How Fractional HR Helps Founder-Led Firms Avoid Landmines And Build Better Teams

Ever wonder why hiring costs keep rising while performance stalls? We sit down with HR leader turned fractional consultant Seth McColley to unpack how founder-led companies in construction, manufacturing, and distribution can get senior HR capability without a full-time hire. Seth shares practical plays that save money fast—like replacing pricey recruiter fees with smart sourcing—and shows how to build a review process that actually improves performance instead of sparking anxiety.

We dive into the backbone of execution: job descriptions that are real, measurable, and updated on a cadence. Seth walks through pairing self-assessments with manager assessments to expose gaps early, then turning those insights into targeted coaching, training, and better project assignments. We challenge the norm of tying performance reviews to pay, making the case for separating growth conversations from compensation so people hear feedback and act on it. Along the way, we cover legal pitfalls across states, termination planning, and why clear documentation is both fair and protective.

This conversation also tackles culture and operations at street level. From low-hanging revenue—like calling back parts portal visitors—to mystery-shopping your phones and building rotation programs, we highlight repeatable habits that compound trust and results. And when succession looms, we map the human risks: runners-up who bolt, or worse, stay bitter. The fix is proactive roles, rotations, or dignified off-ramps. Above all, we argue HR must learn the business: margins, customers, shop realities. That’s how policies, hiring, and reviews line up with what wins in the field.

If you lead a small to mid-sized, founder-led team and want fewer landmines, faster hires, and reviews that move the needle, this one’s for you. Subscribe, share with a colleague who wears “HR by default,” and leave a review with your biggest HR challenge—what should we break down next?

Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.

We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.

Transcript

Meet Seth And His HR Journey

SPEAKER_02 0:21

Aloha and welcome to another candid conversation. We're joined today by a very interesting young man. I say young advisedly because he has less hair than I do, by the name of Steph McAuley, who I've known since the 20 teens, I guess. Seth worked for a dealership that I was involved with, and then he just started his own business. So, with that as our intro, Steph, why don't you give everybody a bit of an idea of what you did before you met me? Um, what what you're trying to do now, and uh the road in between.

SPEAKER_00 0:59

Yeah, yeah, no, I personally stuff. Easy stuff, easy stuff, yeah. You know, I try to think about what my life was like before I met Ron, and uh, it was just uh it was that's that's that's a great way to start.

SPEAKER_01 1:14

It was peaceful, it was calm.

COVID Pivots And Industrial HR Lessons

SPEAKER_00 1:17

Yeah, yeah. I mean, it was um yeah, it was very different. Um, yeah, I know. I mean, but we met in uh in early 2019, and so I had just joined Kirby Smith as uh as the head of HR, and before that, my career had been yeah, I've been in HR all my career. I mean, I I kind of fell into HR, I couldn't even spell HR when I was in college, I didn't know what it was. Um, but I did HR for uh for retail, for um distribution, for uh restaurants, for all kinds of different things. But um, but when I I met you in early 2019, and um I was in the heavy equipment space. And so for several years, while you were um, you know, there connected to them, and I was doing the work for them, uh, we went through COVID together. So there's a lot of pivoting during that time and a lot of interesting things that we had to learn how to do uh that we had never done before. And uh, but since but for the last, you know, probably six or seven years of my career before I launched my business, I've been in the construction manufacturing slash distribution space. So whether it was in uh, you know, prior before I met you, I was uh doing talent acquisition for a very large general contractor. Um uh after uh I left uh Kirby Smith, I was working for a building products uh company, leaving HR, so kind of still in the manufacturing and distribution space. Uh but about three months ago, I uh decided to take the plunge and create my own business. And uh I created my own fractional HR business. And so I am having an absolute blast. Um, some days I wake up and I still don't really know what I'm doing, but I'm having a great time doing it. Um, but my my ideal client profile is really uh small, I say small companies, but small to mid-sized businesses that are in the construction, manufacturing, and distribution space, under 500 employees, under 100 million in revenue. You know, for the most part, a lot of them are going to be founder-led. And so they don't really, a lot of them may not know what HR is or they can't spell HR. And so they they need someone like myself that can come in and and help um help get them on the right path, or help maybe um lead or guide a junior HR person that they might have on their staff, or maybe they're going through some some change, you know, some um uh dynamic events. Maybe it's uh an acquisition, maybe it's a merger, maybe it's a retirement, maybe it's something that's that's uh pivotal, you know, an inflection point in their business where they need some HR guidance. And so that's what I'm doing. I'm in Dallas, Texas, and uh, you know, for the most part, I'm I'm working with clients that are here locally, but I can I can work uh with clients anywhere thanks to uh all the virtual technology that we have. And um, yeah, just looking to grow my business and I appreciate you having me on the on the podcast.

SPEAKER_02 4:16

One of the interesting things from my perspective with dealers, distributors in the equipment space, capital goods space, is they don't know what to do. They're confused. That's the leadership the you know, the the C-suite. And with changes in technology, changes in economics, change in cost, change in the supply chains, change in tariffs, government regulations. It's almost to the place where when I'm talking to dealers, I ask them to look at what their core competencies are and get rid of anything that isn't. Outsource it. An example of that is Salesforce, where people have typically outsourced that to a piece of software. But then continuing to use them as an example, I don't know that anybody really knows how to use that piece of software. And then looking at HR, human resources, I don't think that leadership has a clue of what HR truly is. For instance, I don't think a dealership leader anywhere in the industry, very few of them, if any, know how to conduct a performance review. Know how to conduct an interview, right? Know how to discharge or let people go.

