If you don't understand how the company makes money, you cannot contribute to those conversations in any sort of meaningful way. And moreover, no one's gonna listen to you when you do. I do think that as you become more aware of how the company generates revenue, what are the, it's always about what are the problems that the leadership is dealing with, and understanding how you and your department can help to affect change with those problems, solve those problems. And I think that's, understanding how the organization works, what your role is in the organization, and then looking at, we go back to the data, looking at, what is it that you have in your chest of solutions that you can provide to the leadership?
David Rice:Welcome to the People Managing People podcast. We're on a mission to build a better world of work and to help you create happy, healthy, and productive workplaces. I'm your host, David Rice. My guest today is Julie Mahfouz Rezvani. She is the Managing Director of The Orion Group. We're gonna be talking about something every HR leader should know and understand, and that is the revenue model that drives their business. Julie, welcome.
Julie Mahfouz Rezvani:Thank you.
David Rice:When we were talking before this, you were mentioning to me about the difference between HR being in the admin lane versus affecting real change. And this is where I wanna start this conversation is what defines that shift and what signs tell you? An HR team is still stuck in admin mode.
Julie Mahfouz Rezvani:It's a topic that I think is quite interesting because HR often, especially as they, increase in leadership, they want to get into those spaces where those decisions are making made. And I think that's the sort of the biggest telling sign is which tables are you at? Are you still doing benefits administration and payroll forms and clients administration or are you proactively involved in those conversations where Strats being discussed, strategy plans and workforce planning and the acquisitions, maybe companies that are looking at acquiring, are you in those conversations or are you being given the memo afterwards? So then that's a big telling sign as to which table your data. I think, it's Are you a part of those identifying what are those outcomes that you're looking for, that the organization is looking for? Are you coming. More to operationalize what the organization has already determined, especially through, for example, through strategy planning. Are you somebody who's given the strategy and told, okay, now go operationalize this? Or are you a part of actually coming up with that strategy for your organization?
David Rice:It's interesting, a lot of HR leaders, they know the org chart, right? They're very familiar with sort of the people practices and processes, but maybe they're not so familiar with the revenue model, and I'm curious, what are the most sort of essential financial metrics that HR has to understand if they're gonna prove themselves in those executive conversations and get into those other meetings be seated at that other table.
Julie Mahfouz Rezvani:Yeah. Look, I know of course through the work I do a lot of HR people and I would hate to stereotype that finances is generally not an area that most of them either enjoy, feel comfortable with, unless maybe they're on the comp side. So it's not complex. I don't think that the data that we're looking for that they should know is complex. A lot of them can tell you about things like turnover and how many people you know left the organization and how long it takes to hire somebody or what the costs are. I think we wanna go beyond that. So I deal with a lot of like high growth startups. A lot of them, want to know things like the revenue per employee, you should know that you should know. Even if their cost centers, like overall, what is the revenue per employee? What's the value of an employee's lifetime? Are you, when it comes to retention, are you retaining people long enough? And then what's the cost of not retaining people? So a lot of times you'll hear people say again, this is how much it costs to advertise, or this is the lead time and this is, this is. The impact you have on that let's, make that into numbers so people on the other end can understand, what is the loss of that productivity in dollars and cents? What is the actual spend, how about the onboarding time? How about the training? Oftentimes you get employers who are very dug in on salaries and sometimes when you come back to 'em and being able to say listen, we're talking about X number of dollars. That in the round of how much you're gonna spend if you don't keep this employee is, significantly less. And so I think people need to know what those numbers are and being able to articulate them. So those are, I think, the metrics that I would start with. And it also then shows that you understand the business. I remember being in a conversation many years ago, because before I got into HR, I was in sales and I remember the CFO of our organization came to me and said, there's a word that a lot of people don't understand and especially HR people, and that's profit. And at that time I loft. It, it's important, like you can't work in silos and sometimes HR seems is doing that. So the more you understand about the numbers and how they impact the organizations, what's the CFO looking for? What keeps, or her up at night and that's really important to know.
David Rice:Yeah. I think, HR, a lot of folks, they get pulled into tracking certain data types, you mentioned, hires, exits, engagement scores, things like that. I am curious though, are there more deep or maybe commercially relevant metrics to HR teams really gotta start using and why does that matter so much for their people strategy?
