When Should A Small Business Prioritize HR And Their Workplace Culture?

[ANNOUNCER]: Breaking down everyday workplace issues and diagnosing the hidden sickness not just the obvious symptom, our hosts James and Coby.

[COBY]: Did we lose a patient?

[JAMES]: No that’s just my lunch.

[COBY]: Hey thanks for joining us. I’m Coby, he’s James, so let’s get started with a question. When should a small business prioritize HR and their workplace culture?

[JAMES]: This is a great question, but to really answer it well I think first we need to dispel some of the traditional thinking from small business owners or entrepreneurs, of both people and culture in general. Because, well for instance, it’s been super popular lately for people to state that the only way to build a successful and engaging culture is to have everybody back at work in person. that, that is somehow your magic, secret ingredient to how to create engagement. But what’s really interesting is that Gallup actually just released their state of the global workplace for 2023, which has phenomenal data in it. And in North America about 35% of those who are working remotely, or in hybrid positions, are engaged at work. Like actually highly motivated and enthusiastic about the work. Versus 27% of those who are working full-time on site. So the data is actually showing us the complete opposite. And it might only be an 8% difference in the total population, but that actually represents that people are 23% more likely to be engaged if they have a remote or hybrid opportunity, rather than being forced to work in the office, on site full-time. So some of these… this is just one very commonly spouted traditional approach that I think we need to get rid of before we can really dive into when and why you need to invest in people and culture. And I think most people really understand that a shift needs to happen. Even Gallup who’s been a leader in this conversation about people and culture for a really long time, they’re changing some of their language and approach to better reflect the current realities. Like for instance, they’re trying to make the connection between, a connection of engagement and disengagement more relevant to the pain points that businesses are actually experiencing right now. So for instance in their data they’re aligning what they were calling disengagement, with what the business community calls “quiet quitting”, in an attempt to better make that connection and make the data speak more clearly to the pain points that businesses are experiencing. Which I think is fantastic.

[COBY]: Yeah and I think that like that is a very telling thing. because I mean, employee engagement, you know disengagement, has been used for so long and I mean we’ve done lots of different conversations about how that term sometimes gets co-opted, like people think of engagement, and we talked about this in our last episode. Sometimes people think of Engagement, as you know, the of actions of doing engagement. When it needs to be about kind of creating the environment that inspires engagement, and the motivation enthusiasm. So it is… people definitely do recognize this shift and I kind of do like the, you know, the visual thinking of disengagement as quiet quitting. Because I kind of like the term quite quitting. Because it kind of has that… it creates more of a visual understanding like, at least to me, like I envision it as, like you know, people who kind of quit their jobs but show up every day, right? That’s kind of like they’re….

[JAMES]: It’s the quiet quitting analogy. I mean it’s not a new phenomenon even though it’s a new term. But it is the idea that people are just gonna show up, they’re going to quietly just do the bare minimum to get by, which is disengagement, right? Like the use of that term, the alignment of those two, I think is a good thing. I’m not a huge fan of how they are reframing being actively disengaged. Because they call it “loud quitting” which to me loud quitting is… yeah I know. I don’t love it. It’s an attempt, but quiet quitting being disengaged, loud quitting being like actively disengaged…

[COBY]: I don’t know I’m not a big fan of… okay so loud quitting. Yeah like to me that, like again that invokes the image of like somebody… like you know burning bridges as they walk out the door.

[JAMES]: Oh yeah.

[COBY]: Like I get the movie Half Baked, really dating myself with my movie references here. You know the Dave Chappelle movie, like you know in a character Scarface quitting his job at the fast food place. Walking out like telling everybody off, saying he hates this person, and swearing at everybody else, and then he’s like ‘I’m outta here!”.

[JAMES]: I don’t think we can quote the movie if we want to, unless we’re gonna put an explicit tag on our podcast. I don’t think we’ll actually quote it, but if you haven’t seen the movie, it’s incredibly cheesy and hilarious.