SPEAKER_00 5:57

Yeah. What to say, what not to say. Yeah.

SPEAKER_02 6:01

Is that the the place that you're looking at, quote, fractional leadership?

Why Leaders Misunderstand HR

SPEAKER_00 6:07

Absolutely. Yeah, yeah. So like I think about um, you know, probably probably a good example, right? So I've got I've got three clients today that I that I work with. Um and just to back up a little bit, so back in the in the summer of last year, I got connected to a firm here in town that uh all they do is they place fractional the deck because it's and so I'm doing work, I'm kind of assigned as the uh the HR consultant on their on that business, on their clients. And so um, but I decided three months ago to to venture out on my own and and do my own thing. And so I'm working to build my own clients. But I got three clients, great clients that I'm working with today, doing all number of things. Some of it's a leadership coaching, some of it is um, some of it is talent acquisition and and and recruiting. And I've got one client that uh they've spent thousands, thousands on uh search fees with recruiters, with third-party recruiters. And so I came in, uh, used uh did a simple posting on a deed that cost zero. Uh, and within a matter of weeks, we found our candidate, we hired our candidate, and it cost, I mean, it cost obviously my time, but you know, the search fee would have been 20 to 25 percent. And this person is as um, you know, making over six figures. And so that was cost right there that I cost that I saved them. But some of it is performance reviews. I'm going through with a different client, I'm putting a performance review process in place where there's never been one in place ever. And so a lot of that is is uh, you know, for for for you and for me and for some others that are probably, you know, have have are, I guess, more I say sophisticated, I don't mean that in a bad way. I mean just some people have been around more and been around all the processes. But for us, it seems so so simple. But some of these, uh, some of these clients and some of these people um that are are leading these businesses, like a lot of these dealerships, that's just a that's just a muscle that they've never had to work before. And so they don't know like how what a performance review process should look like or what the cadence or how much time, or like like interviews, like, oh, I know I didn't know that I can't ask if they're married or not married. And so part of that is just some simple education and uh and kind of you know helping them kind of here's the guardrails and kind of keeping them, keeping them in in bounds to make sure that they they don't uh do anything to uh to hurt themselves. So some of it can be very, very basic stuff from hey, let me help you terminate this uh this employee who's in California that's over 40, who's you know, African American and female. There are some things that we need to do a little bit differently here. Um it's not like we're you know uh in Texas where um there's just things we gotta, there's just things you gotta do differently. Uh and there's different uh different watchouts and different pitfalls that you don't want to fall into. So some of it is as simple as that to it could be succession planning, you know, working with a uh a founder who's built up this business from nothing and they have no one to take it over. Maybe they've got a leadership team and a couple of people on the leadership team that are potential successors, but they need some help to kind of suss things out a little bit, like, okay, what's gonna be the right, what's gonna be the right leadership play if we're gonna, if this business is gonna keep going after I'm gone, you know, what's gonna be the right um the right path forward? So it could be a number of things. So it could be compliance, it could be town acquisition, it could be leadership coaching. I mean, I kind of stumbled into a a leadership coaching opportunity with a client recently where that wasn't part of the plan at all, but along the way they said, hey, we've got a director that could use some help in these areas. Is that something that you could do? And I was like, absolutely. And so I just spent some dedicated time over the course of six to eight weeks with this director and helped um provide some coaching, some guidance, and kind of got them got them back on track.

SPEAKER_02 9:47

So that's another aspect of business today that I believe has changed, not for the good, but mentorship, coaching. Um time has become an enemy. We've we've downsized people so much. I call it, we've put people behind profit. One of the my clients said we're spending our grandchildren's uh legacy now, um, which isn't a nice, that's a pretty nasty way of saying it. We we have assessments, job function assessments that are we have two tracks. One is for certification for management, and the other is for job functions, which essentially is a la carte. So on the job function side, we have 20 different job functions in the capital goods space that we have specific assessments built, multiple choice, and at the end of that you get a score. Okay. And what I ask companies to do is have the employee take one of themselves and their direct supervisor take one of them, and then sit down and talk about the differences.

SPEAKER_00 11:05

Yeah, that's important, right?

SPEAKER_02 11:07

What do you think of that approach?

Fractional HR Use Cases And Wins

SPEAKER_00 11:09

I think it's I think it's spot on. I would say the same thing for a performance review process. I think a I think a self-assessment is a good approach for self, because you know, if if I have a perception about the way that I'm performing, and I think I'm up here and I'm a rock star, it's going to be helpful if you do the same. And then you and I come together, and I'm like, wow, I'm like walking on water, and you're down here, like, man, I'm I'm surprised that you find the coffee each morning. Like, I don't, and there's a there's a huge disconnect, there's a big delta there. And so I think it's and it's look, it's it can lead to some very uncomfortable conversations. There's no doubt about it. But I think those are necessary. So I think it's good for, I think it goes both ways. I think it's good for the employee to know in a um in a professional way what their what their manager really thinks or what they think they're missing. But I think it's also good for the manager to know, oh, Ron thinks that he's he's like he hung the moon. Like I need to move me, I need to take that into consideration as I'm coaching him and working with him and assigning him work and assigning him projects because he thinks he is the man. But I mean, he's good, but he may not be great, like he thinks he is. And how do I, or maybe it highlights some training gaps, some opportunities. And you see things as a manager like, hey, this is a good course. I think this would be a good investment. Maybe you need to go spend a couple of of uh of hours or days or go to the seminar or go here because literally you need some some help. So I think I think it's good.

