Mission to Grow: A Small Business Guide to Cash, Compliance, and the War for Talent

Mike: The 2024 HR Benchmark Report is in. We surveyed 1090 businesses and asked them 40 questions around eight areas of HR best practices. Eight chapters from pre employment through post employment binary questions. Do you do this best practice? Do you do that best practice? So 40 questions in total and then we ask one question at the end.

What best describes your organization last year? Was it a fast growth year? Was it a growth year or was it a zero growth year? You didn't, you were flat or you were shrinking. Then we correlated all those answers, all 40 answers across the eight categories from pre employment to post employment, correlating that to revenue growth.

Small business owners, uh, they struggle keeping up with all the compliance requirements of HR. All the laws changing. And sometimes it's hard to decide how do you, how do you prioritize everything you do? You're, you're, you're trying to grow your business. Uh, is there a correlation to following HR laws and HR best practices or not?

I think intuitively we all know that you, you've got to have a great team. You've got to have great people, uh, to, to execute your plan and grow the business. Well, the punchline is just really, really crystal clear. The fast growth firms. do HR way better than down year and shrinking companies. What we're going to do is, uh, uh, is, uh, unpack all the details.

Here's the HR benchmark report. If you hop on to assuresoftware. com, go to resources, eBooks, and guides. It's right there. I invite you to download the ebook. I invite you to follow along in this eight part series where we're going to unpack each of these topics. We're going to start with recruiting and hiring, moving to benefits, onboarding, development, compliance, retention, performance, and post employment.

We're going to Walk through all the questions. We're going to talk about, uh, the differences in scores between shrinking companies and fast growth companies. And my guests will unpack kind of the reasons why and what the best companies are doing versus companies who are struggling. Uh, I think this is super high value information and really look forward to sharing with you.

Welcome to the first episode. Recruiting and hiring. Okay, you know all about the small business HR benchmark survey and report that we did. Today's episode number one. We're gonna jump into our first set of five questions. Pre employment, recruiting, and hiring. My guest needs no introduction. Mary, looking forward

to walking through the

Mary: I am too.

Thank you.

Mike: Okay, so Five questions. I want to spend a little time unpacking each one. Uh, why is it that maybe the fast growth companies are good at this? Maybe why is it that the down year companies, the zero growth companies aren't so good. And I think maybe the biggest lesson is why the spread, why do we have some topics that have a pretty tight spread and other topics have a really, really big spread.

So we're just going to jump into question number one. And if you're following along, so, uh, you, you know, the, uh, the report hop on the website to get it and follow along. Go to the back in the appendix, and we're going to walk through the first five questions. They are, uh, do you have written job descriptions for each opening?

Do you conduct background checks on candidates before they start work? Are you certain your job postings are compliant with federal, state, and local laws? Are you certain your interview process is compliant and effective? And are you certain your applications do not ask any illegal questions? So the first one, I'll say, this one had probably a tighter spread.

Across all 40 questions, the entire survey, uh, tied for the tightest spread on this section for recruiting and hiring. Do you have written job descriptions for each opening? The zero growth firms, Mary, uh, 76 percent of respondents said yes. To that question, uh, growth firms. This is interesting growth firms, 83%.

Yes. This is one of three instances in the entire survey, 80 percent less than the fast growth, 80 percent of fast growth companies said, yes, that they have written job descriptions for each opening. To me, the bigger punchline is the spread between the zero growth firms and the fast growth firms. It's only 4%. Does that surprise you that there's only a 4 percent spread between, you know, the fastest growing firms in the United States versus companies who are

Mary: Yeah, it does surprise me actually. Um, and I guess the reason is, you know, we do Fair Labor Standard Act audits all the time, and you can't do it without a job description. So, when and. You know, we work with all types of companies, fast growth, um, and not so fast growth, but very off, very few employers have up to date compliant job descriptions.

So maybe that's the difference in my mind. I always think you can have it, but is it, you know, compliant, um, and is it going to be effective in all the different ways that you would use a job description? So it does, it does surprise me a little bit. I would have thought that the slow growth companies wouldn't be focused on a document like that, although it's very important.

Um, so I was a little surprised about it. Yeah.

Mike: One of the things that you and I have talked about this before, uh, is we've kind of unpacked this data and presented to a few audiences now. Um, it's a, qualitative, right? So, My gut would say that the qualitative side, your fast growth firms are probably writing better job descriptions. Cause this is binary. Either they're, they said, yes, they do it or no, they don't. Um, uh, but the fact that, you know, over a thousand respondents, it's a big sample size. And to be that tight, my suspicion is this is a check the box activity, which I don't which would align with what your personal experience is, right? Where you come in and see, okay, yeah, you had a job description.

