Building an HR Team in a High Growth Startup with Andrew Bartlow

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This transcript was auto-generated from the original video recording using Otter Voice Meeting Notes. While the transcript has not been human edited, we hope it will still help you to quickly find or reference useful information from the interview.

0:05 

Deliberate Leaders I am your host Allison Dunn, Executive Coach and Founder of the Deliberate Leaders podcast dedicated to helping leaders build strong, thriving businesses. Each episode we feature inspiring interviews to help you on your leadership journey. And our guest. Today, I’m excited to introduce, we have with us Andrew Bartlow. He is a growth company advisor with over 25 years of experience and human resource and talent management. He is also the co author of Scaling For Success. And also the founder of Series B Consulting, which helps businesses to articulate their people strategy accelerate their growth, while navigating rapid change. Today, we’re going to discuss some of the challenges and strategies in recruiting and building recruiting teams in this year of 2021. Andrew, thanks so much for joining us today.

1:05 

Allison, really happy to be here. Thanks so much for inviting me.

1:08 

My pleasure. So I start these up with a deliberate conversation. And so my question for you to kick this off is what would be your number one leadership tip for our Deliberate Leader listeners?

1:24 

Oh, boy, I think this plays into the word deliberate, its plan, have a plan. Boy, when things are changing quickly, when your company’s growing, when the world around us is crazy. That often becomes an excuse for so many leaders and so many organizations to say I don’t have time or it’s changing too fast, we can’t plan. And boy, that’s something I just double down on and encourage leaders to have a at least a directional plan that you know, will evolve. But boy, you’re never going to get there unless you have a general idea where you’re going. So have a plan.,

2:10 

As a deliberate leader you are speaking my language. I beat that drum constantly in my local community. And it is amazing how many people are just kind of shooting from the hip. So with that, thank you very much for that tip. That’s a great tip. And so in your area of expertise, I know that you focus on a lot of startup type companies, but there are so many elements of kind of the years of expertise that you bring in just human resources. So in this year, 2021, what should be the key things that business leaders are thinking about, from the standpoint of their people strategy?

2:53 

Sure, sure. Well, yeah, there are a number of things happening around us that, you know, Hey, I’ll highlight it COVID the pandemic, the world is adjusting and business in reopening. How are we handling that as employers, with our workers and with our customers and various legal and compliance elements? There’s a lot there. And boy, I’ve been leaning on various law firms for their guidance along the way and you know, directing them getting them connected with my clients. You know, I’m not the legal and compliance expert, but I know where to go for help. So that’s a big part of it. Another thing that’s been a hot topic, it has been remote work. So now that we’ve lived like this on video and zoom calls for many months, what will the world of work look like? After it becomes a choice rather than a mandate that we’re that we can work in an office together? Or on video? How does that mix change? Will there be more distributed environments? Will some people live high cost leave high cost of living areas like I live in the San Francisco Bay Area and boy people are headed headed east headed to Austin Texas? Yeah, headed to Boise headed to Colorado. People are getting the heck out of dodge. And how do you deal with that? Do you adjust salaries? That’s been a hot topic as a result of remote work? Yeah. So lots to talk about there.

4:35 

In in your experience, or at least in your circles. What is the typical approach that you’re finding most businesses are taking to the remote aspect of like, are they keeping your the hybrid thing it like I have a completely given up their office spaces? What are you finding?

4:56 

Yeah, most commercial office leases are long term in nature. 357, even 10 plus years. So most employers have not been able to sublease or let go of their commercial leases, it just hasn’t been an option. So, you know, everybody is dealing with that overhead, but, but thinking about how can they operate going forward in a lower cost way in a way that appeals to more workers. So they haven’t actually most, most groups haven’t actually let go of their offices yet, because they can’t get out of the leases. Now, going forward, I just saw study lightspeed ventures published a study, there’s a great article, it’s out on LinkedIn, it’s out on medium.com, Luke is the talent partner there who does a bunch of great work. And they did a survey across about 300 companies in their portfolio, you know, growth, growth stage venture organization, and they are anticipating roughly 60% of organizations will be in a flexible work environment moving forward, meaning employee choice, at least several days work remote, no longer the general expectation that you’re in the office the vast majority of the time. So a lot more flexibility moving forward. And boy, I should pull up the report where while we’re talking about it to reference that, but there are a lot more organizations that are that are distributed first, that are hiring people from everywhere, just to expand their talent pool.