SPEAKER_02 12:46

Yeah, our our our uh certification programs we have basic, advanced, and master levels for managers. And the test, we call it a test with the certifications for basic is 120 questions, advanced is 150, masters 180. And my comment to anybody and everybody is you can't hide, babe. And and the interesting thing is, you know, I've spoken to many men and women over the years, as you can imagine, and one guy said to me really strikingly in the last four to six weeks, you know, I still don't know why they fired me. Well, that's a statement and a half. So dismissal, hiring, recruiting, performance reviews, career path, wage and salary administration, all of those things benefit from an assessment. Our assessments are really expensive, they're fifty bucks. So if you and the boss want to do it, it's a hundred bucks. And you're each going to invest probably two hours of time filling it out before you get together and talk about it. Right. But it leaves something that's missing. Very few places, to my experience, have what I would call a half-decent job description with performance standards.

SPEAKER_01 14:20

Yeah.

SPEAKER_02 14:20

You got any comment on that?

SPEAKER_00 14:25

I think um that actually that's another that's another piece that I'm I'm walking on with uh with with two of my clients right now, is job descriptions. And I think um, ooh, do I have a hot sports opinion about job descriptions? Yes, I think sometimes, oftentimes they are pencil whipped and they're just kind of thrown together just to put something on a piece of paper. And so it's very unfortunate, and it's not really doing it's doing a disservice to the employee when you just throw something out there because you need something to kind of document the job. But if it's not a true reflection of the job, then it's kind of a waste of it's kind of a waste of paper. So I think that a job description, I mean, I think it should be, I think it should be thorough. I think it should be accurate. I do think it makes sense to on a regular basis, whether that's annually or annually might be the best. Look, most places still have some type of an annual performance review, but probably a best practice would be when you're doing the annual performance review to say, hey, by the way, you know, Ronald, thanks for meeting. Here's how you're doing. I want to just, you know, level set on how you did for 2025. By the way, I wanted to share. Let's let's go over your job description again. I know we did this last year, some things have changed. I want to make sure that you and I are on the same page with those any changes. Is there something that you feel like needs to be done differently and sign off on it? Like just like that way, there's like I'm clear and you're clear. This is what I've you you know, it's almost like an agreement, really. And it's like, hey, this is this is you're saying this is the job. And if it's not, then let's talk about it. But if you're saying this is the job, and I'm saying as your manager, this is the job, then there really shouldn't be any pushback or any problems when I come to you in three months and I say, hey, you're doing a really crappy job. What and you and and then you can't be like, whoa, what do you mean? I thought I was doing great. Well, let's go back to the job description.

unknown 16:21

Yeah.

SPEAKER_00 16:21

This is what the you we were lying. We we talked about this. You were you and I were on the same page. You signed off on it saying this was the job, and I'm telling you, you're not doing the job. And so it's it's also kind of helps build a good build a good defense because later on, if you need it, you have it.

SPEAKER_02 16:36

There's a wonderful book out there by Patrick Lindsay, only called The Three Signs of a Miserable Job. It's one of his first books, and he's he's a wonderful, he's got about 10 or 11 of them, and he writes them like fables, so they're stories. It's easy to read, easy to absorb, and and nice lessons. The three signs are anonymity, irrelevance, and immeasurability. Anonymity should not even be on the horizon. That means that you don't feel that anybody at your company knows anything about you. Which in many cases is shamefully true. And then the other piece that you kind of addressed in the previous comment was irrelevance, they do not know the significance of their job in the overall scheme of the business. Right. That's a problem. And it's a big problem. And and if people don't have a sense of pride in what they do all day, that they're contributing, how the hell can they feel good about going to work? And then the last one is immeasurability and acknowledges that he made the word up. And the only people that, in my experience in the capital goods space, the equipment space that we've shared are the technicians. They know what they got done in that eight hour period of time, but the office people they haven't got a clue. The sales people, unless they got orders, they haven't got a clue. Yeah.

SPEAKER_04 18:18

Yeah.

Assessments, Reviews, And Risk Basics

SPEAKER_02 18:19

So performance, the other side of the performance review is I don't want to have them done anywhere near a wage and salary, a payment review. I wanted two distinctly different things so that nobody is in their, you know, nerves as hell because they're gonna get they're gonna get passed over or they won't be raised or whatever. Do you agree with that or not?

SPEAKER_00 18:48

Oh boy, that's a great question. Um I don't I'm trying to I'm trying to figure out the best way to answer that. In theory, I do agree with that. I I have heard that before, and I do believe that the best processes decouple you know performance from compensation. I've never and and why I'm answering kind of so so uh so neutral and so uh so kind of kind of kind of chipping the answer because I've never seen it in practice. I've heard about it, I've read about it, but I've never seen it in practice. Everywhere I've always everywhere I've been in my whole career, they've always been they've always been interlinked. And so I don't know any different. And so I I've heard like, and I do believe that in theory, it is better to kind of keep let's keep the money over here and let's keep the performance over here. And like those are two separate things. I've just never seen it um in practice, and so I don't, I don't know. I think so people, some people are just so tied to like, so that's great, I did good, what am I gonna get paid? Um we're all coin operated. So many people are just coin operated, and so I think there's a way to it'd be hard to separate those two, but I think it's I think it's the right move. I just don't know how to do it.