It wasn't compliant. Maybe, maybe take, go down that a little bit further. When you, when you first engage with a client, somebody in your team, um, what are the areas of non compliance you see, but maybe also then not just the compliance side, I'm curious for what your team typically sees, um, on the, on the qualitative size.

are we cookie cutting, cookie cutter, copy paste from Google, or are we actually writing a thoughtful job description to slot a

Mary: yeah,

I, I think, you know, we, and we work with, again, organizations of all sizes. Some have HR, um, SHRM certified, you know, uh, HR managers that we work alongside with to assist and some have nothing. Um, so it is across the board, but I do find. Both, I find that some of these documents and let's just focus on the job description because that's what we're discussing.

Some have the job description and it's. Not not compliant, so when we're doing that audit for this particular client this week. We have to do 15 job descriptions for them because they had two out of the 15 unique positions they have at their organization and to effectively do a fair Labor Standards Act audit, meaning, uh, who, who's exempt and who's not exempt.

That job description, of course, defends those exemptions and they, they. were not defending the exemptions they had on the job description. So they didn't have enough, uh, and the ones that they had were not compliant. So. I see it across the board. It is rare that we go into an organization. And of course, they're utilizing us because they recognize the gap in the HR services that they have, the HR function.

Um, and they're bringing in the cavalry. Um, so it is rare that we go in and those job descriptions have been reviewed in the past year, are compliant, can defend ADA and FLSA audits. It's rare.

Mike: So, so it's, it's, I guess maybe the survey results are consistent with what your findings are then. So, cause you're dealing with struggling companies and successful ones that are growing and they just need help. Uh, uh, it, that it's maybe not too big of a surprise in retrospect. There's only a four point spread between companies who do and don't have the written job descriptions.

Your contention is that most of them don't do them well, at minimum, from a compliance standpoint, what, talk to me about the quality. So if, if, if they, if, if not compliance. How about the actual description itself? Um, do people do a good job in your experience setting good expectations? Or is it really clear that someone could read that job description and think, Oh yeah, that's perfect for me.

Mary: I am sorry to kind of giggle, but yeah, they're they're kind of all over the place when we see them. So they have two tendencies, I find. So one is either it's way too short and it's too cryptic. So you have to set expectations. And you have to defend the exemption. So non exempt takes less of a defense than an exempt position.

The exempt position, you have to say, why are they exempt? You have to defend why you made them exempt. Cause you know, the, the DOL says everybody's not exempt unless you can prove that they're not right. So. So some are just a little too cryptic and they're not defending the exemption. The other is they're writing a book and you, I think what happens there is the employer will say, Mike, write your own job description, please.

And Mike's like, well, I'm going to show how important I am. And Mike writes a book. You could never list everything that an employee does ever in a document. Uh, you know, we all know that it's fluid and it changes. Including all other duties You know, we're going to put that on a job

description, so it has to be the essential as, as well as some non essential responsibilities that have to be done on a regular basis.

You're not putting negative. So Um, the CMO does not do, you don't put negatives. Obviously, for all your documents, you want to make sure that there's non discriminatory language. And I think, you know, the other mistake is exactly what you said. Anybody should be able to read that and say, I have a general idea.

Now, if I read, you know, a really high level scientist's job description. Could I go do that job? No. But I should understand in general what that position entails.

Mike: Mary, do you have guidance around how long these things should be? Should it be like 500 words, not more than, not to exceed 1500 words, one page, five pages, what's, what, what, what would be a good rule of thumb? Cause I think length kind of dictates how much detail you're

Mary: A page to two pages. It's rare. Maybe you could go to two and a half or three, but it would be rare. And I, I don't recommend one longer than that. It's just, it's just a little too much.

Mike: I would agree. Um, I think two, you're probably pushing the limit, but if you don't fill a page, You're probably also being a little bit too vague, right? Yeah. Yeah. All right. So, uh, I'm, I'm going to take us to the, to the next question here. And it's, it's the exact opposite. It's the biggest spread of the five questions that rattled off at the top.

This is the biggest spread of all of them. So, uh, zero growth firms only 65 percent conduct background checks. 81 percent of fast growth firms do. So again, 1090 companies, big sample size, a 16 point spread just on this one thing. Do you, or don't you conduct background checks? And it doesn't say, uh, how expensive at what lengths do they go?