6:38 

In. So I just also did a similar review on the summary of getting feedback, I’m gonna include the one that you’ve just mentioned in the show notes, and also the one that I’ve just kind of absorbed myself, it’s a big topic that we have at an upcoming strategic meeting. So my question going back to that is, is the hybrid? Are you anticipating, like I think of a hybrid model of maybe it’s shared office, maybe it’s co shared space? It’s smaller, it’s less square footage. What do you anticipate are that people challenges that will be around that along? coupling with COVID? consciousness?

7:18 

Yeah, well, well, space, you know, what’s mine? What, how do you how do you handle, you know, physical meetings, folks are used to many, many folks in an office environment or are used to having their own desk, some people are fortunate enough to have a door that closes, that that is likely to be less frequent, it’s likely to look a lot more like the  weworks of the world with communal hotelling office space. And, you know, I think employers are going to adapt to that there’s going to be less focus on some of those in office perks, like lunches, and, yeah, the activities in the office and more focus on things that are more meaningful, to bring together, more distributed workforce, you know, how do you engage people and build relationships when you’re all over the place versus under one roof top?

8:20 

Thank you, you. You also brought up a really, I think, important topic about wage differences based on where you’re located. What do you envision? How do you think companies are going to deal with that?

8:38 

I think companies are struggling with it. Right now in this in this war for talent that we’re in and when all the companies seem to be competing for the same really highly skilled professionals within the band, you know, technical skills, you know, that’s driven wages way, way up, especially in some of those magnet markets, like the San Francisco Bay Area, or New York City or Singapore, you know, some of those really, really hot markets are so overheated. Employers are, frankly excited about opening up their talent pool to be able to source people from all over the country, even all over the globe. Now that we’re more used to working in this remote environment. And so they’re excited about the labor arbitrage of hiring people for half or 10% of what they’re used to pain in New York or San Francisco Bay, etc. Where it gets complicated is when an employee or when a worker decides on their own. Hey, I’m going to move from this high labor cost area where I’m already working for you. I’m already earning this high wage, and now I’m going to move to Idaho. Does that employer adjust their paid down To match that local labor market, some companies are saying yes, we should do that it’s only fair we have wage compression issues. Otherwise, if we hired somebody in Idaho at let’s, let’s pick around number 100 grand, and they’re moving from the Bay area where they were making 150 grand, it’s awkward to maintain that person’s pay and have this 50% disparity, it’s awkward when it’s just purely happenstance that that worker was hired in the bay, and then they moved. Some employers will do that, yes, I’m working with some employers that are choosing to do that. Other employers, more employers are using a practice that I call red circling, so you maintain the pay that somebody is at today. But you either freeze their wage, or you increase it more slowly, with your annual or semi annual performance review, cost of living adjustments, you know, what, Whatever method you have the increase people’s pay, gets, it’s a slower growth, so that over time things start to equalize. Frankly, that’s been around for a long time, you know, way back in the day, back in the 90s, I worked for General Electric, and for Pepsi, giant fortune 500, companies that move people around all over all over the place. And they, to the best of my recollection, never took away base pay, they just increased it less slowly, if you’re moving from one market to another. And that’s, that’s a way to keep your workforce intact. If you start slashing people’s pay, they’re gonna start looking for another job, especially, they’re gonna look for another job at that third category, a company, which I haven’t talked about at all yet, which is, we want the skilled workers so badly, that we’re willing to normalize across the country, across the globe, in high labor cost area wages. So if we’re paying 150, for it in the bay, we’re gonna pay 150. For it in Atlanta, we’re in Idaho, we as an employer shouldn’t care where that work worker works, because we’re gonna pay this this sum for it. And that will help those companies attract talent, but that will cost those companies more money. So every company is going to need to make their own decision about which one of those three places they want to reside on the scale? And I think that has to do with how much do you need the labor? What are your profit margins? You know, what, how much money do you have in the bank? Each situation depends, I’m not going to recommend one scenario or another, because it depends what your situation is, as an employer. But those are the three big paths that I see people making choices around.

