VANNOY:

Hello everyone, and thanks for joining us today. My name is Mike Vannoy from Asure, and I wanna thank you for joining today’s webinar, HR and payroll, budgeting and planning, where to invest for growth and success in 2021. So depending where you’re sitting in this pandemic you might be just busting at the seams to ready to throw the gas on 2021 and, and really, really grow your business. There’s, there’s plenty of other folks that really are, are, are still going through real tough times. It depends where you’re at geographically you know what your industry is, that there’s a, there’s a ton of factors. You know, clearly we’ve been saying all along in our, in, in this weekly series you know, we’re all in the same storm. We are not in the same boat. But, but I think regardless, you know, here we are in January, today’s inauguration day yesterday’s inauguration day you know, so regardless of where you are politically, we, we are entering a new chapter as a country, as an economy.

 You know, that, that we’re still in the, in, in the, in the, in the depth, I’d say of, of this pandemic. But I think we all see light at the end of the tunnel of this thing, right? So, you know, whether we’re three months away or six months away, I think we all see, see the light coming and, and given the deep, deep, deep cuts so many of us have had to make in, in 2020 I think we’re poised for, even if it’s not back to normal that might be a 20 22, 20 23 scenario. The year over year compare for growth is gonna be real. And, and from a payroll, HR benefits perspective we, we got a plan for that. We got, we gotta have a people plan. We gotta have a technology plan. So, I’m really excited for today’s guest joining me today.

 Colleague and friend Eyal Goldstein. Eyal is Asures president, chief Revenue Officer. But Al spent what, 22, 23 years in, in the human capital management space where he spent a lot of time working at household names, adp, Ceridian, Oracle in different points of his career serving small businesses, medium-sized businesses, large, large businesses in senior vp roles spent about the last decade in executive management chief revenue officer present role. So, so Eyal brings us, I think, really unique experience in, in, in, in look at this, that he’s work with small and medium sized businesses. He knows what the, the culture is there and how tough and ha hand to mouth those businesses are from a cash standpoint, but also has spent time in corporate America. So, also knows a pretty, pretty rigorous formal budgeting process looks like in, in, you know, 20 years of that, all in all in payroll, hr, human capital management. So Eyal welcome. Really looking forward to today’s conversation. Yeah, thank you, Mike, and, and really excited

GOLDSTEIN:

To be a part of the conversation today. Thank you.

VANNOY:

So, here’s what we’re gonna do today’s today’s conversation. We’re gonna be unpacking our, our, our most recent ebook o of the same title, HR and payroll, budgeting and planning. So if you hop on our website, hr azure software.com/ebook, hr, payroll planning and budgeting you don’t have to remember the url, just hop on the website go up to the main menu and under resources and, and you’ll find it real quickly. So, what we’re gonna do is we’re gonna, we’re gonna unpack the, the, the big themes here. We’re gonna put up some color commentary around this. I encourage you to download it now. You can follow along, you can highlight some spots you wanna come back to. In either case this conversation can stand alone. That ebook can stand alone. We’re also gonna be recording this session.

So if you got anybody else you wanna share this information you know, friend, a colleague or somebody in your organization, as you begin to plan for 2021 this is an available resource for you. So if you wanna follow along, great. If you, if you wanna just sit back and listen that, that’s also great. But I think the first topic we’re gonna take is, is really just the concept by itself, right? So for planning for growth you know, the the growth is a weird thing. And I think in 2021, because a lot of it is gonna be people growing, but really just cuz the, the year over year compare is so terrible, right? I mean, q3 quarter over quarter was 33% growth. I think that’s an all time rec GDP growth record, but it’s cuz Q2 is so terrible, right? But there’s some really interesting things. A I I’d like to get your insight on whether it’s the 33% GDP growth in Q3 or the 77% increase in, in new federal ID applications. There’s some really telling signs of what’s around the corner here.

GOLDSTEIN:

Yeah, I, I, I would agree. And, and I think what’s what’s really interesting is when you look at the new business formations today and, and, and, and yes, we are, what I would say coming towards the, you know, the light at the end of the tunnel with, with the vaccine and more clarity around a new administration and, and a go forward plan as a country. But ultimately you are seeing the underpinnings of that in small business, right? And, and yes, for public companies you know, the year over year comparisons are gonna be massive when you think about the growth and, and really the, the trough that happened in, in March, April of last year. So, so those are predetermined in, in, in, I think we’re seeing it in the stock market, which is you know predicts pretty much six months out and, and is a, is a view of the economy or these companies, public companies six months out.

But what’s really interesting is the private business formation. And when you think about the number of entities and federal IDs that are starting to be formed it’s massive and, and it’s in numbers that we really haven’t ever seen before. So you do have what, what I think is a, a groundswell that’s starting with these formations that, that I think is, is really telling of what’s to come and, and, and it’s all gonna be around small business. So a massive opportunity y you know, coming out of a once in a hundred year event like the pandemic.