How much verification, reference checking? It's a binary question. Do you or don't you conduct background checks? It's the biggest spread in this entire category. Why do you think, why do you think background checks of all these questions we asked? is the most indicative of success and has the highest correlation to

fast there's, there's a couple of reasons. I think some of it may just be. Ignorance, and some of it may be, I don't want to, I don't want an additional cost. And of course, that's why we include it with our HR services to a certain extent. But I was at an employer. Um, this week at 2 examples this week, 1 employer said to me.

Mary: Gee, my, everybody else at the firm, they have about 120 employees, warehouse workers, um, et cetera. But their finance team tends to turn over relatively fast and, you know, They can't figure it out. So definitely we looked at the job descriptions and the ads to make sure that they are setting expectations.

But then I said, do you do background checks? Now, this is a 36 million company that five people are managing the finances. And they said, no. And I went, I might've inhaled sharply. And they went, they went, why should I? And I said, I recommend it. I mean, they're, they're working with your money, um, the organization's money.

So I definitely would recommend it. And they were like, you know, you're right. We definitely should, like, they didn't need a lot of convincing. I'm not sure it was on their radar. They're not HR experts like we are. Right. So I think that's part of it. And then the other employer I talked to this week is an accounting firm.

And they do background checks, probably because we've worked with them for so long, but they do background checks, very successful accounting firm, and they had an individual that was referred to them by two other individuals at the time. Their accounting firm. So an unbelievable references, right? Two successful people. Resume is perfect. Interview goes perfect. Skills, perfect. And that's not easy to find in accounting. Not easy to find anywhere. They do a background check and she had a larceny, uh, charge in her background. And this is going to be an accountant.

So that's why you do it. And I think that that gives you kind of like the two scenarios, right?

I didn't do it because it just wasn't on my radar. I didn't even think about it, Mary, and I can't do it for everybody. I said, no, you don't have to. If you just do it for the finance team, you're not going to be out of compliance, right? Just so you do it for everybody you hire on the finance team, or for that, for a particular, maybe you just want to do CFOs or controllers.

You know, you can do that. Um,

Mike: Yeah.

Mary: but the, the other client proves it's useful.

Mike: talk about the cost

Mary: it's kind of all over the place and it is included. So, um, different states, uh, are going to charge you extra, like New York costs more, California costs more, um, just to get into the state database. And then you can do a background check a dip a thousand different ways. Is it, am I checking the education to make sure that the education they told us?

So that's the one, one of the things that professional services wants to do. ,

Mike: just give a range. What's the low

end? What's the 50 to 250 to 300

it.

Mary: each.

Mike: So, so, so 50 to 300 bucks. And, and if you're, if you're scraping by trying to make a living in, in, in, in, and trying to e eke out a profit margin, that might sound like an expense that's, that's nominal.

When you think about the cost of a Two times their salary.

I mean, for forget it's, yes. I mean, it, it is so much more expensive. Um, and, and that's kind of where I want to go. It's like. We're not talking about thousands of dollars per hire. So even if you're doing, you know, a minimum wage, uh, entry level, uh, uh, front of house, back of house staff, what, whatever, the most entry level positions you have, the cost of a bad hire is enormous.

Whether it's a retraining, uh, bad, uh, customer experience and what it can do to your brand. Uh,

the cultural impact is, has on other employees. Theft, right? Right. Um, I just think this is so cheap in, in retrospect. Um, and again, big sample size, over a thousand companies, a 16 point spread from fast growth companies to zero growth companies. Do you, do you think I'm, do you think I'm over reading into it, Mary? I almost feel like And I've been, I've, I've been an employee of, and an owner of really successful and really unsuccessful, uh, uh, businesses. I know how desperate it can feel, especially in today's climate of, you know, low unemployment, this war for talent, I'm just dying.

I need

help. I can't find anybody and you're tempted to the next person who can fog a mirror and walk in my door, I'm going to hire them.

Mary: That's part

of it. I don't think you're reading into it. I definitely think that's, that's part. Hey, we have clients that say, I'm not going to do the I 9 because I don't, I know they're illegal and I'm desperate to hire people. It's, it's a tough time out there, but like you're saying, I think paying a little bit of money and finding this out up front, you know, Is definitely more cost effective than bringing somebody on who may affect our business in a much more egregious and much more expensive way.

Um, you know, hurt, you know,

saying something wrong to the best of your ability. to our best client or, um, stealing, I think is, I think everybody could agree. It probably makes sense. And like we're saying, you don't have to do your entire population. You do the positions that you feel are in a position to do the most damage.