12:58  

The aspect of the third element, the third model that you just mentioned, you know, if I think about, you know, if, if you’re in the day, right, and you’re currently employed there, and typically they’d have 100 employees, and now they’re remotely working. Why would you pay them any less, it’s been the burden or the overhead, the labor costs that’s been built into your pricing structure, it’s already there, at least I’d hoped that they’d have that perspective as well. So interesting.

13:29 

is certainly interesting. Yeah. And Heck, as companies scale, and they move from 100 employees to 1000 employees, you’re starting to deal with perceptions of fairness, pay equity is very important. That impacts you know, trust and confidence in the employer and whether people want to stick with that employer or not. And as you start to get into situations with people moving around, and if you’re able to hire somebody for a lower dollar amount, as an employer, why wouldn’t you so that the financial folks start to look at you a little cross-eyed if you are costing your organization twice as much if you’re making some decisions that, hey, we, we need to build this product really fast. We need to sell it really fast. We need some salespeople, we need some programmers. Wouldn’t you rather have twice as many, by paying local market rates versus paying the high the highest possible rate across all markets? So those are decisions employers need to make? And those are discussions worth having?

14:38 

Sure. What in the current makeup of a human resource team I know that you, you talk about how to scale it properly and building it from the ground up. So I’d love to kind of dive into that and then maybe how the need for some new type of talent on HR teams might be necessary. Ah, so let’s talk about, you know, what should any business regardless of where they’re where they’re at right now be considering for building out an HR team?

15:08 

Sure, sure, boy, that this is my, this is my sweet spot I, I started a executive development program for HR leaders to help them, you know, figure out what the role is and how to be successful in it at different stages. So most organizations start thinking about HR around hiring, around talent acquisition. So even the very smallest organizations, when you’re 2025, if you’re no longer hiring from within your network of first or second degree contacts, you’re either paying an outside search firm or a recruiter or you’re bringing on board your own. And, and Alli, I know that you do some recruitment for some of your clients. So just about every organization needs recruiting help. So that’s often where it starts. I like to suggest that if you’re hiring 20, or last, like even 10 or less people per year, you can use your own insourced recruiter, like let’s do the math on right, if you’re paying an outside, you know, search partner, somewhere between 20 and 35%, of first year’s cash comp, recruiter makes the average of that, so you’re hiring three to five people a year. Internally, your recruiters paid for themselves, right. So if you’re hiring 510 20 people a year, you should certainly be in sourcing recruitment. So that’s typically the starting point of an HR organization, you’ll often pair that with somebody running payroll in finance or accounting. And then, you know, tag team in your office manager or executive assistant for your business owner or head of your business. So that’s often your three headed monster of an early stage or small business, HR team, a recruiter, an office manager slash EA, and somebody running payroll. As you get bigger, it starts to become more important to have somebody you know, manage and maintain the various processes, programs and policies that you have. So stage one is that, you know, kind of three, three headed monster of lots of the recruiter in some part time jobs. Stage Two is you have somebody in HR operations that can help you think through benefits and maybe payroll, maybe reports into them. They might be doing some of the recruiting are the recruiter reports into them. You’re running some more attraction and retention programs, some learning and development programs. So HR operations becomes more important. And then as the end, but let’s say that that kicks in at 50 to 150 employees is ballpark when you’re looking at that past 150 employees. Most organizations have three, four, even five layers of management between the CEO and the frontline workforce. Communication gets complicated, you can no longer easily make fair common sense decisions that make sense based off of an individual situation, you need to have more programmatic, more policy things more dirty word structure, to to your organization. And that’s where having a more professional, more seasoned leader in human resources to help you think through what are those management processes? What are those management practices look like? How should they work? How does it all connect to each other? That person’s probably a member of your leadership team? And the recruitment and ops roll up into them? So 150 plus for sure. You should have a relatively seasoned HR leader that that’s wearing a business hat a business executive hat. Yeah. Does that answer the question?

19:11 

It absolutely does. What? dependent I suppose depending on the size of an organization, what are you what are you seeing are some of the trends of how hrs role is changing in this remote society that we’re in right now?

