Start HR Right: A Human Resources Strategy Your Small Business Can’t Afford to Skip

I was very close to naming this episode after my nickname, HR Disasters.

But.

I decided we were going to go a slightly different way. And we were going to talk about starting HR right from day one instead of like day 1460.

Clean version.

I like that because I believe with your business doing what it does, you get them on day 1462.

Yeah.

And that's about 1460 days too late.

Agreed. Yeah.

So, yeah, let's, let's, let's fix that. We'll be right back. She's the CEO.

He's the marketing and operations guy.

If it's broken, you need the business fix. Today we're going to get into the heart of your business. Or that cold little black heart. Oh, no, no, different piece. We're going to talk about your people from an HR standpoint and why assigning HR to your office assistant who might have like a, like maybe an accounting background. Why? That is a big by huge. It's rectangular. A big by huge mistake.

Yes.

And how to start your HR department off. Right. But how things been? You've had a child that has been away for a number of weeks.

We've been empty nesting. We have one at CMU for six weeks and then one went to camp for two weeks. So we went to visit the CMU student, went to see Maddie and she's doing great. She misses us. We miss her, which is good.

You were very specific in saying she's doing great.

She's doing great. Yeah. I know me, I told you ahead of time I would be like refreshing the life360, seeing where she is. Like, I'm not calling and texting her all the time. But I mean, she's, she's calling, she's texting. So I mean, things are good. I'm happy. Yes.

Good.

I think we'll be able to survive when she goes to college. I'm really glad that we have this test to kind of pregame, preparing for that because I know a lot of parents right now they're like, my kids are leaving and I'm not ready. I'm like, I'm not either. I got a year. But we got this, this pre vacation, pre. On vacation, pre college.

It's dry run.

It is. It's a dry run. That's a test drive. Yes. Yes. I'm going to defer for me. Josh, did you go on a motorcycle trip?

I did. My dad actually had. He's got a cousin that lives in Chicago.

Oh.

They meet in Michigan typically beginning of summer and end of summer just to camp, kayak and all this other stuff. This time they got a Verbo or an Airbnb or something like that. And I looked at him, I said, you care if I come up for the night? And he's like, why did I crash? Just to go for a motorcycle ride. And he's like, yeah, I would love it. So I literally rode 300 and I think it was 379 miles.

That's a lot.

Visited Lake Michigan and then came back the 45 minutes to the place where they had the VRBO.

Okay.

Woke up the next morning, made my eggs, sat on the dock, watched the sunrise up over the lake where they were at small inland lake.

And.

And before my dad's cousin was even awake, I headed for home. Both days were 95 degrees. I went through almost three liters of water.

Oh my gosh.

Because I will not ride without full gear. And so, yeah, I cooked. But no, it was a good time. Really good time.

Okay.

Really good time. Let's. Now we've bantered.

Yes.

Let's talk.

Let's talk about hr.

Right? Let's talk about.

That's a great segue.

Let's talk about the thing that you do and the thing that maybe you do because of me or because of people like me. So I want to. There's. I always like to start with some numbers. Bad hire. We talked about this. 30% of that employee's first year salary. A bad hire can easily cost you that, if not more.

Way more. Especially if you consider time. Business owner. Yep.

Oh, yeah, wholeheartedly. Flip side. A strong structured onboarding process. A core HR function.

Yes.

Then can boost new hire productivity up to 50%. That's a number of things have come back with that research. And then in small companies without hr, over a third of employees don't trust how HR issues are handled. I believe over a third is low.

They really mean 90% over a third. Because we don't want to say everyone. Right.

Over a third.

I want to know who those employees are that trust how HR issues are handled. But it's not professional. They're probably family members. That's it. It's gotta be.

So I, I want to get your perspective on this because I mean, like we said in the intro, there's so many times people, they say put their office assistant in charge of. Okay, you do the accounting, you should do the benefits, you should do the policies, you should do the crap.

You're going to do the employee handbook, Right? Yeah.

All this crap that the owners don't want to do. I mean, me personally, I Don't really enjoy this. I mean, I, maybe I'd rather get the root canal.

Yeah, most people would.

But to me, they put this, they put this in the hands of someone like that.

Yes.

And what they don't realize is that you've got someone managing your building, you've got someone managing your bank account, you've got someone managing all the assets. And then you put someone that's going to give two fly. We're not late enough into the episode that I can swear they don't care that much. They just want to get that job done so they don't put them in charge.

