32: Automating Business Processes with Rhamy Alejeal of People ProcessesPublished March 17, 2020
Run time: 00:51:51
In this episode, we dive deep into automation, specifically focusing around how to automate your HR processes. Rhamy gives us an exercise you can do right now which will get you going down the path towards automating your business. We also talk about how to get automation happening in your organization, whether your company is 10 people or 10,000 people.
In this episode, you will learn:
- Why you should care about automation in your company
- An exercise you can do (right now!) to figure out where to begin with automation
- Why every problem eventually becomes a “who” problem
- Ways that large organizations can navigate the bureaucracy to get changes done
This episode is brought to you by The Jed Mahonis Group, where we make sense of mobile app development with our non-technical approach to building custom mobile software solutions. Learn more at https://jmg.mn.
Recorded February 20, 2020 | Edited by Jordan Daoust
Tim Bornholdt 0:00
Welcome to Constant Variables, a podcast where we take a non-technical look at mobile app development. I'm Tim Bonrholdt. Let's get nerdy.
Today we are chatting with Rhamy Alejeal of People Processes. Rhamy and his team work with hundreds of companies across the United States, helping them learn how to stop pushing paper and start prioritizing people, a lot of "p" alliteration. In this episode, we dive deep into automation. And specifically, we focus around how you can automate your HR process. Rhamy gives us a really great exercise you can do right now which will help you get going down the path towards automating your business. Also, in the episode, we talk about how to get automation started in your business, whether that's a company of 10 people or 10,000 people and I'm introduced to a new phrase that is going to change my life. It's going to replace the phrase "one-stop-shop." It's right towards the end. You don't want to miss it. So without further ado, here is my interview with Rhamy Alejeal. Hello, Rhamy, welcome to the show.
Rhamy Alejeal 1:15
Thank you. I'm so excited to be here, Tim.
Tim Bornholdt 1:17
Awesome. You know, we were talking before the show about how we've been listening to each other's podcasts and you start every podcast interview with a question that I just loved, where you... and the way you phrase it just made me laugh every time I listened to it about how, you know, not very many little boys and girls dress up to become HR people, you know, and I thought that was brilliant. So in the same vein, you know, how did you get into the world of HR? Were you the one that was actually dressing up as an HR representative?
Rhamy Alejeal 1:45
Believe it or not, yeah, yeah.
Tim Bornholdt 1:47
Rhamy Alejeal 1:48
Well, so I'm from a long line of... it's actually insurance is where we started. My grandma is an insurance agent. My mother was an insurance agent. And I loved my Grandmother. We spent a lot of time together. But as I got older, I wanted to spend the night at her house more and she would never let me do that during the week because, being a commissioned sales insurance person, she had to cold call on weeknights. And so when I was 13, I was like, "Gran, no, let me spend the night. I'll cold call for you. It'll be great. I'll cold call. How hard could it be?" And she goes, "Oh, Rhamy, you can't cold call. I'm calling 65-year-olds to talk to them about Medicare, about, you know, like, their new insurance coming up. I can't just-." I was like, "I can do it." And she gave me 24 cassettes in a big folder, and a licensed training manual. And was like, "Well, if you read all of that, and listen to the cassettes, I'll let you try." And I think she thought that'd be the end of it. But two weeks later, I was like, "I'm done. Let's do this thing." And I cold called seniors for Medicare supplements starting at 13 for about two and a half years before it turns out, like, that's totally illegal and you've gotta have a license and an adult. But my grandmother let me do it for so two nights a week and Saturdays, I would call Medicare, I'd call everyone in a zip code turning 65 on these old like, a line printer, like you rip the edges off the sheet. Green and white stacks of paper, we'd get them every month, everyone turning 65 in a zip code, and I would call them and say "Hey, you should meet with my grandmother. She's gonna talk to you about Medicare." And it was shockingly successful. Turns out 13-year-olds calling 65-year-olds saying "My grandmother wants to meet with you" just printed money. I mean, that started my fascination. My grandmother was... she was my gran; she was old. But turns out she was like in her 40s but somehow she was