When it comes to maximizing business profitability, one often overlooked cornerstone is the role of Human Resources. We had the pleasure of talking with Mr. John Beaty, a seasoned HR professional from Texas, who illuminated this aspect with his enlightening perspective on the strategic importance of HR in driving business growth. John highlighted the integral components of an effective HR department - from creating comprehensive job descriptions and well-thought-out compensation plans to implementing employee-friendly PTO policies and fostering a positive work culture.
We further delved into the critical topics of compliance, risk, and talent management, stressing the need for stringent compliance measures to protect the business from potential legal pitfalls and manage risk effectively. Our guest, John, emphasized the high price tag attached to employee turnover and reiterated how a positive work culture can be a game-changer in capitalizing on employee potential. With the right HR professionals on board, businesses can ensure compliance and get a pulse on employee sentiment with the right tools, such as climate surveys.
Finally, we navigated the complexities of HR outsourcing and staffing considerations. Striking a balance between workload and pay, avoiding employee burnout, and creating a family-like, collaborative culture were some of the key areas explored. John shared his valuable insights on recognizing employees' efforts, especially in a virtual setting, and the impact it can have on overall productivity. We also touched upon funding considerations for businesses and the importance of being prepared to handle significant funding amounts. Tune in for these invaluable insights, whether you're a small business owner considering hiring an HR professional or a larger organization pondering over third-party HR services.
A loan brokerage firm that acquires funding for business owners and real estate investors.
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
If you need assistance in obtaining funding, email us at podcast@tdjequityfundinginsiders.net. Tell what the scope of funding is needed and the amount. A broker will contact you to discuss your funding needs. And remember, at TDJ Equity Funding, we do not force your funding needs into a lender's box but find a lender's box that fits you!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Introduction (00:13):
Ready to get the inside scoop on equity funding?
Tune in to TDJ Equity FundingInsiders podcast for an in-depth
look at what it takes to accessfinancial capital and maximize
your investments here fromexperienced professionals,
including bankers, underwriters,loan officers and industry
(00:34):
experts, as they share theirunfiltered stories and valuable
lessons on securing funds.
Jacquelyn Jackson (00:47):
Welcome everyone.
Welcome to our podcast todayTDJ Equity Funding Insiders.
So we are actually having aspecial guest for you all today.
This guest is actually dealingwith the human resource services
that actually affect you ongetting funding.
A lot of companies don't thinkit does, but it do, and so we
have a guest that's coming in toshow how having your business
(01:09):
compliance and having your humanresource services for your job
descriptions, your employees andeverything lined out how it
affects your bottom line, whichis revenue.
So we're going to have adiscussion about that today and
we want you all to sit tight andlisten to what inside
information he has for us.
Let's welcome.
Our guest is Mr John Beaty fromTexas and he's here to discuss
(01:33):
his human resources services andhow they work for us.
Welcome, John.
John Beaty (01:38):
Well, thanks, jackie .
I appreciate that man.
It's a fully loaded questionwhere people ask like, what is
HR?
I mean there's so much tounpack because essentially HR
takes care of businesses, people, but I mean it's really
everything and anything peoplebased, and the importance of HR
gets overlooked.
A ton People over think of itas like a cost center versus a
(01:59):
profit center, and that could bea huge difference in a
business's profitability andtheir equity as far as a
business is concerned as well.
So kind of, take it from the top, lots of businesses have people
right, they have people atservice and take care of their
clients.
So if you're not maximizing thepotential of those folks, then
(02:21):
you're suffering on your backend, whether it's revenue or it's
bottom line.
So from an HR perspective, it'snot just where the benefits are
or payroll comes from or wherepeople go to complain.
It's more of a strategicoutlook of how to put the people
in the right places, servicethem, engage them and help them
develop in that role.
(02:41):
By doing that you're maximizingtheir potential.
And basically, business 101,happy, engaged employees produce
more output.
That output usually leads tomore revenue and other things
along those financial terms.
But how do you get to that spot.
Well, it all starts from thevery beginning, brian, the right
job descriptions that you justsaid.
I worked at a company oncewhere I went to work there at a
(03:04):
certain job description and sixmonths into that job it changed.
My engagement level went waydown.
Jacquelyn Jackson (03:12):
So my output went way down.
John Beaty (03:14):
I was actively disengaged in that job because I
wasn't doing what I was hiredto do, what I wanted to do.
And so you have a lot of folkslike that.
And what does that lead to?
It leads to turnover, andturnover is costly.
To acquire a new associate it'scostly enough, but to lose an
associate it's even more,because you take all that time,
that effort to hire that personon, train them, develop them,
(03:35):
give them up to speed and aftera year, if you let them go, you
lost everything that you putinto there.
So it's just like having aclient it's harder to obtain a
client than it is to retain.
So you don't work on working onthat retention for employees,
and so top tone is also an issuetoo, right.
So you have your jobdescriptions, you get those
(03:55):
solid down.
Then you look at how do we getthe best of the best?
Well, you're going to have tohave a great compensation plan.
You're going to have some sortof benefit offering Not just
medical but maybe the employeeassistance program.
You have dental vision.
The benefits, of course longterm, short term, disability,
(04:16):
good people, good PTO policies.
Maybe you have a communityonline program where you can get
cooking classes, and all thatbecause people are looking at
things differently now.
And the last part is a culture.
You have a great culture, sothat's what people are looking
for.
Back in the day, people workedand accomplished things to be
satisfied with their job right,the job satisfaction came from.
(04:39):
Nowadays, that's changed.
Yeah, it is, people are workingfor their lives versus people
working their job as their lifeExactly.
And so, considering all thosethings, you've got to have
things in place.
So the next thing is you findthe top talent, you hire the top
talent.
Now, now we're looking at okay,what do we do now?
Well, let's look at the cultureand let's train these folks.
(05:01):
So, starting off, lease a basictraining program from a
compliance standpoint, becausethat's a big deal.
A lot of people don't really payattention to the compliance Can
only save the company money andsave them the risk factor of
litigation, even like a place inTexas where you have a right to
fire and hire, but it's aheavily litigated state.
So even if you fire somebody,there could be some consequences
(05:23):
to that If you didn't do itright.
So, making sure compliancetraining is done from like
workplace harassment, sexualharassment, workplace violence,
et cetera, getting those alltaken care of.
But the next step is building acore structure that helps
engage and develop people,whether it's developing into
your culture, because we want tohave a culture by design, not
by default, which most companiesdon't realize that they have a
(05:45):
culture by default, that's right.
So you got to work on that.
Your values equal the bottomline to what that culture means
and they can't be aspirationalvalues.
Yeah, they'll live it.
They'll live it from the top tothe bottom.
And you see a lot of companieslike, hey, we have integrity,
you know, we want to do the bestfor our people, et cetera, et
cetera.
But it, when it gets down tothat middle management, you see
those things breaking apart.
Jacquelyn Jackson (06:06):
And that costs it costs a lot.
John Beaty (06:08):
It costs turnover, people lose, people leave jobs
because of their management,really now because of the
company.
Some do, but I agree.
Most people leave because theirboss, they just can't work.
Right, it's happened to me, asI'm sure it's happened to
everybody else.
A lot of people on this on thispodcast are listening.
So you get them trained, you'redeveloping their skill sets.
Then you got to measure theperformance and not just for,
(06:30):
like, the firing purposes.
Right, a lot of people are like, well, we want the performance
indicators to make sure they'redoing their job.
Well, you also want theperformance indicators to help
people be motivated, engaged.
People want to be told I'mdoing a good job or if I'm not
doing a job, what can I do to dobetter?
Most people want to succeed inlife.
I know I do.
When my boss comes and tells melike, hey, you're doing a great
job, I go.
Can you sit down and tell mewhat you think I'm doing good?
(06:50):
I'm going to go through thatwhole process because his
thought process of doing goodmay not be mine Exactly.
But on the other hand, too,sometimes people just don't work
out and you need to correcttheir actions.
Right, and it's not one ofthose things where, yeah, for
the past six months he's beencoming in late and then you some
day you'll hey, you just beencoming in late and you got to
let you go.
You got to tell people ahead oftime, not only for them to be
(07:13):
able to correct that, because,again, it's it costs you, it's
it costs a lot of money toacquire talent.
But then that last piece, it'shey, maybe this person can
change and be one of my bestassociates if he just knows what
he's doing wrong.
But if you fire him and hedoesn't know why, litigation
could come up, right, right,maybe it's a woman that's
pregnant and you fire becauseshe's been late.