VANNOY:

So, so, you know, for for, for those people who are, you know, they’re, they’re still deep in the throes of this. It’s, they’re like okay, I’m, I’m listening today, but I’m still in survival mode. You know, speak to them. H how should they be thinking about this balance between, I’m still, I’m just trying to survive the day, the week. How do, how do I make next week’s payroll when I can’t let customers in my door? How, how do we, how should those people be thinking about still planning for growth? And why is that important?

GOLDSTEIN:

Y y you know, you know, again, it, it’s really interesting, right? When, when you think about timing in how you anticipate growth and how you plan for growth, right? If, if you’re waiting for all of your competitors to be growing, for you to start investing and growth, you probably have missed a big portion of that growth curve or your opportunity to take market share as growth really starts again. And so it really is about level setting, Hey, you know, planning for, look today, this is what I need current state, but if I look three months out, six months out, nine months out, 12 months out, where do you want the business to be? And if you really start unpacking it and viewing it in a, in a forward looking manner like that, and plan for that, well, maybe you’re not in, maybe you’re not investing directly today because you are really trying to hunker down and stabilize and ensure you’re you maintain and stay in business, but ultimately, maybe it’s next month where that first incremental dollar goes back into the business for some sort of growth.

 Maybe it’s, it’s 60 days out, maybe it’s a, a ramp of an extra, you know, extra incremental funds in the next 30 days, and then increasing it in 60 days, and then increasing it even more in 90 days. So, I, I think planning for growth is the key here, right? And, and understanding where you’re at today is not where you want to be 90 days from now, six months from now, a year from now. And so what is that investment in that, in that timeline or that horizon that you start making those incremental investments again back into the business?

VANNOY:

So, so I wanna reserve a couple of these questions for, for upcoming, but like, you know, your last decade of your career, you’re, you’re doing budget at pretty sophisticated level, working for publicly traded companies and talking about millions and tens and hundreds of millions of dollars. But i, I really want to get get kind of granular and maybe not granular, but just practical for the small business owner. But, but before we go there, I just wanna touch on it, and it’s the second bullet here about human capital being more than a cost center. And, and indulge me for a second, I’m just gonna read a quote out of the ebook. And, and this is cited from, from the HR consulting organization, really respect these guys over at Korn Ferry says, globally, human capital, which is people, labor and knowledge, will be worth as much as 1.2 quadrillion dollars over the next five years.

In contrast, physical capital, which is inventory real estate and technology, will be worth an estimated 521 trillion. So, human talent and intelligent is worth 2.3 times as much, 2.3 x more valuable than everything else put together. So that sounds like one of those things, if you’re at a big company, you can kind of get behind and think about your talent strategy, make, how do we make that real for the small business owner with 17 employees to, to think about human capital as an asset versus just, Hey, this is my staff, these are my employees and really getting the most value from that asset versus, you know, traditional capital.

GOLDSTEIN:

It’s a, it’s a great question, and, and I, and I think it’s relative to the size of the company, but, but it really is down to, even if you have one or two employees your sole proprietor, maybe you have a couple people working for you, ultimately, if you take a step back and think about how hard is it to find really good skilled employees, right? No matter what size you are, if you’re you’re two employee shop or, or you’re, you know a hundred, a couple hundred thousand employees, right? Or whatever. But, but ultimately, it’s the same thing there. There’s a, there’s a shortage of skilled workers out there. It continues to grow, and it is across every single industry in this country, and frankly, worldwide is what we’re seeing now. And so when you think about how hard it is for you to find some of these employees and keep these employees, well, ultimately, you gotta have a plan for what you do to, to continue to invest in, in those people, right?

Because, because it is so hard to attract that talent and keep ’em, I think people are really ta taking a step back and saying, okay, well, how, how do I give more to my employees and invest in my employees? So they wanna be a part of our growth or, or our trajectory as an organization? And, and I think that that runs the gamut. I talk to small business owners every single day and, and their biggest concern and their biggest challenge is, I, I just need to find good people. If I, if I could find good people, I believe in the strategy of our company. I believe in, in the objectives of the company. I believe in the addressable market or, or opportunity of the company I built, but I really just need good people, and I need to be able to hold onto ’em.

