Latest / Budget Your Business / AI Is Changing the Rules for Employees AND Employers with Scott Baker

Transcript

AI Is Changing the Rules for Employees AND Employers with Scott Baker · Budget Your Business

• 0:00
  SPEAKER_02: The first part of it starts with performance, right?
• 0:02
  SPEAKER_02: So if they're not if they're not adopting AI to the degree that you want them to, then it becomes a performance issue.
• 0:10
  SPEAKER_02: It becomes a write-up, becomes a disciplinary write-up, it might come a become a performance improvement plan.
• 0:14
  SPEAKER_00: Welcome to the Budget Your Business podcast, where small business owners go to learn how to financially plan for every aspect of their business.
• 0:22
  SPEAKER_00: Let's get started with your host, Scott Geller.
• 0:25
  Scott: Hello, and welcome to another budget your business episode.
• 0:28
  Scott: Today I'm excited to have another Scott on board.
• 0:31
  Scott: This time Scott Baker of Stage 3 Leadership.
• 0:34
  Scott: Hello, Scott.
• 0:35
  Scott: Hi, Scott.
• 0:36
  Scott: Nice to have you on here.
• 0:36
  Scott: Appreciate you joining me.
• 0:38
  Scott: Thank you.
• 0:38
  Scott: So, Scott, for our listeners that that you know don't know you as well as I do, why don't you tell them a little bit about yourself and what you do?
• 0:47
  SPEAKER_02: So I do fractional HR.
• 0:49
  SPEAKER_02: I'm based in beautiful Tampa, Florida, and I have clients throughout the entire United States, as a matter of fact, globally.
• 0:55
  SPEAKER_02: And I do fractional HR.
• 0:57
  SPEAKER_02: So I come in to smaller companies, usually between 50 and 150, sometimes more.
• 1:02
  SPEAKER_02: And so I'm their kind of their strategic HR advisor.
• 1:06
  SPEAKER_02: I help them out with a variety of different issues, policies, uh hiring, recruiting, compensation, whatever it might be.
• 1:12
  Scott: Great.
• 1:13
  Scott: And and I think one of the obvious buzzwords here is AI.
• 1:17
  Scott: And from the HR perspective, I'm sure that that's a huge just can be a huge distraction as well as opportunity in some ways.
• 1:25
  Scott: The you know the the the big theme, it seems, is AI is is taking jobs.
• 1:31
  Scott: And we you and I were talking about an interesting story about yes, it's taking jobs is also kind of a uh a natural progression of uh you know roles and the responsibilities.
• 1:43
  Scott: So could you could you just start with that?
• 1:45
  Scott: I think it was around Ford and in how you know how a similar wave occurred several years ago.
• 1:51
  SPEAKER_02: Absolutely.
• 1:51
  SPEAKER_02: This is uh many years ago, but I started off my career at Ford, and it was very interesting because it was the dawn of the internet, dawn of email.
• 2:00
  SPEAKER_02: And so people were just starting to get their own big, bulky computers with the big CRT monitors on their desks.
• 2:07
  SPEAKER_02: And Ford had a lot of talented executives and leaders, and a lot of them, the culture at the time was if you were in a big company, you'd all have your own separate executive admin.
• 2:18
  SPEAKER_02: And that admin was responsible for your scheduling for responding to correspondence and uh, you know, coordinating your schedule and whatnot.
• 2:25
  SPEAKER_02: And what was interesting is Ford bought all these computers and put them on their executive desks and also their admin desks and said, we are gonna start using the computer to correspond to each other through email.
• 2:39
  SPEAKER_02: It's faster, it's quicker, it's more efficient, and we're gonna start doing that.
• 2:44
  SPEAKER_02: And at first, the executives just had this big paperweight on their desk and they didn't do anything with it.
• 2:49
  SPEAKER_02: And they, what would happen is their admin would print out an email they received from another executive, they would put that email paper copy in the inbox of the executive.
• 2:58
  SPEAKER_02: The executive would write a response, give it back to the admin, the admin would type the response and then email it to the other executive, who's their executive, their executive assistant would then print it, show the executive, and they would write a response.
• 3:11
  SPEAKER_02: And this is the way it went back and forth.