19:31 

Yeah, well, remotes part of it. legal compliance, pandemic related stuff is another part of it. The social equity issues that have even more strongly entered the public consciousness and workplace discourse and design guys has been huge for employers and for HR leaders like we were expected to know how to deal with This, we’re expected to know how COVID and pandemic return to work stuff impacts us. We’re being asked to be remote work experts as well, and how do we engage the team and maintain culture and all that good stuff. And, and the bottom line, what I’m what I’m seeing is a lot of burnout from a lot of HR leaders, more is being asked from them than at any point that I can recall in my 25 year career, even during the.com, boom, bust, and, you know, et cetera. And it’s something frankly, that not all HR leaders are prepared to handle. Not everybody has the resources and community at their disposal to get the answers to this. A lot. Lots of HR folks are fans, fantastic in their lane, you know, maybe moved from that that three headed monster, maybe you came from recruiting? Or maybe you were a former office manager, or maybe you used to run payroll. And then you were anointed as the head of human resources for your group, without the training without the experience without the resource and network to figure out how to answer these questions. And so I’ve seen and I have a bunch of close friends in the HR search world. I’ve seen and I’ve heard that there’s, there are more changes at the top of the HR organization than ever before, in terms of people opting out, people being replaced. And the function being upgraded, in many ways, because organizations are seeing that they need more from their HR leaders and HR leaders are figuring out, they need to know more, and they need to have community and resources to be able to answer that these questions that had never really been contemplated before.

22:02 

Thank you for that perspective. I know that I’m guiding clients on the types of shift and perks from like the in office, you know, like, you know, a coffee machine and you’ve got, you know, lunch every once in a while and you know, you get office use and a computer, what are what are some of the transitioning elements that that professionals are expected, or workers are expecting to have in their home environment that should all employers should consider at least evaluating on including as part of their benefits or part of their work package?

22:40 

Yeah, great question. Oh, my goodness, I’ve and boy, I rail about this a little bit as well, where, where people, employers get really caught up in keeping up with the Joneses around what flashy perk you’re offering. Like, there’s the joke about Silicon Valley, ping pong tables, and we’re a company with ping pong table now. And the free lunches there, there’s so many dollars, and so many hours, put into perks and programs that don’t matter that don’t move the needle. So rather than point out, like, Hey, here’s one thing that’s super useful. Actually, I’ll give you a few at the back end of this. But I, I’d suggest the framework to think about perks and programs as an employer is, what is really meaningful to your workforce, are free lunches really meaningful, those originated, by the way, in these giant campuses, where it took a bunch of time for people to leave the workplace to go out and get food and come back. And so the employer wanted them to be in the office longer, and it was more efficient to provide the food, it saved them money, got more labor dollars, got more productivity by keeping the people on campus. So what’s important to your workforce, what’s important to you as an employer? What can make your workforce more productive, and more likely to stay? It’s not always what people are asking for. Right? People are usually asking for more money. And yeah, we all want more money. But what really does your particular workforce need that will be meaningful to them. And some things will be table stakes, some things will be an anti like health insurance, that’s expected, right? at a certain level, everybody ought to have medical insurance 401k a lot of startups don’t offer 401k it’s just not something that early career millennial workers think a lot about retirement, even though it’s super valuable. So that that’s an example of something where many technology startups with a different demographic and their workforce have chosen to spend those dollars in other areas, the ping pong tables, the parties and the free food versus the 401k. But if you as an employer have a different workforce that you’re trying to attract and retain, think about what’s meaningful to them. So one of the things I, I do a blog on my Series B consulting website, and, you know, I talked about the plight of the working parents in the midst of COVID child care, and even elder care. So how are we enabling workers to help them work, help them focus on their work, if their kids are at home, and they’re trying to take care of an aging parent, that can be really challenging. So there, there are more benefits and programs that that might be supportive in a more meaningful way. That’s an example. Mental health benefits have been attracting a lot of attention, a lot of interest boy COVID. And the work at home and the school at home environment has been really tough. A lot of people in a lot of different ways. And so mental health is getting, rightly, more attention. That that’s likely to be something that could be considered table stakes in the future. So I don’t know if I gave you enough specific examples. But the general suggestion is think about what’s important to your workforce. Don’t just try to keep up with the Joneses.

