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

Easy, easy stuff. Yeah. You know, I try to think about what my life was like before I met Ron. And it was just. It was.

Yeah, yeah. I mean, it was. Yeah, it's very different. Yeah, I know. I mean, we met in, in early 2019, and so I had just joined Kirby Smith as a. As the head of hr. And before that my career had been. Yeah, I've been in HR all my career. I mean, I. I kind of fell into hr. I couldn't even spell HR when I was in college. I didn't know what it was, but I did HR for, for retail, for distribution, for restaurants, for all kinds of different things. But, but when I. I met you in early 2019, and that was in the heavy equipment space. And so for several years while you were, you know, they're connected to them and I was doing the work for them, we went through Covid together. So there's a lot of, A lot of pivoting during that time and a lot of interesting things that we had to learn how to do that we had never done before. And, but since.

But for the last, you know, probably six or seven years of my career before I launched my business, I've been in the construction, manufacturing, slash distribution space. So whether it was in, you know, before I met you, I was doing talent acquisition for a very large general contractor. After I left Kirby Smith, I was working for a building products company leading hr, so kind of still in the manufacturing distribution space. But about three months ago, I decided to take the plunge and create my own business. And I created my own fractional HR business. And so I am having an absolute blast. Some days I wake up and I still don't really know what I'm doing, but I'm having a great time doing it. But my, my ideal client profile is really small. I say small companies, but small to mid sized businesses that are in the construction, manufacturing, distribution space, under 500 employees, under 100 million of revenue.

You know, for the most part, a lot of them are going to be founder led and so they don't really, a lot of them may not know what HR is or they can't spell hr and so they, they need someone like myself that can come in and, and help, help get them on the right path or help maybe lead or guide a junior HR person that they might have on their staff. Or maybe they're going through some, some change, you know, some dynamic events. Maybe it's a, an acquisition, maybe it's a merger or maybe it's a retirement. Maybe it's something that's, that's pivotal, you know, an inflection point in their business where they need some, some HR guidance. And so, so that's what I'm doing. I'm in Dallas, Texas and you know, for the most part I'm, I'm working with clients that are here locally, but I can, I can work with clients anywhere. All the virtual technology we have and yeah, just looking to grow my business and I appreciate you having me on the, on the podcast.

Right.

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

Absolutely. Yeah. Yeah. So like I think about, you know, probably, probably a good example. Right. So I've got, I've got three clients today that I, that I work with and just to back up A little bit. So back in the, in the summer last year, I got connected to a firm here in town that all they do is they place fractional executives. And so I'm doing work, I'm kind of assigned as the, the HR consultant on their, on that business, on their clients. And so, but I decided three months ago to, to venture out on my own and do my own thing. And so I'm working to build my own clients. But I got three clients, great clients that I'm working with today doing all a number of things. Some of it's a leadership coaching, some of it is, some of it is talent acquisition and recruiting. And I've got one client that they've spent thousands, thousands on search fees with recruiters, with third party recruiters.

And so I came in, used, did a simple posting on a deed that cost zero. And within a matter of weeks we found our candidate, we hired our candidate. And it cost, I mean it cost obviously my time, but you know, the search fee would have been 20 to 25% and this person as, as you know, making over six figures. And so that was cost right there that I cost, that I saved them. But some of it is performance reviews. I'm going through with a different client. I'm putting a performance review process in place where there's never been one in place ever. And so a lot of that is, is, you know, for, for, for you and for me and for some others that are probably, you know, have I guess more I said sophisticated. I don't mean that in a bad way. I mean just some people have been around more and been around all the processes but for us it seems so, so simple.

But some of these, some of these clients and some of these people that are leading these businesses, like a lot of these dealerships, that's just, that's just a muscle that they've never had to work before. And so they don't know like how what a performance review process should look like or what the cadence or how much time or like, like interviews like oh, I know, I didn't know that. I can't ask if they're married or not married. And so part of that is just some simple education and, and kind of, you know, helping them kind of here's the guardrails and kind of keeping them, keeping them in, in bounds to make sure that they, they don't do anything to, to hurt themselves. So some of it could be very, very basic stuff from hey, let me help you terminate this, this employee who's in California that's over 40, who's, you know, African American and female. There are some things that we need to do a little bit differently here.