Julie Mahfouz Rezvani:Look, I think understanding everything you do on the people side as it relates to growth, as it relates to revenue. As it relates to longevity for the company. Being able to, I think, come to the table utilization rate. So like when do you decide that you, especially again working with smaller companies that you know are a little bit tighter on off because they're newer and they're maybe being funded that's really watch how quickly they scale. When do you decide that you're gonna hire somebody new? When is that decision made? And oftentimes it's, are you looking at the utilization rate? Are you saying that you know that, are you able to articulate when the right time, not just based on, sometimes it's about look at the data, bring the data forward and make it very clear not only that this is the right time to hire, but what's the consequences of not hiring? How is that gonna impact the scaling? And again, putting that back into dollars in debt and cents.
David Rice:We were talking before this, you said something I thought was really insightful and he said HR often has the right data, but not the right language. I'm curious, in your opinion, how can HR leaders sort of present insights in ways that resonate with different business stakeholders and move decisions forward, around that language?
Julie Mahfouz Rezvani:I think first of all, a lot of that data is there, right? So knowing your audience, who are you speaking to? Who cares about what? So I don't think that the same data should be presented to the COO versus the CEO versus the CFO. So it depends on who you're talking to and what's the purpose of the conversation. If we look at COOs, oftentimes they're looking at efficiency, so that's the data you should be bringing to them. If you're looking at CFOs, obviously we're looking at things like cost per hire or. The cost of retention. CEOs, we're looking I think more at morale and we're looking at overall culture in the company and how the company's gonna move forward. So I think you'll have to be very aware of who your audience is, and then being able to bring it back to basic things that people can understand. For example, like the Society, human Reverse Management says that turnover costs, I think it's six to nine months of a salary. Take that, don't say six to nine months, say, bring it back and say, okay, this is how much it's gonna cost to replace data. And empathy wants 10 grand more, give them the 10 grand or look for the replacement. But if you're just gonna get rid of them because of the 10 K, you need to understand what that's gonna mean in terms of replacing. So really making it basic. I think, and again, a lot of this data, I think HR is flooded with data. They're flush with data. It's just about how do you extract the right thing. For the right audience. And also, I think it's important to understand what's the objective, what are you trying to get? Buy in for, how are you trying to, what are you trying to convince people of? And I think that presenting the data in a way that it only doesn't just look at the immediate, but also the long term. And I think that's enough too, that HR has to say, here's the data that we have. Here's what it tells you in terms of what's gonna happen three to six months from now. But let me tell you what it means for two to 3, 5, 7 years from now. And I think that's something that. Especially, organizations, the C-Suite, they're definitely looking for longer term impact as well, and I think that's something we should be bringing to this table.
David Rice:Yeah, I'd say you hit the nail on the head there, right? Storytelling 1 0 1, know your audience, but as part of knowing your audience is knowing how to hook them and what is really relevant to them and that, what do you have within your data that is going to provide that hook or that thing that makes them more interested in what you're bringing?
Julie Mahfouz Rezvani:Yeah, look, I've worked with organizations. I can tell you one on the not-for-profit side that I worked with who know they were just not-for-profit, right? Lots of government funding, lots of donations. They're a little bit more conservative when it comes to things like learning and development for their executives. And so we were having this situation where they didn't want to invest the money into their CEO to take a few courses that really she needed to take to be able to better manage her staff. We were having issues with, they were having issues with. Turnover and for morale in the organization and the cost of the course. So this was $25,000 to take at the university level and we sat down with their HR department, we pulled out the data. We talked about how many people have left. What the exit interviews told them. And so it's not always quantifiable data, it's a lot of qualitative data, but you can take that and you can, put that into sort of the quantity and what that means in terms of the impact to the organization. So that's exactly what we did. We said this is how many people have left. Here's the reason they're leaving. She's really great at everything else. We need to help her on the management side. So we made the business case, she took the course and we told them that this is what's gonna be the impact in terms of savings for the organization when it comes to, again, turnover and replacing these individuals in morale. And also, the impact of funding with government funders because no one wants to see that type of situation unfolding at a do good not-for-profit where people are leaving and. Say awful things about the CEOs. So yeah, I think, it's about being able to put it into very basic terms that that who your audience is can really have that, resonate with.