Yep. Correct. Like.

What can be done about this?

Well, a couple things.

And give me your, give me your perspective on, like, why this happens.

Yeah, I think part of it happens in. As business owner, you think, okay, I'm going to take away the things that I don't want to do and I'm going to delegate them to other people and that is fine. That's your purview. However, when you delegate to someone maybe without a budget or you go, I just want you to figure it out. A lot of times those individuals are going to go to their best Friend, Google or ChatGPT to answer that question. And oftentimes it's not necessarily correct. So you have, depending on what you're doing, a 50, 50 shot, sometimes a 90, 10 shot of being correct or incorrect. And sometimes those mistakes can be really costly. So if you're going to delegate and you're delegating something that is a high function, I think there's two things that you should think about. You either hire a fractional expert on your own or you give that individual that you're delegating to that you know is not the expert a budget and say, I know you're not the expert either, but I need you to find the time to do this for me. And then you can kind of walk through those things. Because what I see the biggest danger is is it's a false sense of security. So you think things are being handled because someone's printing the onboarding packets, they're tracking everybody's pto. But HR is not about paperwork all the time. Most of the time it's about. No, it's not. It's about people.

Most of my interactions with HR have been paperwork.

Well, that's, that's a different episode. We can talk about documentation and, you know, hard conversations, termination, all those things, but really it's more about, it's about people. It's about risk, building trust and Kind of having the right structure. So when you delegate to an untrained admin, what you're signaling are a couple of things. I would say. The first is that your team's development, safety and well being are administrative tasks. So they're not strategic priorities. You're, you're a checkbox that I'm going to deal with that I don't think that you're your organization. The people that are working for you really want to think that they're just a box that they check. And the other, and this is a big one, especially when you're in a small business and when you're in a tightly held family business that gets delegated to the admin or to the wife or to grandma. Is that, can you tell I've got some things around this. And maybe some of the organizations we work with is that confidential complaints from your team members, performance conversations are handled by someone without the training or the legal awareness to do it properly.

It's funny you say all that because what I, what I'm getting the. One of the first things that you say is about how thing you think things are being handled. Just because you don't hear about it as a problem doesn't mean it's not a problem.

Correct.

There can be a lot of leaks in the dike before it finally bursts.

Yes. Especially when you delegate to an admin who maybe you have trained to say I don't want you to bring me problems unless you bring me solutions. And sometimes though, it's easier to hide those issues. So I mean like to me, the other, the other issue I would say this too is organizations think all of a sudden, okay, I've hit 10 employees, I've hit 20 employees. I need to hire a full time HR generalist right now. That's not necessarily true because oftentimes when you're in a company of that size, the budget that you have for a generalist is not going to be the size of budget that you maybe need for someone that has a wide breadth of knowledge. So I mean like have the mindset shift that you need to invest in your, your, the engine of your business, which is your people as opposed to I just need to find one person to do this job.

It's interesting because when you say the generalist thing, I think of a pitch that I give from the marketing side for people in a lot of cases. Do you want to hire a generalist for your company or do you want to hire five experts?

Yeah, that's a great question.

Most people like, well, I Want five experts, but I can't afford five experts. And I'm like, oh, yes, you can, because you're only paying each one of us for a little bit of our time.

Exactly.

HR appears like it could go the same way.

It absolutely can. When you're working with different types of fractional people. Like, with what we do at Clarity, we have a wide breadth of HR knowledge from different individuals that add to the team. So when you're working with us, you're not just working with one person. You're working with an HR department. So I think if you can level up and find the right types of consultants to work with, I think your business will soar. As opposed to just having somebody there in the organization who's responsible for HR that maybe doesn't have the certifications, the understanding, or the HR body of knowledge. They're just using Google. That's not okay. Can get you sued.

What I'm quickly realizing is that this is part podcast, part therapy session.

Yes. For me, absolutely. Yes.

There is a lot of trauma that I feel coming out here.

Well, I think part of it's personal experience. I mean, launched Clarity because I was afraid of dealing with the HR stuff myself. So, I mean, it's like, okay, if we're going to be fearful about it, let's just start a company around it and we'll just address that head on.

Yeah, I hate this. I'm going to start a company that handles it.

I'm going to hire certified. People know way more than me about this.

But see this to me, and I want to, I want to highlight this real quick because that is the CEO visionary, whereas the. The operations guy sees that, it's like, nope, nightmare. From your aspect, you're like, there's a vision behind this. And I'm like, there's a nightmare behind this. No, thanks.