• 3:13
  SPEAKER_02: And so Ford realized that nobody was really adopting the internet or adopting email.
• 3:18
  SPEAKER_02: So they said, in the next six months, we are going to start reducing or eliminating our executive admins.
• 3:24
  SPEAKER_02: And you are going to have to respond purely on email on your computer.
• 3:29
  SPEAKER_02: And they made that.
• 3:31
  SPEAKER_02: Very big change.
• 3:32
  SPEAKER_02: And it was interesting because some executives said, I'm going to retire.
• 3:36
  SPEAKER_02: I can't handle this.
• 3:37
  SPEAKER_02: I'm not going to do it.
• 3:38
  SPEAKER_02: And I'm going to leave.
• 3:39
  SPEAKER_02: And they left.
• 3:40
  SPEAKER_02: And some people said, okay, this is a pretty good tool.
• 3:42
  SPEAKER_02: I'm going to learn it.
• 3:43
  SPEAKER_02: And they learned it and they did very well.
• 3:46
  SPEAKER_02: Now, let's talk about the executive admins.
• 3:48
  SPEAKER_02: They realized their job is going to start going away or it's going to change as it related to what they normally would do.
• 3:53
  SPEAKER_02: And some of them retired and said, I'm not going to use the computer.
• 3:56
  SPEAKER_02: I'm used to typing responses on a manual typewriter, electric typewriter.
• 4:01
  SPEAKER_02: And some of them left.
• 4:02
  SPEAKER_02: But other people said, you know what?
• 4:04
  SPEAKER_02: I see where it's going and I want to learn about this.
• 4:06
  SPEAKER_02: I'm going to become really good at it.
• 4:08
  SPEAKER_02: And I'm going to shift my career to use more email and use the computer more.
• 4:13
  SPEAKER_02: And I think we have the same change, the same shift going on today with AI.
• 4:19
  Scott: I was about to say that that sounds eerily familiar to what's happening today, doesn't it, Scott?
• 4:23
  SPEAKER_02: Does.
• 4:24
  SPEAKER_02: It's a big shift.
• 4:25
  SPEAKER_02: Some people are adopting it, some people are not.
• 4:28
  SPEAKER_02: Some people are resisting it.
• 4:29
  SPEAKER_02: Some people are saying, I don't want to learn anything new.
• 4:33
  SPEAKER_02: I don't believe in it for whatever reason.
• 4:35
  Scott: And and Scott, what are you seeing or what are you reading around?
• 4:39
  Scott: We're all reading about layoffs, right?
• 4:40
  Scott: And a big, a big cause of that is AI.
• 4:44
  Scott: Now, a lot of these are bigger companies.
• 4:46
  Scott: What are you seeing along those lines?
• 4:48
  SPEAKER_02: Well, first of all, I want to put in context where the layoffs are really coming from.
• 4:51
  SPEAKER_02: I think they're coming from two different spots.
• 4:53
  SPEAKER_02: One is companies that realize they need more revenue to invest in AI.
• 4:58
  SPEAKER_02: And that might be what's happening at Google and other companies to say, we have to take resources or money that we're putting towards a particular department and we need to realign it with AI because that's where the future is.
• 5:10
  SPEAKER_02: So I'm seeing that.
• 5:11
  SPEAKER_02: The second thing is AI is really helping to do jobs more efficiently.
• 5:15
  SPEAKER_02: For example, coding, software engineers.
• 5:17
  SPEAKER_02: I'm an HR.
• 5:18
  SPEAKER_02: You could not hire, it was very difficult to find a software engineer and hire a good one seven, eight years ago.
• 5:24
  SPEAKER_02: Now it's a dime a dozen.
• 5:26
  SPEAKER_02: It used to be seven, eight years ago, schools to get into their software engineering program for students was extremely competitive.
• 5:32
  SPEAKER_02: And you would guarantee a job of 150, 100 to 150 when you graduated.
• 5:37
  SPEAKER_02: Now those jobs evaporated.
• 5:39
  SPEAKER_02: And now it's done a lot through code.
• 5:41
  SPEAKER_02: So, and that's also impacting, you know, some of our basic functions, like AP or purchasing, or some aspects of HR.