able to pick me up from school at two o'clock and I can always spend time with her. Well, you know, in my head, I was like, "Well, that's just what grandmothers do." But in actuality, you know, that's what someone who had built a career with renewables and had a long client list was able to do; she was able to spend time with her family. And by the time I started realizing that I said, "Okay, this is the world I want to go into." I got bachelor's degrees in finance and economics with minors in physics and math because that's what you do if you want to be an insurance agent, and on and on and set up my company at 22 to do insurance and rapidly niched into employee benefits and within a year realized that while you've got to be good at the benefit's side of things, you got to know your actual policies and have markets and not be an idiot. That's not the bar. What you really had to do was actually provide significantly more value in terms of how do you communicate these things, what is the purpose of the benefits, why are we trying to attract and retain great talent. And that moved me into the HR space, even though I was still benefits, it was all about attracting and retaining good talent. Within a few years, we had full payroll operations, HR consulting, communications, design, onboarding, recruiting systems. And that's the transition. It was "I just want to sell some insurance" in the beginning. But within just a few years, it was like, okay, the way we're gonna actually make a mark is by being an HR expert. And benefits is a component; it's still about 25% of my business. We love it. It's still a big part of why people stick with jobs. But it's become a one tool among many in the HR world.
Tim Bornholdt 5:47
Well, it's funny, you know, business in general, you think you go down one path and it's funny how you just kind of, as an entrepreneur, you see the problems and you start to go towards it, but it's funny at the end of the day, all the problems, it all comes back to people at the end of the day, if you can be a good communicator and you can help people solve problems. It's fascinating that you were able to turn it into... seeing where instead of just providing the baseline value that you're able to talk with people, figure out how to actually solve problems, go above and beyond and grow your business to be as successful as it is today.
Rhamy Alejeal 6:23
Thank you. Yeah, communication is everything. There's actually a great study, and it's old now. It was 2008, something like that. But I referenced it a lot in the beginning of my business. But it was actually taking some different union shops that had similar industries, in similar areas economically. And they had different benefits plans. And they asked the employees to rate communication, like "How well do you understand it? How do you know, you know, where do you do feel like they... How did they communicate it with you?" In 2008, the internet was still like, "Oh, how do we handle this?" People were faxing applications.
Tim Bornholdt 7:01
People still fax applications. It's ridiculous.
Rhamy Alejeal 7:03
Crazy. But the bottom line is the satisfaction with the employees' benefits was almost entirely uncorrelated to the benefit themselves. It was like 90% of an employee's, you know, whether they think they have good insurance or not was around communication. Basically, for every dollar that was spent on communication, simplification, your actual enrollment experience, you were receiving, in terms of employer spend, almost $250 in benefit. You could have increased the cost of the benefits by 250 bucks to the company per employee, or spent a buck an employee on color paper, right? Like crazy, crazy amount difference. And that's what, that kind of... I read that article. I'm a nerd. I actually read academic journals and I read that, you know, two years into my business, it was like, "You know what? That's so right." It's not about, I mean, it is... you've got to have good insurance. I'm not knocking it. But communication changes everything. And that's where we differentiated and grew from.
Tim Bornholdt 8:10
Absolutely. Well, changing gears slightly. You know, one of the big things that we talk about on this show is automation technology. And it's really geared towards non-technical people. But you know, as a business owner, I'm sure, you know, we all have a million things that we need to do when we're running our business. And I'm sure a lot of people think that they would like to have these tasks, you know, automated. Now, what do you tell people? Why should a business owner care about going about automating just things in general, and then getting specifically into some of the HR things that you do, why should anybody care about that?