Well, she can turn around andsay, hey, you fired because I'm
(07:34):
pregnant.
I've seen it.
It's happened a lot.
Jacquelyn Jackson (07:37):
So basically what you're saying, john, not
knowing the compliance orknowing actually the HR process
of what, how it really works foryour company and how it can
save your company, you can losea lot of money.
Oh, yeah, you know, and a wholelot.
Now let me say well, I want toadd to this too, because as a
loan broker, we deal withfinding funding for business
owners and real estate investors, and so just recently we had
(08:00):
one of our business clients, wasable to get him $1.7 million,
but what helped him to get thatwas the fact that it's a line of
credit that he's getting.
Now let me show you how to leta lot of credit works with what
you're saying.
In the process, they always askthem about their hiring what
are you going to use, use whatyou're going to use the funds
for.
And basically he's using thefunds for hiring, along with
some equipment.
On the hiring part, they askedwhat's your projections of what
(08:21):
you think your number is goingto be for as your payroll and
your expenses and all of that?
That is what they're asking tosee what you look like.
Now, people don't understand it.
On a line of credit, they do anannual evaluation of you every
year, and so what they'relooking for is to see how stable
your company is, cause you knowthey can cut that line of
(08:41):
credit off.
You can have it this year andthey cut it off next year If you
don't qualify based on how youlooking on paper and in your
business.
So it's important to take thathuman resource part seriously,
especially when you talk aboutthe turnover and the proper way
of doing stuff, cause they askyou do you have any jurors,
jurisdictions or notjurisdiction?
But if you have any cases comingup against you and stuff like
(09:02):
that and they need they askedthat when they're asking for
money and that's what I'm sayingit's important.
That's why we wanted you tohave be a guest, because what
you talk about is what I think alot of people I definitely want
you to talk about that thedon't realize in those.
It's something that do cause myguy, the 1.7 guy he realized
how important you are.
He actually had our humanresource services that worked
with him with his company.
He had 50 employees, he got 50employees.
(09:24):
So that's understandable.
So but it's some companies thatthink, oh, and they got 10, 12,
they don't need that type ofservice.
I can handle it.
So if you would tell ourlisteners today how important,
or even the story of how you'veseen it by not having or
utilizing the services that youhave, what happens with that?
How does that?
John Beaty (09:40):
happen.
Yeah, there's a lot of goodstuff that you just said.
So let's kind of hit each oneby one question at a time, okay.
So from that compliance piece,so what we're talking about
really is risk.
So, whether it's some of thethings I talked about before,
like workplace violence orthings like that, um, someone
has a lawsuit, those departmentof labor type of things we call
it um, uh, eoc charges, right,equal opportunity charges.
(10:05):
So someone comes back on that.
One of those charges could puta business out.
I mean, I've seen lawsuitsanywhere from 1.2 million.
Jacquelyn Jackson (10:10):
And it would actually stop a loan too.
I can take that as well.
Oh, absolutely it would stop it.
John Beaty (10:14):
It's a huge risk and you know I deal with a lot of
poverty equity groups and whenthey see those they're scared
off and the evaluation goes outthe door.
So putting things in place toprevent that is huge and part of
that is the HR piece right.
Jacquelyn Jackson (10:26):
But even if it's putting in place, if you
can show you have it in place,even if you haven't rent through
it, cause sometime they askthem you know, let's see your
policies, your procedures, this,this and this, and that's where
, if they're working on an HR,you all can provide that for
them when it could be with it.
I think you call it complianceperiod.
You can show we are incompliance.
We have this set up to handlethis type of situation.
That's why it's good to haveyou too, right, yeah.
John Beaty (10:48):
Well, here's a funny statistic 70% of all small
businesses are out of compliance.
Jacquelyn Jackson (10:52):
Hmm, what's that percentage again?
John Beaty (10:55):
70%.
Jacquelyn Jackson (10:56):
Okay, it's crazy, it's crazy high.
John Beaty (10:59):
Um, the thing is, you got 50 states and we live in
a remote workforce place rightNow.
Every single state hasdifferent compliances, every
single one of them Wow, likeCalifornia is different than.
Texas.
Texas is different thanMassachusetts.
Massachusetts is different thanWisconsin.
All of them have somethingdifferent, whether it's taking a
uh a compliance course ormaking sure payroll is done a
certain way.
I mean, there are so manydifferent things and that's
where it becomes a huge hassle.
Jacquelyn Jackson (11:20):
Let me say that so that means if I have a
friend that's in business inCalifornia and I'm in Texas, I'm
going to call them about apersonnel problem I have and
she's going to give me her bestrecommendation based on what you
know in California.
It could really be wrong, iswhat you're saying?
Uh, yeah, a possibility.
John Beaty (11:38):
So to be able to have the knowledge let's say I'm
a business owner, I'm not an HRexpert- HR sure.
And people have to go continueeducation courses to understand
all these things.
That's good.
That's good, so I'm, I'm asmall little business owner.
I have 15, 20 employees.
I have millions of employees.
I have maybe in three differentstates.
Okay, well, I have to Google.
Google is my best friendbecause that's all I have, but
Google is, on the very efficientbecause it doesn't.
(11:59):
There's so many different thingsout there.
Having a professional that'scertified in this that can help
you limit the risk of our onthis is the most important thing
, right?
So, regardless of the situation, it's hey, you know, don't take
this lightly for your point,from a financial piece, from
somebody looking at me, what'smy evaluation?
Uh, but just to protect yourassets, okay, having somebody
(12:21):
being able to be back thereunderstanding the compliance, uh
, is a huge, huge factor.
The other part that you weretalking about was the talent
piece and the evaluation.
So you have a company that hashigh turnover.
Well, that's like I said, it'sa costly, exactly Problem.
It's going to cost companyquite a bit to keep hiring and
hiring, and hiring and hiring.
There's a lot of processes thatrequire someone to hire into a
(12:41):
business.
As many people know, if they'veever hired people, it's kind of
a pain.
There's a lot of things to gothrough there from you know,
putting out on the job boards.
Maybe you have an ATS andapplicant tracking system or
maybe you have a recruiterperson, uh, and then getting
them up and trained, cause thatperson, when they first start,
most likely they're not beingproductive, right?
They're in that, that startupphase, that that um honey move
(13:02):
phase with the company, whereyou're getting to know the
company, getting to know myposition.
So it's usually, you know,anywhere from three months to a
year before they start beingproductive in the company, right
?
Uh, I know, being in the salesindustry, if you're going to one
industry to another, it takestime to learn everything.
Most companies will understanda year ramp up time because it's
so much.
But imagine training thatperson for a year and then
(13:24):
you're gone.
That's money that has cost youfor sure, and then you're
looking at it from the outsideof you as an investor in.
Well, these people can't justkeep anybody.
Exactly, what are the?
I mean, there's a lot of moneybeing wasted right here, and so
there's a risk there too,because you want these people to
be productive in your company,Right?
Well, it's hard to beproductive if you keep rolling
people in and out and in and outand in and out of your company.
(13:44):
So there's that matter.
And then the last piece isgoing to.
You know, if they're not fullyengaged, if you have a bad
culture and you're not seeingthe profitability that you want,
you got to go back to what Isaid earlier.
Ask yourself, if I'm not happywith my profitability to show on
paper.
Then you got to go back to yourpeople, Right?
What are the what?
Why are my people not being asproductive as they can?
Exactly, Like I said it's thatculture by default, by design.
(14:07):
You got to design a culture andhe's got to be top bottom.
That's an HR person to come in.
They would do climate surveysto understand what they're doing
, what they're feeling from thetop down which is great yeah.
And that report comes back toyou because what you think of a
business owner?
Hey, everybody loves me,everybody's happy, everybody's
going great.
But then once you really go,start asking people right
Exactly, it could completelychange.
(14:29):
I was talking to a young ladythe other day.
She is at a recruiting company.
She was telling me she had afriend that was about to leave.
She was going to give a no, nocall, just no show, leave, walk
out.
And because her husband got ajob in another state and because
she was having difficultieswith her manager and she would
allow her to work remote but shewas one of their top producers,
(14:51):
and so he went to thisconference and someone told what
was the last time you talked toyour people and asked them how
they felt?
And the guy was like I don'tthink I ever have.
So that day he went to go talkto her.
She broke down in tears becauseshe said, uh, no one was going
to ask me anything about how Ifelt about this company.