• 5:49
  SPEAKER_02: That AI is coming all into finance, it's coming into HR, it's coming into marketing.
• 5:55
  SPEAKER_02: And it's amazing the impact that it's having on departments where you'd have somebody doing a content writer in the past, now it can be done purely electronically.
• 6:05
  SPEAKER_02: It could be done using AI.
• 6:07
  SPEAKER_02: And there's stories of people who were in marketing and wrote all this content using AI, and it took their companies more than a year to figure out they were only working 15 minutes a week.
• 6:17
  SPEAKER_02: And they were pulling down over$100,000, right?
• 6:20
  SPEAKER_02: They were just using AI.
• 6:21
  SPEAKER_02: So how what do you see, or how is this impacting the culture of some of these businesses?
• 6:26
  SPEAKER_02: The culture is changing rapidly, right?
• 6:29
  SPEAKER_02: So people are are having to move out of their uncle, their comfortable zone into their uncomfortable zone, and they almost feel like they're going back to college for the first time.
• 6:38
  SPEAKER_02: Think about the first time you think about somebody learning Excel for the first time.
• 6:42
  SPEAKER_02: It's different.
• 6:43
  SPEAKER_02: It's a different way of thinking, it's a different way of navigating, it's a different way of positioning and and all that.
• 6:49
  SPEAKER_02: So people are having to learn new things, which is stressful for them.
• 6:54
  SPEAKER_02: And some people are adopting it, mostly the younger generation, right?
• 6:57
  SPEAKER_02: Because they're already learning it in school.
• 6:59
  SPEAKER_02: And some of the folks that have been around and have a lot of experience are struggling with how to use AI more and use it more efficiently.
• 7:07
  SPEAKER_02: I was reading an article earlier today, it might have been on the Wall Street Journal, I can't remember where it was, but it was talking about how young people need to think differently about the careers than maybe what we did in our careers.
• 7:18
  SPEAKER_02: So in our careers, we got ahead because we knew things.
• 7:22
  SPEAKER_02: We had the experience, we knew how to look at disparate data and bring up trends and themes and that sort of thing.
• 7:28
  SPEAKER_02: And that's what made us really good, especially in finance.
• 7:31
  SPEAKER_02: But now AI can do a lot of that.
• 7:33
  SPEAKER_02: So now it's different.
• 7:35
  SPEAKER_02: What got you ahead 20 years ago will not get you ahead today.
• 7:39
  Scott: Yeah, that that makes a lot of sense.
• 7:41
  Scott: It's definitely been that that catalyst for for organizations and people.
• 7:46
  Scott: Let's all right.
• 7:47
  Scott: So you've got one path of look, we don't think we need these individuals.
• 7:52
  Scott: To your point, maybe it's coders, maybe it's it's folks that are more transactional based, AR, AP.
• 8:00
  Scott: Uh, you know, that that's one route.
• 8:02
  Scott: Another route is, well, we know we've this these individuals have been at the organization for X number of years.
• 8:08
  Scott: It might be three, 10, sometimes 15 years, right?
• 8:12
  Scott: They're really good people.
• 8:13
  Scott: They're they know the business, they know the people in the business, they have connections with vendors, with clients.
• 8:19
  Scott: There's a lot of value still to that.
• 8:22
  Scott: So is another option instead of just doing a layout, maybe training them to embrace and use AI?
• 8:29
  Scott: Are you seeing that?
• 8:30
  SPEAKER_02: Yes.
• 8:31
  SPEAKER_02: And I think it's it's the training aspect is two parts.
• 8:34
  SPEAKER_02: It's not necessarily relying on the company 100% to say, I'm gonna give you a training program on how to do XYZ.
• 8:40
  SPEAKER_02: Some of it is I want you to go off and learn this.
• 8:43
  SPEAKER_02: I want you, there is hundreds and thousands of hours of videos on how to use AI and emails and different people to follow.
• 8:52
  SPEAKER_02: Here's how I use AI to do this, or how do I do that?
• 8:55
  SPEAKER_02: It's not necessarily waiting for the company to provide the training.
• 8:59
  SPEAKER_02: It's telling the employee, I need you to get better.