SPEAKER_02 20:03

So just as an interesting comment to you and to continue to prove that I am weird, that's the only way I've ever done it. Really? Yeah. You know, I I was I was blessed, in my opinion. I was blessed. I was a competitive swimmer. I remember that, yeah. And I was a very anxious meet a race guy. I'd throw up before I leave the house, I'd throw up when I got to the pool if there was anything left. And it's interesting because I'd I never really lost. I had records for years. And I used to fight with myself, what the hell's the matter with you? Are you afraid to lose? You need to win, or what the hell's going on here? And one of the other interesting attributes of performance reviews is personality profiles. That if you take your strongest asset, your best attribute, to an extreme, it's your biggest weakness. I agree with that. And so what I love doing is, you know, I'm sitting talking to somebody and they're nervous. I try and get them over the nervousness. And I said, tell me what you think you're best at. And they just don't stop talking. Right. And I never start with, you know, what's your biggest problem? What's your biggest failure? Because they're gonna dance around, they're not gonna tell me anything, but you tell me. You know, it it's it's phenomenal. So I learned from a very young age, teenage age, that I'm not competing with anybody but me. So if you do the performance review on the basis that this is how I think you can get better. Where do you want me to help you get better in the performance review? Obviously, that then is nothing to do with a wage.

SPEAKER_00 22:07

Yeah.

SPEAKER_02 22:07

It's a very healthy approach. Well, it's it's it's different because it's non threatening. Right. And the other part of that is I don't think. Leaders, managers, supervisors, whatever. I don't think they're prepared to get into the weeds like that with the employee. This is what you need to do be to be good at the job. That means that you know what the job should do. Right. And today I don't think very many people do.

Job Descriptions With Real Standards

SPEAKER_00 22:41

I agree with that. I also think that a lot of managers and leaders um don't like giving constructive feedback. I think they're just they're just not good at it. It's whether it's conflict avoidance or whether it's they're just I don't know. I just I think they have a hard time. But you know what, I I do think I want to go back to that. Um because I really do think that I mean again, in my mind, it may in theory, in my mind, it does make sense because when you when you when you have these things tied together, like, oh, I've got my performance review, and how I do in that kind of dictates what my my compensations are gonna be. Then you've you've kind of you've let you've you've almost kind of it's a self-fulfilling prophecy because you've said, well, my self-worth is gonna be tied to whatever my review is gonna be. And so, and so I think it's it is I that's why I said healthy. I do think it is a healthy approach to separate the two. And one should really be more about hey, how do we get you better at your job and not have it tied to like, oh, and by the way, I'm only gonna give you one percent, because that's the only thing they're gonna hear out of that conversation is I just got a one percent raise, or I got no raise. I must be crap. And then they just it becomes like that's their whole self-worth is tied to whatever that percentage is, and they don't they didn't even hear the performance piece. Let me let you all they heard was the dollars.

SPEAKER_02 24:01

Yeah, let me give you an I started on a consulting contract for my first employer to fix a specific problem. And it was an inventory management, it had to do with the computer system, and we found the problem, we fixed it, and and they hired me and kept me on and all the rest. But the guy who ran the parts business didn't talk with me at all until I was his boss. So it it became that was a really interesting discussion. The only interaction I had with him, his name was Herb. I won't mention his last name. Um I'm sure he's long past. But the first interaction I had with him in a discussion was it was a review time. And I was making$435 a month. This is in the 1860s. And here comes June. So the first of July was going to change in wage, and the first of January was the next one. He said, from the 435, now remember that number. He said, these these are difficult times, but you're doing a nice job. So what I propose that we're gonna do with you is we're gonna give you two dollars an hour, uh excuse me, a month more, effective July 1st, and we'll give you the other three January 1st. Okay. So I was gonna go to$440 a month. Okay. My response was thanks for your time. I stood up, I started to leave, and he says, What are you doing? And I said, Well, you need it more than I do, so why don't you keep it? And I left. And about three months later, he worked for me. Wow. And we we've revisited that discussion. What in the hell were you trying to do? You know, so uh money isn't a motivator to me, money's a demotivator, and if I'm clear on performance objectives, the employees should come to me if they don't feel they're getting properly paid. The employee should come to me if they feel they're overpaid and ask me for help such that that wart or whatever it is gets resolved. You know, we we just we just saw one of the best hockey games I've ever seen in my life between Canada and the U.S. at the Olympics. It was remarkable. That's correct. That's somebody, one of the announcers made a comment this is the fastest I've ever seen in a hockey, and that was absolutely true. And the guy made an interesting point. He said it was the middle of the season. You go through a full hockey season at the end of the year when the playoffs and the big championships come, the guys are beat. Yeah, they got nothing left. Well, they sure as hell had a lot in the tank when it went on, and that goalie for America, who's 24 years old, for goodness sake. It's crazy. Amazing.

SPEAKER_00 27:10

Yeah.