From that, uh, they did worksomething out to be remote so
(15:12):
and he was scared it was goingto not work.
But it ended up working and sohe got to keep one of his best
employees just by having aconversation.
Jacquelyn Jackson (15:19):
And that's what it just talking to and
that's where you guys come in tomake them do that type of
valuation.
I think business owners are soused to working in our business
and we do as well as but we needto work on the business and I'm
talking about people.
I know we have clients thathave 50 employees Cause you know
they say, well, you're notreally a business owner, do you
have employees?
I know some to have employeesand they still working in their
(15:41):
business, because you have tounderstand that professional
services there and you're goingto need it, they're going to
know exactly what to do, andthat's all we're saying when our
clients that we talked to andwe we have fun millions of
dollars with different types ofclients and different industry.
Okay, but we notice as you getbigger and at three and four and
five and employees growing, youcan't do the same thing you did
(16:04):
when you had that one employeeor you was.
You wet, all those differentacts.
You just can't.
So you have to have that inplace and this is something I
think is an insider I want togive everyone to be aware of
when the banks and the lendersask for documents like PLs, pls
and balance sheets and cash flowand projections.
You all have to understand thattells a story, and I think what
(16:27):
you think is oh, they justasking something, just that.
No, it tells a story about you.
They don't have to come to yourplace.
They can actually see whereyour income dropped last year
and you know your income droppedthis year.
But two years ago you made this, what happened?
And they also look at you knowyou had so many employees and
you said you want to getemployees, but then we're
looking at your employees.
This is a drop from month tomonth when you showed us your
(16:48):
financials.
So now you have a story thatyou're telling that you haven't
opened your mouth to.
But if you have the humanresource services or, like I
said, you as a performanceadvisor because that's what you
do you come into the company andlook at it and that's why we
wanted him on our show.
So you all can realize it'simportant to have this type of
service as part of your business.
If you're going to grow and youwant to make millions and you
(17:10):
have a product that is alreadymaking millions we have a lot of
people already making millionsyou need to have this type of
services because if not justlike what you're seeing, it's
going to cost that bottom line.
So let me ask you this whensomeone is looking at getting
this type of service as abusiness owner, what do we look
for when I want to actually hiresomeone for you?
Give an idea of somebody's inCalifornia.
They need somebody.
(17:30):
Of course we need them to callus so they can get you.
But just in case they don't,what should they look for in HR
services and performance?
John Beaty (17:37):
Lots of things.
One if you have a revolvingdoor, that's the first thing.
Hey, why are my employees notsticking around.
They're using me as a jumpingpoint to go up to the next
company or something along thisline.
Wow, two, they're in highgrowth mode.
There are so many things goingto happen, like you were saying
before, when they're like fouror five, maybe the company,
everybody there has the samelast name, and so HR wasn't that
important, right?
But as they grow, I mean, ithappens a lot.
(18:01):
These small companies start withthe same family, the same last
name, and then they grow to like20, 30, like oh wow, we have
employees.
Introduction (18:06):
What do I do?
John Beaty (18:08):
And there's no structure in place and they have
they just start a piece billingRight, and what happens is then
things start getting a littlecorrosive, right?
It goes back to that culture ofdefault and things fall apart.
And when you're not seeing theprofitability you want, that's
another time to look at HR.
If you're not happy with yourprofitability, you need to talk
to someone about HR period.
Wow.
And then right now, like thethings that I see are like you
(18:34):
said when we were talking aboutthe remote workforce how do we
keep my employees engaged whenthey're like 12 different states
?
How do I communicate properlywith them?
How do I maximize my ability?
The great thing about a remoteworkforce now is that, instead
of having a pool of people justin your local community, now you
have the entire country, right,and so now you have a plethora
of fighting the best talent, butif you're not being able to
(18:56):
hire the talent you want again.
That's when you got to look atthe HR, because you've got all
these people across the countrynow and you see the unemployment
, I mean it's going to get tighthere a little bit and the way
the economy is going to getbetter and better and the way
the economy is going we're goingto see a little, probably a
little, shift in the market.
As far as hey, now it's goingto be a very employee Like I got
to be really careful of keepingmy employees and finding the
(19:18):
talent, because that pool isgoing to get real small pretty
quick.
Jacquelyn Jackson (19:21):
Well, let me ask you this so can you all help
them?
Do you work with them forprojecting what the economy is
going to look like?
So when they get to hiring, youall kind of give them the
numbers of what they need to belooking for for hiring people in
their companies.
Do you help with them alonethat far?
John Beaty (19:36):
Certain aspects of that, sure, based upon I don't
know the specifics of how mycompany handles the bug, I'll
give you the kind of high level,but understanding the
financials from a company, whattheir goals are, because the HR
person again is not there justto do payroll and that is to be
a strategic work the CFL and theCEO To understand.
Okay, so here are projections,here's what we're trying to
(19:59):
accomplish.
And then, how many people do weneed to put in seats and can
this one person take theworkload of all this?
Where does their output mean?
You don't want a personoverworked because they're going
to get disengaged real quick.
You burn somebody out, they'regone, right, they're going to
find another company where theycan get paid exactly the same,
doing less.
Jacquelyn Jackson (20:15):
Wow, and that's true.
I've seen that happen.
John Beaty (20:18):
I see a lot of folks where, yeah, we laid off 10
people.
So, hey, james, you're going tohave to take the load of this
other two people, but he's notgetting paid anymore.
But ABC coming over here isgoing to say, hey, come work for
me.
You can do what you were doingbefore.
You don't have to do that extraworkload for $30,000 more,
right?
So then you kind of look atthat.
So now you're putting yourselfin a very competitive market for
losing your employees.
Jacquelyn Jackson (20:36):
So I mean there's so many.
John Beaty (20:38):
Like I said, I could talk hours about this, right,
because the facets of this areincredible and before I even
started with the company I'mwith, I really didn't really
understand HR.
Jacquelyn Jackson (20:47):
I mean, I thought it was the cost of us,
though.
John Beaty (20:49):
Yeah, Until you dig into it, you don't know what you
don't know.
Um, and then, uh, as I told you, I had a job.
I left because of a lot ofdifferent things, HR wise and
once I applied what I myknowledge now to that I go, oh
yeah.
That's clear cut, yeah, I meanto lose an award winning
employee who's been extremelysuccessful in his career and
(21:10):
then, all of a sudden, he'sleaving the company because the
performance was in there.
Yeah, I was, I was disengaged.
You don't want those, you don'twant your, your, your, your
customers talking to disengagedemployees Exactly Imagine that.
Jacquelyn Jackson (21:22):
Oh boy, you know is trying to look for no
job you don't want that.
John Beaty (21:26):
So you know you gotta be careful with talking to
your employees and understand.
You know there is a feelingaspect of it.
I mean human resources,resources has an emotional side.
Uh, like recently when we gotoff of the pandemic, you had a
split workforce.
You had some people in theoffice, some people on zoom.
So I I heard this a ton and, uh, our thought leadership um
director for our company, saidthis to me and it made perfect
(21:48):
sense.
So, john, you ever notice whenyou're on a zoom call or you're
in person, the the leadershipthere goes so great to see
people in the office again, sogreat to see their faces, but
never once acknowledges thepeople on zoom.
Wow, think about the perceptionthat that gives to people.
Jacquelyn Jackson (22:05):
Am I not important.
John Beaty (22:05):
I'm going to miss that, that job promotion because
I'm on zoom and I'm not inperson.
So you have to start thinkingabout small things like that and
how to really engage them.
You don't want to disconnectpeople and if you're going to
have a like you know, bringpeople in and have them all like
working in the, in the, in theoffice you got to, you got to
build a culture of that.
So on your job descriptions,hey, we're, we're a company that
(22:27):
is tight, family-like and we'recollaborative.
We want to be able to speakwith each other and in instance,
in person.
So once you give that upfront,okay, people are going to come
work for, they believe in that,they're going to come work for
that.
But if you don't put that inthere and that's kind of the
expectations that, hey, I canwork remote, but then all of a
sudden it's like Nope, you gotto be in the office.
Well, think about that person.
(22:47):
They're not going to be engagedanymore.
So that's the part of the, theturnover part, and I can go on
and on and on and keep going ontangents here, but it's crucial
that people pay attention to allthis.
And if you, if you, if you'renot going to hire an HR person,
look for a third party companythat does it.
There's tons of them out there.
Jacquelyn Jackson (23:06):
Well, let me ask you that on that, no, when.