David Rice:Yeah, it's interesting. I think it's a good example of translating a people issue, something like turnover, engagement into a financial argument that leadership can't ignore. I'm curious though, is there an experience level where you become comfortable with that? Or is that because I, when you first move into a cer like an HR leadership role, I imagine that's a little bit of a challenge to feel comfortable doing that. I'm just curious to get your thoughts, like at what point did you feel like. You had the tools to do that, and what were some of the keys along the way to helping you be able to do that?
Julie Mahfouz Rezvani:Yeah, look, I think it's changing the frame of mind sometimes in the company that you're working in. We talked about this earlier, that HR, being in the admin lane, HR being a call center, like that's the sort of the de fact position that most companies will take, especially medium to small size companies. And so I think that the shift, I think it's less about. What level or how many years or what your title is. I think it's much more about the understanding. So yeah. Are you going to the meetings when you are given opportunities where you are sitting down with leadership outside of HR? Are you asking those questions? Are you listening? Oftentimes that's what I will tell people that I work with is that, you need to listen to when they're describing what the problem is. You need to listen to what the problem is and you need to understand. First of all, start with understanding how does the company make money? If you don't understand how the company makes money, you cannot contribute to those conversations in any sort of meaningful way. And moreover, no one's gonna listen to you when you do. So I think that asking the questions can happen at any stage. I do think that as you become more aware how the company generates revenue. It's always about what are the problems, right? What are the problems that the leadership is dealing with? And understanding how you and your department can help to affect change with those problems. You'll solve those problems. And I think that's, understanding how the organization works, what your role is in the organization, and then looking at, go back to the data, looking at, what is it that you have in your. Of solutions that you can provide to the leadership. So I would tell you that, anyone can, I think it's not really a level thing. It's, I think it's much more about your understanding. And I'll tell you a an example. We were working with an organization who was looking to change their recruitment because they were just, they were an organization, it was a call center. They had a big part of what they did was a call center that they had. And the turnover, if, call centers is atrocious. So they're, I think the cost to sale for what they were selling, I think their margins were like so slim and they, they were hemorrhaging money at this point because everyone was on the call too long. It was just ridiculous. And they were turning over constantly. They had somebody who was in talent acquisition and this person was maybe two years outta school trying to get into HR. So of course they go down the talent acquisition route to try to get there. And she came back and she said, we're using a recruiter and we have these three month guarantees. And guess what? Like they're making a load of money off.'cause we're turning these people over in that sort of after three months or six months or whatever the guarantee period was. And she had taken that away and she said, you know what, based on what we're spending. I think it's smarter to bring in two in-house recruiters. These are not specialized roles. They're call center. We could find people, so let's bring in, a couple of talent acquisitions, more talent acquisition people, and stop using the recruiters. And she had brought up a very basic Excel sheet where she showed how much we were spending and how much we would be saving if we brought these folks in house. I think it can be done at any stage. You just need to understand. How does the company make money and what can you do to help the company either make that money or then save on the expense? And she got it even though she was super junior.
David Rice:It's an interesting time, right? AI is everywhere right now. And I'm curious from your perspective, how can it help HR professionals build that commercial fluency, analyze people data in different ways, and maybe communicate insights more persuasively to leadership?
Julie Mahfouz Rezvani:Yeah, AI is everywhere. Anyone who says they're not using it, fine. Because everyone's using it.
David Rice:Pretty much. Yeah.