• 9:02
  SPEAKER_02: I need you to learn this more, I need you to find out ways that you can implement AI.
• 9:08
  SPEAKER_02: And on your performance review for the next 12 months, one of your goals is to demonstrate three ways that you've learned AI and applied AI to your job that makes you do X, Y, and Z more efficiently, or saves you, you know, X hours in your job.
• 9:24
  SPEAKER_02: And putting that as part of a performance plan, I want to see uh, you know, in your goal, I want to see what you're gonna do, how you're gonna do it, what's your time frame for implementing it, and what you expect the outcome to be.
• 9:35
  Scott: And I like that.
• 9:36
  Scott: I specifically like the what are three ways to that that as part and part of their the their goals.
• 9:44
  Scott: Who should be or who do you see setting in those three items or or two items, whatever number is.
• 9:50
  Scott: Is that should that be the employee, should that be the manager, the employer, or who figures that out, like what those three should be?
• 9:57
  SPEAKER_02: Setting the three objectives, I think the best way to do it is just by deciding it together.
• 10:03
  SPEAKER_02: The employee probably already has some ideas, and you have some ideas as a lead as a leader and as a manager, and it's really coming together and deciding what works out best.
• 10:12
  SPEAKER_02: Ultimately, the best AI projects are the ones that the employee wants to do, right?
• 10:17
  SPEAKER_02: If I asked you, what do you see is a value for AI, what would you want to experiment with, what would you want to try, you're gonna embrace it more than if I told you what area of your job to do AI with.
• 10:30
  SPEAKER_02: So I think it's a back and forth discussion of what it looks like.
• 10:34
  SPEAKER_02: The other thing I would say is that there is a lot of opportunities within a company for people to share ideas, right?
• 10:41
  SPEAKER_02: So one person in your company is probably very far along in terms of incorporating AI.
• 10:46
  SPEAKER_02: Why not ask them to come in and give some ideas of how they're using their AI in their job?
• 10:52
  SPEAKER_02: And that might give other people ideas.
• 10:55
  Scott: Yeah, that that that's a good idea.
• 10:56
  Scott: I I've heard about companies where they're putting teams together and and targeting teams.
• 11:02
  Scott: Because I do, I feel like it's probably a pretty big range of of knowledge and acceptance with for AI.
• 11:09
  Scott: Yes.
• 11:10
  Scott: So, how do what kind of reaction are you seeing from employees that are in these types of roles and and maybe being forced into these conversations?
• 11:18
  SPEAKER_02: It's it's a variety of responses, right?
• 11:21
  SPEAKER_02: There are some people that are very strong resistors of the technology.
• 11:27
  SPEAKER_02: And they, no matter how much you try to convince them to try it, they're saying, you know what, I don't believe in it.
• 11:32
  SPEAKER_02: I'm not gonna do it.
• 11:33
  SPEAKER_02: And they will never do it.
• 11:35
  SPEAKER_02: They might do some of the minimal amounts, but they won't dive into it and grab a hold of it as much as they should.
• 11:40
  SPEAKER_02: Uh, and then there's gonna be other people that are, hey, thank you for the nudge.
• 11:43
  SPEAKER_02: I'm gonna, I'm gonna jump into this both feet.
• 11:46
  Scott: And what if they do refuse?
• 11:47
  Scott: What if they're just not ready to to go down that path?
• 11:51
  Scott: Well, one way you could position it is is this part of their job now?
• 11:54
  SPEAKER_02: It's not a volunteer effort to be in AI or not.
• 11:58
  SPEAKER_02: They must incorporate AI in their job.
• 12:01
  SPEAKER_02: They must determine and identify ways to use AI.
• 12:05
  SPEAKER_02: And they must demonstrate the value of them using AI in their job.
• 12:10
  SPEAKER_02: And having a very focused discussion on that is fine.
• 12:14
  SPEAKER_02: You, as a business owner, are allowed to change a job description or the job responsibilities at any time.
• 12:20
  SPEAKER_02: At any time.
• 12:21
  SPEAKER_02: So you can change it and add things and say your job is now X, Y, and Z, or you put it on their performance goals.
• 12:28
  SPEAKER_02: You now have this component that's AI related.