How many employees should Ihave before I have the HR person
?
Hr person, let you tell us,should have it when I have the
first one, should not?
Yeah.
Yeah, I figured you said that.
So then what about when?
Should I look at having thethird party compared to my HR
person?
How many employees yourecommend?
John Beaty (23:23):
Oh well, it really depends on the situation of the
company.
For example, ideal companiesthat use they might have two or
three HR people and then theystill use a third party
outsourced.
Because remember there's a lotof those tasks that I was
talking about the payroll piece,administration, part of it, all
that Okay, well, that takes thetime away from the HR people to
do that strategic piece.
(23:44):
So it has to do with workload.
Like, how much workload isthere for a 10 person, 15 person
engineering company?
They're not really a huge HRtype company.
Right, they're pretty happywhere they're at and all that,
but they're small pieces thatthey still need to do compliance
wise.
You know handbooks and policiesand you know benefits come up
(24:06):
and all these little smallthings.
So they may not need an HRperson, but the third party HR
service would be great.
Now, a company is a littlelarger, they get calls all the
time, they have a complicatedpayroll and that they have a
high growth mode and there'slots of different pulling parts
to their, to their, theirbusiness and lots of different
divisions.
Oh yeah, you want something HRperson in place, cause you need
(24:27):
that strategic mindset in place.
Third party HR folks can onlydo so much I mean, they're only
integrated so much to accompany.
Uh, because we're not sittingdown every day with the CFO and
the CEO and understanding.
Jacquelyn Jackson (24:40):
So we need to make sure you you have your HR
person or people to actuallywork with the third party as
well to help the company develop.
Yeah, I mean yeah a combination.
John Beaty (24:49):
I see a combination usually working out the best.
Jacquelyn Jackson (24:52):
Okay.
John Beaty (24:52):
Because it takes off the workload.
Um, another example I have acustomer in mind that before
they worked with us they hadfour HR people.
One was kind of the head of HRand they were trying to do that
strategic piece.
But they have another personthe full time doing payroll the
whole day, every day, justpayroll, payroll, payroll,
payroll.
That person was getting paid$80,000 just to do payroll.
(25:13):
And then you have another personthat their whole entire thing
was on the compliance piecebecause they had, you know, they
had 20 employees here, theywere in like 18 different States
and all she did was focus onthat piece.
And then you had one otherperson that was kind of, um, uh,
a more of an assistant to theHR, didn't have a certification,
but their whole thing was doingsome of the administrative
tasks, making, like, hey, ifsomeone had a problem with their
(25:34):
login or whatever that is, thatwas their job.
So you have about I don't know150, 200,000 dollars worth of
salary, right, the more thanthat probably, um, that could
probably be reduced.
And now we're not trying toreplace those folks.
What we're trying to do is getthose people reallocated into a
different, uh, part of theirbusiness so that way they can
work all in the business,exactly.
(25:54):
You don't need a person doingpayroll all day long.
Jacquelyn Jackson (25:56):
Well and see, and that makes a lot of sense.
We don't realize that.
I mean just you bringing thatout into my attention because I
work with a lot of companies andbusiness development as well.
Our main thing is loan broker,but I, my background, is
business development and that'ssomething I know.
Owners do not look at that, thatyou have a person working this.
Like I said, they've been there.
When your names were last nameswas the same, and so now you
(26:16):
have grown so big to the pointthat you actually probably would
need someone else to come inand you can utilize those people
and a better, maybe a salesposition or something else, like
you said, and let you allhandle that.
So I don't think they think ofthat.
You know it's like once westart this way, we're going to
keep this way for years.
But you're basically saying yougot to open up to have you know
somebody professionally to comein to help your company growing
(26:38):
Cause I think and you tell mewhat you think I don't think you
can grow as well, uh, withoutsome type of service like what
you guys have.
John Beaty (26:45):
Oh, yeah, what do you think?
Yeah, no, that's exactly right.
I told, uh, um, the folks Italked to all the time, you can
grow perfectly fine without me.
I mean you can grow.
I mean I have no doubt you willcause you have a success.
Jacquelyn Jackson (26:56):
Right, we're not saying you won't right.
John Beaty (26:58):
But how fast do you want to get there Exactly?
You want to get there faster.
I mean, you want to wait, youwant, you want to look at a 10
year outlook or a five yearoutlook to get where you want to
go Exactly, and that can beeverything.
Again, it goes back to theprofitability.
Are you happy with theprofitability of your 10 year
outlook?
If the answer is yes, then youdon't need me.
Introduction (27:14):
Okay.
John Beaty (27:14):
You don't need an HR service.
If you're super happy with thatand I mean I'm a big believer
in broke.
Don't fix it.
Jacquelyn Jackson (27:19):
Right, right.
John Beaty (27:20):
But if you go, you know what probably could be a
little bit more profitable.
That bottom line of thatrevenue could be a little higher
, the bottom line could be alittle bit lower Then yeah, you
probably want to talk tosomebody, and that's simple, it
is.
I mean the, the.
The equation is if you want tochange your success, success
equation is look on, look at.
Are you happy with yourprofitability?
Cause it affects everythingwhether you got to do that.
Jacquelyn Jackson (27:40):
Check yeah, correct.
John Beaty (27:42):
And for your piece that I mean that's how people
look at it.
I mean how profitable is thiscompany?
Jacquelyn Jackson (27:47):
How, how are you going to be here five years
from now.
I mean, we do it alone for 10years and you want to make sure
you're going to be there.
That's why they do onlineaccredited.
They do a yearly annual check.
You just don't get that line ofcredit and they leave you alone
.
They want to see everythingevery year.
So that is important.
They know that.
It's just.
I think that's the reason whywe had this podcast, because, as
business owners, a lot of us wedon't know that, and so what
(28:09):
you're saying is what we need togo after.
So, like we can tell you, wehave a bank, you have a banker,
you have an attorney, you have aCPA, so you need to have a
business development, but youshould have HR services
Something.
John Beaty (28:22):
You got to have something.
Jacquelyn Jackson (28:23):
Yes, and so I think that's something we just
not aware that we need, but itall affects the bottom line,
which is revenue, and it alsoaffects you for us getting
equity partners, because, yousaid, equity partners look at a
lot different than lenders, dothey look?
John Beaty (28:36):
at it a little bit more stringy and, I think, right
, you think on the other sideFrom an equity point of view,
that that P and L line from fromuh for for the employment part
is it's pretty big.
I had that fringe cost, thecost after salary.
I mean they don't want to see ahigh fringe cost.
So a lot of folks don't do duediligence.
You kind of uh.
It frustrates me so much when Italk to business like oh, we're
(28:57):
good where we're at, You're notgoing to do any due diligence.
I mean you're not going tocheck into it.
It's like, okay if you're.
If your mortgage rate is like7% on your house and then all of
a sudden interest rates droppedto like 2.3%, are you really
not going to do some duediligence?
Jacquelyn Jackson (29:12):
I don't want to go that low.
No, I like spending a lot ofmoney.
I love spending more money.
John Beaty (29:16):
And not I'm getting less service out of it, Right?
Jacquelyn Jackson (29:18):
Right.
John Beaty (29:19):
Um, it's like when everybody cut the cord off the
cord off cable and went to allstreaming, seems they, you know
they do some due diligence.
You know what makes more senseto to do all this and get
cheaper, and I get more out ofit with my dollar, especially
when I don't watch everything.
Jacquelyn Jackson (29:30):
That's okay, that's what people say.
I only watch one show, sothat's why they went with that I
don't know.
John Beaty (29:34):
I was paying like $300 for dish for like a bunch
of little boxes and show TVsthat I didn't watch.
I could just switch to likeHulu TV and.
Jacquelyn Jackson (29:42):
Right now if you type in person to watch
every show that's on cable.
John Beaty (29:45):
A lot of people do they're not making money then
Watching that much TV.
You're not out there makingmoney, so they're not listening
to this right now.
Jacquelyn Jackson (29:55):
Right, okay, they're the same people, but
anyway, if you watch a lot oftelevision, we can see you
justify and having the cable.
Yeah, you say yeah, so that isgreat.
So we want to definitely thankyou today.
I mean, this has been reallygood, is very enlightening.
I want our listeners to knowyou can contact us at the
podcast at TDJ, equity fundinginsiders net.
(30:19):
If you all want to reach out toJohn and have him and get with
you guys, definitely contact usand we can make that happen.
As well.