Julie Mahfouz Rezvani:And and every day something new comes out on, I was reading this article the other day about how every job is gonna be replaced by AI. So that's the big fear out there. And so I was reading this article about how they were talking about how recruitment is definitely one of the ones that HR, that's going to opposition's gonna be replaced by AI. Especially these sort of third party head hunters. There's a lot out there that is. It's bit scaremongering, I think, but no doubt there's a lot of benefit here. So how do I think it can help? Look, I think the very basic way is when you don't know something, having AI explain it to you. And I think that's what often happens, not just in HR, but just generally is when you are not, people are using jargon. You don't know what that acronym stands for. And even if you know it, you have no idea how to talk about it intelligently or relate it back to the work that you do. So for sure, I think that. There's a lot that can be done when it comes to just the knowledge building within HR and within any other department. So I would start with that. I think data can be intimidating, very intimidating for people who maybe don't work with it as much or. I don't really know how to use I would say, even some things as simple as Excel to extract data and manipulate data. And I think that's again, another place where AI, whether it's, you're trying to understand financial modeling, you're trying to extract data to make it more relevant to. There's obviously a lot there that AI can do to support you. I always tell my clients, just be mindful of what you're putting out there. Obviously you wanna be very careful about what you're sharing. And we've had situations where people are sharing things that they shouldn't be. So being mindful of, the confidentiality around that. But I think that AI also, can help you to understand when you're looking at your organization, help you to understand what are those risks. Even asking it to look at it from the perspective of the CFO or the CEO or whatever, and looking at your data and saying, how would I present this? Or what part of all of this information that I have, could I use or could I slice and dice and give to the CEO for it to be something that they can benefit from? So it's a lot of educated. That AI can do. A lot of people who are in HR, maybe they started off in a, they were in the support lane, and they are in lead admin lane and they really wanna get out of that. So being able to use AI to tackle those things that otherwise intimidate you, I think is really important. And I think that goes right across the board. And I think that the opportunities to learn also. So when you are familiar with some of the language, some of the jargon, whatever it is. Being able to have, utilize tools to actually break it down and also creating efficiency, right? There's you talk about burnout. Burnout is everywhere. The worst burnout I see is people who are, for example, often responsible for those internal investigations, for the employee relations types of matters. And that can be really draining. And so it's okay, but this is what I do all day long. I really don't have capacity to learn anything else or do anything else or take a course or whatever it is. And so being able to, again, utilize AI to quickly be able to understand or be taught something that you otherwise maybe don't have time to attend that college class or whatever it might be. So I think there's a lot of opportunity here to learn and to understand and then being able to, again, understand the language and then speak the language and that helps to propel you forward, I think. And I think AI is great for that.
David Rice:I couldn't agree more. It is just a good example of sort of that idea of speaking the language. Like I had to give a strategy presentation and I used it just to challenge my assumptions, like I had opinions on whether or not that would matter to this person in the audience or that person in the audience. And then I asked it to give me an assessment of should this be in there based on the audience? And it gave me some perspective or views that like I just wasn't Oh, that's a good point. They might be interested in it for that reason. And or it helped me refine what it was like. You don't really need this part because you're the only person that's gonna care about that. You know?
Julie Mahfouz Rezvani:And to your point, if you are somebody who maybe isn't generally invited to those tables where the executive said, if you are somebody and you are going in to present something, you're pitching something for a new HRIS or some sort of new sort of process. I think using AI to say, okay, this is my audience, to your point. Tell me of all of this stuff that I have, what is it that they're gonna be the most interested in, and how can I best deliver that? And I think that you know that it will help to instill confidence in people who have really good ideas, really understand what's happening in their department. Just don't have. Haven't been in that room, don't know how to present to those people. And yeah, we wanna hear from those people, right? Because they're the people who are on the ground. They know what's going on. And you wanna affect change. You need to be listening to the people who have all of that information, that data are talking to your employees because, that's the real stuff, right? Everything else can be manipulated. You wanna hear right from those folks who are on the front line, what what your company needs to be doing.
David Rice:Absolutely. And anything that can help them come into that room with more useful things and things that they feel comfortable talking about. So now I'm curious, you've worked in nonprofits, tech startups, construction firms, across the gamut of industries. One of the questions I wanted to ask you was, where do you see the biggest gaps between HR and business strategy across different sectors and what sort of sector maybe surprised you the most in how it used HR?