VANNOY:

Yeah. And, and we’ll, we’ll, we’ll have this recurring theme. We talk about this all the time here. It’s, it’s not just a, but in a seat. It’s not just a, a, a fte a full-time equivalent headcount, right? That this is, we’re talking about talent, right? So certainly there’s a minimum requirement around you know, butts in seats that you just gotta perform the minimum acceptable level. But this is, you know, I was joking with one of our colleagues the other day that, you know, it’s you know, con contemplating how to do a job, you know, more cost effectively, and, you know whether it’s engineering and development or call centers or whatever, you know, what’s how, how much does it, would it cost you to, to outsource and offshore? Some things in, in the question comes up, you know, how, how many, how many offshore composers would it take to write Beethoven’s fifth? And the answer is, there is no number, right? There was only one human that could do it. And that’s, that’s talent. So when you have, when you have the right people with the right skills, with the right passion that are aligned culturally the productivity is just, it’s exponentially more than just a, a headcount game. Can you, can you speak to that?

GOLDSTEIN:

Y Yeah, I mean, I mean, do do more with less, right? I mean, we see it all the time on how much productivity and, and it’s almost back to this 80 20 rule, right? And, and you, you, across every business, across every department, and every discipline it’s obvious that, that you get a lot more productivity outta your high producers. And in, and in, in, it’s very evident that there’s a gap between, you know, having so many or having enough of those high producers, right? And so, you know, being able to keep those folks and, and keep them engaged and, and invest in those folks, it, it’s mission critical to the business, right? And, and I think investing across the board in, in those folks, in those skilled workers, I think is it, it’s the key to success today. And, and we’re seeing it across all industries.

VANNOY:

All right, very good. Let, so, let, let’s, let’s bring that, make this a little more real for folks and bring this down to like a, a, a budget and how do you budget for human capital management? And, and it might sound like a buzz phrase for big companies, but really, it, it, it’s a mindset, right? Human capital management, human capital is your people. And then how do you, how do you manage that? So the applications that we’re all used to are like payroll and, and HR and benefits administration and recruiting applications, but, but all these kind of fit into this, you know, human capital, how, how do you better manage that human capital? Talk, talk to, to, to the folks about what we see, what you, what you see about kind of the common approaches to incremental budgeting and zero base, you know, maybe, maybe some pros and cons of each. And then you know, what, what, what would be our guidance for our clients and our and small business owners out there to be thinking about a budgeting process?

GOLDSTEIN:

Yeah. And, and, well, I guess from a guidance standpoint, number one, in, in, in the quote on the bottom, or the data point on the bottom is, is is the most critical piece, right? When, when three outta four business owners, small business owners are not creating an official budget, it, it’s troubling, right? And so, number one, create a budget. Yes, there are absolutely different types of budgets and, and we’re gonna hit on really a couple that, that are I would say the, the most obvious ones are the ones that are most widely used. But at the end of the day, create a budget. And, and you don’t have to go to business school to create a budget. You know, you, you run a business you know what it takes to bring money in. You’re writing the checks for all the money that’s coming out.

 You know what your expenses are, right? And, and so ultimately just create that budget, whatever it is, that’s the first thing that I would suggest is mission critical to the plan. And, and then let’s talk a little bit about the two types of most commonly used budgets, right? Ultimately, incremental budgeting has been used across the gamut, small business, mid-size companies, enterprise or large corporations. And really that is taking the run rate or whatever budget that you’ve had in the prior year or prior quarter, and then incrementally adjusting it up or down based on your plan, based on the strategy and your plan for growth of your organization. Zero based budgeting is, is really starting from scratch, right? And, and so starting from zero and creating a budget from scratch, where are you going to invest? Where is that revenue coming in from?

 Where are you going to be spending all the dollars coming in? And, and ultimately, where is that investment into people is a big chunk of that. In today’s environment I’m seeing a lot more zero based budgeting from our small business owners and entrepreneurs. And, and that’s really because Covid was a reset. It, it, it changed the game. It reset a lot of the strategies of small businesses worldwide. And so it really gave an opportunity for entrepreneurs to say, I’m gonna start from zero, and I’m gonna really, really take a hard look at every single dollar that I’m investing or putting into or spending in this business. And I think it’s a really healthy approach to go through zero-based budgeting, because, because your priorities changed. And we saw that in 2020 in a very big way, and folks had to shift, and folks had to pivot.

 And folks had to change their business model in many cases. And so what you’ve spent on certain things and certain aspects of the business changed dramatically March of last year. So zero based budgeting is, I would say, probably the latest, what we’re seeing the most of. But ultimately, if there’s businesses that have been stable or fortunate enough, fortunate enough to be stable through covid and, and maybe accelerate growth, they might be looking at a starting point of incremental which, which we’re seeing some of, but, but the primarily zero based budgeting in this type of environment.

VANNOY:

Yeah. You know, I mean, I, I, I so completely agree, and I think maybe I wanna, I wanna stick on this topic for a little bit because I, I wanna make sure that, that this is not just okay, here’s my business. I got a, I got a sale, a sales and marketing function. I’ve got a, a, a product, you know, manufacturing or purchasing function in, in looking at my traditional departments and saying, okay, do I really, and then, and then just sharpening your pencil, so to speak, to how do I drive cost out of that model? I think the zero based budgeting kind of begs the question in, in, in the pandemic obviously did this for some industries, you know, think about restaurants and, and, and having to go to takeout only in, in so many cases is let zero base budgeting be the thing that just challenges the business model, period, right?