As if you have any questions orcomments about to show that you
Want to get, send those toolswhen you download.
We definitely want you tolisten and rate us as well.
Again, as loan brokers, we'reactually trying to help you
learn the insights of gettingfunding for your business, and
(30:40):
we're talking about Thousands,millions of dollars, not just,
you know, ten thousand, twentythousand.
They are doing it, we are doingit, it is out here, but we have
to be, as a business and a realestate investor, you have to be
prepared to taking in thosefunds, okay, so we want to thank
you all for listening us today.
We look forward to seeing younext time.
Until then, you all take care.
Introduction (31:02):
We hope you enjoyed this episode of TDJ
equity funding insiders podcast.
If you'd like to be a guest orget in touch with us, please
visit our website at TDJ equityLLC net forward slash podcast or
email us at podcast at TDJequity funding insiders net
Insiders net.
Until next time, take care.
Ready to get the inside scoop on equity funding?
Tune in to TDJ Equity FundingInsiders podcast for an in-depth
look at what it takes to accessfinancial capital and maximize
your investments here fromexperienced professionals,
including bankers, underwriters,loan officers and industry
(00:34):
experts, as they share theirunfiltered stories and valuable
lessons on securing funds.
Jacquelyn Jackson (00:47):
Welcome everyone.
Welcome to our podcast todayTDJ Equity Funding Insiders.
So we are actually having aspecial guest for you all today.
This guest is actually dealingwith the human resource services
that actually affect you ongetting funding.
A lot of companies don't thinkit does, but it do, and so we
have a guest that's coming in toshow how having your business
(01:09):
compliance and having your humanresource services for your job
descriptions, your employees andeverything lined out how it
affects your bottom line, whichis revenue.
So we're going to have adiscussion about that today and
we want you all to sit tight andlisten to what inside
information he has for us.
Let's welcome.
Our guest is Mr John Beaty fromTexas and he's here to discuss
(01:33):
his human resources services andhow they work for us.
Welcome, John.
John Beaty (01:38):
Well, thanks, jackie .
I appreciate that man.
It's a fully loaded questionwhere people ask like, what is
HR?
I mean there's so much tounpack because essentially HR
takes care of businesses, people, but I mean it's really
everything and anything peoplebased, and the importance of HR
gets overlooked.
A ton People over think of itas like a cost center versus a
(01:59):
profit center, and that could bea huge difference in a
business's profitability andtheir equity as far as a
business is concerned as well.
So kind of, take it from the top, lots of businesses have people
right, they have people atservice and take care of their
clients.
So if you're not maximizing thepotential of those folks, then
(02:21):
you're suffering on your backend, whether it's revenue or it's
bottom line.
So from an HR perspective, it'snot just where the benefits are
or payroll comes from or wherepeople go to complain.
It's more of a strategicoutlook of how to put the people
in the right places, servicethem, engage them and help them
develop in that role.
(02:41):
By doing that you're maximizingtheir potential.
And basically, business 101,happy, engaged employees produce
more output.
That output usually leads tomore revenue and other things
along those financial terms.
But how do you get to that spot.
Well, it all starts from thevery beginning, brian, the right
job descriptions that you justsaid.
I worked at a company oncewhere I went to work there at a
(03:04):
certain job description and sixmonths into that job it changed.
My engagement level went waydown.
Jacquelyn Jackson (03:12):
So my output went way down.
John Beaty (03:14):
I was actively disengaged in that job because I
wasn't doing what I was hiredto do, what I wanted to do.
And so you have a lot of folkslike that.
And what does that lead to?
It leads to turnover, andturnover is costly.
To acquire a new associate it'scostly enough, but to lose an
associate it's even more,because you take all that time,
that effort to hire that personon, train them, develop them,
(03:35):
give them up to speed and aftera year, if you let them go, you
lost everything that you putinto there.
So it's just like having aclient it's harder to obtain a
client than it is to retain.
So you don't work on working onthat retention for employees,
and so top tone is also an issuetoo, right.
So you have your jobdescriptions, you get those
(03:55):
solid down.
Then you look at how do we getthe best of the best?
Well, you're going to have tohave a great compensation plan.
You're going to have some sortof benefit offering Not just
medical but maybe the employeeassistance program.
You have dental vision.
The benefits, of course longterm, short term, disability,
(04:16):
good people, good PTO policies.
Maybe you have a communityonline program where you can get
cooking classes, and all thatbecause people are looking at
things differently now.
And the last part is a culture.
You have a great culture, sothat's what people are looking
for.
Back in the day, people workedand accomplished things to be
satisfied with their job right,the job satisfaction came from.
(04:39):
Nowadays, that's changed.
Yeah, it is, people are workingfor their lives versus people
working their job as their lifeExactly.
And so, considering all thosethings, you've got to have
things in place.
So the next thing is you findthe top talent, you hire the top
talent.
Now, now we're looking at okay,what do we do now?
Well, let's look at the cultureand let's train these folks.
(05:01):
So, starting off, lease a basictraining program from a
compliance standpoint, becausethat's a big deal.
A lot of people don't really payattention to the compliance Can
only save the company money andsave them the risk factor of
litigation, even like a place inTexas where you have a right to
fire and hire, but it's aheavily litigated state.
So even if you fire somebody,there could be some consequences
(05:23):
to that If you didn't do itright.
So, making sure compliancetraining is done from like
workplace harassment, sexualharassment, workplace violence,
et cetera, getting those alltaken care of.
But the next step is building acore structure that helps
engage and develop people,whether it's developing into
your culture, because we want tohave a culture by design, not
by default, which most companiesdon't realize that they have a
(05:45):
culture by default, that's right.
So you got to work on that.
Your values equal the bottomline to what that culture means
and they can't be aspirationalvalues.
Yeah, they'll live it.
They'll live it from the top tothe bottom.
And you see a lot of companieslike, hey, we have integrity,
you know, we want to do the bestfor our people, et cetera, et
cetera.
But it, when it gets down tothat middle management, you see
those things breaking apart.
Jacquelyn Jackson (06:06):
And that costs it costs a lot.
John Beaty (06:08):
It costs turnover, people lose, people leave jobs
because of their management,really now because of the
company.
Some do, but I agree.
Most people leave because theirboss, they just can't work.
Right, it's happened to me, asI'm sure it's happened to
everybody else.
A lot of people on this on thispodcast are listening.
So you get them trained, you'redeveloping their skill sets.
Then you got to measure theperformance and not just for,
(06:30):
like, the firing purposes.
Right, a lot of people are like, well, we want the performance
indicators to make sure they'redoing their job.
Well, you also want theperformance indicators to help
people be motivated, engaged.
People want to be told I'mdoing a good job or if I'm not
doing a job, what can I do to dobetter?
Most people want to succeed inlife.
I know I do.
When my boss comes and tells melike, hey, you're doing a great
job, I go.
Can you sit down and tell mewhat you think I'm doing good?
(06:50):
I'm going to go through thatwhole process because his
thought process of doing goodmay not be mine Exactly.
But on the other hand, too,sometimes people just don't work
out and you need to correcttheir actions.
Right, and it's not one ofthose things where, yeah, for
the past six months he's beencoming in late and then you some
day you'll hey, you just beencoming in late and you got to
let you go.
You got to tell people ahead oftime, not only for them to be
(07:13):
able to correct that, because,again, it's it costs you, it's
it costs a lot of money toacquire talent.
But then that last piece, it'shey, maybe this person can
change and be one of my bestassociates if he just knows what
he's doing wrong.
But if you fire him and hedoesn't know why, litigation
could come up, right, right,maybe it's a woman that's
pregnant and you fire becauseshe's been late.
Well, she can turn around andsay, hey, you fired because I'm
(07:34):
pregnant.
I've seen it.
It's happened a lot.
Jacquelyn Jackson (07:37):
So basically what you're saying, john, not
knowing the compliance orknowing actually the HR process
of what, how it really works foryour company and how it can
save your company, you can losea lot of money.
Oh, yeah, you know, and a wholelot.
Now let me say well, I want toadd to this too, because as a
loan broker, we deal withfinding funding for business
owners and real estate investors, and so just recently we had
(08:00):
one of our business clients, wasable to get him $1.7 million,
but what helped him to get thatwas the fact that it's a line of
credit that he's getting.
Now let me show you how to leta lot of credit works with what
you're saying.
In the process, they always askthem about their hiring what
are you going to use, use whatyou're going to use the funds
for.