Mike: Yeah. Yeah. Um, all right, I'll, I'll move on. I just, I'll reiterate. That's the one category that 16 percentage points between the zero growth firms and the fast growth firms. And to me, it's when you're feeling desperate, you might do more desperate things. And just keep your eye on the ball here there's almost nothing worse than a bad hire,

right? And it's very expensive. Okay. Um, the next two questions tie that pretty big spread at 13 percentage points. And interesting here, uh, these both are among the highest responses in all the entire survey. So, 40 questions across 8 stages from pre employment to post employment. These are all really high scores and I think they don't know what they don't know is what you're going to tell me.

The question is, are you certain your job postings are compliant with federal, state, and local laws? Question number one was, do you have written job descriptions? Very different than the posting, right? So, are you certain your job postings are compliant with federal, state, and local? Um, 13 points, so it speaks to the level of confidence that the firms have.

Uh, fast growth firms at

Mary: Yeah.

Mike: 93%. So nearly all of them, uh, 80 percent of zero growth firms. It seems to me that it's a big spread. So there's an, it's too big to ignore. A 13 point spread is a strong correlation to higher confidence that I actually know the laws that I know my postings are compliant. And therefore the fast growth companies, they're simply doing it better.

They, they, they lean into these things. Um, do you believe those

numbers are

Mary: because

I look at ads all the time for my clients. Um, and there's a lot of legislation right now. I think we're up to. 23 states that have, um, you know, legislation for salary transparency and. Listen, I do this for a living and some of the states are so onerous on that one piece of legislation, I have a hard time interpreting it.

It's like, how much of a range can I put? Can I put a big range? Can I put a little range? Can I put just one salary? So you can go on and on and on. So, so that alone, I think is difficult. And I also think that In their innocence, a business owner might put some verbiage that is discriminatory without realizing it.

So, that's another area. And that's, that, they wouldn't write something discriminatory, um, on purpose. So, of course they're going to say, the first thought when you say compliance in an ad, they're thinking, well, I didn't put anything discriminatory. I didn't say only white men apply, which I saw on LinkedIn about three years ago.

Not that long ago, three years ago. So, so people

are still, you know, doing things improperly, discriminatory, etc. So I find the numbers, uh, misleading, um, because who's going to say yes?

Yeah, I know my

ads are

not.

Mike: I don't think anybody who would, uh, put a white man only apply, need to need to apply that person is not listening to this podcast. So we can ignore them and hope and hope some whistleblower calls them. Um, but tell, tell me about the instances, giving everyone listening the benefit of the doubt.

No one No one listening is doing this on purpose, but yet you walk into clients every day and you find some of it's black and white. Uh, the law requires me to disclose the pay range and maybe I don't do it or I don't, I do it, but not in a compliant way. So some of this more black and white, but some of the discriminatory questions or requirements, they don't seem to the business owner discriminatory and face value.

Can Um, listen, something as simple as must own a car, um, can have disparate impact on certain classes, um, protected classes. Uh, so I, I see that a lot. Is there an exception for some organizations to actually mandate that? There may be, but it is very narrow. I will tell you right now. And I'll also say, and not to scare people, but to make people aware, look, we live in a litigious society.

Mary: There are attorneys who are out there and all they're doing is looking at ads. And then having somebody apply and triggering a lawsuit. So, um, it happens all the time, um, to employers that we support with all good intentions. Right? Um, so that that definitely happens. I mean, we had a client come to us and say, we didn't think we're home health aid organization and our.

Clients always tell us that, that, or have mentioned they don't want Haitians. So we put no Haitians apply in our ad. Why is that bad, Mary? Uh, I think everybody listening knows that that's. That's improper, but this entire organization did not see anything wrong with it, Mike. So again, I think, and unfortunately, ignorance is not a defense in a court of law.

So if, you know, um, they were brought up on charges, because an attorney saw that and they triggered

Mike: Yeah.

Mary: them saying, I didn't know that was bad. I'm sorry. That was not a defense. That was an expensive mistake.

Mike: Yeah. You, you don't get to, you don't get to what's your contractor on the law

is I think what you, what you always say, right. And so you can't

say, well, my clients, this is just their preference. I'm honoring. Yeah. Well, that

doesn't mean you get to break the law. Right. Yeah. anything else that you would add?

what strikes me is a little bit different for this one of all 40 questions. Pretty good spread at 13 percentage points. So clearly, whether they're right or wrong, I'm going to, I'm going to, I'm going to assume the fast growth firms are equally inaccurate in their self assessment as the zero growth

firms are, because that your experience would tell you that, that they, they don't know what they don't know, but they do seem to be more confident at 93 percent versus 80.

why do you think there's a correlation to revenue growth?