[COBY]: Yes and so thus ends the movie review segment of our podcast. But no, but like to me that’s the the vision I get of loud quitting. Of people like actively telling people off as they walk with their box of stuff out the door. so I don’t love that term. But I do think though that you’re right. It is indicative of the fact that we need to start talking about this differently. Because I kind of think these traditional mindsets, the traditional thinking is part of the problem when it comes to answering the question, when should a small business prioritize HR and workplace culture. Because a lot of the stumbling blocks, the barriers that we have to really addressing these issues sustainably and effectively in our workplace, is these things that we often refer to as Antiquated Assumptions, right? The old school way that worked 30 years ago, that mindset…

[JAMES]: 10 years ago, 8 years ago.

[COBY]: Well yeah but like almost, like we’re popularized kind of in the 90s. And are still the kind of law of the land in a lot of workplaces. And then, you know, not realizing that this shift happened. Because… and the shift was happening pre-COVID, but COVID, you know, poured gasoline on the fire and things that work in 2019, don’t work now. But workplaces and entrepreneurs themselves are slow to pick up on it. And I think that this is why if you really want to answer the question for small business owners and leaders about when they should really prioritize HR and workplace culture, we need to make sure that their thinking critically about how they understand people and culture to begin with.

[JAMES]: I think a great example, recently I had a really good conversation with a very experienced business coach. Very knowledgeable, professional, good at his job. Like I’m in no way disparaging the work that they do because they are very good at what they do. But the mentality that… like we were talking about this issue of you know what challenges their clients are experiencing around people and culture. And the statement that I think stood out the most to me was when he made the contrast between an entrepreneurial culture and people and culture. And that somehow the idea has permeated that to… in order for your business to operate in an entrepreneurial culture that means that you can’t have good HR policies. Because HR is just there to bring you down. Or you can’t have proper processes and frameworks in place, because that limits the ability of the entrepreneur to do what they magically need to do to make the business a success. And this idea and I think a lot of this comes from the way that, in society, we talk about entrepreneurship. You know the “hashtag entrepreneur life” the, you know, “hustle culture”, the whatever you want to call it. This idea that if your business rests entirely on the shoulders of one person, that’s not sustainable. That’s not a growth oriented business. You can try to grow your business that way but if it’s all on your shoulders and you’re not putting proper structures in place. You’re not putting proper processes in place. And you’re not delegating and empowering people to actually lead those processes, then your growth is going to be significantly hampered by your ability to do anything. You’re going to get overloaded and you’re not going to be able to respond the way that you should. And it was a really good conversation, interesting conversation, but that idea that somehow entrepreneurship and workplace culture are diametrically opposed is just, I believe, is fundamentally just flawed and wrong. Because if you want to grow… entrepreneurship, if you’re trying to build a job for yourself, great. There’s nothing wrong with that. If you’re trying to build a business that exceeds what you can do, then you need to put the proper structures and frameworks in place that will allow you to grow. And the reality is that your people… if your business relies on people to drive profits, then you need to build those people structures. If you don’t, you’re not going to grow at the rate that you should, and sustainably.

[COBY]: Yeah I think that may actually…

[JAMES]: That was a little bit of a rant.

[COBY]: That’s okay, we’re all used to it. I think that might be… I think it might be at the heart of where some of this traditional, these Antiquated Assumptions kind of come from. You’re right, there is this expectation with entrepreneurial culture, entrepreneurial life, that it’s very much about about the founder, about about the business owner, the entrepreneur themselves. And that there’s, they need to, they’re responsible for everything, so they need to control everything. And by control, they need to have a tight grip on the control. And this kind of goes back to when we talk about the Fragile Grip Principle, and about having that Harsh Grip and holding on to things too tight, which ends up squeezing the life out of people. Because if the business is the entrepreneur, then it does really limits scalability. And it also kind of explains why, like you know, if they put policies in place to protect employee rights, well then that’s less control that I have as the owner. Again, to me if that’s the expectation then workplace culture, a healthy productive, profitable workplace culture and entrepreneur life are diametrically opposed. Because if that’s the kind of entrepreneur that you think you have to be, then I can see the logic, the flawed logic, but the logic behind it. But again, it’s about playing, it’s really about playing the long game, right? If you want, if you don’t want to be responsible for every dollar made, every dollar. And the other people are going to be taking that off your plate, and you’re going to be about growing the business, by investing in the people who are the business, then this is maybe the shift that we need, that we need to really be looking at. Because if, because you know, when should small business prioritize HR workplace culture? Well I think if they want to scale beyond the business owner, the entrepreneur being the only Rainmaker, being the only person that has, that is empowered to do things. And they want to scale in size, and scope, and profits, then I think that they need to be, one; rethinking how they understand people and culture and getting away from this diametrically opposed hustle culture and workplace culture. But they really need to be thinking about; if I want to scale and grow my business beyond what I can do myself, then I need to be prioritizing HR and workplace culture.

