How to Create an Awesome Workplace

Thank you so much for joining us today. My name is Matt Vady. I'm with ERG Payroll and HR here out of Columbia, South Carolina, and today we're going to talk about how to create an awesome workplace. First, I'd like to start with a question, and that's, have you ever had a job you didn't like? I know I have. I've had a couple of them, as a matter of fact. But most recently, I had a job I didn't like, and I know it made my spouse crazy because I would come home every day complaining about work. And then I had friends who had to listen to me also complain about work and were tired of listening to me bitch. And I was miserable to the people I worked with also because I just wasn't happy there. So it really wasn't a good time. Every day I felt like my work didn't matter and I really wasn't living out my purpose. I just wanted to get the day over with. It was a waste of a perfectly good time in my life. But what do you think would happen if you made just one of your teammates a little bit happier to come to work every day? How big could that ripple effect get? Well, we'll get a little bit more into that later, but you know, it's important that you recognize that some people on your team are miserable to come to work every day.

Of the workforce is actively engaged, and that means 70% of the workforce is either disengaged or not actively engaged, and some are actively disengaged. So, that number stays pretty static, and if you're having trouble visualizing that, just picture 10 people from your team around a table, and, you know, you're almost always going to have 3 people who are in it to win it, that are well-prepared for the meeting or whatever event you're having, and are, are ready to get started and chomping at the bit. And then you're going to have a few in the middle who are, you know, maybe still talking about the game from last night, but they've got their stuff with them and they're going to be engaged in the meeting. And then you've got that sort of bottom 3 to 4 people that are just completely checked out. And, you know, they're complaining about the fact that they're even at the meeting in the first place. And then they're just kind of a cancer to the rest of the team and bringing them down. So, you know, we want to try to bring some of those folks in that bottom third up into the top. And that main reason is, if you look at that bottom number, with 200% is how much engaged employees outperform that other 70% of the workforce. So, let me read that again. 200% higher performance and productivity out of the top 30% of your staff. And I don't think this is very surprising. You know, we hear a lot about the 80/20 principle or the Pareto principle where, you know, 20% 20% of the effort reaps 80% of the results, or, you know, it originated from 20% of the population had 80% of the wealth. And so, not very surprising in that we would get most of our productivity from just a small percentage of our team. But it is something where we can look at how can we foster individuals into that top 30% because that middle number, the cost of turnover, this is— This is really a conservative estimate. In most estimates, we look at 1 to 2 times the annual salary being the cost of a turnover, whereas we've used the sort of low number of $25,000 as the average cost to turnover and replace an employee. If you don't believe that, you're saying, "Well, I've got a team member who only makes $30,000 a year. How on earth could it take me $25,000 to replace them?" You've got to think about everything that goes into that: the screening of the candidate, the going out and pursuing the candidate, the people who have to interview, the people who train the individual when they come on board, the onboarding process, the initial wages before they leave. So when you start to add that stuff up, $25,000 usually is the floor as far as what you're going to— it's going to cost your organization to turn over an employee. So let's talk a little bit about what, what kind of place do you want to work. You know, the first thing we talk a lot about when we initially put this together, one of our teammates stumbled across this quote, and that's Customers will never love a company until the employees love it first. And I think this is where a lot of folks have the biggest mess, is they're so focused on serving the customer and so focused on getting their product to market and being great at what they do, they often put off serving their employees and serving their team as sort of an afterthought. And so you want to make sure that putting your— serving your team is your number one priority in creating the type of culture that people want to be a part of. Is the number one focus of the organization, and then these other pieces will surely follow. And then ultimately, as a leader in the organization, you have to be, you have to create the type of place you actually want to work at. If you come into a place every day and you're miserable to be there, then by default, the rest of your team is going to be miserable to be there as well. So, if you're creating a workplace that is not your dream job, then how would it be different for anybody else on your team? So, I'm particularly blessed. We work with a fantastic team of truly talented people that many of you on the phone have conversed with in the past and can attest to that. And so, I've created the job I want. I'm really lucky in that way. And so, I know you can do that too, and you can help to create that job that somebody else on your team wants. And in November of last year, we— put together what we call our Executive Summit, and we'll be pushing out some information very soon. We're recording this in July of 2017. Our upcoming summit will be in October of this year, and we