• 12:31
  SPEAKER_02: And it has to be very specific and time-bound, the SMART acronym for doing goals, put it in the SMART method and let them know and say, This is an important aspect of your job.
• 12:41
  SPEAKER_02: You're required to do this.
• 12:43
  SPEAKER_02: And if they say, Well, I still refuse, then I think you have an opportunity to have a discussion about well, what does it look like for you to transition out of a company?
• 12:50
  SPEAKER_02: This is something that is important to me.
• 12:52
  SPEAKER_02: You might be able to find another role that does not require you to use AI, and that might be a better fit for you.
• 12:58
  SPEAKER_02: But for us in our company, we're using AI.
• 13:00
  SPEAKER_02: It's similar to years ago, used to be a big focus on Six Sigma some companies.
• 13:05
  SPEAKER_02: Remember that?
• 13:05
  Scott: Oh, I worked for Ginworth Financial, which was a GE spin-off insurance.
• 13:09
  Scott: You better believe I know what Six Sigma was.
• 13:11
  SPEAKER_02: Yeah, so we both worked at GE.
• 13:13
  SPEAKER_02: Yes.
• 13:13
  SPEAKER_02: And it was Six Sigma, and they basically said to you, if you want anything, approval for anything, either resources or to move a different direction or initiative or whatever, you have to show it in the Six Sigma way.
• 13:26
  SPEAKER_02: You have to justify it using Six Sigma methodology and terminology.
• 13:30
  SPEAKER_02: And they wanted to see the data behind it before they approved anything.
• 13:34
  Scott: Yeah, it it that you you're bringing back a lot of memories and a few um a few horror stories because six sigma is great in the right place, but with an insurance company, it doesn't fit nearly as well.
• 13:45
  Scott: But, anyways, I I won't go down that path, Scott.
• 13:47
  Scott: That that that's a completely different conversation.
• 13:49
  Scott: All right, so we've got these employees, they may or may not, you know, embrace this new wave that that that's coming regardless.
• 13:57
  Scott: Can you talk us through the right way of unfortunately using the words layoffs or or letting some of these people go?
• 14:04
  SPEAKER_02: Well, probably the first part of it starts with performance, right?
• 14:07
  SPEAKER_02: So if they're not if they're not adopting AI to the degree that you want them to, then it becomes a performance issue.
• 14:15
  SPEAKER_02: It becomes a write-up, becomes a disciplinary write-up, it might come a performance improvement plan.
• 14:20
  SPEAKER_02: And then you think about accessing them from there.
• 14:22
  SPEAKER_02: It's not necessarily a layoff, it's more of a performance issue that you're moving people out.
• 14:28
  SPEAKER_02: Now, part of that performance improvement plan might be some additional training if there's somebody within the organization that can provide them with some training or some extra support.
• 14:36
  SPEAKER_02: Uh, there's a lot of consultants that do that.
• 14:38
  SPEAKER_02: I don't know, there's a lot of consultants saying that they can teach people AI.
• 14:42
  SPEAKER_02: But it's taking the steps to help them to learn it.
• 14:46
  SPEAKER_02: Now, at some point, you can't force somebody to do something that they don't want to do.
• 14:51
  SPEAKER_02: So at a at a certain point, it's maybe the best step is for us to go our separate ways.
• 14:56
  SPEAKER_02: And that's when you look into that process, you look at perhaps a severance agreement to help uh cushion some of the exit for them.
• 15:02
  SPEAKER_02: It could be anywhere from two to four weeks or more.
• 15:04
  SPEAKER_02: It depends.
• 15:05
  SPEAKER_02: But you're helping them to exit.
• 15:07
  SPEAKER_02: And you just both come to the realization that what their desire to learn AI and your desire for them to learn AI is just not going to happen.
• 15:14
  SPEAKER_02: Right.
• 15:14
  Scott: Well, I I want to ask you about the severance piece of it.
• 15:18
  Scott: Because I've I I started the first half of my career in the corporations and they have a very structured way of managing severance, but that's also changed in the la over the last 10 to 15 years, if you will, or even five to 10 years, probably.
• 15:31
  Scott: What is expected in in a severance agreement next?
• 15:35
  Scott: I you know, at one point I know it was per years of of employment.