It's not like we're, you know, in Texas where there's just things you got to, there's just things you got to do differently and there's different, different watch outs and different pitfalls that you don't want to fall into. So some of it is as simple as that to. It could be succession planning, you know, working with a founder who's built up this business from nothing and they have no one to take it over. Maybe they've got a leadership team and a couple of people on the leadership team that are potential successors, but they need some help to kind of suss things out a little bit. Like, okay, what's going to be the right, what's going to be the right leadership place? We're going to. If this business is going to keep going after I'm gone, you know, what's going to be the right, the right path forward? So it could be a number of things. It could be compliance, it could be talent acquisition, it could be leadership coaching.

I mean, I kind of stumbled into a, a leadership coaching opportunity with a client recently where that wasn't part of the plan at all. But along the way they said, hey, we've got a director that could use some help in these areas. Is that something that you could do? And I was like, absolutely. And so I just spent some dedicated time over the course of six to eight weeks with this director and helped provide some coaching, some guidance and kind of got them, got them back on track.

Okay.

Yeah, that's important, right?

I think it's spot on. I would say the same thing for a performance review process. I think a self assessment is a good approach for self because if I have a perception about the way that I'm performing and I think I'm up here and I'm a rock star, it's going to be helpful if you do the same. And then you and I come together and I'm like, wow, I'm like walking on water and you're down here. Like, man, I'm. I'm surprised that you find the coffee each morning. Like, I don't. And there's a, there's a huge disconnect. There's a big delta there. And so I think it's. And it's, look, it's, it can lead to some very uncomfortable conversations, there's no doubt about it. But I think those are necessary. So I think it's good for. I think it goes both ways. I think it's good for the employee to know in a, in a professional way what their, what their manager really thinks or what they think they're missing.

But I think it's also good for the manager to know, oh, Ron thinks that he's, he's like, he hung the moon like, I need to mummy. I need to take that into consideration as I'm coaching him and working with him and assigning him work and assigning him projects because he thinks he is the man. But I mean, he's good, but he may not be great like he thinks he is and how do I. Or maybe it highlights some, some training gaps, some opportunities. And you see things as a manager like, hey, this is a good course. I think this would be a good investment. Maybe you need to go spend a couple of hours or days or go to the seminar and go here because literally you need some, some help. So I think, I think it's good.

Right.

Yeah.

I think that actually that's another, that's another piece that I'm working on with two of my clients right now is job descriptions. And I think, oh, do I have a hot sports opinion about job descriptions? Yes, I think sometimes, oftentimes they are pencil whipped and they're just kind of thrown together just to put something on a piece of paper. And so it's very unfortunate. And it's not really doing, it's doing a disservice to the employee when you just throw something out there because you need something to kind of document the job. But if it's not a true reflection of the job, then it's kind of a waste of, it's kind of a waste of paper. So I think that a job description, I mean, I think it should be, I think it should be thorough. I think it should be accurate. I do think it makes sense to on a regular basis, whether that's annually or annually might be the best.

Look, most places still have some type of an annual performance review, but probably a best practice would be when you're doing the annual performance review to say, hey, by the way, you know Ronald, thanks for meeting. Here's how you're doing. I want to just, you know, level set on how you did for 2025. By the way, I wanted to share. Let's, let's go over your job description again. I know we did this last year. Some things have changed. I want to make sure that you and I are on the same page with those, any changes. Is there something that you feel like needs to be done differently and sign off on it? Like, just like that way there's like I'm clear and you're clear. This is what I, you know, it's almost like a, an agreement really. And it's like, hey, this is, this is, you're saying this is the job and if it's not, then let's talk about it.

