapping because ultimately it makes the success all that much sweeter, so.

Exactly.

That's cool. So, okay, some really great stuff and I know our listeners are going to have lots of questions and things. What's the best way to learn more about BuildHR and get a hold of you, Kelly?

So our website is your HR source all1word.com. So on there, there is a contact form that you can reach out to us directly or you can find us on Twitter. We're on LinkedIn. We're also on Facebook. Facebook. All of the, you know, slash usernames are going to be your HR source, because that's really what we're looking to be at. We are available Monday through Friday, 8 to 5 via phone as well. All of our contact information is on the website. We've been getting a lot of spam calls lately, so if it goes to voicemail, just please, please, please leave a voicemail and I will get back to you, like very quickly. It's just the reason why we have it going to voicemail right now is because for some reason, when we registered our new phone, we've been getting a crazy amount of spam. So that's really the main reason.

That's great.

That's good. Well, we definitely wish you success. We love hearing about your story and we'd love to have you come back on sometime and give us some more tips and let us know how it's going.

Yeah, I would enjoy it. Thank you so much, Shannon and Dave. It has been awesome.

Yeah, no, this is great. I now it, you know, invariably I know it's been a good interview. If I've got a list of things that I need to go do when we're finished. That's good, folks. Thanks so much for listening. Of course you can find us on Facebook and our small business support group over at BusinessShow Co Facebook. That'll bring you right there. Thank you so much for listening, Kelly. Thanks for being here.

Here. Thanks for having me, guys.

Of course. Keep living that charmed life, folks.

Take it easy.