[JAMES]: But it’s really important to also state that just because you are empowering others, or you’re delegating responsibility, you as the business owner still do have ultimate responsibility and control. You need to set up the processes that allow you to evaluate success, right? So what are those KPIs? What are those key performance indicators that are going to allow you to quickly assess whether or not the people who you’ve empowered are doing the job the right way? Those things still need to be put in place. You still, as the business owner, are ultimately, the buck stops with you. You are ultimately responsible. But you don’t have to do it all yourself. and you can’t do it all yourself. And unless you’re willing to actually empower others, and put structures behind them to support them, then you can White Knuckle it, and just try to push through. And you will make some gains, and you will you can build a pretty fairly successful business. But if your goal is to scale, if your goal is to grow exponentially, you know that… you know the idea of what all investors want to see, that hockey stick curve, growth line. You’ll never do that without structures, without policies, without standard operating procedures, without some sort of foundational structure and system that will actually allow you to achieve that.

[COBY]: Yeah, yeah. And that’s a good point. Because I think that, again, where we’re really going to answer the question now that we’ve kind of put some preface, and put some critical thinking behind, you know, around where people need to have their mindset be. But if they really want to hear the real answer, the question is going to be about, you know, if you want to create a business that will scale, that will not hit the invisible ceiling that’s hampered by the founders having to have complete control, and everything like that. Or keep, you know, their fingers in every pot, then the question, then the answer to the question really is going to be – it’s about working on your workplace culture and your HR early enough that you can get it right from the beginning. Doing it right from the start, so that way you can actually start to see that scalability growth, because nothing’s being slowed down or bottlenecked by the owner, founders having to be the ones that push everything through. Empowering, using the policies, procedures, the expectations, the workplace culture, training all the sort of stuff, to allow the growth to happen through the people that you employ. And I think that if that’s a priority for you, then starting as early as feasible and practical is going to be when you should prioritize workplace culture and HR. And where that is, is a little bit trickier. Because there’s not one answer to it.

[JAMES]: Well I know. It’s our it “depends TM”. Right? It’s our standard answer. But I think it would be helpful to contrast two different conversations that I’ve had fairly recently. One is with a manufacturing company we were talking about people and culture, because we’ve… you know, the work that we do, we’ve heard from a lot of small/medium-sized manufacturers that they need more support. Like HR is a big challenge in general, people in culture they can’t get to because they don’t even have a lot of the administrative support to handle the the core HR functions. I was talking with a manufacturing company recently who, you know, they’re a fairly small business, they’ve got, you know, around 27 to 30 employees. But they have just hired a full-time HR professional to not only to look at, yes their administrative and structural pieces, you know make sure that they are meeting legal compliance. But you know in our conversation, they also really wanted that person to take on a leadership role in developing the culture. They understood that it’s going to be those processes that are going to get them to where they want to be over the next two years. They are taking a strategic approach of let’s put… like do they need a full-time HR person for 30 employees? Probably not. But they’re not planning to be 30 employees for the next several years. Their plan is to scale and grow they’re planning to actually add at least 30 to 40 in more positions over the next, you know, two years. They want that growth, so they’re putting the investment in place now to make that happen. Unfortunately that’s completely counter to another conversation that I had recently with a company. Different industry, I won’t say which. They had just acquired, they had multiple sites already, they had just acquired a third site, and they were constructing a fourth site. They had the same type of goal in terms of doubling their the number of employees that they have. And their growth was really going to be driven through this acquisition model. Because of the industry that was a viable strategy for them. The problem was that they didn’t have any of the structures in place currently. They understood the importance, but decided that what they wanted to focus on was not the… like they wanted to get the administrative HR pieces handled and then put all of their energy into continuing to acquire businesses. Which unfortunately, I have serious reservations about their long-term success. Because I don’t know if anybody listening has gone through a merger or acquisition, but it is messy. It is challenging because you’re taking an existing culture, an existing team, people who are used to working in a particular manner, and you’re trying to integrate them into an entirely different way of doing things. Even if it’s the same industry, same city, a lot of similarities; the cultures, the way that things happen, are going to be different. There’s going to be conflict, there’s going… like you really need to have your ducks in a row before undergoing mergers and acquisitions. Because, wow. It is not easy, it is complex. And you have to be a really solid, have really solid change management practices to accomplish that well. They’re going to have some good… they’re going to make sure that their legal processes are in place and that is important. But they haven’t taken the time to build their people and culture strategy. And that makes me worry about their long-term success.