So you, you might, you might make widgets and provide ’em to customers in an industry, and that part might be consistent, but if you’ve been in business for 10 or 20 years, you probably have a lot of legacy process and go to market strategy baked into your day to day. If you were gonna start that exact same business over today, would you really build everything the same? Would you have the exact same number of salespeople and the exact same number of marketing people? Would you have the exact same office structure? Would you have the exact same you know square footage of real estate to accommodate people talk, talk, how to challenge how small business owners can and should be challenging the business model, not just an expense side of a budget?

GOLDSTEIN:

No, I, I, I think, yeah, that’s really, really important because I think what we’ve seen you, you know, over the last 12 months is you have got to evolve as an organization and, and in a lot of, whether it’s, you know, you’re in the, the hospitality business and the food business, and you really had to shift to delivery and takeout model. And so your cost structure changed in a very big way whether you were retail, small business, retail organization, and, and you had this ship from, you know, brick and mortar to a website and digital sales again, these are massive evolution in transformation. The organizations and, and folks have done really well, the folks that, that have been nimble and, and that have been able to evolve and change that. Now, there’s a lot of companies that are looking at those model and, and are following suit now, right now that they see where where the business needs to go in this, in this new type of environment.

But I, but I would say, you know, a few things when you think about challenging, well, the first thing is for me is, you know, you’ve gotta make sure that you also understand some of the benchmarks in the industry. So, so who are your competitors and how are they spending and, and how are they going to market? I think that’s really important to level set as you create some of these budgets. And then ultimately, you know, it’s a living, breathing document. And so, so you gotta revisit this thing I would say every week, every month, every quarter religiously, because it does change. And, and I think this past year taught us all a lesson of, yeah, you, you really need to continue to you really do need to continue to make sure it’s a living, breathing document and, and that you adjust it accordingly based on the market and based on the macro environment. So I think challenge, challenge the business again, if you go back to zero based budgeting, you know, if you’re writing it from scratch, you will challenge or you should be challenging every dollar that you’re spending at the same time making sure that you’re spending enough right to grow the business.

VANNOY:

Yeah. And, and, and, and, and you’re challenging not just the dollars per vendor, so to speak, but also how you’re gener the method in which you’re generating the revenue that, that might have to change, and that will fundamentally change the, the model. So let, let, so let’s get really practical for, for folks, you know, this might sound like really obvious intuitive stuff, but let’s break down what we’re calling kind of, you know, six, six tips for, for, for budgeting for small midsize companies here. And I think the first one is obvious, you know, in times of uncertainty, cash is king, right? So can can you just kind of walk us through in, in a, there’s a couple of these I probably wanna spend some more time on, but just walk us through how, how you see these, these tips.

GOLDSTEIN:

Yeah, sure. So, so cashflow is critical, right? And, and so you need to understand and, and obviously know what, what is the cashflow that’s needed out of the business, right? And so, you know, if there’s a cashflow number that’s necessary it, it, you, you gotta keep that in mind as you’re thinking about where you’re spending the dollars, right? We talked a little bit about benchmarks. It’s really good to know, Hey, I aspire to be like this organization, or I know I’m very competitive with these organizations and, and the this is what they’re spending on, or, or, or, these are the industry benchmarks for my type of industry, whether it’s cashflow, margin, growth it’s really important because it helps level set and know, am I ahead of the curve? Am I behind the curve? And, and really for, for the business owners that I speak to it, it gives ’em that north star a lot of times of, of where they want to go. We talked about it being a living, breathing document that’s really important. This isn’t something that you create once put away in one of the files or the desk drawer, or they used to say, and and not look at it ever again. It’s a living breathing document. The more you look at it, adjust it the, the healthier and, and the more visibility you’re gonna have as a, as a business.