Julie Mahfouz Rezvani:I think the mindset. I see there's a big difference still between mindsets that are still, that sort of HR is a cost center, right? We've heard that before and I think that those organizations that see it as such are organizations that typically underfund. HR departments, right? So you're HR. I'm working with somebody right now and she's, has responsibility for an organization that's 500 people. There's her and an HR admin, and she's drowning, and there's so many things that she could be doing that would help optimize business processes and would allow higher retention rates. They'd be able to just. In better, more qualified, richer sort of staff with richer experience, rather. And she has no time to do that. And so I think that's a lost opportunity there. So I think the underfunding, I also think that, HR isn't we pay a lot of attention to succession planning when it comes to outside of HR. So we will look at the CEO, what's the plan for the CEO? The CFO, we go one level, the second level, maybe even three levels down when it comes to leadership. I don't know that we look at HR in the same sort of way. I think that people don't consider always that there should be, especially in organizations where there are big HR teams, there's leadership in HR. We are doing the same for HR. So I think that's an issue. I'd like to come back to the burnout. Like I think that, we're not is a word that you probably, it's, we're using it a lot. We used it a lot through COVID, post COVID, but really it's quite real, right When you are. In these situations, you are working in HR, you are stretched, you are the one person who is expected to do all the administration and also the organizations that don't even farm out their legal work, they expect HR to really know all of the laws. And that's a big ask and more currently. I think that's a huge risk when you're asking HR to do that because the consequence can be quite significant. So I think that's another area I think we have to talk about is, if people are burnt out, why are they burnt out and is HR burnt out? Then what does that say about the rest of your staff and especially if they're the ones who are supposed to be helping to create that culture. What organizations are, what sectors? As I said, I do a lot of work in the tech sector. I would say that is one of the ones I think. There are significant gaps. We talk about being agile, especially they love to talk about that. There's a shift, but there's a culture. They really like to promote the culture and then whatever the ping pong tables and the free food and the whatever. But I think that when it comes to scaling HR in these departments? I don't think they're there yet. And I think that part of that is they obviously think about where their funds need to go to and sometimes product development, as we all know, and going to market, obviously, takes priority. But I think that those organizations, you can't scale if you don't have the right systems in place, if you don't have the right HR in place, the right people in place, and HR brings that to you. So I would say that, some of the more, most innovative sectors. Light tech probably have the most outdated people strategies. And I think that's something that they need to work on and off. And what happens is, I think it's an impediment to them scaling. They they're moving forward. They're like, we'll outsource this. We'll, use a recruiter for that, and that's all fine. There's a lot that you can outsource. I'm not saying that you need to have robust, huge HR departments, but oftentimes they're not even bringing anybody in. To deal with the people issues. It's very reactive. So they bring in someone when they, there's a problem. I worked with an organization, this is a compliance thing, but I worked with an organization doing great things. They're building this fantastic product. And they were a Canadian office in an American company. And what they weren't doing was they were not paying their staff for staff holidays. They were not paying their staff. Like they weren't compliant. They weren't, they were paying vacation paid. A lot of things they just weren't doing. And not because they couldn't, they just didn't know they were supposed to. And and they came to me once they were hit with the SA had come back and they were being investigated. So that's when they came. And it was just so much more money that they could have saved, that they had to set up those systems, which they do for everything else, but not for HR. I think that's probably one of the industries I think that really needs to pull up their socks when it comes to this.
David Rice:It reminds me of an old tongue twister. My dad used to say, you don't know what you don't know until, you don't know it.
Julie Mahfouz Rezvani:Dad, a hundred percent right. And that's the thing I tell organizations like, you do what you do. You, you, this is what you do. You do this best. And I'll talk to CEOs and I'm like, I'll tell you babe, it's not even about the money. It really is not. It's just an afterthought. It's oh yeah, we should. We didn't even know we were supposed to do that. He said, how do we solve this problem? How much is it gonna cost? And when they look at how much it's gonna cost, it's okay, I just don't know why we didn't do this before, because now we have to play catch up For the last three years where we didn't do this and had we done it consistently, we wouldn't be in the situation, period. And so a lot of it is just the knowledge of again, you don't know what you don't know, right?
David Rice:Yeah, absolutely. Before we go, there's always a couple things I like to do here. The first is I want to give you a chance to tell people more about where they can connect with you, find out more about what you have going on, all of that.
Julie Mahfouz Rezvani:Yeah. We're based here in Canada. We're The Orion Group. We like, you've probably heard throughout, obviously I do HR advisory. My team does everything from HR consulting. We work with mostly, I'd say midsize and smaller sized organizations. We work with boards and not-for-profits. So yeah, we're on LinkedIn. Julie Mahfouz Rezvani. The Orion Group purchased the organization and you can find us there and I'm sure somewhere in there you'd be able to find our website as well. That's where we're at.