[COBY]: And this is part of it too, is that it isn’t necessarily just about the business, you know, size. Kind of going back to the manufacturing company that you mentioned first. That there is, you know… at 27 employees it’s time to get an HR person. It doesn’t work that way. I mean we’ve worked with clients over the years where we’ve had to come in and put in some strong HR structures at five employees. Because of the nature of the work, and their growth, and their impact, you know required very empowered staff to have what they needed. Clear KPIs, business outcomes, that whole thing. Then we’ve worked with some that, you know, didn’t really need to until they were closer to like 20. And then we had some that didn’t really need to until they hit closer to 45. So it really is about kind of knowing what’s right for the industry. But like some industries, like you said, the acquisition model is big. Like cannabis is an industry that seems to really rely on acquisitions. Trucking, you know, the transportation sector. That’s a big one.

[JAMES]: Huge.

[COBY]: Yeah, so those types of companies should be really having like a powerhouse HR department, workplace culture processes, procedures, to make that, you know, to make those Investments fruitful. And turning around to you know higher employee performance and outcomes early on to cover the costs of the acquisitions, right? So, you know it really is, again, it does based on industry, and your business and growth model. And again, companies that don’t necessarily want to have that high growth, they still need to be asking themselves these questions. Because again, sustainability. Because turnover, it can be really expensive too, right? Maybe it’s not about high growth, it’s about reducing the stress on the owners, and the founders. About, you know, maybe it’s not having a high turnover. Again, employee retention is one, like the most effective dollar spent when it comes to kind of maintaining business sustainability. So maybe it’s about, you know, that’s a priority. We don’t think we’re going to get bigger than we are now in the next five years. But we want to allow the founders to have more time, to take more vacation, right? To have more time to actually work on the things that they enjoy, and work less on the on the administrative part. Because recruitment can be so challenging…

[JAMES]: And the process is expensive. From 20% to depending on your industry. And the stats that you look at from 20% to 50% of the annual salary can be eaten up in your constant recruiting costs, right? Like if… that’s a lot of money. Like if you are just recruiting for minimum wage positions constantly, you’re still talking about thousands of dollars per position that you’re recruiting every single year. And the constant turnover, it’s not just… like the money is important but what about your corporate knowledge? Do you have a really effective onboarding process to make sure that people are coming… if they’re only staying with you for a year or two can you get them onboarded and productive in that time period? Or are you just continually funneling people who aren’t productive in and out of your business? The invest, it is an investment.

[COBY]: And the thing too is like it’s about, you know, like how much is it worth to the ownership to have things taken off their plate? How much is it worth not having to have these constant problems, and headaches, and fires put it all the time? Because part of it too is to realize that there’s like a real… Like we kind of say the trickiest place to be when you’re asking yourself ‘when should we invest in prioritizing HR or workplace culture?’ Between 15 and 50 employees is a bit of a tricky place to be. Depending, because you know, depending on your business and industry. Because while you’re small, each employee has so much more impact on the business’s sustainability. Single employees issue, or single employee missing time, or single employee leaving, can decimate. Like we had a business that we were working with, and we were looking to kind of.. do something really cool with. And they have a member of their operational team leave, and it like set the business back like six months. And we had to kind of close the project down until they could kind of get, ramp back up again. Because again, while your small every employee has such a bigger footprint on the business. on sustainability, and profitability. So this is a really, really important question to ask when you’re in that, between 15 and 50 people. Because a lot of it too is that when the founders and executives are taking on so much of the day-to-day people management, you know HR responsibilities, off the side of their desk. Then that impacts the abilities growth because the founders and executives have to take so much more personal responsibility for dealing with a lot of these issues. Especially when these processes and everything aren’t in place. And you’re having to react to everything because so much of stuff in the HR realm is reactive.