And basically he's using thefunds for hiring, along with
some equipment.
On the hiring part, they askedwhat's your projections of what
(08:21):
you think your number is goingto be for as your payroll and
your expenses and all of that?
That is what they're asking tosee what you look like.
Now, people don't understand it.
On a line of credit, they do anannual evaluation of you every
year, and so what they'relooking for is to see how stable
your company is, cause you knowthey can cut that line of
(08:41):
credit off.
You can have it this year andthey cut it off next year If you
don't qualify based on how youlooking on paper and in your
business.
So it's important to take thathuman resource part seriously,
especially when you talk aboutthe turnover and the proper way
of doing stuff, cause they askyou do you have any jurors,
jurisdictions or notjurisdiction?
But if you have any cases comingup against you and stuff like
(09:02):
that and they need they askedthat when they're asking for
money and that's what I'm sayingit's important.
That's why we wanted you tohave be a guest, because what
you talk about is what I think alot of people I definitely want
you to talk about that thedon't realize in those.
It's something that do cause myguy, the 1.7 guy he realized
how important you are.
He actually had our humanresource services that worked
with him with his company.
He had 50 employees, he got 50employees.
(09:24):
So that's understandable.
So but it's some companies thatthink, oh, and they got 10, 12,
they don't need that type ofservice.
I can handle it.
So if you would tell ourlisteners today how important,
or even the story of how you'veseen it by not having or
utilizing the services that youhave, what happens with that?
How does that?
John Beaty (09:40):
happen.
Yeah, there's a lot of goodstuff that you just said.
So let's kind of hit each oneby one question at a time, okay.
So from that compliance piece,so what we're talking about
really is risk.
So, whether it's some of thethings I talked about before,
like workplace violence orthings like that, um, someone
has a lawsuit, those departmentof labor type of things we call
it um, uh, eoc charges, right,equal opportunity charges.
(10:05):
So someone comes back on that.
One of those charges could puta business out.
I mean, I've seen lawsuitsanywhere from 1.2 million.
Jacquelyn Jackson (10:10):
And it would actually stop a loan too.
I can take that as well.
Oh, absolutely it would stop it.
John Beaty (10:14):
It's a huge risk and you know I deal with a lot of
poverty equity groups and whenthey see those they're scared
off and the evaluation goes outthe door.
So putting things in place toprevent that is huge and part of
that is the HR piece right.
Jacquelyn Jackson (10:26):
But even if it's putting in place, if you
can show you have it in place,even if you haven't rent through
it, cause sometime they askthem you know, let's see your
policies, your procedures, this,this and this, and that's where
, if they're working on an HR,you all can provide that for
them when it could be with it.
I think you call it complianceperiod.
You can show we are incompliance.
We have this set up to handlethis type of situation.
That's why it's good to haveyou too, right, yeah.
John Beaty (10:48):
Well, here's a funny statistic 70% of all small
businesses are out of compliance.
Jacquelyn Jackson (10:52):
Hmm, what's that percentage again?
John Beaty (10:55):
70%.
Jacquelyn Jackson (10:56):
Okay, it's crazy, it's crazy high.
John Beaty (10:59):
Um, the thing is, you got 50 states and we live in
a remote workforce place rightNow.
Every single state hasdifferent compliances, every
single one of them Wow, likeCalifornia is different than.
Texas.
Texas is different thanMassachusetts.
Massachusetts is different thanWisconsin.
All of them have somethingdifferent, whether it's taking a
uh a compliance course ormaking sure payroll is done a
certain way.
I mean, there are so manydifferent things and that's
where it becomes a huge hassle.
Jacquelyn Jackson (11:20):
Let me say that so that means if I have a
friend that's in business inCalifornia and I'm in Texas, I'm
going to call them about apersonnel problem I have and
she's going to give me her bestrecommendation based on what you
know in California.
It could really be wrong, iswhat you're saying?
Uh, yeah, a possibility.
John Beaty (11:38):
So to be able to have the knowledge let's say I'm
a business owner, I'm not an HRexpert- HR sure.
And people have to go continueeducation courses to understand
all these things.
That's good.
That's good, so I'm, I'm asmall little business owner.
I have 15, 20 employees.
I have millions of employees.
I have maybe in three differentstates.
Okay, well, I have to Google.
Google is my best friendbecause that's all I have, but
Google is, on the very efficientbecause it doesn't.
(11:59):
There's so many different thingsout there.
Having a professional that'scertified in this that can help
you limit the risk of our onthis is the most important thing
, right?
So, regardless of the situation, it's hey, you know, don't take
this lightly for your point,from a financial piece, from
somebody looking at me, what'smy evaluation?
Uh, but just to protect yourassets, okay, having somebody
(12:21):
being able to be back thereunderstanding the compliance, uh
, is a huge, huge factor.
The other part that you weretalking about was the talent
piece and the evaluation.
So you have a company that hashigh turnover.
Well, that's like I said, it'sa costly, exactly Problem.
It's going to cost companyquite a bit to keep hiring and
hiring, and hiring and hiring.
There's a lot of processes thatrequire someone to hire into a
(12:41):
business.
As many people know, if they'veever hired people, it's kind of
a pain.
There's a lot of things to gothrough there from you know,
putting out on the job boards.
Maybe you have an ATS andapplicant tracking system or
maybe you have a recruiterperson, uh, and then getting
them up and trained, cause thatperson, when they first start,
most likely they're not beingproductive, right?
They're in that, that startupphase, that that um honey move
(13:02):
phase with the company, whereyou're getting to know the
company, getting to know myposition.
So it's usually, you know,anywhere from three months to a
year before they start beingproductive in the company, right
?
Uh, I know, being in the salesindustry, if you're going to one
industry to another, it takestime to learn everything.
Most companies will understanda year ramp up time because it's
so much.
But imagine training thatperson for a year and then
(13:24):
you're gone.
That's money that has cost youfor sure, and then you're
looking at it from the outsideof you as an investor in.
Well, these people can't justkeep anybody.
Exactly, what are the?
I mean, there's a lot of moneybeing wasted right here, and so
there's a risk there too,because you want these people to
be productive in your company,Right?
Well, it's hard to beproductive if you keep rolling
people in and out and in and outand in and out of your company.
(13:44):
So there's that matter.
And then the last piece isgoing to.
You know, if they're not fullyengaged, if you have a bad
culture and you're not seeingthe profitability that you want,
you got to go back to what Isaid earlier.
Ask yourself, if I'm not happywith my profitability to show on
paper.
Then you got to go back to yourpeople, Right?
What are the what?
Why are my people not being asproductive as they can?
Exactly, Like I said it's thatculture by default, by design.
(14:07):
You got to design a culture andhe's got to be top bottom.
That's an HR person to come in.
They would do climate surveysto understand what they're doing
, what they're feeling from thetop down which is great yeah.
And that report comes back toyou because what you think of a
business owner?
Hey, everybody loves me,everybody's happy, everybody's
going great.
But then once you really go,start asking people right
Exactly, it could completelychange.
(14:29):
I was talking to a young ladythe other day.
She is at a recruiting company.
She was telling me she had afriend that was about to leave.
She was going to give a no, nocall, just no show, leave, walk
out.
And because her husband got ajob in another state and because
she was having difficultieswith her manager and she would
allow her to work remote but shewas one of their top producers,
(14:51):
and so he went to thisconference and someone told what
was the last time you talked toyour people and asked them how
they felt?
And the guy was like I don'tthink I ever have.
So that day he went to go talkto her.
She broke down in tears becauseshe said, uh, no one was going
to ask me anything about how Ifelt about this company.
From that, uh, they did worksomething out to be remote so
(15:12):
and he was scared it was goingto not work.
But it ended up working and sohe got to keep one of his best
employees just by having aconversation.
Jacquelyn Jackson (15:19):
And that's what it just talking to and
that's where you guys come in tomake them do that type of
valuation.
I think business owners are soused to working in our business
and we do as well as but we needto work on the business and I'm
talking about people.
I know we have clients thathave 50 employees Cause you know
they say, well, you're notreally a business owner, do you
have employees?
I know some to have employeesand they still working in their
(15:41):
business, because you have tounderstand that professional
services there and you're goingto need it, they're going to
know exactly what to do, andthat's all we're saying when our
clients that we talked to andwe we have fun millions of
dollars with different types ofclients and different industry.
Okay, but we notice as you getbigger and at three and four and
five and employees growing, youcan't do the same thing you did
(16:04):
when you had that one employeeor you was.