will be pushing out some more information on that. But last year's summit, the topic was how to create an awesome workplace, and we put together a panel of 5 executives from Best Places to Work in North and South Carolina, and we just asked them a lot of questions around How do you hire? How do you compensate? How do you do all these different things? And then we stole their ideas. It's just that simple. You know, like this quote says, "Good artists copy, great artists steal." You know, I'll go through, and as we're going through these, I'll tell you some things that we as an organization took right off of these, right out of these playbooks and implemented in our own organization. And I've heard from many of our clients who've done the same thing. So definitely try to find that one thing that you can pull out of this conversation today to make your organization better and a better place to work for your team. So, this is the workflow that we followed. We asked about the vision, about the, their hiring and firing processes, about education and training, compensation and culture. And these were the biggest areas of impact that we saw when we questioned them on how they do things at their organization. So, let's first take a quick sidebar into what kind of impact impact does a bad boss make? How big of an impact can one person make in your organization? One of the members of the panel talked about how their company went from regularly being a top 10 best place to work in South Carolina, and then this past year they were ranked as the worst of the best places to work. And so, it was a precipitous fall, and they did not expect it. And when they got back the data and they were able to look at it, they realized it was all a result of one supervisor inside the organization. So, one department led by one man actually resulted in dragging the entire organization down to one of the worst best places to work. So, the impact of one bad boss can make a tremendous, tremendous beer on your organization. So, you need to make sure as you're looking at these ideas and things that you're going to implement that you're— everybody's on the same team if they're going to be global organization-level changes that you're looking to implement. So, let's talk about vision first. When I asked the panel if they were intentional about creating their culture and sharing their vision, there was a unanimous and resounding yes. The panelists mentioned that not only was the culture intentional, but it was a primary focus of the leadership teams. And they did this by keeping the vision and mission front of mind for their team. So, what were some of the ways that they kept the vision top of mind for the team? And now you have to think about this. It gets really difficult for your team to all be marching towards the same goal when they don't know where the organization organization's going. So, if you don't have to share the vision of the organization of where you're going to be in 5, 10 years, and that changes, and I think this is where most people get hung up is they don't want to share the vision because they think it's, "Oh, well, I'm not exactly 100% sure where we're going to be in 5 years." That's okay. It changes. When you're communicating it regularly, you're able to make those tweaks on the fly. So, one of the individuals, going back here, actually I'm going to list out everybody who was on the panel as I forgot to do that. So, on our executive panel we had Tony Paracelli, who's a partner over at Scott and Company. Sean Regan, the CEO of RhythmLink International, and both of those companies are right here in Columbia, South Carolina. David Dunn, the CEO of DC3, also in Columbia, South Carolina. Matt Talmanek, the CEO of CCS Construction Staffing, which is out of Charlotte, North Carolina. And Tom Petrus, shareholder from Bach Knight Petrus and Stormer, which is in Columbia, South Carolina. So, the wealth and knowledge of this panel can't really be overstated. These guys represent hundreds of millions of dollars in revenue, multiple industry awards, multiple Inc. 500 Awards, multiple Charlotte Fast 50 Awards, and most importantly, they were all voted best places to work. So, you know, the process itself was entirely self-serving in that I really just wanted to sit these 5 guys down and grill them with a bunch of questions, and it would have seemed weird if we didn't do it with at least somebody else watching. So, it definitely got to, I got to pull a lot of stuff out of them that I wouldn't have otherwise been able to do. So, let's get back to the vision piece. So, Sean Regan from RhythmLink mentioned that they put their "moonshot" on the wall. The moonshot goal is visible to the entire team and reviewed every single quarter along with their quarterly and annual goals. And if you don't know what a moonshot goal is, I mean, that's the pie in the sky. That's the 100 million users. That's the billion-dollar company. That's the unicorn status. That's the outrageous goal that everybody's marching towards. If all things go well and we get everything, all of our ducks in a row, we can achieve this. And that's on the wall for everybody to see at any given time. And they're reviewing their status and their process towards their quarterly goals every quarter and their annual goals. So nearly every executive on this panel mentioned the importance of regular team meetings where they share the progress with the team. And David Dunn from DC3 even talked about how You know, they're fully transparent at all times. They have these all-hands meetings and they communicate to their team everything going on within the organization. And he brought it back to when it really helped is when things were not going well. So, in 2008, 2009, and 2010, when things started to go