Mary: I, you know, I think they're spending more time. I think if you, if the fast growth companies are just spending more time and focusing on the HR deliverables, are they all 100 percent successful? I, I doubt it. Uh, but I think they're focusing on it and they may have somebody assisting them with the expertise like our.

So I think the focus on it and, you know, the intent to, to do it right, I'm going to write, I'm concerned about writing an ad that's, that's compliant. I think that that helps your success. Whereas maybe the zero growth organizations, like you said, are. On the hamster wheel. They're like, I, we got to make money.

I need to hire somebody, just slap something together and put it up there. And, um, look, it's hard to be a business owner. The business owners we support, you know, we partner with them. We just want to be an advisor in every way, shape, or form. And so that's where, um, You know, they benefit from us just taking that off their plate.

But for the other business owners, it's a lot. It's a lot to try and take care of HR yourself.

Mike: All right. So starting at the top, we talked about job descriptions and. Certainly HR best practice is that you're writing good job descriptions I'd say before you create an opening, you should have job descriptions as part of your performance management process. They should just be required for every job.

That then leads to the background checks before I bring people on, the job postings. Now all of a sudden I've got applicants. Let's talk about the interview process. Um, It's the same spread as my compliance question of 13 percentage points, but it's lower. So 75 percent of the zero growth firms said yes, that are you certain your interview process is compliant and effective?

88 percent of fast growth firms. I think, so you and I, I mean, you got way more experience, I'll never have your experience on the compliance side. I feel like this is an area I've put a lot of time and energy through my career on the, on the, on the interviewing side. I, I think most firms are not good methodical, they don't have good interview processes to mine for the competencies required to fulfill their job descriptions anyway.

So there's a, don't know what they don't know, on the qualitative side, but, um, let's maybe start on the compliance side. So are you sure your interview process is compliant and effective? We'll, we'll break those two pieces out. What, what, what do you find every day when you walk in working with clients on their

Mary: Yeah. So, so not, not even just clients, but, um, you know, you know, we, we, we do a lot of presentations and I just kind of went around the country and I will say in a, in a seminar with, you know, lots and lots of business owners in the room. , give me your favorite interview question. And I'm telling you, Mike, every time I do the presentation, I did it about 10 times.

A business owner will go, I like to ask them about their personal life. I want to make sure it's a culture fit. And I go, Oh, no. I think on the compliance side, again, innocently, they're asking questions like, wow, that's such a cool accent. Where are you from? And simply put, they have to stay job related, right?

So, and then when I do the training, because we do interview training, a manager will go, but Mary, I want to get to know them. I'm like, let's do that. Flip that to, you want to get to know whether or not they will be successful in the role. Yes, you want them to fit in culturally and you'll discover that through behavioral questioning because you'll understand their communication skills.

You know, you'll understand their reasoning skills. You just ask them a question. How quickly can they answer it? How articulate are they? That speaks to, to the culture and how they're going to fit in your organization.

Mike: Yeah, I think you're so right. I feel like these questions, like, I just want to get to know them. That's a beyond reasonable desire. You should, you should be assessing for cultural fit. You should be assessing for how articulate they are. You should be assessing, can I get along with this person? How you

Mary: right. That's right? And it should be job centric. So it all surrounds the job and that's why we write. Interview questions for our clients for every position. You're going to ask everybody those same core five to ten questions. And then i'm going to look at mike's resume and i'm going to have some different questions based on his His particular resume.

Why'd you leave this firm? What's your best success story from that firm? So that's that's the differentiator um, but compliance On the interviews Again, I want to be nice and say it's innocent, right? Oh, somebody comes in on crutches and and like, oh my goodness, what happened to your foot? So that seems innocent, but you might be uncovering a disability.

Um, and then when you don't hire the person, now you just put yourself in a liable position, right? Did you not hire me because I have a disability?

Mike: Yeah, right. And, you know, you and I have done shows on this topic. We'll probably do more. It's a passion project of mine is behavioral interviewing, but tied to competencies, tied to job descriptions. If you just can describe the job in detail was required. Now you can uncover the competencies required to fulfill that job.

Now you can ask questions to mind for those competencies. And once they're on board and you get through that filtering process, including cultural fit, you're You can have a performance management process tied to those same competencies and drop job description there. They all, all, all linked together.

Um, yeah, yeah. Anything else you would say on, so, so we talk about the compliance side of interviews. Um, and I guess I I'm empathetic. I I get the, Hey, I just want to get to know them. Um, is there anything you would add maybe a little color around behavioral interviewing? How do you. How do you get them talking?