SPEAKER_02 27:11

So, you know, at that point, I don't care who wins. I'm born in Canada, so I'm a little bit ticked, but I'm gonna go to the house. I know I was gonna ask so I'm a pretty happy guy. So I'm I'm I'm kind of uh by either way, you could have win. You could have won either way. That's right. That's right. So, you know, I in a way you're a specialized consultant. I don't know if I've got you and Jay Lucas talking to each other yet, but um I know Jay. Okay, so you guys need to need to get closer together. What I'm I'm saying to Jay, and I'm I think I'm saying to you is, and I say to dealerships, HR is not one of your specialties. That's not you need to hire somebody who knows what the hell is doing that and contract with them to look after it for you. Yeah, and so with Jay, I'm saying, okay, we got a platform here. Do you want to put things up that you can teach people so they can self-teach on the internet, learn things, courses? Our courses are really expensive, they're a hundred bucks and they're eight hours long, so be prepared, babe. You're gonna be spending a fair amount of time with me. Right. As you also know, I taught university when I first started, and I'm sitting with a group of 30 or 50 or 100, and I'd ask a question and ask for a show of hands. You know, what's the answer? You know, is it greater than blah blah blah blah blah, whatever it is? And they'd show their hands. I don't know if they're lying to me or not. I had no way of knowing. Right. Today in our classes, we have roughly 21 segments. I'm going to make it easy for arithmetic, call it 20. We have a 10-question pretest to find out what you know before you start.

unknown 28:53

Okay.

SPEAKER_02 28:54

Multiple choice, and we have a 20-question final assessment, see what you've changed was. And at the every one of the segments in between, there's three to five questions. Okay. And if you don't get 60%, you can't leave that segment. You have to repeat it. Okay. So at the end, on your certificate, you get two scores. One's your final assessment score, and if you in order to get the certificate, you have to get 80%. But the other is the scores of all of them put together.

SPEAKER_00 29:30

Like an average of all 20 segments?

SPEAKER_02 29:33

Yep. Oh, interesting. So you can't hide, baby.

SPEAKER_00 29:38

Yeah. Interesting.

SPEAKER_02 29:40

So I get guys that are in the job 20, 25 years. They come in and they're cocky and they say, Well, I'll go for the you know, the master test. That's 180 questions. And they get 25%. They say, Well, there's nothing wrong with this damn thing. I said, No. There's something wrong with your understanding of what the job is. Yeah, interesting. And technology is changing so much now, Seth. Example. Almost every dealer has an internet portal where people can go in and check availability and pricing on parts at night. Sure. The next morning I would like to have somebody call and say, hey, Seth, last night I noticed you checked on Fufu Valve, part number 100, and you we've got it in stock and you check the price, but I didn't notice you buying it. Do you mind me asking, did you buy that last night? And if you did, who'd you buy it from? And if you didn't, why not? Why not? Yeah. Nobody does that. Well, very few people do that. That's low-hanging fruit. Of course it is.

SPEAKER_04 30:39

Yeah.

SPEAKER_02 30:40

So when I say they don't understand what the job is, they really don't. They're so busy trying to keep up. Right. Are you running across that with people when you say, you know, you need some help in HR? And I'm putting words in. Well, no, I don't. I know how to do that. They haven't got a clue.

SPEAKER_00 31:01

Yeah. I mean, I've got yeah, one of the clients I'm working with right now, it's just it's a small outfit. I mean, it's it's it's less than 10 people. And the but the president is he's doing it all himself. He has he has no HR support. So he's onboarding employees, he's interviewing employees, he's scheduling employees, he's I mean, all of it. He's I mean, and so uh I came in and within just a matter, I mean, within two weeks, I I took over a lot of that man just cleared his plate, and he's just like, I don't know, like I got so much time back. It's amazing. And so uh I guess you know, the other thing too, I think I think I think about the work that I do, um, but the reality is a lot of a lot of the my prospective clients, which you know, a lot of these, these, these dealers, they they probably don't need a full-time HR leader or HR CHR. They probably don't need a full-time, they may not even have the budget for one, but where I uh where I fit is I say, hey, you don't need me full-time. You probably don't want me full-time. And even thinking about the cost, like that's just a you think about the salary and benefits, you don't want all that. But I can be yours one day a week. Like I can come in, you know, whether it's on site, whether it's personal. But I mean, I can you've got me for one day a week. And that's when we can have time with the leadership team. That's when, you know, I can help provide like, you know, some people advisory, like just kind of help to make sure things are on track from a compliance. What are you doing here? What are you doing there? And um, and that that is really a lot of times that's all they need is just someone to kind of just help them stay on track and kind of avoid the landmines. Because it's like, you don't need me full time, you don't want me full time, but yeah, if I can be an adjunct member of the leadership team and kind of be there to help, you know, in the important conversations, the important meetings, um, to help some some and make you make some typical difficult people decisions, that's where I feel like the value comes in for a fractional HR. Because I can come in and I can do that.