south, they were out in front of it by communicating hard decisions that they were going to have to make with their team and allowing their team to understand where they were coming from as they made these decisions. And it really helped their organization, not just in these good times when we're talking about growing towards those high aspirations. In the good situations that we have, but also in the bad times. So, the vision, you want to keep that front of mind. You want to keep everybody marching towards the same destination on the horizon and give everybody the roadmap on how to get there. The next topic was hiring. So, this was really interesting to me. There were so many great tips that came up, and everyone agreed that, you know, you've got to have the right people on the bus, and it's just not possible otherwise to become a great place to work because so much about culture and the people inside your organization. And one quote I pulled from Mr. Sean Regan was, "When we learn how to hire, we could fire." And he was very liberated by the fact that as soon as they had a great hiring process in place, they were able to then fire the people that were not great fits for their team and make room for A-players. And I think this is a really important process for you to go through as an executive, is to sit down and ask yourself, If this person walked into my office tomorrow and told me they were quitting, how upset would I be? Would I be willing to fight for them to stay with the organization? And if not, why not? And do I need to look at potentially topgrading this role? You have to get tough, not just in evaluating new talent during the hiring process, but evaluating the talent that you currently have in your stable. So, when we talk about that get tough during the hiring process, one of the things that came up was asking the really hard questions. Well, Tom and David made mention of the importance of asking really hard questions. Having thorough interviews, getting multiple people involved, doing skills analysis when applicable, especially for individuals that are developing products or solutions. And they also wanted to make sure that the culture fits. So just because somebody is fantastic at doing a job and could be great for another organization, are they going to fit in with your culture? Every one of these people mentioned how careful they are during the hiring process to find people that are not only talented but a good fit for the team. So, that kind of brings up the second point. If you're going to get tough, you have to be committed to hiring slow. And hiring slow is one of the toughest things for us as business owners because you've got an opening, you need somebody to fill the seat, and you really want to get somebody in. You tend to rush the process. Whereas you need to make sure that you are slow to hire and quick to help someone move on to the next stage of their career if they're not a good fit. Matt Telmanek talked about how they're pretty quick to help move people on and hold team members accountable whether or not individuals around them are a good fit. And because this does more harm than good for both the company and the employee if you keep the wrong person around too long. So make sure you hire slow, find the right person, have a thorough process when it comes to interviewing and onboarding. And then the onboarding piece is something that also came up a lot. Employee onboarding, each of these executives recognize that's not a one-time event. It's an ongoing process. So, it's important to be following up with the employees 30, 60, 90 days after they've started to ensure they're happy and that the job aligns with their expectations. And one of the best practices we try to recommend to our clients is that you also survey the employees at the one-year mark to try to see what they still remember from the onboarding process. And then you can constantly be improving your onboarding process by pulling individuals further down the road. So hiring, want to make sure that you hire slow. And finally, you want to always be recruiting. So David Dunn mentioned that the key to hiring A-players was really finding the passive candidates. So finding people who weren't necessarily looking for work. And, you know, for him, they used a LinkedIn recruiting account to recruit people who weren't necessarily looking. And a lot of people talked about asking this question all the time: Who are the most talented people you know that I should consider hiring? Now, you ask that question to the people inside people inside your network that know you and you know them and they know what it takes to be successful at your organization, and you'll find your talent then starts to develop over time. And when you need those people, you're not going to have to go looking quite as far. Now, Sean Regan took this a step further, and he talks about how they train the entire company on how to hire. So, everyone at his company knows their hiring process from front to back, whether or not they're in charge of hiring or not. So, once they had that good hiring process, it made everything easier and they could get rid of anyone who didn't fit the culture as we alluded to earlier. So, make sure that your hiring process is diligent, slow, and you're always on the lookout for talent to add to your team. So, let's talk about education and training. This is probably one of the more overlooked things when I look at what I'll call lesser-performing organizations is how much time we're investing in the education and training of our new hires. And it's interesting because, Just behind a competitive wage, millennials rank excellent training and development programs as one of the most important characteristics of an attractive employer. And, you know, the