You wet, all those differentacts.
You just can't.
So you have to have that inplace and this is something I
think is an insider I want togive everyone to be aware of
when the banks and the lendersask for documents like PLs, pls
and balance sheets and cash flowand projections.
You all have to understand thattells a story, and I think what
(16:27):
you think is oh, they justasking something, just that.
No, it tells a story about you.
They don't have to come to yourplace.
They can actually see whereyour income dropped last year
and you know your income droppedthis year.
But two years ago you made this, what happened?
And they also look at you knowyou had so many employees and
you said you want to getemployees, but then we're
looking at your employees.
This is a drop from month tomonth when you showed us your
(16:48):
financials.
So now you have a story thatyou're telling that you haven't
opened your mouth to.
But if you have the humanresource services or, like I
said, you as a performanceadvisor because that's what you
do you come into the company andlook at it and that's why we
wanted him on our show.
So you all can realize it'simportant to have this type of
service as part of your business.
If you're going to grow and youwant to make millions and you
(17:10):
have a product that is alreadymaking millions we have a lot of
people already making millionsyou need to have this type of
services because if not justlike what you're seeing, it's
going to cost that bottom line.
So let me ask you this whensomeone is looking at getting
this type of service as abusiness owner, what do we look
for when I want to actually hiresomeone for you?
Give an idea of somebody's inCalifornia.
They need somebody.
(17:30):
Of course we need them to callus so they can get you.
But just in case they don't,what should they look for in HR
services and performance?
John Beaty (17:37):
Lots of things.
One if you have a revolvingdoor, that's the first thing.
Hey, why are my employees notsticking around.
They're using me as a jumpingpoint to go up to the next
company or something along thisline.
Wow, two, they're in highgrowth mode.
There are so many things goingto happen, like you were saying
before, when they're like fouror five, maybe the company,
everybody there has the samelast name, and so HR wasn't that
important, right?
But as they grow, I mean, ithappens a lot.
(18:01):
These small companies start withthe same family, the same last
name, and then they grow to like20, 30, like oh wow, we have
employees.
Introduction (18:06):
What do I do?
John Beaty (18:08):
And there's no structure in place and they have
they just start a piece billingRight, and what happens is then
things start getting a littlecorrosive, right?
It goes back to that culture ofdefault and things fall apart.
And when you're not seeing theprofitability you want, that's
another time to look at HR.
If you're not happy with yourprofitability, you need to talk
to someone about HR period.
Wow.
And then right now, like thethings that I see are like you
(18:34):
said when we were talking aboutthe remote workforce how do we
keep my employees engaged whenthey're like 12 different states
?
How do I communicate properlywith them?
How do I maximize my ability?
The great thing about a remoteworkforce now is that, instead
of having a pool of people justin your local community, now you
have the entire country, right,and so now you have a plethora
of fighting the best talent, butif you're not being able to
(18:56):
hire the talent you want again.
That's when you got to look atthe HR, because you've got all
these people across the countrynow and you see the unemployment
, I mean it's going to get tighthere a little bit and the way
the economy is going to getbetter and better and the way
the economy is going we're goingto see a little, probably a
little, shift in the market.
As far as hey, now it's goingto be a very employee Like I got
to be really careful of keepingmy employees and finding the
(19:18):
talent, because that pool isgoing to get real small pretty
quick.
Jacquelyn Jackson (19:21):
Well, let me ask you this so can you all help
them?
Do you work with them forprojecting what the economy is
going to look like?
So when they get to hiring, youall kind of give them the
numbers of what they need to belooking for for hiring people in
their companies.
Do you help with them alonethat far?
John Beaty (19:36):
Certain aspects of that, sure, based upon I don't
know the specifics of how mycompany handles the bug, I'll
give you the kind of high level,but understanding the
financials from a company, whattheir goals are, because the HR
person again is not there justto do payroll and that is to be
a strategic work the CFL and theCEO To understand.
Okay, so here are projections,here's what we're trying to
(19:59):
accomplish.
And then, how many people do weneed to put in seats and can
this one person take theworkload of all this?
Where does their output mean?
You don't want a personoverworked because they're going
to get disengaged real quick.
You burn somebody out, they'regone, right, they're going to
find another company where theycan get paid exactly the same,
doing less.
Jacquelyn Jackson (20:15):
Wow, and that's true.
I've seen that happen.
John Beaty (20:18):
I see a lot of folks where, yeah, we laid off 10
people.
So, hey, james, you're going tohave to take the load of this
other two people, but he's notgetting paid anymore.
But ABC coming over here isgoing to say, hey, come work for
me.
You can do what you were doingbefore.
You don't have to do that extraworkload for $30,000 more,
right?
So then you kind of look atthat.
So now you're putting yourselfin a very competitive market for
losing your employees.
Jacquelyn Jackson (20:36):
So I mean there's so many.
John Beaty (20:38):
Like I said, I could talk hours about this, right,
because the facets of this areincredible and before I even
started with the company I'mwith, I really didn't really
understand HR.
Jacquelyn Jackson (20:47):
I mean, I thought it was the cost of us,
though.
John Beaty (20:49):
Yeah, Until you dig into it, you don't know what you
don't know.
Um, and then, uh, as I told you, I had a job.
I left because of a lot ofdifferent things, HR wise and
once I applied what I myknowledge now to that I go, oh
yeah.
That's clear cut, yeah, I meanto lose an award winning
employee who's been extremelysuccessful in his career and
(21:10):
then, all of a sudden, he'sleaving the company because the
performance was in there.
Yeah, I was, I was disengaged.
You don't want those, you don'twant your, your, your, your
customers talking to disengagedemployees Exactly Imagine that.
Jacquelyn Jackson (21:22):
Oh boy, you know is trying to look for no
job you don't want that.
John Beaty (21:26):
So you know you gotta be careful with talking to
your employees and understand.
You know there is a feelingaspect of it.
I mean human resources,resources has an emotional side.
Uh, like recently when we gotoff of the pandemic, you had a
split workforce.
You had some people in theoffice, some people on zoom.
So I I heard this a ton and, uh, our thought leadership um
director for our company, saidthis to me and it made perfect
(21:48):
sense.
So, john, you ever notice whenyou're on a zoom call or you're
in person, the the leadershipthere goes so great to see
people in the office again, sogreat to see their faces, but
never once acknowledges thepeople on zoom.
Wow, think about the perceptionthat that gives to people.
Jacquelyn Jackson (22:05):
Am I not important.
John Beaty (22:05):
I'm going to miss that, that job promotion because
I'm on zoom and I'm not inperson.
So you have to start thinkingabout small things like that and
how to really engage them.
You don't want to disconnectpeople and if you're going to
have a like you know, bringpeople in and have them all like
working in the, in the, in theoffice you got to, you got to
build a culture of that.
So on your job descriptions,hey, we're, we're a company that
(22:27):
is tight, family-like and we'recollaborative.
We want to be able to speakwith each other and in instance,
in person.
So once you give that upfront,okay, people are going to come
work for, they believe in that,they're going to come work for
that.
But if you don't put that inthere and that's kind of the
expectations that, hey, I canwork remote, but then all of a
sudden it's like Nope, you gotto be in the office.
Well, think about that person.
(22:47):
They're not going to be engagedanymore.
So that's the part of the, theturnover part, and I can go on
and on and on and keep going ontangents here, but it's crucial
that people pay attention to allthis.
And if you, if you, if you'renot going to hire an HR person,
look for a third party companythat does it.
There's tons of them out there.
Jacquelyn Jackson (23:06):
Well, let me ask you that on that, no, when.
How many employees should Ihave before I have the HR person
?
Hr person, let you tell us,should have it when I have the
first one, should not?
Yeah.
Yeah, I figured you said that.
So then what about when?
Should I look at having thethird party compared to my HR
person?
How many employees yourecommend?
John Beaty (23:23):
Oh well, it really depends on the situation of the
company.
For example, ideal companiesthat use they might have two or
three HR people and then theystill use a third party
outsourced.
Because remember there's a lotof those tasks that I was
talking about the payroll piece,administration, part of it, all
that Okay, well, that takes thetime away from the HR people to
do that strategic piece.
(23:44):
So it has to do with workload.
Like, how much workload isthere for a 10 person, 15 person
engineering company?
They're not really a huge HRtype company.
Right, they're pretty happywhere they're at and all that,
but they're small pieces thatthey still need to do compliance
wise.