[JAMES]: And this is…you’re absolutely right. At that stage it tends to be “okay who on our team has some capacity? And let’s put the administrative HR piece on that person’s plate”. And yeah that will keep, I mean that’s the reality for a lot of small businesses. That you kind of have to start that way, because cash flow is, well Cash is King, right? Cash flow is what’s going to keep your business operational, and you know at that stage, it’s unlikely that you can afford to bring in a full-time HR person to handle all that for you. But when you’re overloading your executive team, or you’re overloading… like when it’s… especially when it’s the founder or the visionary who ends up taking on these HR administrative responsibilities, it’s keeping them from, it’s keeping them working IN the business rather than working ON the business. And that position, that visionary position, that leadership, executive, CEO, founder whatever you want to call it, position needs to be the one who is working on the business. On building the business, on growing the business, setting the vision, setting the strategies, pursuing opportunities, developing collaborations, right? That’s how you’re going to grow and scale. But when that person’s time is taken up with the administrative responsibilities, because you haven’t put the structures in place, it’s limiting the businesses ability to grow.

[COBY]: And you’re right. Because when the founders, executives are looking in too much, in the business, then they’re not focused on looking out of the world, and the external, towards that growth. Because a lot of times when, especially when they’re pursuing growth, they may not realize until it’s too late that they don’t have the foundations they need in place to actually sustain that growth. Which could actually set them back even more. So there’s lots of problems to kind of come from not prioritizing HR, workplace culture early enough, and doing it right from the beginning. So I think one thing that we’ve talked about before, you know, with a lot of these types of common mistakes that kind of happen. We actually kind of, like you know, we kind of categorize different types of businesses into different kind of situations. Because we see this kind of happen, pretty commonly, both with clients that were kind of onboarding, and kind of in the conversations that we have with those we work, we build a lot of Partnerships and connections with other HR Consultants, other fractional consultants, and stuff like that. Because one of the things, I think I kind of want to explain those and share those with people. Because they’re Illuminating, but one thing I think that maybe, to kind of put a bit of an answer to the question, is there’s the common idea. Is that there’s two ideas or there’s two ways to deal with prioritizing HR and workplace culture in small business, and that’s the founders handle it off the side of their desk or they hire a full-time HR person. And sometimes when they hire the HR person or even if they have an HR, like generalist, someone that’s working on the administrative side, that isn’t necessarily solving the problems we’re talking about. So we’ll get to that, but there is a middle ground between the founders carrying responsibility or hiring a full-time person. And that is kind of the growth of the Fractional HR Consultant or the external HR Consultant. To kind of help carry some of that load, help take things off the plate of the executives and founders. And that’s something that we’ve been doing more work with. As we, you know, we’ve always kind of done that, but again we focus on different stuff kind of as things come up, but that’s an area that we do like doing that work. Because it’s kind of nice to kind of come in and see the change, and see the growth, and see the scalability, and we can see businesses that we work with, like three years ago, being really successful now because we help them do it right from the beginning. So it’s really important to realize that there is that option of that Fractional, you know, external person that can come in and solve some problems for you. Do things right from the beginning. And again companies like ours, we’re not the only ones, but companies like ours can do so much more. Increase so much more internal change than just hiring a generalist fresh out of school who’s just going to be reactive the whole time, probably get burned out if they’re really behind the eight ball when they walk into their job. So there is really that important piece to consider as well.

[JAMES]: And what I just, what I like about the fractional model is something that is becoming more common. But I want to be clear, like there is a distinction between a fractional leader and a consultant. And we’ve done both roles, and continue to do both roles. But typically with consulting there, it’s, you know, you establish a scope of work and you are looking at one very specific defined area. So often like in HR, you may hire an external consultant to write your policy manual, right? Or to build your performance framework, or to… you know different project based initiatives. The rise of the fractional work is interesting to me, because it basically it’s like an interim role. Where you have a leader who fits in with your team, who can actually become a part of your leadership team and provide that expert advice. Take on the responsibilities and take things off of the leadership team’s plate, and is there to actually respond to situations as they arise. So that’s kind of just in case people aren’t familiar with the term fractional versus… what’s the difference between a fractional person and an external consultant. That tends to be the general distinction. And either supports can help you, it’s about what you want and what you need.