That's okay. That's why we're together. That's why we do this podcast.

100%. 100%. What do you think is like, the opportunity? Because, I mean, as business owners, so many of us, we don't. We don't just want band aids for stuff. Yeah, unfortunately, we put a lot of band aids on stuff. Like the office administrator here, you're in charge of HR now, so we don't want that. What is, I mean, one thing that a business owner, you think should do in order to avoid the band aid or what? I guess what I would, what I would say is what's the result that they can get from. Instead of band aiding this, finding an actual solution to it. Does that make sense?

It does. And so I would say the band aid that you get is trust erosion. So that's what the cost is. The cost is trust erosion. So when things aren't handled transparently, when people don't understand the process for payroll, when someone mishandles a complaint, it doesn't just affect that person, it ripples through the whole team. So if you want to eliminate trust erosion, continue to build a strong culture and be able to scale your business without. I mean, there's lots of things that keep us up as business owners at night. Lots of things. The people part, other than do I have the right people in the right seats? It shouldn't be, oh my gosh, did I fill out things right? Am I following the Fair Labor Standards Act? Am I going to get a notice from like that stuff? You don't want to think about that. There are way more important things to think about. So defer it to an expert so you don't have to worry about it.

So do you feel it's easier to have. I guess my question is then too, is it. For me, as a business owner, it would be easier for me to ask an outside HR person, can we do this right? Than it would be for me to go to my office administrator and be like, hey, did we fire that person correctly?

Yes, it absolutely is. Well, and the other part too is when you hire outside hr, especially if you're, if you're a tightly knit organization, there's a couple things that it does. It gives you a third party perspective in that, you know, we, we love your organization, we want to keep you as a client, but we're not going to give you bad information to keep our jobs. Sure. Someone who's within your organization, that can be a challenge. Like a great example is we're an experience that we've had in the last year is that we're working on helping an organization determine what type of operating system they want to use for their business. They have one employee that's internal that is saying this is the operating system that we're going to use because that's what his job is tied to. As opposed to bringing in a third party who's a little bit more transparent and goes, you know, I'm going to tell the business owners things that they may not want to hear and I don't care because that's my job. I don't need to worry about keeping my job because I don't need this job to make sure that I can feed my family. So does that make a little bit of sense in trying to understand the transparency. The other part, I would say, is that when you're dealing with outside hr, there's more of a pro employer approach. And that, yes, we are very, let's take care of the employees, but we're looking at the organization as, how do we protect the business? How do we protect the business owner? So there may be some times where we're like, you don't have to do that. Like when, when an HR person comes in and says, we want to give unlimited pto. And we're like, you can do that, but is that the right answer for your organization? I mean, you're a manufacturer and you have certain deadlines that you have to meet. If you give unlimited pto, it has to have some of these caveats. So it's, how do you continue to maintain that balance and help the business owner know what is the right way to do things, what is the wrong way to do things? And then also having those conversations around, look, I know that this may be an issue for you. It's a red flag and you're probably going to get sued and you need to listen to us. And when they go, well, we're not going to listen to you. We go, okay, you're going to deal with a lawsuit and then we're going to help you with it. But, I mean, I think it's, it's important to kind of navigate which, which line things are on. Especially when it comes to tightly held family businesses. Having a third party is really important, especially as you're looking at potential leadership transitions or you're dealing with performance improvement conversations. If you have a family member that you're preparing to exit, I would say you call your attorney if you haven't already talked to your HR expert, But you should talk to an HR expert that's a third party in order to kind of navigate that situation always with family.

So I want to, I want to ask something else from the perspective of it can't happen to me.

Fair.

I just had a conversation with a close friend of mine this morning. He's in charge of. It's him, the owner, and then they've got, I believe, three employees.

Okay.

They just had someone else quit recently. He's like, I think I'm going to let this one guy go. And he, his line to me was, we've told him what we want done. We've given him all sorts of pep talks.

Okay?

I had the same look on my face. I'm not even the HR person. We've given them all sorts of pep talks, and we've given multiple chances. We're going to have to let him go. And I'm like, dude, you. You. Did you give him a performance improvement plan? Did you say, look, this is what we expect from you? And he's like, yeah, we told him the expectations all the time. And I'm like, did you put it on paper? He's like, well, no. And I'm like, right. And I. To me, I have. I mean, I have a small group of friends largely because of the way I talk to people. How often are you seeing this? I mean, how big of a problem is this? And I guess because my question is, is do businesses think I'm never going to have this problem and then it just shows up on their doorstep?