You know handbooks and policiesand you know benefits come up
(24:06):
and all these little smallthings.
So they may not need an HRperson, but the third party HR
service would be great.
Now, a company is a littlelarger, they get calls all the
time, they have a complicatedpayroll and that they have a
high growth mode and there'slots of different pulling parts
to their, to their, theirbusiness and lots of different
divisions.
Oh yeah, you want something HRperson in place, cause you need
(24:27):
that strategic mindset in place.
Third party HR folks can onlydo so much I mean, they're only
integrated so much to accompany.
Uh, because we're not sittingdown every day with the CFO and
the CEO and understanding.
Jacquelyn Jackson (24:40):
So we need to make sure you you have your HR
person or people to actuallywork with the third party as
well to help the company develop.
Yeah, I mean yeah a combination.
John Beaty (24:49):
I see a combination usually working out the best.
Jacquelyn Jackson (24:52):
Okay.
John Beaty (24:52):
Because it takes off the workload.
Um, another example I have acustomer in mind that before
they worked with us they hadfour HR people.
One was kind of the head of HRand they were trying to do that
strategic piece.
But they have another personthe full time doing payroll the
whole day, every day, justpayroll, payroll, payroll,
payroll.
That person was getting paid$80,000 just to do payroll.
(25:13):
And then you have another personthat their whole entire thing
was on the compliance piecebecause they had, you know, they
had 20 employees here, theywere in like 18 different States
and all she did was focus onthat piece.
And then you had one otherperson that was kind of, um, uh,
a more of an assistant to theHR, didn't have a certification,
but their whole thing was doingsome of the administrative
tasks, making, like, hey, ifsomeone had a problem with their
(25:34):
login or whatever that is, thatwas their job.
So you have about I don't know150, 200,000 dollars worth of
salary, right, the more thanthat probably, um, that could
probably be reduced.
And now we're not trying toreplace those folks.
What we're trying to do is getthose people reallocated into a
different, uh, part of theirbusiness so that way they can
work all in the business,exactly.
(25:54):
You don't need a person doingpayroll all day long.
Jacquelyn Jackson (25:56):
Well and see, and that makes a lot of sense.
We don't realize that.
I mean just you bringing thatout into my attention because I
work with a lot of companies andbusiness development as well.
Our main thing is loan broker,but I, my background, is
business development and that'ssomething I know.
Owners do not look at that, thatyou have a person working this.
Like I said, they've been there.
When your names were last nameswas the same, and so now you
(26:16):
have grown so big to the pointthat you actually probably would
need someone else to come inand you can utilize those people
and a better, maybe a salesposition or something else, like
you said, and let you allhandle that.
So I don't think they think ofthat.
You know it's like once westart this way, we're going to
keep this way for years.
But you're basically saying yougot to open up to have you know
somebody professionally to comein to help your company growing
(26:38):
Cause I think and you tell mewhat you think I don't think you
can grow as well, uh, withoutsome type of service like what
you guys have.
John Beaty (26:45):
Oh, yeah, what do you think?
Yeah, no, that's exactly right.
I told, uh, um, the folks Italked to all the time, you can
grow perfectly fine without me.
I mean you can grow.
I mean I have no doubt you willcause you have a success.
Jacquelyn Jackson (26:56):
Right, we're not saying you won't right.
John Beaty (26:58):
But how fast do you want to get there Exactly?
You want to get there faster.
I mean, you want to wait, youwant, you want to look at a 10
year outlook or a five yearoutlook to get where you want to
go Exactly, and that can beeverything.
Again, it goes back to theprofitability.
Are you happy with theprofitability of your 10 year
outlook?
If the answer is yes, then youdon't need me.
Introduction (27:14):
Okay.
John Beaty (27:14):
You don't need an HR service.
If you're super happy with thatand I mean I'm a big believer
in broke.
Don't fix it.
Jacquelyn Jackson (27:19):
Right, right.
John Beaty (27:20):
But if you go, you know what probably could be a
little bit more profitable.
That bottom line of thatrevenue could be a little higher
, the bottom line could be alittle bit lower Then yeah, you
probably want to talk tosomebody, and that's simple, it
is.
I mean the, the.
The equation is if you want tochange your success, success
equation is look on, look at.
Are you happy with yourprofitability?
Cause it affects everythingwhether you got to do that.
Jacquelyn Jackson (27:40):
Check yeah, correct.
John Beaty (27:42):
And for your piece that I mean that's how people
look at it.
I mean how profitable is thiscompany?
Jacquelyn Jackson (27:47):
How, how are you going to be here five years
from now.
I mean, we do it alone for 10years and you want to make sure
you're going to be there.
That's why they do onlineaccredited.
They do a yearly annual check.
You just don't get that line ofcredit and they leave you alone
.
They want to see everythingevery year.
So that is important.
They know that.
It's just.
I think that's the reason whywe had this podcast, because, as
business owners, a lot of us wedon't know that, and so what
(28:09):
you're saying is what we need togo after.
So, like we can tell you, wehave a bank, you have a banker,
you have an attorney, you have aCPA, so you need to have a
business development, but youshould have HR services
Something.
John Beaty (28:22):
You got to have something.
Jacquelyn Jackson (28:23):
Yes, and so I think that's something we just
not aware that we need, but itall affects the bottom line,
which is revenue, and it alsoaffects you for us getting
equity partners, because, yousaid, equity partners look at a
lot different than lenders, dothey look?
John Beaty (28:36):
at it a little bit more stringy and, I think, right
, you think on the other sideFrom an equity point of view,
that that P and L line from fromuh for for the employment part
is it's pretty big.
I had that fringe cost, thecost after salary.
I mean they don't want to see ahigh fringe cost.
So a lot of folks don't do duediligence.
You kind of uh.
It frustrates me so much when Italk to business like oh, we're
(28:57):
good where we're at, You're notgoing to do any due diligence.
I mean you're not going tocheck into it.
It's like, okay if you're.
If your mortgage rate is like7% on your house and then all of
a sudden interest rates droppedto like 2.3%, are you really
not going to do some duediligence?
Jacquelyn Jackson (29:12):
I don't want to go that low.
No, I like spending a lot ofmoney.
I love spending more money.
John Beaty (29:16):
And not I'm getting less service out of it, Right?
Jacquelyn Jackson (29:18):
Right.
John Beaty (29:19):
Um, it's like when everybody cut the cord off the
cord off cable and went to allstreaming, seems they, you know
they do some due diligence.
You know what makes more senseto to do all this and get
cheaper, and I get more out ofit with my dollar, especially
when I don't watch everything.
Jacquelyn Jackson (29:30):
That's okay, that's what people say.
I only watch one show, sothat's why they went with that I
don't know.
John Beaty (29:34):
I was paying like $300 for dish for like a bunch
of little boxes and show TVsthat I didn't watch.
I could just switch to likeHulu TV and.
Jacquelyn Jackson (29:42):
Right now if you type in person to watch
every show that's on cable.
John Beaty (29:45):
A lot of people do they're not making money then
Watching that much TV.
You're not out there makingmoney, so they're not listening
to this right now.
Jacquelyn Jackson (29:55):
Right, okay, they're the same people, but
anyway, if you watch a lot oftelevision, we can see you
justify and having the cable.
Yeah, you say yeah, so that isgreat.
So we want to definitely thankyou today.
I mean, this has been reallygood, is very enlightening.
I want our listeners to knowyou can contact us at the
podcast at TDJ, equity fundinginsiders net.
(30:19):
If you all want to reach out toJohn and have him and get with
you guys, definitely contact usand we can make that happen.
As well.
As if you have any questions orcomments about to show that you
Want to get, send those toolswhen you download.
We definitely want you tolisten and rate us as well.
Again, as loan brokers, we'reactually trying to help you
learn the insights of gettingfunding for your business, and
(30:40):
we're talking about Thousands,millions of dollars, not just,
you know, ten thousand, twentythousand.
They are doing it, we are doingit, it is out here, but we have
to be, as a business and a realestate investor, you have to be
prepared to taking in thosefunds, okay, so we want to thank
you all for listening us today.
We look forward to seeing younext time.
Until then, you all take care.
Introduction (31:02):
We hope you enjoyed this episode of TDJ
equity funding insiders podcast.
If you'd like to be a guest orget in touch with us, please
visit our website at TDJ equityLLC net forward slash podcast or
email us at podcast at TDJequity funding insiders net
Insiders net.
Until next time, take care.
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.