VANNOY:

Hey, you know, I, I, I wanna, I wanna stop one thing I, for number two on, on benchmarks that I, so I’ve always had this conflicting feeling on, on benchmarks. On one hand, I think it’s really great to just have to, to me, it, it’s context, right? So it’s like, okay, am I, am I just crazy here having this cost structure? And, and it’s a sanity check, but at the same time, I would really e encourage folks, don’t, don’t view benchmarks as a target. You know? If you are trying to reinvent an industry, if you’re trying to be number one in a space, you might fundamentally think about things differently, and therefore your cost structure might be different than your competitors, right? And that might be a really good thing. But, but it’s, it, it, it’s a way to measure and get context to how the herd is performing versus you trying to carve out a new space, right? You got, you got thoughts on that

GOLDSTEIN:

Now? No, I, I, I, I think, right, Mike, and, and, and I guess for the innovators and, and, and the folks that, that have organizations that have disrupted industries, you know, they might have looked at benchmarks of, okay, here, here’s, here’s the industry, but they might be seeing something there from a disruption standpoint where they can be more profitable or they can go to market in a different way. And, and, and I, I, I think that’s a really good point you make as businesses evolve and, and disrupt current industries that, that have maybe do have done business a certain way for a long time. We’re probably seeing that more than ever right now where benchmarks for certain industries are, are being turned upside down cause of the environment and cause of the disruption that’s happening as a, as a byproduct of

VANNOY:

It. And, and I just think about like a non-industry specific example. Like if you have, if you have customers that are paying you and you got this recurring revenue stream from those customers, you could, you could, and, and maybe the benchmark is in your space, is maybe a 50% gross margin, right? So and that’s just the standard. But, but maybe you want, you could say, Hey, we’re gonna go into harvest mode. We’re gonna try to automate like crazy, and our customers will, will still like it, they’ll tolerate it, but I’m gonna, I’m gonna take my, my, my gross margin up a whole bunch, and I’m gonna harvest a bunch of cash, and this is what’s gonna make us se separate. You’re gonna go the exact opposite direction. You can say, I’m gonna throw more expense at this. I’m gonna willingly accept a lower gross margin on my, on my services, but I’m gonna double the length of time customers stay with us because this extra level of service we provide makes them love us for life, right? So I, I, I think there’s a lot of ways to think about benchmarking as just that it’s, it’s context, it grounds you, but that doesn’t have to be your target. You still gotta come up with your own way to innovate. So, all right. I, I totally cut you off. I’ll let you take us through the pick us back up at expecting the unexpected a k a a pandemic.

GOLDSTEIN:

Yeah. I mean, it’s a, you know, it goes with number three, right? And so you’re revisiting, or you should be revisiting the budget every month. And, and I think, again, we, we learn many of us to expect the unexpected and, and why revisiting that budget and that business model is, is really important. It’s a once in a hundred year pandemic. And, and I think there’s not much more to say there than expect the unexpected there for your business. And, and then as well as non pandemic, right? It’s, you’ve got new competitors you’ve got new suppliers. The, the market dynamic changes technology changes that, that also is something from expect the unexpected. And so, you know, there’s folks out there that are looking to disrupt industries at all times, and I think expect the unexpected is just a key part of running a business.

 You know, underspending is a, is is a risk, and it, it, it’s probably one of the biggest misnomers in business or small business that, that we see is you know, it, it’s really easy for business owners. And, and, and this isn’t just small business. I’ve seen it in, in the Fortune 100 companies I’ve been a part of in my career. It’s really easy for organizations to become hyper-focused on cost cutting and, and on driving more and more and more into the business. And what we have seen historically and we continue to see is you’ve gotta have a balance there. And, and not spending enough you could lose that competitive edge and, and ultimately long term, it, it can hurt in a very big way. And so I think there is a huge balance there. But at the same time, the, the, the business owners, the small business owners, and really business owners across the board that have the mindset of, okay, cashflow is gonna drive this plan.

I, I need, I know I need a specific amount of margin or cash flow to run the business day to day and live, but at the same time, how am I able to drive more dollars into spending on growth? And, and that could be on your people, it could be on technology, it could be on sales, on growth marketing. It could be just in a lot of different ways. But, but, you know, being single track focused on cost cutting without really making sure that you’re focused on where you could spend for growth it is, is really detri or could be really detrimental to a business long-term prospect. And, and then measure. And then I would say the last thing, Mike, is measuring and tracking the workforce data. The more, the more you’re able to measure and analyze and track your data across your workforce, the, the better equipped you are to be able to make real time decisions across all of these components, right? And so, I, I think it’s, regardless of what you do measuring and tracking, whether it’s workforce data or, or your business data, I think, I think is, is the key to making sure you’re on track or where you do need to pivot and make adjustments.

VANNOY:

Yeah, I, I just have this picture in my mind of the, like previous slide you talked about, you know incremental budging versus zero based. It, it’s kind of both, right? It’s incremental that you gotta, you gotta flex with, you know, the change daily changes in, in your, in your environment and marketplace and compe, whether it’s competitors or a pandemic you, you can’t start from zero every day, but you have to also have this always reevaluating our entire model in, in, in, in thinking about not just, okay, 10% across the board, cut for everybody, or, Hey, I’m gonna, I’m gonna, we’re just gonna, we’re just gonna cut our marketing and our advertising budget so I don’t have to let anybody else go. Well, that might be the shortest way to have to let everyone else go down the road if you’re not, if you’re not feeding the machine, right?