I think so. I think that a lot of times people believe that HR is something we'll figure out as we scale. And HR is not something that you bolt on after you scale. It's part of the frame of your business. And so there's another phrase too that, like, if it ain't on the. The page, it ain't on the stage. Have you ever heard that?

No.

Oh, yeah. Yeah, I have them.

If it ain't on the page, if.

It ain't on the page. If it's not on the page, it's not on the stage. But if it ain't. If it ain't on the page, it ain't on the stage.

So what's that referring to?

Well, I think a lot of what it was, was it real estate contracts was like in some of the masterminds that I'm in, on the real estate side, it was like, if it ain't on the page. And so if it's not in the offer, if it's not in the agreement, if it's not in due diligence, you didn't talk about it and you didn't codify it in writing. It's not there. So, I mean, again, if it's not in writing, it's not defensible. So you've got to pay attention to, you know, how do we document? And that's the other part. We talked about this in a previous episode about how there are different types of learners. Sure. So it's important that from the lawyer perspective, like, lawyers tend to like things written down. Some do. I mean, judges, like, if you're gonna make a judgment, also the Department of Labor likes things to be written down unemploy likes things to be documented. So if you're going to have it written down. It's helpful. But the other part is for employees if you give them a reference document, hey, here's your performance improvement plan. It's been documented. Here is your write up for something that we didn't like that you did. It doesn't even have to be a performance improvement plan. Even if it's just documentation of our meeting, documentation of the expectations. It's something that they can refer to. And it's important because then you can go back because a conversation is a conversation. I've told you multiple times how, when, what and if you don't note to file. Did you?

Right. Did you just scream it at me across the shop one day when you were pissed?

Yes. It's hearsay. And is it something that. It gets very difficult in a litigious situation or in depending on if that we're going to let this person go. Are they in a protected class? Did you make sure that you documented. No, we didn't. We just decided to let them go because, you know, our state's an at will state. That's fine. You still may have to pay him unemployment. You still may get sued. Doesn't mean you're going to be found liable. Doesn't mean that like any of the situation could. I mean, it could resolve itself, but you still gotta pay to deal with that situation. So just cover your butt. That's what I'm saying.

It's amazing that it really. You never think of it, but paper is a phenomenal way to cover your butt.

It is, it is. And again, if it's not in writing, it's not defensible. So like, you need job descriptions, not job assumptions. That's really important. You need a handbook that sets expectations and protects both the company and the employee. Julie Wheeler, who's one of our HR business partners, she says all the time employees love guardrails. They love to know the map as to where they're going and what they can and cannot do. Most people think that employees hate rules. They don't. They like rules. They make them feel safe. And that's, that's part of the issue is we've got to create a safe working environment where people can do their work and not have to worry about, am I doing a good job? Did I do the right things? Is it okay for me to ask for pto? I think I have a complaint, but I don't know what to do. It's really important that we clarify all those expectations and what's going on. The other thing I'll say Too. And we talked about another podcast is your onboarding process needs to be consistent. Every new hire gets a different experience. You're not onboarding, you're winging it.

I, I, I even see this all the time.

Oh, I'm sure you do.

Someone shows up, I mean, with some of my friends in business where they're like, yeah, I got a new employee. I'm like, oh, that's cool. They're like, yeah, they're doing this. And I'm like, they've been there for 20 minutes and you've got them working on stuff already.

You haven't gone over mission vision values. You haven't gone over the basic stuff they have. And that's the other thing, Josh. When you onboard people, there is some paperwork that has to be done. And for some organizations, there's compliance items that need to be done first day. And if you're not doing those things, you're potentially putting yourself up for legal liability, voiding potential insurance policies that you have. If you have employer practices liability and you don't do the things that you need to do to make sure that you're maintaining that policy, it doesn't, HR is not going to help you. You, you did this to yourself.

Yeah, it, it, it's funny because it is that from, you know how I am about repeatable things, clear things, you can't do that as you go. It's the, it, it's funny because HR is no different than any other piece of your business and use one of those cliches that everyone loves to use in business that I absolutely despise.

I can't wait.

You cannot build the airplane in the air. That does not work. That is what's called a projectile. That is not building an airplane in the air. No, it is a projectile. No, it is not an airplane. You build it on the ground and then you fly it.