How do you get to know them? Uh, asking only questions about the job, because I think that probably hits some people's ears like, uh, yes, no questions. Can you do this? Can you, can you do that?

Mary: They're going to always, you know, answer in the affirmative when it's something they know will affect whether or not they're going to get the job. So the behavioral questions are going to be, um, sort of in two areas. One is their past performance is the best indicator of how they're going to perform on your job.

So, As I, as I said, give me a time when you failed and how you worked through that situation. Give me a time when you disagreed with somebody on your team or your manager or somebody above you and how you worked through that situation. your behavioral questions are going to be, Real, tell me about a situation that happened and how you dealt with it, but I think it's also important to ask them a question so that they're just relating to you what happened.

They're repeating. Now, how they repeat it, the words they use, uh, the time they take, do they beat around the bush, especially if it's in a client facing position, will all be important skills that you're mining for, uh, to get to the success on the job. But the other behavioral question you want to ask is one of a situation.

What would you do if? You know, if it was a sales position, what would you do if you worked on a client and and spent hours and hours and hours, and this was going to make or break your year, and in the 11th hour, they went, went with a competitor, what would you tell me what steps you would take? What would you do?

Right? So is the person going to, you know, get angry? Are they going to just drop it? Are they going to continue to follow up, find a way, right? So, again. And you want to know what answers you're, you're sort of looking for in general, right? I want that person to fight for that sale. I don't want them to give up, right?

But though, asking those two types of behavioral questions, you will find out a lot more than saying, tell me what you do on the weekends, Mike.

Mike: Yeah. Right. Right. And, and for those of you guys who aren't picking up what we're putting down here, asking the question, what do you like to do on the weekends? It's not job related. And it's not even there's anything wrong or illegal about that question of itself. It's where the conversation goes based on that answer, right? Because that answer could really can lead to all kinds Right, right. I go for dialysis on the weekends. Disability, right?

Yeah, I, I go to

this church or that church. I, I go to such and such place. Oh, they're a partier drinker. Oh, I participate in this activity. Oh, you're that kind of a person, right? I

mean, you get into slippery slope

Yeah. Okay. Last one. So. Lower scores, um, uh, but, uh, again, not a huge spread.

Um, my zero growth firms in my, in my growth firms, relatively the same. My fast growth firms were 86 percent said, yes, 82 percent of zero growth firms. So only a four point spread. And I, I mean, I think there's gonna be a broken record for you. Are you certain your, here's the question. Are you certain your applicants, your applications?

Do not ask any illegal questions. So we've talked about job descriptions, background checks. Now we have a job posting. Now we've talked about the interview process. Um, we should maybe even flip the order here, uh, that you're probably

not interviewing people without applications first. Uh, maybe we should address that, but the applications themselves, are you compliant?

The spread is only 4%. My sense is this is an area they don't know what they don't know. What do you mean

is my application compliant? Of course it is. And well run firms that are fast growing probably are just more overconfident

Mary: Yeah, I,

Mike: Is that

Mary: I think I've said this to you before and that's how you, but the applications I look at 99 percent have at least one thing that's illegal or they haven't included something, right? So, number one, you know, ban the box is in probably, 20 ish states where you can't ask about a felony conviction until you make a conditional offer of employment.

So right there, I see social, asking for social security numbers. You shouldn't be asking that before you make a conditional offer of employment. Um, asking about past salary, right? So, um, can't, can't do that in New York, California and about 10 other states. There's so many areas in which they can, you know, when did you graduate high school can be looked at, like, I'm trying to find out how old you are.

Mike: Right.

Mary: yeah, the application is, you know, an area where, where you can get into a lot of trouble. There is some exceptions for some organizations for some of those questions, but for the most part, the applications I look at are not compliant.

Mike: I alluded to it. Why, why should folks be. Why should or shouldn't, I guess, folks be thinking about an application

Mary: So the resume, you know, when, when you're looking at a resume, there can be a gap of employment and there might not be anything. Let's say they took a job for a month and it didn't work out. They're not going to put that on the, the, um, on the resume. The application is going to say, list all the jobs you had in the past.

10 years, so any gaps of employment are going to that 1 month job should be included there. And then, of course, at the end of the application, you have a statement that says everything that you wrote here is true. Okay, so I think that that's really. And so would an employment attorney, if you went to terminate somebody and you said, you said that you had a four year degree.