So real, really, really solid advice. Appreciate it. Okay. Let’s, let’s move on to our next topic. And, and this is a big one, I think, we’ll, we’ll probably park here for the rest of our conversation, cuz each of these bullets could probably be, you know, a whole webinar series in and of itself. I, I first wanna kind of focus on this, you know, yellow quote from Korn Ferry in, in, in the bottom. You know, this, it seems almost tone deaf in a way to talk about a, a, a labor shortage. But we were well on our way on this path where people were feeling the labor shortage in February of 2020, you know, 11 months ago. And when this thing comes back and it’s going to, the, the global demographic numbers are just too big, and they don’t, they just, they don’t, they don’t lie. It’s a sequencing and a timing issue. But, but I want you to put some color and bring the, bring this, this labor shortage to life for small business businesses. This is not, you know, the 10,000 employee large enterprise that just has to think about these things in the macro. This is real stuff for small business owners.

GOLDSTEIN:

It is, it is. And it goes back to, you know, as I talk to small businesses every single day th this is their biggest even today. You know, it’s, it is a, it’s finding good people and finding people that I can count on that understand the business and can learn the business and perform and perform well, and are committed and are responsible and are responsible employees. And, and, and again I don’t, you know, I think every single person that’s listening to this broadcast can attest to that regardless of whether they’re, you know, the sole proprietor or they’ve got, you know, a few dozen employees. It, it really is a shortage. We saw it in a very big way where you had to offer pre covid a much higher rate of salary benefits, total compensation in order to attract the, the right type of talent to your company regar, again, regardless of size.

And, and so that’s a very real thing. Did it take a small, what I would say leg down in, in March? It, it, it did. But when you look at the v recovery of the employee the, the unemployment rate it’s snapped back within one or two months. And, and I think now it’s, you know, somewhere around six and a half, 6.8%. But, but ultimately it will get back to you know, a model or, or market macro environment that’s got just a massive shortage of skilled workers.

VANNOY:

It can, can, so again, I don’t, I don’t wanna sound tone deaf and, and not be sensitive to the real, very, very real struggle people might be facing. So it might sound ironic that there is a talent land grab opportunity that probably has just a few months left in, in this, in this window. Can, can you speak to the, the, if, if, if you’ve got the war chest, you’ve got the cash reserves to be able to, to, to do it. You got, you can cash flow it. Those are obviously the, the minimum requirements. What this means be, I if, if you can capitalize on going after some talent now and, and really look hard at, at, at your, at the talent you have i on staff versus what exists in the marketplace. Because there’s, there’s, I’d say it’s a, I mean, this is a once in my career opportunity that I, that I see, and I don’t wanna be unempathetic to existing employees or anything, but there is some incredible talent that is in the marketplace that probably is never gonna be at this level again.

GOLDSTEIN:

It, you, you’re absolutely right. And so that is the other side of the coin. So the first side is this massive shortage that we had in have the, the, the event of the pandemic that, that essentially drove this number or this shortage down because of how many folks became unemployed or, or, or were not, did not have the ability to stay in the organizations they had. And so now the, the flip side of that coin is you have a, a a once in a, I think, generation opportunity to capitalize on that now. And, and so knowing that the overall trend will not change, yes, there was a dramatic shift during the pandemic, but ultimately the, the, the overall trend of the shortage will continue and continue in a very big way for the foreseeable future, right?

And so now how do you capitalize on a lot of these skilled workers being back in a, what I would call job seeking or in an, in a, in a opportunity for you to attract some of these folks? Yes, you need to invest in, but at the same, if you’ve got the ability to invest, if you’re looking for how to grow coming out of this, you know, the most important thing to do is to attract the right talent. I would say over the next 90 days, six months, nine months, 20, 21, you’re gonna see a lot of companies recruiting a lot of this talent because there’s more visibility in the marketplace and, and, and these folks are out there. And that’s a very big and that’s just a very big opportunity.

VANNOY:

Yeah. Yeah. So let, let’s talk about the next topic here. Compensation. So you, you can read in the ebook, you know, Korn Ferry talks about, it’s, so, it’s only one in three businesses are gonna be awarding salary increases in, in, in 2021. So some important be benchmarking data, but I think maybe the area I wanna focus more around comp is classification type, right? So with this explo absolute explosion in new business formation, that this is publicly available information, it’s the, it’s the federal ID employment identification number, the year e, the e i n, the in q3. Those, those are 77%, they nearly doubled. It’s this like, incredible hockey stick chart of how many people are forming businesses. And so you can imagine all these people got laid off, now they’re starting companies. This just, this is throwing steroids on what was already a shift to a more gig economy as, as they’d call it you know, flexible work, freelancers, contractors, how should, how should employers be? And small business owners be thinking about how to, how to structure compensation and bonuses for, for traditional staff, but how, what other opportunities exist to, to tap into this shifting way? You know, it’s, I wanna say it’s 57 million people now, but 36% of the workforce participates in some form or another of the gig economy.