Yes.

Yeah. It's not. You're not. And yeah, because the other thing is too, is I always like when people say these preposterous things like building the airplane in the air. Building your HR department as you are 20, 30, 40 people in.

Yes.

Like, you're going at, like, if it's an airplane and you're actually going through the air, try putting a, try bolting a wing on at 300 miles an hour. Because that's, in a sense, what people are trying to do with their HR is there. Right. They're trying to put a wing on.

Yeah.

At 300 miles an hour. And guys, you just, it, you just cannot do it. So you need to start that. This is another one of those things. I. I refer to this movie a lot is Spy Game.

Okay.

One of my favorite lines from that movie is when Robert Redford says to his assistant, he goes, when did Noah build the ark? She like, what? And he goes, before the flood.

Yes.

I'm not even a religious guy, and I love that. That is. And then the other one, you know, that I use all the time is if I'm walking into a shitstorm, it's nice to know which way the wind's blowing.

Yes.

If you build the ark before the flood, you have less of a likelihood of walking into the shitstorm.

Yes. Tough. It is. And if you're not doing that, you're creating chaos. And chaos can be really expensive to put in order.

It's funny because it is that it's that pay a little bit now or pay a lot later. Yeah, it is both from a time and operational standpoint. It is an investment in hr. I would in some ways equate it to marketing, though, because you don't necessarily see it. See it. We talk, like, from a marketing perspective. I say, look, you spend the money and we do the things for you. And you're like, well, great. What happened in manufacturing? If you buy a widget maker, you. You can go out, you can hug your widget maker.

Yes.

You can sit on your widget maker, you can pet, you can tell stories to your widget maker. Whatever you want to do, you can do that. You can't necessarily do that to hr, but you have to realize that that investment, if done correctly and done with a plan.

Correct.

Instead of an oh, shit, yeah. It has a return to it.

Yeah. And I think oftentimes you think they're in. It's an intangible cost or an intangible payoff. You think, well, I'm not going to see it. But you do. You see it in. Do you have a positive culture? Do you have individuals that are willing to embrace innovation? Do you have employees that are willing to give you feedback? Not just positive feedback, because they don't want to tell you any bad things, but they're also willing to tell you when things are not working? And so as much as people say, I don't know why I would invest in hr, I don't really see any value in it. I'm like, your employees do, and your employees are one of your most valuable resources. And if you want to maintain the relationships that you have with your employees and have more of them, you want to make sure that you've got solid HR practices now. That said, Josh, I will say 95% of our clients do not come to us when they're starting a company. We have a few that have and we're really grateful because it's, we've been able to kind of help them build the company from the ground up and kind of make sure they're going in the right direction, make sure they've even applied for business licenses in the right states so they know ahead of time, like what do I need to do setting things up the right way. But most of them come when they've got an issue. And what I say too is if you've never had an employee handbook and you're a 50 year old company, okay, you need one now. Like I appreciate that you've done it for that long, but now it's time. So let's. If you're getting ready to transition in sale, if you're getting ready to go from one generation to the next, these are the times where you work on shoring up what your HR practices are. Because inevitably, whenever you have a leadership transition, management transition, ownership transition, there is always at least a little bit of churn with employees because there's uncertainty. So if you don't clarify expectations, you don't clarify what, what the organization is going to look like, you can, you can have issues and you're always going to have some of those people like, well, I liked it better the old way. Okay, well now we know how to exit you and we know how to bring other people in if we need to. I think it's really important, especially as you're looking at major shifts within your organization. I think if you're going to open up a new location, if you're going to move in a different direction with your business, start a new venture, start a new branch, it just makes sense to kind of bring, bring HR in. If you don't have it kind of look at everything.

What's interesting is I want to go back to one of the first things you said in that is the, the employees ability to give you feedback.

Yeah.

If there's guardrails there. And I mean everyone's like, I got an open door policy. Right. Which that door is open both ways is how most employees feel like, like you can walk in but you can walk, get walked right back out.

Yes.

Is how many employees feel about it. And if you've got those correct guardrails, those procedures around it saying look, as long as I'm, I'm sticking within these guardrails I'm safe, I'm fine. I can tell them something's wrong. Rather than, hey, he's what?

What?

I've worked for people where you're like, what kind of mood are they in today?

Oh, that's hard.

Yeah. And there's times where you're like, can I tell them this I'm gonna have? And I mean, after you've waited three weeks to tell them something, you're like, they'll figure it out on their own.