David Rice:Excellent. And the second thing is we have a little tradition here on the podcast where you get to ask me a question, so I'll turn it over to you. You can ask me anything, can be about the topic or not. Anything you want.
Julie Mahfouz Rezvani:I was actually reading through recently interesting people that you brought on and I was listening to the podcast and I was reading on your website some really great stuff. You talked to all these really interesting people and I'm wondering like in the discussions you've had, because I haven't, heard all your, I know, whatever, 129 podcasts or whatever, it's that you have.
David Rice:It's a lot.
Julie Mahfouz Rezvani:But some great guests. I'm always curious to know what sort of, if you were to say what's one sort of people related or let's call HR decision that you've seen in your work that is, where you've seen HR maybe deviate from its stereotypical path of administration, what have you, whether good or bad, what was the decision that you saw where really the business was impacted because of the decision that HR one of your guests, maybe brought to the forefront or in your own experience that really changed the business's trajectory?
David Rice:Gosh, I have a terrible memory. I'm sure that there's something in there. I'm sure there's a bunch of examples from the episodes. For me, like from what I've seen is there was an organization I worked at years ago and HR really got sucked into sort of the glamorous stuff around people, like around office spaces they advocated for, they spent a significant amount of time talking about how culturally we needed to shift, and they were right about that. We did need a shift, but the issue wasn't that we didn't have a common space with a ping pong table and the beer taps. This was like, they had this big vision, and I don't know who got to present this to the CEO, but it worked, and they opened up this space that was nice, don't get me wrong, but a little bit ridiculous, especially for what it costs. And then a year later, COVID hits within a year and we no longer needed it. It sat there in derelict for a year, and so I can remember thinking like, wow, would've wasted time of time and money. That was when really what everybody needed was a salary reassessment. That was what was actually needed. Yeah. Like people weren't leaving because we didn't have a place to hang out. They were leaving because they weren't happy with what they were getting in rewards. It's yeah. It was one of those things, like it got the, I think that they got really sucked into. Some of the fads of the time and what was going on at these like glamor companies. And they thought if we had some of that, and they didn't really do enough polling of everybody to find out, would we actually appreciate that or is that what we all needed or wanted? And yeah, that was a decision that I know they lost a bunch of money on.
Julie Mahfouz Rezvani:Sure. That's the thing, right? Like you, you talk about, I was reading this, the survey from Mercer. Me put this global health survey that you're talking about exactly. That there's disconnect between what youth, what HR thinks its people need versus what they really need. So they were both aligned when it came to like salary and benefits and things like that. But then you have like HR thing, oh self-care and self-care was, I don't know, whatever, number six on their list or something. Health and wellness as they called it. And the employees were like, way down at the bottom.'cause they're like, yeah, no we're good. We'll take care of that ourselves. And yeah, I get my own gym membership to hear that, right? Yeah. Yeah. Just you have money and I'll take care of the rest.
David Rice:I've seen orgs where people really do value that stuff and Right. I've even had worked at places where I took advantage of it and it was great, but yeah. Especially now at a time when I think costs of living have shifted so much and all these other things, like people would rather have a crash course on stocks or like how to manage money or something. You know what I mean?
Julie Mahfouz Rezvani:Hundred percent. Yeah.
David Rice:What's more important to you at the time? Like during COVID, yeah, like some of these other things, like these apps, that would give you something to engage with and keep you challenged mentally or whatever. Yeah, that might have been really big at that time, but then when the world opened back up and everybody went back to normal, maybe not as much,
Julie Mahfouz Rezvani:yeah. Yeah.
David Rice:You always have to, I think those, the type of things you always have to listen and adapt.
Julie Mahfouz Rezvani:Listen to your people. Hundred percent. They enjoyed.
David Rice:Julia, I wanna thank you for coming on today. This is a great discussion. I really appreciate it.
Julie Mahfouz Rezvani:Yeah, thank you for having me. I really enjoyed it.
David Rice:Alright listeners, if you haven't done so already, be sure to head on over to peoplemanagingpeople.com/subscribe. Get signed up for the newsletter, you'll get this podcast and all our other content straight to your inbox. And until next time, listen to your people. Enjoy summer.