Um, and I think there's some politicians that said that they had some, some, uh, you know, Degrees and worked certain places and they didn't. Um, a resume is one thing, you know, it's just a document, but an application I signed off on. So what, when we do the interview training, we always tell the managers, if they utilize a application at their organization, Cross reference the two.

Is there differences there? If there's differences, maybe there's an untruth there that we want to get to. Uh, we want to ask why you didn't put that company for one month. What happened? You know, why somebody leaves an organization? Tells a lot about the individual, right? So it, you know, you want to get to culture that, that's a great question.

Walk me through why you left that organization. I even ask, uh, if, if they're still at the organization, well, you're obviously looking for a job, Mike, what could they do to keep you? So that, you know, that's when they tell you kind of the, the secrets. Well, I really hate my manager and you're like,

Mike: right. right. what percent of jobs, so this question we ask, presume that they even have job applications. I, I, I kind of think again in this, uh, I'll take the next warm body who can fog a mirror kind of level of desperation so many folks are in. Now, maybe not frontline workers, but I think it's so easy to mistake a resume or a LinkedIn profile for an application.

It's like, well, they told me everything, everything, but that's a, that's a sales document, that's a marketing document, right? That the, uh, the, the, what you can uncover and then sounds, sounds, I don't know, Machiavellian perhaps, but it's, it's the, it's the level of commitment cause they're signing saying, I agree, all this is truthful to the best of my knowledge,

Mary: Yeah, and it says this is not a contract of employment on it, also to protect the organization. But, you know, I can't tell you how many times I've interviewed executives and they're like, well, I gave you a resume. Please pull out the application because we also want to be consistent, but you don't have to give, I don't want to give anybody the impression that it's mandated anywhere that you have to give an application.

You certainly do not, but if you are giving an application, there are some benefits that we explained and make sure that that application is compliant.

Mike: Mary, you've used the word consistent a handful of times here. So, um, job descriptions, something kind of an internal thing that you do on your own per job. Uh, the background checks, your postings, your interview process, and your applications. So four of the five questions we asked, I think, beg for consistency.

Can you tell us what that means and why it's so important to be consistent in

Mary: as we're not consistent, we're triggering exposure to litigation because treating individuals differently may lead to a discrimination case. So it may be, you know, you gave, um, something positive to everybody. So, you know, maybe everybody got, um, Further to, you know, once they're employees, you gave training to all the males in the organization, but not the females.

You can see the inconsistency there. That makes a lot of sense. But, but if we said, oh, I don't like the way Mike looks when he comes in for an interview, I'm going to make him fill out an application. Because there's something about him I don't like. And then the next candidate comes in, and I don't, for the same exact position, and they don't, we don't ask them to fill out an application, but you're like, he's a nice young kid.

I like, come on in, you know, and you don't have to fill out an application. It's the same. We're still putting ourselves in a position where we've treated two individuals differently, uh, and that makes us, uh, susceptible to litigation. Beyond litigation, because, you know, people are going to be on the call and go, Oh, Mary, I don't think I'm going to get audited.

I'm fine. And, um, I love your positive attitude, but I doubt it. Bye. Bye. Let's think about consistency as far as solving what we want done. If you don't give everybody an application, at least for all the same positions. So maybe you say, all my warehouse workers, I want to fill out applications because they rarely have a resume, but the other positions, I'm okay, not filling out an application.

That's fine as well, because we're consistent within a class of a position. But think about the consistency here. If we only gave the application to some warehouse workers, how are we comparing two candidates when one, one, let's say you went for a warehouse position and I went for a warehouse position and they didn't give me an application, but they gave you one.

How are they doing a fair comparison to make sure that they successfully interview and choose the best candidate? So the consistency is good. So that the HR function is successful. And the other reason is to protect you from litigation.

Mike: And I got a few thoughts jumping through my head. I mean, one is your employers are going to talk, right? I mean, so if you're a great boss, most of your employees love you. There's going to be somebody Right, right. you're all that.

Right. Um, they're, and they're going to talk to each other.

And they're going to compare notes. in the aggrieved person, even if, even if they haven't been aggrieved, but they feel aggrieved, they're going to see the fact pattern to validate how they feel, right? Um, so yeah, you have to be consistent. I think about the interview process. Well, I'm consistent. I ask everybody, tell me about your weekend.

That's the same question. Okay. But Depending on how they respond to that, the follow up questions, by definition,

could never be consistent, right? You could, however, ask the question, tell me about a time you disagreed with your boss. What was it? How did you handle it? What was the outcome? Right? You're going to get a pretty good sense how they deal with conflict.