Yeah.

And then they figure it out and they come into your office screaming, been there.

Yeah.

But it is, it's having that setup. So there is a path for the employees to come in and feel like, hey, I can. And once again, you want it to feel like that point that they can come in and talk about it, not scream or just about it. That if there is a concern.

Yeah.

They can be like, I have a concern. Not wait till the point where they're like, I'm out of here.

Exactly.

I see it. So I've seen, worked with and heard it so many times where it's just. Yeah. There's no good, no good route for it because there's no structure around it to kind of give a little bit of a summary here.

Yeah.

One of the key takeaways, stop using untrained staff.

Yes.

Please do not put the now 24 year old office assistant.

Yes.

In charge of your most valuable asset.

Correct.

That's.

Yeah.

That, that, that would be my first one. What do you got?

I would say also, you know, conduct a compliance audit. So if you don't want to do it, hire somebody like Clarity to help you. But you need to review your i9s, review your employee files, your payroll practices, identify any gaps. One thing that we do a lot at with our clients is fair labor standards audits. So what is exempt? What is non exempt? Who gets paid overtime? Who does not get paid overtime? In the past, we worked with a client that's like, I don't pay anybody overtime. And we're like, you don't do what? They're like, yeah, they're all, they're all exempt. They don't need. It's like, no, no, no, no, no, no. That's not, that's not the right definition. So we need to fix this. We need to fix it now. Oh, well, they're keeping track of their time so they can tell me what the overtime wait. They're keeping track of their time. You're not keeping track of their time. I mean, you can go down a rabbit hole pretty Quickly. And I would say too, with i9s, given the way we are with immigration right now, it's just important that you have them regardless of who you're hiring. It's a really easy. Everybody fills out the i9 form. They give you the documentation. You keep it in a separate file or in a separate notebook. So in any case, if someone ever comes in and says, I need to look at your i9s, you can pull them off the shelf and you can hand them to somebody, or you can pull them from your payroll system very quickly. You don't have to give them access to everything. You just give them access to your i9s.

Interesting point one that I'm going to say is one of your favorites is get and or build an employee handbook, please. And, and I, I thought of a great analogy for this. If you do not have an employee handbook, it's essentially we all remember being on the playground as a little kid and playing a game where someone else made up the rules as they go. Oh, yes. It's not how it is.

That's exactly how you live without a luck.

And no one wants to play with that kid. And no one wants to work for that kid who is now an adult that owns the business.

No.

So have an employee handbook. So that way the rules are set up and you can't be like nuh.

Well, and the other point too is for that nuh kid, what they don't understand is that they're deferring to case law or like what the definition and parameters are that maybe could have been defined for them, but they don't get a choice anymore. Now your rules and regulations are defined for you, so you may say nuh. And then you get suede and it's like, really? Uh, nope, nope, you were wrong.

Then they're like uh huh. And when someone with a gavel says.

Cha ching, cha ching.

When someone says with a gavel says uh huh.

Yeah.

No, you kind of have to go with uh huh.

Yes.

Yes.

Nice.

What's the last one?

I'd say map out your HR roadmap so you don't have to do it all at once. Kind of decide what you need now. Great. One is compliant onboarding and a handbook. And then maybe what you'll need in a year from now, which could be in six months. We need performance management in a year. We need to know what our career mapping is for employees that are continuing to move through the organization. Maybe we need a new payroll system. I mean, like, you don't have to get everything all at once. You can start with one thing and usually an HR consultant. What we do is we come in, we diagnose what some of those issues are and we map out a plan so it's affordable for you so you're not doing all the things at once because that's difficult too. And oftentimes when you hire a full time HR person, they're trying to do all the things at once and that can be overwhelming. So it's about giving it to the business owner and the employees in bite sized chunks.

I was about to say it becomes an evolution rather than this tectonic change we've got here. How to coach clients to start HR the right way. Yeah, I'm just going to let you take this.

You have these three things.

If I say this, everyone's going to be like, yeah, right, dude, so this is all you.

Yeah. So here's how we coach clients at clarity to kind of start HR the right way. The first is kind of acknowledging that risk. So understanding that improper HR isn't just an admin problem, it's a business liability.

Improper hr.

Improper hr.

I believe that was another nickname I had.