• 15:40
  Scott: Is that still a kind of a factor in that, or is it changed?
• 15:45
  SPEAKER_02: It can be whatever you want it to be, as long as it's it's legal and it's not discriminatory.
• 15:50
  SPEAKER_02: So, first of all, it's important to know that severance agreements are not required at all.
• 15:53
  SPEAKER_02: There's no legal requirement for a severance agreement.
• 15:56
  SPEAKER_02: You can let somebody go tomorrow, it's an employment employee well at will, and adios.
• 16:00
  SPEAKER_02: Typically, what a lot of companies will do is it give at least two weeks' notice.
• 16:05
  SPEAKER_02: Because that's what kind of notice period we would like from the employee.
• 16:08
  SPEAKER_02: So it's there's no legal requirement for it, but we just do it because it's a professional way to do it, right?
• 16:12
  SPEAKER_02: Unless it's a perfor, it's termination for performance.
• 16:15
  SPEAKER_02: But if it's, hey, it's just a straight layoff, it doesn't have it might have something to do with performance, but that's not the main, you know, decision maker.
• 16:23
  SPEAKER_02: We might do a severance of anywhere from two to four weeks.
• 16:27
  SPEAKER_02: Might be a little bit more based upon years of service.
• 16:30
  SPEAKER_02: There's a lot of different ways you can do it.
• 16:31
  SPEAKER_02: Most companies put together a chart that says, you know, get a minimum of two weeks and then plus one week for every year of service up to a maximum of six weeks or whatever you want to do it.
• 16:42
  SPEAKER_02: It's okay, but you want to be consistent with it.
• 16:45
  SPEAKER_02: And it has to be based on service.
• 16:46
  SPEAKER_02: You don't want it to be on age because that can be discriminatory.
• 16:50
  SPEAKER_02: And so you could, but you can make it different for an executive level versus an exempt person, I think middle management, exempt or individual contributor, or hourly, somebody in the manufacturing plant.
• 17:01
  SPEAKER_02: You can make it different.
• 17:02
  SPEAKER_02: It doesn't have to be the same.
• 17:03
  SPEAKER_02: And then part of the things that some people look at from severance is do you want to continue medical coverage for the for the term of the severance?
• 17:10
  SPEAKER_02: And basically, you can get a severance agreement created by any attorney.
• 17:14
  SPEAKER_02: Usually it's between$600 and$800 to make it.
• 17:17
  SPEAKER_02: They have to have two separate agreements.
• 17:19
  SPEAKER_02: One is for under 40 years of age, and one is for over 40 years of age, because the one that's over 40 has to include language for their uh older workers' benefit protection.
• 17:29
  Scott: Gotcha.
• 17:29
  Scott: So we would fall in the under 40, right, Scott?
• 17:31
  Scott: Definitely.
• 17:32
  Scott: Absolutely.
• 17:33
  Scott: Well below, well below.
• 17:34
  Scott: Well below, well below.
• 17:35
  Scott: Yeah.
• 17:36
  Scott: Um it sounds like like a lot of things is think about this ahead of time and write it down.
• 17:43
  Scott: And do you recommend is that something that you have in the employee handbook?
• 17:47
  SPEAKER_02: No, it's not something when you think about severance and how much you give out, it's not something that you you would publicize or that you require to publicize.
• 17:55
  SPEAKER_02: It's something that you have as your own internal matrix that you use or your chart to determine how much severance you're going to give.
• 18:02
  SPEAKER_02: And I I'm not an attorney, by the way.
• 18:03
  SPEAKER_02: So this the advice I'm giving you and the thoughts I'm sharing with you is not from a legal perspe perspective at all.
• 18:09
  SPEAKER_02: It's just my own personal experience and highly recommend that they bring an attorney into the loop to not only before you do a layoff, because there's disparate impact to be concerned about, and the good attorney can help you give a third-party objective view of who you're laying off.
• 18:24
  SPEAKER_02: For example, if you're laying off all your people over 60, or you're laying off just your women who are pregnant, or something like that, they can help you look at it and make sure there's not a disparate impact there.
• 18:36
  Scott: Right.
• 18:36
  Scott: Okay.