SPEAKER_02 33:00

And I can just uh and I can I think that's absolutely I think that's absolutely true. The the you know, that's a case that we don't know what we don't know. And I with the AED back in the 90s, I wrote a book for them called the Product Support Handbook that had every job description with performance reviews in the parts and service world. And we sold it, I don't remember, some obscenely low price, but um you know there's there's uh a need for that today. Somebody who works with the tele collections, let's call it accounts receivable collections. Yeah, how the hell do you know what the guy's doing? There's a company out there called Signature that does mystery shopping. Oh, okay. So isn't that revealing? And they get all of the people that answer the telephones during the day or sell on the telephone during the day, and they're in a room after hours sharing pizza, and they listen to themselves being recorded and how they're answering the customers. Wow. And you have no you probably do have an idea of what it's like when the people, the employees in embarrassment, dive underneath the table. Oh, yeah, yeah. It's amazing. All of the simple things that we have available at our disposal today, teams meeting, this kind of a discussion. In my view, every employee of every company should visit with somebody from HR for at least an hour once a year. Just to have a chat. Yeah. God, you've been married 34 years now to the same person. Wow. You know, it's it's um I I don't think we do that. We don't recognize we're people first.

SPEAKER_04 35:04

Yeah.

SPEAKER_02 35:05

Yeah. It's almost like we're treated as tools in a toolbox.

SPEAKER_00 35:09

That's right. Yeah. Just just expendable, right? A lot of people think that, well, if this doesn't work out, I'll just go get another one.

SPEAKER_02 35:18

In many cases, that's what's happening.

SPEAKER_00 35:21

Yeah.

unknown 35:21

Yeah.

Training, Certification, And You Can’t Hide

SPEAKER_00 35:21

And they don't think about the tur, the cost of turnover. The cost of turnover is, I mean, look, there's all these, there's all these formulas out there. And I I wish I could give you like, you know, here's the magic bullet. But I mean, a lot of times they say turnover is six times the annual salary. And so, you know, when you think about, you know, if you got whatever, you know, widget makers out of that rule for that long, the longer they're out. That's just you know, it's just compounding. And so, um, but I would, I would, you know, you talked about everyone in the company spending one hour with with HR. I would, I would also flip the script, and and I'm a big proponent of this. HR, by and large, and I'm not speaking for all HR people, but I am speaking, I am speaking to a certain number of HR people. I think that unfortunately, there's a lot of HR people out there who don't know jack squat about the business that they're in, that they're exactly that's exactly right.

SPEAKER_02 36:11

And they don't make an effort to try and learn it either.

SPEAKER_00 36:13

No, no, they just got blinders on. They're just like, I'm just here to do benefits. I don't even know what we make, I don't know how we make money, I don't know anything about our margins, I don't know anything about EBITDA, I don't know anything about all I know is that I just gotta punch the buttons and we just gotta do benefits, and that's all I'm gonna do. And um I that's unfortunate. And I think that the best HR leaders are ones that get into the business. Like they spend time with operations they do right along with salespeople. They go out in the shop and they visit with the technicians and I mean they know the business. Um, and so I think it goes both ways. I think it would be great if people spent time with HR to understand what they do, but I think it also I think more HR people need to be out there spending time in the business to understand. Oh, so this is how we make money.

SPEAKER_03 37:00

Yeah.

SPEAKER_00 37:01

Oh, so this is our primary customer. Oh, this is how we lose money, this is what's profitable, this is what's, you know, those are things that I think a lot of HR people don't do, unfortunately.

SPEAKER_02 37:12

Well, it I worked at two different companies, two caterpillar dealers in Canada, both of whom had extremely strong HR people. Um, the guy in Montreal, his first name was Fred. The guy in Vancouver, his first name was Charlie. And the only reason I'm not giving Fred's last name is I can't remember it right now, but I'll put it it was Charlie Loist in Vancouver. And there was a significant difference in size of the businesses, and I was running the parts department, well, many different operational sides in parts or service or data processing, that kind of thing. When I went to Finning, I had two days, 16 hours worth of interviews with 10 different people. Oh, okay. And the last one was Charlie. And one of them turned out to be, at the end, the CEO of the company. His name was Don Lord. He was a professional football player, a big, tall, lanky guy. He was involved in sales and branch operating. He was good at what he did. But he sits down with me and he says, Um, they they tell me you're pretty good at what you do. Is that true? I said, Well, I'm not gonna argue with people I don't know. And he said, Have you got any questions for me? I said, About what? About the job. I said, Would you know the answers if I did? He said, Probably not. So I said, Well, I guess not. He said, Well, good luck. I hope you enjoy your your time here and see you later. Honest to God, it was exactly that kind of thing, it was that short. And what was interesting is his godmother was one of my aunts. Wow, really? And neither of us knew that. Oh, really? Yeah. At the time of the interview. A couple of months later, I'm visiting with the aunt. She said, Oh, I've got my nephew, my godson lives works there. I said, Yeah, who's that? And and she tells me, Oh, Don Lord. So I'm passing him in the hall a week or two or whatever later. And I say, Hi, Don. Hazel says hello. And he stops. He says, Pardon? I said, Yeah, Hazel says hello. How do you know Hazel? She's my aunt. I'm closer to her than you are. Wow. And things changed from that day on. It came back to the old nonsense. It's not what you know, it's who you know. Yeah. And that still bothers me about HR. The Quebec world, the French world.

unknown 40:02

Yeah.

SPEAKER_02 40:03

They're really more interested. So sociologically, our societies are different, our cultures are different. One of the things that Charlie did in Vancouver for Finning, and it's still the largest cat dealer in the world, I think, somewhere in the room in the world, 16 to 20 billion dollars a year. They're in South America, Europe, Canada, blah blah blah. Every summer, Charlie brought in interns. Okay. They were led by, supervised by the youngest manager at the time I was. So I had 18 to 24 people coming in between their junior and senior years undergraduate and between their in between on their master's programs, and I had them for four months. Wow.