26:33 

Excellent advice. And I think, you know, finding out what’s important to your employees is just by simply asking them, right, yeah, it is that simple. What are what are some of the most common mistakes that you see businesses doing?

26:51 

Well, I just talked about one which is keeping up with the Joneses like assuming that because somebody else did something you should do it to lots of business leaders that I work with, you know, they’ll read an article or, you know, HBr comes out with, you know, some interesting, you know, concept or best practice or the latest book comes out, you know, about some new practice or process like holacracy was the hot thing a number of years ago from Zappos and Ray Dalio, his principles, and you know how you operate your organization. One of the biggest mistakes is best practicing, I’m giving air quotes, is using somebody else’s best practice that worked for them in their organization at some particular time in some particular context. And thinking that that’s naturally going to work for you. One of the things I talk to my clients about is, context is more important than content. So if Google’s doing something, and you’re a 50, person organization, chances are it could actually hurt you rather than help you right there. They have 10s of 1000s, probably hundreds of 1000s of employees right now, very different stage of maturity and talent and labor market environment and probably profit margin versus whatever your business as, so be really skeptical about others best practices, versus lifting and shifting those best practices. Way too many examples of business leaders coming into the office on Monday with some you know, flashy, you know, bright, shiny object, you know, great new idea that they heard about that they want to go implement on Tuesday. So be really skeptical about best practices. Think about what your own needs are. That that’s one of the larger traps I’ve seen. I’ll give you one more quickly. One more. I hear an awful lot about trying to maintain the culture, trying to keep our culture as we grow. Yeah. Did I did I jump ahead a question that you were that was led right into the next question.

29:14 

Telepathy, I love it. Yeah, that that’s one of the larger mistakes I’ve seen. And if your organization is growing, it should be and it needs to be evolving. The way that you the way that you operate, the way that you communicate, the way that you make decisions at five people is different than at 50. And that’s different than at 500. And it should be that way. At five. Everybody knows everybody, you’re able to chat informally. You know what everybody’s working on. At 50. You probably have middle managers involved communication is different. You’re starting to insert a little bit of process and structure at 1500 at 500 much more Process structure programmatic stuff needs to be there to allow the organization to operate in a healthy way. And so this idea of how do we keep our culture, I think is inherently wrong? How do you keep your core, your core values? What’s important to you becomes more about how do you communicate and articulate what that core is. And do it do it in a clear and differentiated way to express who you really are, and who you really are to be helpful in aligning people around what you’re trying to accomplish, versus trying to hold on to the past. And I’ve seen a lot, a lot of leaders try to hold on to the past, and that often ends up holding them back.

30:46 

Thank you for addressing that. That’s, I think, a key challenge that I think everyone feels like they have, but if they focused around the core, they’ll get it right every time. So not keep not trying to keep it. Um, Andrew, what are your favorite HR tools or resources that you would recommend?

31:10 

Oh, my goodness. I’m one of my favorite authors, professors. I don’t know him well enough to call him a mentor. But Dave Ulrich, ul ri CH, the father of modern HR has written too many books, actually. Blurbed my book. I’m just forever honored that he has Thank you. That that he even answered my email. But yeah, he really described how HR operates in the context of a business. And so that Yeah, huge. Patrick Lencioni. His work around Five Dysfunctions of a team and the advantage, he has a more recent book out I don’t think that the science is particularly strong there. But the concepts are very practical and easy to grasp. And I use a lot of a lot of his stuff. Those are two of my favorites. And in the scaling world, there’s a professor, who I think that his first work on this was back in the late 50s, early 60s, even Larry Greiner, gr e i n, er, he has one of the top five, Harvard Business Review articles of all time. And it talks about evolution and revolution in organizations. So how organizations change as they evolve and mature. And, you know, the language may be a little dated, and the examples are, are super old. But the concepts and the research they’re, you know, rings so true in today’s high growth, high change world.

32:53 

Fantastic. Thank you very much for that. Andrew, it has been a pleasure having you on the show today. Thank you, sharing so generously on some of the things that all of our businesses worldwide are facing right now. So thank you so much.

33:09 

Such a pleasure. Really appreciate the opportunity. Thank you.

Transcribed by https://otter.ai

Transcribed by https://otter.ai