• 18:37
  Scott: Let's take a little kind of a little bit uh the softer side of this unfortunate situation.
• 18:43
  Scott: How should the business owners or leaders think about communicating this?
• 18:47
  SPEAKER_02: Is your question about communicating AI or communicating a layoff?
• 18:50
  SPEAKER_02: Sorry, the the layoffs, correct.
• 18:52
  SPEAKER_02: Okay, sure.
• 18:53
  SPEAKER_02: So the most important thing to think about up front before you even think about how you're going to communicate it is do you want to do this in one phase, or is this going to be three or four different phases or waves?
• 19:03
  SPEAKER_02: In other words, you're going to let two people go this week, two people go next week, another person go the following week.
• 19:08
  SPEAKER_02: You trickle it, right?
• 19:09
  SPEAKER_02: Versus ripping off the band-aid and doing it all at once.
• 19:13
  SPEAKER_02: My recommendation is if you can do it all at once, because then the communication is after that, we did a layoff, it was hard for us to do.
• 19:20
  SPEAKER_02: I know there's a little bit of chaos going on right now, things will settle down, but that's it.
• 19:24
  SPEAKER_02: If you do the trickle approach, then people are always wondering, Am I next?
• 19:28
  SPEAKER_02: That meeting you put on my calendar, Scott, for two weeks from now that just happens to be out of the blue and doesn't have a subject line.
• 19:34
  SPEAKER_02: Is that me being laid off?
• 19:35
  SPEAKER_02: I better start looking for a job.
• 19:37
  SPEAKER_02: So you're gonna lose your best people first because they're most marketable.
• 19:40
  SPEAKER_02: And other companies are gonna target your company for particular talent because they know that you that those people might be might be nervous and they're gonna try to recruit your top people.
• 19:52
  Scott: Scott, I I agree.
• 19:53
  Scott: I've unfortunately been through this process more times than I want to admit from the CFO side, working with the HR side, working with the legal side, and I agree.
• 20:01
  Scott: I've always felt that figure out what you need to do, do it once, and then move on with the organization.
• 20:08
  Scott: It's your point that meaning that you throw out there, who knows what the purpose of that is.
• 20:12
  Scott: Even if maybe even if it does have just a one-on-one, it's okay, is this the one-on-one where it's gonna happen?
• 20:16
  Scott: Is this one that's not going to?
• 20:18
  Scott: And I don't know.
• 20:19
  Scott: I've I've I've found that it just sets a tone across your organization that's hard to come back.
• 20:25
  Scott: Yes, it is.
• 20:26
  Scott: Yeah.
• 20:26
  Scott: Well, Scott, this has been really interesting.
• 20:29
  Scott: Let's let's hope that our listeners take the path of let's retrain our folks, let's find the right put spot for them in the organization.
• 20:37
  Scott: Because I I do think that there's so much value in keeping people that I don't know, that know the business, know the processes, know the the have the contacts outside the business, and just let's find a better place for them, right?
• 20:50
  Scott: There's still value in keeping those people for the most part.
• 20:53
  Scott: Obviously, there there's some unfortunate decisions that need to be made.
• 20:56
  Scott: And if you do, then you make it more of as a performance than necessarily this is AI and we're getting rid of all these people like you hear in a lot of the the larger company announcements lately.
• 21:06
  Scott: Well, Scott, this has been great.
• 21:09
  Scott: We like to wrap up all of our shows with one to three takeaways that our listeners can put in action at their in in their business.
• 21:18
  Scott: Could be something you've already mentioned, or it could be some other uh planning takeaway.
• 21:22
  Scott: What do you have for us today?
• 21:23
  Scott: Let me think about this.
• 21:24
  SPEAKER_02: Number one, I would say, is to when you think about your your following year's headcount, so your new headcount openings, is the first thing to do is you don't have to release all that headcount at once.
• 21:36
  SPEAKER_02: And number two, release it by milestone.
• 21:39
  SPEAKER_02: So once you hit a certain revenue goal, X and Y positions were open up.
• 21:43
  SPEAKER_02: Don't open, as we go through budgeting season, everybody says, well, I want these, all this headcount, you need to approve it.
• 21:48
  SPEAKER_02: And it goes all at once to say, let's hire these positions right away.