SPEAKER_00 40:55

So the first hurting cats? Was that hard?

Low-Hanging Fruit In Customer Follow-Up

SPEAKER_02 40:57

Oh, I tell you, the first 30 days, what they did, they were in the warehouse the whole time, receiving parts, picking parts, counting parts, and I lost a third of them because this is way too much work. Yeah. So let's say I got 20 at the end of that, and at the end of that four-month period of time, we offered them a job, sight on scene, just graduate, come back, we got a job for you. And we put them into an 18-month training program, three months in every one of the departments, parts, service, selling, marketing, and administration, and then three months just general, and we offered them a job.

SPEAKER_04 41:31

Yeah.

SPEAKER_02 41:32

That had been Charlie brought that in. And that when I got there, it had been going on for about 10 years. Every parts manager, every service manager, every sales manager, every branch manager, every administration person came in that way. Wow. How do you break that culture?

SPEAKER_00 41:50

You don't. Wow. You don't. Yeah, because they all know. They've all they've all walked a mile in each other's shoes. Yeah. So they know. Yeah, they know the job. They may not like the job, but they know the job and they have respect for it, they appreciate it.

unknown 42:03

Yeah.

SPEAKER_00 42:04

I think that that rotational thing is strong. That's strong.

SPEAKER_02 42:07

And that's that's the benefit of having people that really know their way around HR. You not only avoid financial penalties for bad actions, but you you show tremendous gain in customer retention and customer loyalty and employee, unbelievably powerful things that are soft skills.

unknown 42:28

Yeah.

SPEAKER_02 42:29

I don't like that term. Soft skills, they're the real skills, but yeah, yeah.

SPEAKER_00 42:34

I heard something recently, and they said, let's start calling, let's stop calling them soft skills, let's call them power skills. And I was like, ooh, I like that. Power skills.

SPEAKER_02 42:42

Yeah, like I got the right idea the other day. I'm I'm 80 this year, and instead of saying I'm 80, I'm eight to the power of 10. You know, I gotta try and find some way to make it a positive thing.

SPEAKER_00 42:54

You are not 80 this year, are you, bro?

SPEAKER_02 42:56

Yep.

SPEAKER_00 42:57

Oh man, man. Doing good for 80. That's fantastic. Thank you.

SPEAKER_02 43:03

Thank you. Flattery will get you everywhere, man. Yeah, I I you know, there's so many subjects that can be transferred to a blog, and and I hope that my audience, there's we we get about um eight, nine thousand hits on these things when they get posted across social media. And there's uh you know, 20 to 40 to 60 people. There, it's on every podcast channel that there is, and they're longer than the average bear. We've been going now for about 45 minutes. Yeah. And it's you know, for people to hang in the whole time, there has to be interest. So what I'd like these things to be is thought provokers. Get people to think. And I think you've given a lot of people a lot of subjects to think about, and I would like you to follow up with some of the blogs. You know, how much does it cost on displacing somebody? I'll give you an example. A couple of months ago, I was talking with a company who just named the CEO successor. He was in he was just under 50, so he's going to be there 10, 15 years. And the other two men that were pretenders for the throne didn't get the job. And they're all in the same age block. And I'm talking to the company, the owner whose CEO's position is being replaced. I said, Well, what are you going to do about the other two guys? He said, Nothing. Why why do you ask? I said, Do you expect them to stay? He said, Of course. I said, Well, why would they stay when they have no future? Yeah. He said, What? I said, they're going to leave you. They're going to find someplace that they have an opportunity. They're they've they've they've got another 10-15 years, man. They're not they're not going to sit waiting for you.

unknown 44:59

Yeah.

SPEAKER_00 44:59

He was not, but you need, but you need a plan on them leaving. Yeah. They may not.

SPEAKER_02 45:04

That's correct. And if they don't, it's a it's a glorious deal.

SPEAKER_00 45:08

Yeah. Or, I mean, honestly, I mean, they could see this is this is man, people are so interesting, Ron, because if they don't, that may be even worse. Because what if you've got a sour apple who's like, you know what? I'm just gonna make things miserable and I'm just gonna stay right here and I'm just gonna, I'm not, I've not been named the heir apparent. And so I'm just gonna sit here and I'm just gonna be an ass, and I'm just not gonna, I'm just gonna punch the clock and I'm gonna do my thing. And so then it's almost worse. So it could be great if they stay, if they've got the right attitude, but if you got someone who's just bitter and they stay, then you've then you've got kind of a worse situation. So so yeah, I mean, you asked what I think you'd I think you'd have to think about. These are the two people that were not selected. What are we gonna what are we gonna do with them? Do we need a plan for them to leave? But if one of them turns bad and turns into a um a bad apple, then we need to we need to figure out a a contingent contingency plan to you know to remove them possible. It becomes a problem.