panel had some things to say that were very much in line with this and some of the processes they used to put education and training in place for their team. The first was to have a mentorship and a buddy program. This was almost unanimous across the board. So, not only is it great to help people learn and help them get acclimated with the environment and give them somebody to lean on and talk to who's not their direct supervisor, but it also, it helps to engage— excuse me, it helps to assist with engagement or attention down the road. So, it helps the employee in all facets to understand how you do what you do and why you do what you do. So, outside resources. You know, as small businesses, we are always looking for ways to further educate our team, whereas we might not necessarily have all of those processes built out internally. To achieve, people mention different outside resources they use, whether that be a learning management system, an LMS, like a Lynda.com or Cornerstone On Demand, or whether it be through associations. One of the members of the panel was a CPA firm, and they talked about how they partner with a National Alliance group to get access to resources that aided employee development that they wouldn't be able to build out themselves. So, they lean on other organizations that already have these resources available. This can go as far as sending individuals to conferences and continuing education. You know, I think we all learned a lot from the couple of CPAs that were on the board because they've got stringent requirements annually as far as how many hours they need to do in continuing education. And so why don't we take that same approach with the rest of our staff? So everybody's required to do 40 hours of continuing education in your specific discipline. And I think that was one of the things that a lot of people walked out of the room kind of a little bit of a paradigm shift as far as how they could continue the education with their employees. Now, putting training in the employee's hands. This was one that a lot of people got excited about. So, Tom Petrus mentioned that at his firm, the employee is responsible for creating their own annual learning plan. So, this creates ownership of the process for the team member, helps to remove some of the administrative burden from the management staff, and also gets makes the employee a little bit more engaged. And they take it so far as to have employees teach classes to the rest of the staff. So, they give their team members the opportunity to teach the rest of the team about skills and processes that they're good at. This helps build confidence in the employee, bolster their knowledge, and educate your team at the same time. So, it's really a huge win for everybody involved. We do some similar things in our organization where each team member leads our Monday morning team meeting. We rotate in and out. So, this helps employees to develop their presentation skills, to be more engaged in the topics that are at hand, and keeps everybody engaged in the meeting process and continuing to develop themselves as future leaders. So, finally, a couple more things here. A lot of these organizations have done away with more formal reviews. They don't do the annual performance reviews with more frequent one-on-one meetings with the team members. The speed of information is such that annual annual reviews are really a thing of the past. And we follow the same roadmap internally where we do monthly one-on-one meetings and then quarterly reviews. And, you know, you really want to— you're looking at education and training for your employees, you want to plan for the future and you want to make sure that you're positioning people for future success, not just in the role that they're in, but the next step and the next step. So succession planning can be a big piece of the education and training. You don't want to look back 2 years from now and realize that you haven't really nurtured anybody on your staff to take the role of potential executives or leaders that are leaving the organization. So finally, steal it. There were people literally stealing the ideas immediately as they happened. Sean Regan looked at Tom Petrus after he told him that the employee is responsible for creating their own annual learning plan. He said, "We've got a new policy at RhythmLink, and that's that the employee is responsible for creating their own learning plan." So, you don't have to come up with great ideas on your own. Take these from those who have been there and done that. All right, let's talk about compensation. Raise your hand if you ever thought you'd be willing to take a pay cut to be happier in your job. My hand's up. I've done it and I would attest to it. So, you're not alone. Money is really not the biggest motivator for actually more than a third of the workforce. 36% of employees would give up $5,000 a year in pay if it meant being happier and more engaged at their work. So, 36% of people are willing to give up some money to be happier at work. And I think that most of us probably fall in that category. And I think we, you know, when we looked around the room at the summit and I asked that question, most of the hands in the room went up because work is a third of our lives. We want to be happy. It's not all about compensation. But, however, everyone on the panel agreed that they did have to be competitive, obviously. They weren't trying to be the highest-paying organization in their field, but they did want to highlight all the other areas that they used to attract top talent to their organization. So, how do they attract the most talented people outside of a competitive wage? Well, it starts with, you know, that competitive wage and then career planning and development, those