But if you're saying this is the job and I'm saying as your manager this is the job, then there really shouldn't be any pushback or any Problems. When I come to you in three months and I say, hey, you're doing a really crappy job, and then you can't be like, whoa, what do you mean, I thought I was doing great? Well, let's go back to the job description. Yeah. This is what we were lying. We. We talked about this. You were, you and I were on the same page. You signed off on it saying this was the job. And I'm telling you, you're not doing the job. And so it's. It's also kind of helps build a good. Build a good defense, because later on, if you need it, you have it.

Yeah.

Right.

Yeah. Yeah.

Oh, boy, that's a great question. I don't. I'm trying to. I'm Trying to figure out the best way to answer that in theory. I do agree with that. I, I have heard that before and I do believe that the best processes decouple, you know, performance from compensation. I've never. And, and why I'm answering kind of so, so, so neutral and so, so kind of, kind of, kind of chipping the answer because I've never seen it in practice. I've heard about it, I've read about it, but I've never seen it in practice. Everywhere I've always, everywhere I've been in my whole career, they've always been, they've always been interlinked and so I don't know any different. And so I, I've heard like, and I do believe that in theory it is better to kind of keep. Let's keep the money over here and let's keep the performance over here and like those are two separate things. I've just never seen it in practice and so I don't, I don't know.

I think so people, some people are just so tied to like. So that's great. I did good. What am I going to get paid? I'm. We're all coin operated. So many people are just coin operated. And so I think there's a way. It'd be hard to separate those two but I think it's, I think it's the right move. I just don't know how to do it.

Really?

I remember that.

and I

I agree with that.

Right.

Yeah, it's a very healthy approach.

Right.

Right.

I agree with that. I also think that a lot of managers and leaders don't like giving constructive feedback. I think they're just, they're just not good at it. It's whether it's conflict avoidance or whether it's, they're just, I don't know, I just, I think they have a hard time. But you know what? I do think I want to go back to that says because I really do think that. I mean again, in my mind, in theory, in my mind it does make sense because when you, when you, when you have these things tied together like oh, I've got my performance review and how I do in that kind of dictates what my, my compensation is going to be. Then you've, you've kind of, you've let, you've, you've almost kind of, it's a self fulfilling prophecy because you've said, well my self worth is going to be tied to whatever my review is going to be. And so, and so I think it's, it is. I, that's why I said healthy. I do think it is a healthy approach to separate the two.

And one should really be more about hey, how do we get you better at your job and not have it tied to like oh, and by the way, I'm only going to give you a 1% because that's the only thing they're going to hear out of that conversation is I just got a 1% race or I got no raise, I must be crap. And then they just, it becomes like that their whole self worth is tied to whatever that percentage is. And they, they didn't even hear the percentage performance piece. Let me.

Okay.

Okay.

Wow.

That was great.

Yeah.

Yeah.

By either way, you could have went. You could have won either way.

I know Jay.

Right.

Okay?

It's like an average of all 20 segments. Yep. Oh, interesting.

Yeah, interesting.

Yeah. Interesting.

Sure.

Why not? Yeah, nobody does that.

It's low hanging fruit.

Yeah.

Right.

Yeah.

Yeah, yeah. One of the clients I'm working with right now, it's a small outfit. I mean, it's, it's, it's less than 10 people and. But the president is, he's doing it all himself. He has, he has no HR support, so he's onboarding employees, he's interviewing employees, he's scheduling employees. He's, I mean, all of it. He's, I mean. And so I came in and within just a matter, I mean, within two weeks, I, I took over A lot of that man just cleared his plate and he's just like, I don't know, like I got so much time back. It's amazing. And so I guess, you know, the other thing too, I think, I think about the work that I do. The reality is a lot of, a lot of the, my prospective clients, which, you know, a lot of these, these, these dealers, they, they probably don't need A full time HR leader or HR Chr, they probably don't need a full time. They may not have the budget for one. But where I, where I fit is I say, hey, you don't need me full time.