The Case For Part-Time HR Leadership

SPEAKER_02 46:11

I've never saw I've never seen it done, and but in that case, I'd love to see a rotation. The three of them will rotate hold on the job for a certain period of time. The the other, you know, the leadership is so critical, but having the right people, and the best example I give anybody is Lewis Gersner, who when he went into IBM from the consulting company. His first meeting with his management, his leadership team. Have you heard this story? I don't think so. He had I think 20 people as direct reports. Oof. So yeah, a killer, right? Yeah, way too many, number one. But yeah, he he gets them all together, they have a little bit of chit-chat and make everybody relax, and he said, Well, I'd like to go around the table. And I'll give you a couple of minutes to think about it and write them down if you wouldn't mind. I'd like you to tell me who your top three customers are. And nobody was able to give an answer. So he said, Okay, the meeting's over. I'm gonna have a week from now, so think about it. I want you to come back and tell me who those three best customers are. The week goes by, they come back, they give them the three of each of them. So I got 60 customers. The meeting was over. What do you think he did? I'm not trying to put you on the spot at all because how many of them were the same?

SPEAKER_00 47:43

Were they all the same? Like you know, did he have 20 of one or not?

SPEAKER_02 47:46

No, 20 different divisions, little computers, big computers, database, software, blah, blah, blah.

SPEAKER_00 47:52

Yeah, I don't know. What did he what did he do with 60 different customers?

SPEAKER_02 47:56

He took the list, got on a plane, and went to see all of them. Twelve weeks later, he comes back. Four weeks after that, he got his 20 guys together and told them what the next five years was going to be. Here's the plan. Staying close to your customers is still the most critical piece of any business. Everybody says customer loyalty in America is terrible. We've caused that. We've reduced the number of people, we use voicemail. Some people even had recordings that people had to listen to before the phone would be answered. It was unbelievable. It's still going on. So, what you're doing, in my view, is long overdue, but you're awful alone. So look over your shoulder. In another year or two, there's going to be a lot of people doing what you're doing now.

SPEAKER_00 48:51

Yeah, yeah. I just got to get a head start and get way out in front of them.

SPEAKER_02 48:55

Yeah, you don't need to be that far in front. Just keep changing the the the rules. How do you how do you want to? Well, first of all, what have you thought about a discussion? Is this weird or what? No, no, no.

SPEAKER_00 49:06

This is great. This is great. You know, you I always walk away from our conversations with with with a new uh new perspective, and and you always leave me something to think about. So you've you've you know, you always send me something. And it's so funny because I got I think I shared with you. We texted the other day, I got this book, and I saw this and I was like, I remember reading that years ago because you you had kind of tasked the uh the leadership team with and so uh I'm gonna be uh going out of the country on vacation in a couple weeks, and I might just have to have to read through it again. So refresh my my memory.

SPEAKER_02 49:39

Yeah, reading is something that's really important. Is I told you on our website under resources, under other at the bottom of resources, we have a suggested reading list. And my daughter's a teacher with a master's in education, and and I want her to start a reading room where what we did at Kirby, getting everybody to read a book and then get together and talk about it. Yeah, like a book. And it's always helpful. Yeah.

SPEAKER_00 50:11

Well, it it it it is. Um, admittedly, I don't, and this is this is gonna sound really funny. I don't read as much as I should, just because I get busy with life and other things, but uh, but that's really no good excuse. But I think the other thing it does is when you go through like a reading room or the book club with with your colleagues, you kind of start to develop some common language, right? Some common, like, you know, you can kind of like look across and be like, you know, it's almost like it's like having an inside joke, right? Yeah. Like you and I, I know you and I are both uh connoisseurs of of good gem. And so, like, you know, we can look across the room and I can be like, oh yeah, the Empress. Yeah, that's the one from uh that's the one from you know, whatever that the uh Victoria can be. Victoria, yeah, exactly. So like we know, so see, we have that common, like it's when you have a book, when you're reading a book together as a group, you've got this common, like there's characters that certain people identify with, and you can say, Ah, yeah, you're being a Charlie, you know, ah, you're being a you know, Robert or whatever, you know.

SPEAKER_02 51:11

It's just yeah. So how how how do you want to put a bow on this? Any closing comments you want to put out for everybody?

HR Must Learn The Business

SPEAKER_00 51:18

You know, I I just I just want to thank you. Thank you for having me on. Thank you for having the conversation. It was very casual, very easy. I mean, we could sit like this and and just uh and chat for hours, but I think this is uh I'm really enjoying the work that I'm doing. I mean, not that I didn't enjoy what I was doing before, but I love, I think there is a I think there's a need out there for for HR know-how and guidance and uh and expertise. And so I'm I'm I'm looking forward to fulfilling that that need for people. So what's the name of the company? Six degrees or less. How did they? So that started. And probably the best way is you can go, you can find me on LinkedIn, you can go to the website, so six with a six degrees or less dot com. Or my uh email address is just Seth at again, you know, this the number sixdegreesorless.com. And so it's um you know, it started years ago when I had my my podcast. And so when I was thinking about you know this idea of creating a company, I was like, well, I've already got the website and I've got why why not just keep it all the same? And and so I did. So that's it. But it's uh but it's really relationship driven, it's all comes back to relationships, and so perfect.

SPEAKER_02 52:35

Yeah thank you, Seth. Thank you for your time today. And to the audience, thank you very much for listening to us. I hope that some of what Seth has put forward to you gets you thinking a little bit. It's a very, very important subject that needs a lot more attention than what it's currently getting. So thank you for listening. Good luck, Mahalo. See you the next time.