GOLDSTEIN:

Yeah. And, and, and I think, listen, I mean, it, it, it takes a ton of time for organizations to fill open requisitions and, and that costs a lot of money. There’s a lot of labor, there’s a lot of money or opportunity lost doing that. And, and so now organizations have the ability to tap into, to these freelance workers and, and there’s different ways to attract these folks. There’s, there’s great ways to and process and, and ways to pay these folks. And, and a lot of times it could be an added benefit because you are able to flex up and down rather than having strictly full-time employees, right? Or even part-time employees here. You, you could get the best of both world with some of these freelance or gig economy workers that are there at the same time. You, you gotta offer the right packages. And, and so to attract folks, you, you know, you gotta make sure that you’re offering the right type of compensation package, bonus package, or overall total comp package. And, and, and I know we’ll talk a little bit about, you know, benefits, wellness, you know, some of these ancillary or complimentary components of total compensation that almost have become table stakes today. Talking to a lot of employees,

VANNOY:

Let’s let, let, let’s go ahead and pivot and go there cuz there’s this, you know, there’s this compare contrast. If you’re talking, you know, the, the gig economy versus traditional employees, then that requires benefits. So we’ve got a lot of moving parts. The shift to the gig economy. You’ve got traditional employees that, you know, there’s the traditional 50 employee or greater that, you know the ACA Affordable Care Act says you, you, by law, you gotta provide the benefits. But there’s just this real world thing going on that people are freaked out about their healthcare cost right now, for obvious reasons, right? A lot of lot of medical treatments. A lot of healthcare services have been delayed by a full year, right? And so so much uncertainty. You know, I’ve been reading studies where employees have this really heightened sense of anxiety about what’s, how they’re gonna manage their healthcare costs in, in that, and they don’t care if it’s working for a big company or a small company. So how, how should entrepreneurs and small businesses and mid-sized companies be thinking about all that in the backdrop of wellness and benefits?

GOLDSTEIN:

I think now more than ever, you’re hearing about, you know, employee fatigue, burnout, mental wellness. I mean, folks are working, they’re, they’re working hard. It’s a very stressful environment. And, and it, it’s impacting productivity in many ways, right? And, and if you think about that and, and you take, keep that sort of, that framework in mind, i I I think it’s important to, you know, really tailor the type of benefits that you’re offering to your employees in, in a very specific manner, keeping those things in mind. So, so we’ve seen, you know organizations that are offering P t o that, that has to be used days off that don’t hit PT o we’re seeing a lot of different wellness programs, and there’s stuff that’s out there. There’s different apps that are out there that organizations are providing to their employees from mental wellness, from a health and wellness standpoint.

 We’re seeing fitness because home fitness has become so big and, and that folks allocate time for that and, and actually provide services around that. And, and these are very small what I would say cost that, that really don’t have much impact from an overall cost standpoint, especially when you think about, you know, on average, I think the number we saw something Mike, was something like 30% of the comp cost compensation costs come from benefits, right? So you’re spending all this money on benefits, you know, you, you, you’ve got these subscription based apps in, in these certain things around health and wellness and fitness that are really, really small in the grand scheme of things, that the value back to the employees is monumental. And we’ve seen that in, in the, in the organizations that have embraced those things and offer them to their employees. They’re getting more productivity out of their folks, and then they’re attracting the talent that’s out there that’s looking for an organization that’s got that sort of empathy towards health and wellness.

VANNOY:

Yeah. Very good. I’m gonna lump together the next kind of couple topics cuz I think, I think they got go hand in hand. And we’ve been touching on this throughout our conversation here, so recruiting and onboarding, training and development, talent management and engagement. Let, let, let’s, let’s take those three and, and you’ll see in the, in the ebook that we, we go deep on each of these three topics in themselves, but in the context of pandemic budget, small business approaching growth mode here, what, what, what’s your guidance for small business owners here? A

GOLDSTEIN:

I I think what’s, what’s critical is be, be very aware of remote and, and when you think about recruiting talent management the landscape has changed. Remote working is here it’s been here, the acceleration, I think is showing and proving that it, it, it’s here to stay. So keep that in mind as you think about the, the folks you’re recruiting, the folks you’re retaining, and what you put out there from a training and development curriculum that ensures that remote workers feel plugged in, feel a part of something in, in that, tho that communication is there with remote workers. That’s really important to keep in mind as you, what I would say, look at a training and development curriculum for the organization from, from a, from a compliance administration and technology. I mean, ultimately, you know, unless you’re in the compliance business, unless you’re in the, you know, human capital administration business your core competency is running your business.