You probably don't want me full time. And say, even thinking about the cost, like that's just a, you think about the salary and benefits, you don't want all that. But I can be yours one day a week. Like I can come in, you know, whether it's on site, whether it's personal, but I mean I can. You've got me for one day a week and that's when we can have time with the leadership team. That's when you know, I can help provide like, you know, some people advisory, like just kind of help to make sure things are on track from a compliance. What are you doing here? What are you doing there? And, and that, that is really, a lot of times that's all they need is just someone to kind of just help them stay on track and kind of avoid the landmines. Because it's like you don't need me full time, you don't want me full time.

But you know, if I can be an adjunct member of the leadership team and kind of be there to help, you know, in the important conversations, the important meetings to help some, some you make, you make some typical difficult people decisions. That's where I feel like the value comes in for fractional hr. Because I can come in and I can do that and I can just, and I can.

Yeah.

Oh, okay.

Wow.

Oh, yeah. Yeah.

year,

Yeah.

Wow.

Yeah, yeah.

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

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

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

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

Oh, okay.

Wow, really?

Oh, really?

Wow.

Yeah.

Okay.

Wow. So the first, like herding cats. Is that hard?

Yeah.

Yeah.

Wow.

Well, you don't. Yeah. Because they all know. They've all. They've all walked a mile in each other's shoes.

So they know. Yeah. They know the job. They may not like the job, but they know the job and they have respect for it. They appreciate it. Yeah. I think that that rotational thing is strong. That's strong.

Yeah.

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

You are not 80 this year, are you? Really? Yep. Oh, man. Man. Doing good for 80. That's fantastic.

Yeah.

They may not. But you need, but you need to plan on them leaving. Yeah, they may not.

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

But if one of them turns bad and turns into a, a bad apple, then we need to, we need to figure out a contingency plan to, you know, to remove them. Possibly becomes a problem.

I don't think so.

of them were the same? Were they all the same? Like, you know, did he have 20 of one or.

What did he do with 60 different customers?

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

No, no, no, this is great. This is great. You know, you. I always walk away from our conversations with, With. With a new. A new perspective, and you always leave me something to think about. So you've, You've. You know, you always. And it's so funny because I got. I think I shared with you. We texted the other day. I got this book and I saw this. I was like, I remember reading that years ago because you. You had kind of tasked the. The leadership team with. And so I'm going to be going out of the country on vacation in a couple of weeks, and I might just have to. Might just have to read through it again. So refresh my. My memory.

Yeah, well, it, it is. Admittedly. I don't. And this is gonna sound really funny, I don't read as much as I should just because I get busy with life and other things. But, but that's really no good excuse. But I think the other thing it does is when you go through like a reading room or book club with, with your colleagues, you kind of start to develop some common language. Right? Some common. Like, you know, you can kind of like look across and be like, you know, it's almost like it's like having an inside joke. Right? Yeah. Like, you and I, I know you and I are both connoisseurs of, of good gin. And so like, you know, we can look across the room and I can be like, oh, yeah, the Empress. Yeah, that's the one from, that's the one from, you know, whatever that.

Canada. Victoria. Yeah, exactly. Yeah. So like, we know. So see, we have that common. Like it's. When you have a book, when you're reading a book together as a group, you've got this common. Like there's characters that certain people identify with and you can say you're being a Charlie, you know, you're being a, you know, Robert or whatever, you know, it's just.

You know, I, I just, I just want to thank you. Thank you for having me on. Thank you for having the conversation. It was very casual, very easy. I mean, we could sit like this and just, and chat for hours, but I think this is, I'm really enjoying the work that I'm doing. I mean, not that I didn't enjoy what I was doing before, but I love, I think there is a, I think there's a need out there for, for HR know how and guidance and, and expertise. And so I'm, I'm, I'm looking forward to fulfilling that, that need for people.

Six Degrees or less. How do they. So that started they. And probably the best way is you can go, you can find me on LinkedIn. You can go to the website. So six with a six degrees or less dot com. Or my email address is just Seth at. Again, you know the number 6 degrees or less dot com. And so it's, you know, it started years ago when I had my, my podcast and so when I was thinking about, you know, this idea of creating a company. I was like, well I've already got the website and I've got why not just keep it all the same. And, and so I did. So that's it. But it's, but it's really relationship driven. It's all comes back to relationships and so perfect.