• 21:52
  SPEAKER_02: And what you should do is stage those over the year based upon milestones.
• 21:55
  SPEAKER_02: The second one would be to consider a high deductible savings plan or high deductible medical plan if you'd already, if you don't have one already.
• 22:05
  SPEAKER_02: And what that allows people to do is it's a less expensive plan, a medical plan.
• 22:10
  SPEAKER_02: It allows people to put money away per IRS guidelines and put it aside, almost like a 401k.
• 22:16
  SPEAKER_02: You keep it with you, you can take it with you, build on it year over year over year, carry it over, versus uh a health savings account or a flexible savings account that goes away by you know the March or April of the following year.
• 22:30
  SPEAKER_02: So I highly recommend that because there are a lot of we expect future medical increases to be in the 10 to 15, perhaps 20 range.
• 22:38
  SPEAKER_02: So it allows you to save a little bit of money because you're saving money in terms of the premiums that you pay for that and the employees saving money on it.
• 22:45
  SPEAKER_02: The third thing I would say is a lot of companies have bonus programs for their hourly workforce.
• 22:52
  SPEAKER_02: And even, even some, for example, but my my focus is mainly on the hourly piece for this at this point, is when you're talking about an hourly rate, the hourly folks are living paycheck to paycheck.
• 23:03
  SPEAKER_02: And so for them, if they get a dollar more an hour to go to another company down the street, they'll go, even though their benefit costs might be higher and there might be some other disadvantages.
• 23:14
  SPEAKER_02: So my view is that bonus programs for hourly maybe are not as lucrative as they once were because employees don't realize waiting until the end of the year to get a bonus, and of course it's all you might get it, you might not.
• 23:26
  SPEAKER_02: So take that money or at least a large portion of that money and think about putting it in somebody's hourly base wage so that you're able to attract and retain better talent.
• 23:37
  Scott: Yeah.
• 23:38
  unknown: All right.
• 23:38
  Scott: So yeah, well, what one more question is do you have a favorite book or podcast you can share with us?
• 23:43
  SPEAKER_02: I do.
• 23:44
  SPEAKER_02: So my favorite book is called The Leadership Playbook, and it's by Nathan Jamal, and his last name is spelled J-A-A-I-L.
• 23:54
  SPEAKER_02: And it is a book about how to have conversations with employees.
• 23:58
  SPEAKER_02: I I pretty much give it to a lot of managers because it's a simple book to read.
• 24:03
  SPEAKER_02: It's not theoretical, it's not academic.
• 24:05
  SPEAKER_02: It tells you how do you deal with this issue, how you deal with that issue, what's the uh what should you be thinking about?
• 24:11
  SPEAKER_02: What are the words and the phrases you should be using?
• 24:14
  SPEAKER_02: Highly recommend it.
• 24:15
  SPEAKER_02: Easy read, weekend reading.
• 24:17
  Scott: Well, we'll put that on our on our list, Scott.
• 24:19
  Scott: Well, we're we're coming up on our time here, and and this has been great.
• 24:22
  Scott: Where can people find out more about you online?
• 24:25
  SPEAKER_02: So I'm on LinkedIn, very popular.
• 24:27
  SPEAKER_02: Uh, my email is Scott Baker at stage3leadership.com, and the three is the number three.
• 24:34
  SPEAKER_02: Great.
• 24:34
  SPEAKER_02: Well, Scott, thank you so much for coming on today.
• 24:37
  SPEAKER_02: Thank you very much, Scott.
• 24:38
  SPEAKER_02: I enjoyed it.
• 24:38
  Scott: All right, folks, that's it for today.
• 24:40
  Scott: Hope you enjoyed our budget your business episode and join us next neck in two weeks for our next one.
• 24:46
  Scott: Thank you.
• 24:46
  SPEAKER_00: If you like the show or found something useful, text someone right now and say, I have a podcast recommendation to check out budget your business.
• 24:54
  SPEAKER_00: You can also like the show or find more at your favorite podcast locations, Apple Podcasts, Spotify, and Amazon.
• 25:03
  SPEAKER_00: Thank you for listening, and we hope you join us for our next guest on Budget Your Business.