[COBY]: Yeah and you’re right as a lot of companies do need different things, especially we talk about that tricky place between 15 and 50 employees is a good example. So I think I want to share kind of some of the like business types that we’ve talked about before, because I just really find I find them very helpful, I think people will as well. So here are three examples of a business situation where it’s really important to be, again, rethinking how they understand people in culture, but also maybe looking at what kind of… how can they prioritize the HR workplace culture. So the first one is, we call, The Rising Star. So this is a good size business, they have a good reputation that is aggressively pursuing growth. But kind of going back to some of the things that James talked about with scalability and especially around the acquisition model. But if they don’t have the foundations in place they need to maintain this scalability, then they’re likely going to have to try and put things into place, you know, after they’ve already kind of, almost like retroactively. Which adds more time, costs, and a significant higher amount of risk. So it’s one of those things where, you know, they are trying to especially pursue growth, but they don’t have the internal operations, the internal foundation that they need in order to maintain that growth. Now we see this in like manufacturing, we see in food production, we see a lot really in those export focused companies. The ones that are trying to get that hockey stick kind of graph of their growth. But we even see this kind of in like restaurants too, right? So a lot of times they kind of come in and they’ll bring a bunch of people, and they’ll try and maintain that. But again, they also don’t have… they’re kind of bad for… a lot of the restaurant industry is not necessarily known well having a great culture.

[JAMES]: And kind of the restaurants that we’ve seen it, you know, it’s a successful initial location that has done really well, that is okay “we’re doing like our… we can’t really grow this location anymore. So if we want to grow we need to open a second, and a third”. And it’s at that point that type of growth focus in restaurants that we see The Rising Star. They’re doing really well, but man they rarely put the foundations in place first. Usually it’s “Oh crap, we’ve done this how do we kind of go back and put some of those structures in place?”

[COBY]: Yeah a lot of The Rising Stars are either, tend to not only be in, but tend to be in the either the export or the expansion business model. And a lot of them, their external growth is not in line with their internal growth, or their internal structures. And it creates a lot of risk and a lot of them end up burning themselves out because they can’t maintain the internal to keep up with the external.

[JAMES]: I just I know you’ve got two other things that you want, but I like, there’s something in that comment that I want to just build on. Because you talked about external growth versus internal growth. I mean I spent years as a business coach working with small businesses, hundreds of businesses too, and the focus was always on export. It was always on the external, I mean we talk about the antiquated notions or ideas or traditional thinking, I’m guilty of it myself in previous work. The idea is that you need to shed those, and become as great as I am. But what I want to say is that so much of our advice, so much of our focus is externally. We think about the success of our business as our… only from the external scalability piece. But it’s that internal scalability that is going to sustain our growth. And that’s, I just wanted to reiterate that. Because you mentioned it and I think it’s a really important point to highlight for people.

[COBY]: Yeah, that is a good point. Okay so the next one is what we call The Full Plate, so this is usually when you have a small team and the responsibilities of the complex people issues tend to fall on the founders. And again it ends up tying up a lot of the founders time and taking away from, you know, focusing on the external. So they’re too internally focused because of all the fires they have to put out or all the issues that kind of come up to actually place the needed time they need on what their real job is, which is going to be of a growing organization externally. And now we see this kind of happen in I.T., we see it happen in engineering, and it actually happens a lot in nonprofits surprisingly too. So it’s one of those things where, like you know, it’s about, you have a small core team that is there for the work, and is passionate about the work that they do. But then they almost like are not necessarily prepared for the people management side. Or they understand that the growth of the organization is reliant on good people, so they try and become you know great managers, but because of the time it takes for the complex people issues that it tends to rob them of the ability to actually focus on the external growth that they need. So it ends up being about kind of a lot of their time is pulled away and there’s too much. We call it The Full Plate because there’s too much on their plate to actually do the jobs that what they want to do, because that’s why they started the business, but that they need to do for the business to grow and scale and to be what they envision it to be. And the last one is The Firefighter. So this is kind of a business where sometimes they will have an HR person or a person with HR responsibilities but often that person is an admin staff that they may have HR in their title, but they’re not necessarily an HR professional. Or they’re a very low level employee that is mostly given scheduling or recruitment responsibilities…

[JAMES]: They are not empowered to really affect the people and culture.