Tell me about a time that you had to deal with conflict with a co worker. What was

it? How did you handle it? What was the outcome? Right? So there you can be extremely consistent. You're still going to get a feel for what that person is like and how they

handle handle themselves. Right? Let's close by coming back up to the top level.

So we, we, we talked about the differences in the scores question by question. Um, I think the punchline here is, uh, it was bookended job descriptions. And are you certain your applications don't ask you legal questions? Had the smallest spread, only a four percentage point difference between zero growth firms and fast growth firms.

Um, We kind of, you and I, I think,

agree that people just, they don't know what they don't know, and they're probably way more off, but they're probably

equally off on this one, right? Though it's not a huge correlation to success because they, the, the, the, the short spread. The biggest difference, uh, between the fast growth at 81 percent and the zero growth firms at 65 percent was do you conduct background checks?

To me, this is just a, I am willing to spend the money to make sure I'm getting this right. They know how critical it is to get the right people in the organization. You know, we'll talk about

performance management, onboarding, all that kind of stuff in future episodes as we, as we unpack the rest of, you know, the, the ebook, right.

Um, But that's the one category that, that you got to put your, put your money where your mouth is, because you're gonna have

to, have to, pay for these background checks. And I think the flask growth firms demonstrate that this is, that this is the most important in

Mary: I agree, I agree, I mean, I I love that you, that you drew the line with the consistency, that that's, that's what has to be here. And I, and, you know, again, I think they, some, some of the data might be skewed by, you don't know what you don't know and the difference between doing it and doing it compliantly.

Mike: Yeah, right. So it, I'd say in closing on this topic, when we average all, so again, eight, categories from pre employment to post employment. This is the first category, recruiting and hiring. Those five questions, we broke down the question by question. If I add all of them up, so all five questions, uh, zero growth firms, so people not growing, said yes, 75 percent to all of the five questions.

Fast growth firms said yes, 86 percent of the time. So it's an 11 percentage point spread. What's fascinating to me. And I think people could just dismiss this out of hand. There's compliance oriented HR that is more administrative. And then there's, I just need really talented people who can go, you know, raise the bar on performance and productivity.

And this kind of calls bullshit, and forgive my language, because there's a lot of compliance oriented questions here. And the spread is still 11 percentage points. Fast Growth Firms. Fast revenue growth is just simply following the HR best practices around compliance for recruiting and hiring folks has an 11 percent advantage in

revenue growth. Now, Mary, why don't you bring us home on this one? 11 percentage point difference in all the best practices for recruiting and hiring. What's your guidance for the zero growth companies? Um, why do you think the correlation is so strong

Mary: Well, I, I, you know, listen, no company is, is going to be successful without the right people in the right places. And so this piece. Has to be done right. Um, so number one, you want to bring on the best people. And unless you're focusing on that, that onboarding piece that we just discussed, the ad being, you know, setting expectations so we give a good job preview, the interviewing being done correctly, doing the background check, right?

Uh, having a compliant ad. That's it. First things first, let's get the right people. Second piece, let's do it compliantly so we don't then also have a lawsuit that's going to take us down. So, the small group organizations need to, I think, you know, you just want to double down on the HR and not only do it, but ensure that you're doing it compliantly and solving to, to the result that you want.

What's the result that I want? We all want the best. people to help us be successful and make the organization a fast growing company. If you do it right the first time, that is, that is going to follow. And I, and I think that's the correlation to me is that the fast growth companies are doing these, uh, these different HR functions compliantly and successfully, and that helps them bring the best people on, which then helps you grow.

Mike: If you want to go fast, go alone. If you want to go far, you need a team. If you want to have a, have a longterm successful growing business, you're going to need people and, uh, finding people in this war for talent is harder than it's ever been, and it's not going to get easier if you don't make recruiting and hiring a priority.

Um, you're going to have strong, strong headwinds, uh, in your growth. So you Yeah. is something you just got to get right.

Mary: I, I think exactly what you said. I think, uh, it's not enough. Google does not work anymore. I think you, you need some assistance to get this right. And it, in the end, it definitely pays off.

Mike: Yeah. Always enjoy our conversations. I'm looking forward to our next, the next in our series here, is we move on to the topic. Uh, if I can flip through my book, we are going to talk about benefits and specifically, we're going to talk about the benefits of benefits. Uh, And there's, there's some big takeaways for employers.

So, uh, until our next conversation, thanks as always, Mary. And thanks for everybody else joining today. If you got value from this conversation, I invite you to subscribe, to like, to comment, to share this content with anybody who is trying to grow their business. Until next week, thanks for joining Mission to Grow.