things that we just talked about. They want to make sure that you understand the vision of where the company is going and you're going to be a part of that vision and here's what you can do to advance your own career. And they're going to provide you the resources and compensation for gaining that knowledge. You know, the balance of rich PTO policies with flexibility, providing people time away, making sure that they take it is obviously really important in retaining top talent. A lot of organizations talk— will do policies such as requiring 5 days off in a row at some point during the year or just ensuring that they don't roll over any PTO to make sure that employees take the PTO inside of the course of the year and they stay on top of that.. And trying to maintain that balance of life while still being competitive as an individual is important. There were a lot of other little perks that folks brought up. So, several had either an onsite fitness facility or provided gym memberships. This keeps your team really happy and healthy so they can be a complete person. And I think this is something that, you know, large organizations have to look at as far as how will this impact our insurance premiums over time if we can help our team to maintain their health and continue to get healthier. And one of the kind of cooler perks was that Tom Putris and their staff, they pay overtime to exempt employees. And this is really rare. So pay overtime to exempt-salary employees, first of all, most people just get really excited that they don't have to pay any overtime because somebody is exempt. And also these guys are an accounting firm. So there's portions of the year where their people are staying substantial hours. And they're paying that overtime to, A, they're trying to limit the amount of time those people have to stay at the office, and B, they're trying to make sure they're compensated for it when that occurs. So, that was a really cool idea and something that makes them very competitive when they're going out and trying to get after talent. And some of the other perks, you know, people talked about having the free stock fridge and snacks and all that stuff that you expect. And a couple mentioned beer in the fridge. You know your team. Can they handle a fridge full of beer? If so, by all means, keep a fridge full of beer. I don't have one here. So, the— so, we maybe are not the best candidate for that. And then also some incentives. People talk through examples of time they sent the team home after a half day for, you know, looking at those quarterly goals. If you're sitting down reviewing those goals often, then you can say, "Hey, we nailed our goal. Everybody get out of here early on Friday afternoon." Some folks will do flexible hours during the summertime. They provide team bonuses, prizes for different contests. You know, we've seen the contests recently like the scavenger hunts and prizes for that. And the incentives just help to keep morale high. You know, RhythmLink was a really good example. I always laugh. If you sit down with them and ask them, you know, "What types of things do you guys do for your team to keep them engaged and to make this place a great place to work?" And you could just sit back for the next 45 minutes while they go on and on and on about all the great things they do. Whereas most organizations, when I ask that question, it's, "Well, we offer a 401, and we, you know, we pay out for benefits, and we do the same thing as everybody else, and none of it's fun, and we just, you know, we just expect everybody to show up because we provide them a job." So, it doesn't have to be that way. You can create the type of culture that you want, and you can make your workplace awesome. So, finally, you know, you're going to have to do these things. We talked about that cost of it. Turnover earlier. I mean, you're going to have to pay for good people. You're going to have to pay for these additional perks to make sure that they're happy there, but it's a wise investment in the long term. All right. So, let's talk about culture. That's really the theme of all this. And this is one of my favorite quotes, "Culture eats strategy for breakfast." And, you know, I've heard just some really great stuff about this lately from a host of different executives. But, As I mentioned earlier, all of the executives from Best Places to Work said the development of their culture was completely intentional. So, it's not something that can be accomplished with a poster on the wall. Like we always joke about, you know, we've got the mission out in the lobby. It's a picture up on the wall. It's all dusty. Nobody knows what it is. It's, that's not it. You need to live, eat, and breathe your mission to get your team on board. And probably one of the more overlooked things is how frequently you have to bring it back up. So, people don't just remember just because they know know the mission and they've heard it once or they review it every quarter. It's, it's something that has to be reviewed frequently and something that people need to keep top of mind and understand the values of why you do what you do. So what are some of the ways these companies created a culture that people want to be a part of? Well, first of all, flexibility. I think this is getting more and more important as we get into, you know, the millennial generation coming into the workforce and also just the expectations that people have based on what that the more publicized great places to work offer their employees. And this comes in a variety of forms, whether that's flexible scheduling, the ability to work from home from time to time or full-time, work assignments that are, you know, we're working in groups that are a little bit more unique. Giving people the flexibility