[COBY]: Yeah, like people, like culture is not something that’s really on the radar. Keeping the people in jobs and on schedule is really what they’re mostly responsible for. So again they’re mostly admin staff that may have an HR title but they’re really not like fully empowered HR professionals, or they don’t have the authority or the placement in the organization to allow for anything more than just retro, you know like reactive, putting up fires. Now where we see this, like abundantly, is unfortunately in the care home industry, like seniors homes and stuff like that. They are notorious for The Firefighter type of business. Because like, it’s hard to believe but sometimes a lot of these care homes have some of the worst workplace cultures. Some of the highest burnout, and are almost, every day are understaffed. And what happens is, you know, anyone with anything thing remotely HR and the responsibility is just running from fire to fire trying to put things out. And they’re always reacting to problems and they never get ahead. Which burns out people like crazy and it’s something that, you know, The Firefighter pieces, I mean they need almost a total overhaul. Because they’re spending so much, losing so much, burning people out so much, because they’re a non-stop firefighters, going from fire to fire. So you know they often needed to start prioritizing their workplace culture and their effective HR policies and procedures, well before where they are now. But they can resolve them, it’s just usually not a quick, or easy, or cheap fix.

[JAMES]: Yeah, those are good illustrations. I think coming back to our original question, when you need to invest in and start working on your people and culture, is when you decide or set the goals for growth, right? Not waiting until after you’ve achieved your growth strategy. So if your goal is to acquire a new business this year, or your goal is to go from 30 to 50 employees, your goal… like if you are, if you have that type of strategic goal in mind for, you know, you need to grow your business and by X percent, then you also need to think about how are you going to scale the internal operations and invest in your people and culture. Because that’s what’s going to make it sustainable. So we did actually answer the question.

[COBY]: All right I think I’ll do a bit of a wrap up, is there anything else you want to add?

[JAMES]: No I got my final thought in and some cornball jokes so I’m good.

[COBY]: All right, plus we got a movie reference to Half Baked, what an episode! okay…

[JAMES]: What on Earth is this podcast?

[COBY]: Yeah okay. So when it comes to when should a small business prioritize HR in the workplace culture? The first thing that needs to happen is that the entrepreneurs, the owners, founders need to shed the traditional thinking around culture, and employee engagement, and employee productivity. Because we have these Antiquated Assumptions that think that the entrepreneur and the business founders, their power, their control is threatened by good policies, good procedures, and empowering workplace culture. When in reality though, that type of very positive, effective, empowering workplace culture is going to be the key to that businesses scalability. So the questions to ask around when should a business prioritize HR and workplace culture, it’s an important question to ask in general, but it’s an especially important question to ask today. Because the world changed in 2020, and these types of questions, this type of scalability, is now going to be reliant on people. Because people have different, because the world’s different. Employees are different. And businesses need to need to adjust for that. If you want to scale your business and we want to actually become, have the growth that we that we expect, or even the peace of mind that we want, we have to do things right from the beginning. Because while you’re small, each employee has so much more impact on a business sustainability and scalability. A big mistake sometimes is that the founders and the executives are looking inward too much, that they can’t focus outward on the business growth and on the business profitability and productivity side. We have options in place to address these issues. Sometimes it’s a matter of you know better training the our team’s while they’re small so that they we can put the right culture in place and then, and maybe hire a HR consultant to kind of help get some of the structures in place, the performance procedures and stuff. We have the option of the fractional HR consultant which is like the interim executive to kind of help guide pieces without having to have a full time CHRO at the table. But have that knowledge of the table without having the cost of it. And then there’s the idea of investing in the right HR executive with the right empowered authority to really kind of make sure that the internal scalability is as effective as the external scalability. Because their link is something that we can no longer overlook. If you want our businesses to grow sustainably externally we have to make sure that the foundations exist internally to make that happen. So that about does it for us. So for a full archive of our podcasts and access to the video version hosted on our YouTube channel visit our website at roman3.ca/podcast. Thanks for joining us.

[ANNOUNCER]: For more information on topics like these don’t forget to visit us at roman3.ca. Side effects of this podcast may include improved retention, high productivity, increased market share, employees breaking out in spontaneous dance, dry mouth, aversion to the sound of James’s voice, desire to find a better podcast…