Really? Yeah. Just remember, like, one bad complaint can shut you down. So it's really important that you do things the right way. Second is to define your foundation. So you don't need to wait until you have 50 employees to define culture and values. You don't need to wait until you have 10 employees to write your handbook. I mean, when you have, you have an employee, you, you can have a handbook. It's okay.

You should have a handbook.

Yes, yes. Your HR structure should protect and reflect that foundation. So it's really making sure that you've defined it. And then the third is invest in expertise, not just headcount. And that is the first HR hire shouldn't be a person you hope can just figure it out. It shouldn't be someone like, oh, I'm here, I'm going to hire, here's my virtual assistant. They're going to write our HR handbook. They live in another country and they don't really know what our HR policies and practices are, but they can use ChatGPT and Google. They'll be fine. No, they will not. Don't do that. I'd rather you just be HR naked than be HR dangerous. So it's important to invest in someone who knows what questions to ask, even if that's fractional help at first. And that's really, I mean, Josh, why we do what we do and why we love it because we're experts who can help you walk through things. And we're not going to be in your business all the time. We don't want to be in your business all the time. That's the other thing I will say dirty little secret and probably why I'm going to get HR hate mail is that a lot of times full time HR people will find things to do.

Yes.

And you don't want that because sometimes those finding things to do can be expensive or absolutely unnecessary or they become the open door that everybody comes and talks to and then those problems continue to fester. When you have fractional hr, you are in, you are out. We're telling you what needs to happen. We're working on the things that we need to do. Yes. We're doing employee relations and sometimes people have to sit and talk to us, but it's a very different type of relationship.

So I'm still giggling about HR naked because I'm a 9 year old. So what is our for our quick shots?

Yeah.

Most overlooked yet critical policy that someone should include in their company's handbook.

Yeah. That is clearly defined harassment and complaint resolution process. Makes sense because that can get people into trouble really quickly. And if something goes sideways and your process is vague or it doesn't exist, you've lost the trust of your entire team.

Makes sense.

And you've opened yourself up to legal litigation, liability.

I am been in a situation where they did not have a good complaint process. And it was just, I made two complaints and it just never went anywhere. And I was like, well, okay, see you guys. Bye. Somewhere, right?

Yeah. Right. All right, my turn. From your operational standpoint, what's the biggest red flag you've seen in a company's onboarding process that tells you they're not taking HR seriously?

The biggest one that I see is when training is we're just going to have you shadow this person for two weeks. I see it. I've been in so many situations where it was literally we're just going to have you shadow.

They don't tell that person until like the day before.

They don't tell the person till the day before and they're mad. That's the best your interactions with HR become. Here's papers for you to sign. Here's a video from the late 80s for you to watch on sexual harassment.

And you're in a windowless room and you're in a window for a day.

For a day watching terrible videos of. Hey, Betty, you look good today.

Betty feels harassed.

Correct.

No, don't do, do that.

Correct. So the, the, that to me, when I see those types of things, I'm just like, when there is no onboarding, it is, they're, they, they think they're onboarding.

Yeah.

But they're not. It's sign all these papers and shadow that dude for two weeks. That's your onboarding. And they never talk to you ever again.

Yeah. I will tell you this. When you are in an organization, you're in the windowless room and they roll in the TV and VCR cart from like elementary school. Correct. You need to run. You just don't just get up and leave. You will find another job. Don't do it.

I have made a terrible mistake. Get up, leave the room. Yeah, no, I, I was in a few of those situations and I, I am grateful that I would be able to recognize those now. And when I have friends or family or someone that's looking for jobs, I'm like, yeah, no, these are some of the red flags that, to me. The other one that I usually tell people to ask during an interview is what would you consider your leadership style? And if they don't have that, once again, that is the equivalent of. I mean, I used to get excited when I'd see them roll the TV in like in elementary school.

Yes, I did too. Not anymore.

No. No. Hopefully. I think we can help some people avoid some HR disasters.

Absolutely.

They can avoid mean like getting my nickname.

Yes.

Thank you for joining us, Chrissy. Thank you for your insights. You can find all the resources from this past episodes, business fix, podcast.com, all the socials for the business fix. Leave us a. They should leave us a review, should they not?

Yeah, only the nice review. If you're going to be crabby, you can text us.

Well, well, if you're going to leave a review, talk about Chrissy, we'll just leave it at that. Next week we're going to talk about how to handle inflation without deflating your bottom line.

Yeah.

This is going to be interesting.

This will be hard fun.

We will talk to you guys soon. Sam.