to do their job in different ways and different places is a great benefit. So, doing the basics really well. One of the things about culture that probably gets overlooked is like, Execution should be part of the culture. Matt Telmanek made an excellent point about how his team, his culture is not flashy. They don't do anything, you know, they do all those little things really, really well and consistently, right? Like there's not a lot of, you know, oh, this month we're going to do this flavor of the month, and this month we're going to do this flavor of the month. No, like everybody knows that what they're all about is executing, executing as a team. And if you're not picking up your portion of that, then you're not going to be able to celebrate when they do all those other fun They're pretty good at having great after-hours events. And I know Matt actually brought his whole team every year. They bring their whole team down to Charleston for the Cooper River Bridge Run, and they pay for everybody to go down, and they pay for the rooms, they pay for, you know, a meal out while they're down there, and basically make a whole weekend out of it. Not any sort of a, you know, president's club or something you've got to earn. It's just something that they do for their team, and that's really, really cool.. And I know it keeps people engaged. So, Sean Regan talked about just make sure you have substance to what you do. How important is it that there's actual substance to what you do and your team can see the impact that you make? Can everybody see outside the walls and understand what your organization is doing? Do they see, you know, if you're an accountant and you're helping to relieve that burden from somebody, whether that be giving them a peace of mind that their taxes are taken care of, or helping them to, you know, maximize the income that they bring back into their company or to their home. Do they see the impact that that makes on the individual on the other side of the phone or on the other side of the desk? Do they understand how important the work is that you do? And, you know, another thing, another big thing that was culture, talking about doing the basics, is just giving your team the tools to be successful. This applies to both hiring process and doing their job. Games and incentives. We heard about all kinds of games like team trivia, sales contests, the onsite fitness training we talked about. Nearly everyone made note of how important it is to have fun as a team. And then finally, the golden rule. Everybody treat— treat everyone the way that you want to be treated and just create that type of culture that you would love to be a part of. And, you know, this is something you just can't fake. You know, your team is going to have a big part in creating the culture. But once again, if you show up to work every day and you're miserable, and then that's going to rub off on your team, and that's going to be a part of the culture because they're going to look to you for guidance. And so, you've got to make sure that you're creating the type of place that you want to be a part of. Finally, "A rising tide lifts all boats." This is a quote we look to all the time. So, what difference does it make if you create a better place to work? Why should you even care about it? We'll think about this. So, what if one of your teammates is miserable? He goes home at night and is miserable to his wife, who is then miserable to the kids, who then go to school and are mean to other kids, who go home and are mean to their parents, and on and on and on and on it goes. It seems like it might be an overdramatization, but I don't really think it's that far off. I think if you've ever had that bad job, you know how, how, how impactful that can be in other people's lives. But now, if you think about the flip side of that, what happens if you create the type of place people want to work at? Well, then our local economy gets better. We attract more talented people to the area. We create more jobs together. We thrive together as a community. We give more to people in need, and we create opportunities for those who need them in our community. So, I think that sounds a lot better, and I think collaboratively we can create the type of place that people want to be and then can make an impact in the community. I know that sounds better to you. So get started today. Do something simple for your team that you learned about here during the webinar that takes one step towards creating a better place to work. You just really don't know who you'll impact, and you can really— I challenge you to go to the worksheet. If you're watching this on a recording, you can drop me an email at matt@ergpayroll.com, M-A-T-T. At ergpayroll.com. I'll send you over the worksheet that accompanies this. And our mission as an organization is pretty simple. That's to serve. And we start with serving each other and then the community and then our clients in that order. We know if we start by serving each other first that we're going to be able to do those other things really, really well. So, I'm grateful that you took the time out of your day to spend it with us for this webinar. And I'm hopeful that you'll reach out with any questions that you have. I just want to leave you with one parting thought, and this is how we end every webinar. So, if this isn't your first one, then you're probably used to this, but 95% of our assets drive out the gate every evening. It's our job to maintain a work environment that keeps those people coming back every morning. A quote from Mr. Goodnight, CEO of SAS out of Cary, North Carolina, and one that I think we should all take with us. But so, go take action today. I appreciate the time very much and look forward to talking to you all soon.