And so we don’t have enough hours of the day. And, and again, when I talk to small business owners specifically on their biggest challenge outside of finding good talent, it’s ale. There’s not enough time in the day and, and not having enough time in the day I, I, I think is a testament to what can I outsource and how do I make sure I am in compliance? How do I make sure that I can’t administer and offer all these benefits? How can I make sure that I’ve got the right technology to measure my workforce and in, in my, my greatest investment without spending hours every day and every week doing on that, doing that, and focusing on my business and growing my business, right? So to me, those are probably the most important aspects as you sort of bring it together on y you know, a business owner’s view of attracting, developing and, and measuring and making sure you’re in compliance and offering all the greatest things to your employees.

VANNOY:

Yeah, I, I, I just gotta add, I I, I think probably one of th this has obviously been a continuum to shift to virtual flex flexible work. Th th this is shift has been going on for a couple decades, right? In, in this been accel, the shift has been accelerating, and then the pandemic was obviously a gigantic accelerator. I would just encourage business owners to, to think about this as more than a way to, this is not there. There’s a labor excuse me, there’s a real estate arbitrage play. There’s a, hey, more flexible employ work environment a means more engaged employees. The data’s really clear on that. There’s that play. But the, the talent pool, I mean, if you just think about if you’re a, if you’re a, a small high school with, you know, 250 students, hard to feel the competitive football team, right?

If you’re a mega school with 5,000 students across a big campus, you can produce a football powerhouse just because your talent pool is so much larger, you just pick the biggest kids out, right? It’s the same thing for small businesses when geography doesn’t matter, and, and you have the ability to work virtual the, the number of people that are truly special in your really unique field field of, of work that the, the talent game changes dramatically. Let, let’s, let’s, let’s bring it home, Al I know we’re, we’re getting close on time. You know we’re an inflection point for, with, with the the government, right? So there’s obviously, there’s more HR legislation passed in 2020 than probably the prior decade with, you know, F F C R A and and that, those are just the, the, the federal at the federal level, the, the changes in, in healthcare policies at the local, you know, the, the, the mayoral, the, the county, the state level kind of just leave your head spinning here, but I, I, I think safe to say and that, you know, we’re not taking any sides, red state, blue state at all, but it’s reasonable to expect when you have one party controlling both congress, both houses of Congress, the and the presidency, there’s gonna be policies that get through, they’re gonna be pushed through, would probably maybe even <laugh> as much, as much as 2020, if not, if not more.

 How, how do you guide small business owners to, to keep up with it and stay, not, not only take advantage of opportunities, but to stay compliant?

GOLDSTEIN:

Well, I, I, I think the good news is, like we chatted about, or, or one of my comments was, you know, tech technology’s out there, right? And, and so you don’t need to do this with an abacus anymore and in a notebook and, and spend hours during the day of your day or your work week doing it. There’s technology out there that streamlines this, that, that really gives you the ability to manage this, control this really from anywhere and, and from any device these days. And, and that’s pretty amazing, right? Where technology has come. So I think look to technology to really ease the burden on the compliance and the administration side.

VANNOY:

Yeah. And that, and that goes from cer to services to tools, right? I mean, you don’t have to keep track of 11,000 taxing jurisdictions. You don’t have to keep track of the never, never changing laws when, when there are tools, platforms, service providers to, to do that for you. Al really good conversation today. A anything else you’d wanna, wanna add or, or wisdom you’d wanna part with, with our, with our audience today?

GOLDSTEIN:

I, I think, no, Mike, I, I really enjoyed it and appreciate being a part of it and, and, and look from, from my standpoint it’s a once in a lifetime opportunity for small businesses out there. We’re seeing it in the business formation numbers that, that are really amazing. When you look at just in the third quarter alone, the, the amount of business formations versus how many business formations happen the prior 12 months, which was a growing economy prior to covid. And so we know that people, small business owners specifically, are out there and see an opportunity. And so if you keep that in mind, if you plan, if you understand that your people are your biggest asset and, and really the ticket and the key for success and growth, if you keep those things in mind I think it’s going to be an amazing year and, and an amazing trajectory for small businesses in the United States and frankly across the globe.

VANNOY:

Yeah. Very good. All right. So to recap the, the, we, we were unpacking the, and put some color commentary around their latest ebook, HR and payroll budgeting and planning hop on our website to, to download it share as you desire. And as always if we can help, we’d love to Asure Human Capital Management as a suite of payroll and tax time and attendance, HR and HR services suite that we, we help small businesses grow, specifically our 60,000 small businesses, help them stay compliant, save money, and grow their business. So Al, thank you so much. Thank you for everybody else attending, and we look forward to talking to everybody next week.

GOLDSTEIN:

Thanks, Mike.