Rhamy Alejeal 8:45
Well, there's kind of two layers to that. Why should you care about automation or processes in general, and why should you care about HR, and I'll take them one at a time. Let's go with the broad processes. Most business owners know they have to define their operation's processes. Whatever business you're in, whether it's making apps, doing taxes, running a daycare, you have to have a process to deliver that actual good. You may need, you may have a sales process, a marketing process, but the first process people get familiar with is, I think, if you use the example, you know, everyone's read the E-myth Revisited. Er, not everyone, but a lot of people have. And I think the example he uses is making a pie, right? You can't sell pies until you write down the recipe to have a consistent product, and that is a huge part of it: have a consistent product. But why is that important? And why does that actually grow your business? Because by having a consistent process, you can improve it and measure it. And unless you don't, unless you actually consistently do the same thing over and over, you're never able to apply the scientific method and improve over time. If I change this, what will I get? How can I improve it over time? I have to update my process and repeat it and repeat it. Automation is the next step of that. The process itself is outstanding to have and you've got it, you know, you can have it on a piece of paper, and we're gonna follow the process. That's a start. But the more time you spend doing the process, the less time you're spending improving the process. So normally the outsize impact of automation is not so much that it, quote unquote, saves you the time you would have normally spent manually updating your CRM or paper onboarding an employee; it does do that and that is an immediate return on investment. The bigger thing is you can then spend that time improving the process that is now automated, making tweaks, growing it, doing it better, communicating it better and that will have a ridiculous return on investment. That's why automation is a worthwhile investment, even for small companies, because it gives you the ability to improve over time.
Tim Bornholdt 11:09
And how about specifically related to HR then? Are there certain things about HR that you see as kind of low-hanging fruit that people go to to automate right away?
Rhamy Alejeal 11:20
Absolutely. I mean, HR is one of those kind of legacy parts of businesses. People understand or business owners understand they have to lower their marginal cost for delivering their product or for acquiring a new client. They see the immediate return by automation and processing those pieces. HR, for some reason, gets left behind, even though your people are the ones who execute the vast majority of those deliverables. So the investment into automating HR, again, allows you to improve your HR and the reason that's important, there's really two. One is, of course, your labor is often one of your highest, if not your highest, expense. Even if it's not necessarily a variable expense, when you look at your costs over the course of the year to deliver your product or service, labor is a huge part of it. So anything you can do to get more return out of that labor investment is outstanding. The way you get more return is through retention, keeping good people and making them better. That makes that the return. Like if you think about hiring someone fresh to work in your development, a new college kid, new college graduate, who knows the technical skills but doesn't have the work experience. It may take you 18 months for them to even really be, if you're, you know, if you're just in kind of a standard small business, for them to even really have their head around what's going on and be reliable. Moving that from 18 months to three months is a huge return. But even more than that, by automating you can continually improve that skill set and that knowledge of your culture and understanding over the months and years to follow. Because, again, automation lets you work on the process. So repeat and grow, as opposed to just putting a little bit of effort in right at the beginning. A bunch of manual work and now after that, it's like, "Alright, you figure it out. You're part of the team now, buddy." You can, we can automate those things and grow them. So HR super benefits from automation. I mean, the reason that business owners often don't see it is because while the rate of return is incredibly high, it's slow. Because you have to implement it. You've got to get your people trained on it. And often you're trying to improve humans, or improve your humans', you know, love of your company and their ability to make decisions when you're not there. These are the goals of good people processes, as we call them. But that takes some time, three months, six months, 12 months to really start seeing the outsized impact. And the impact will be outstanding, but I think that's why it's a little bit lower on the list. They may have a much more pending, you know, pressing problem in, "I can't get the damn pie out the door every week." Right?
Tim Bornholdt 14:09
Well then that's fair. I mean, I guess I could see that to a point but I also think, you know, we all are emotional by nature but I think rationally thinking, if you can get me a student right out of college from 18 months trained up to just three months, I mean, I would take that every day. So when you're talking about those, you know, big improvements like that, what do you do? How do you get started making those? Are there like quick easy big things that you can knock out or is this like a painful, you know, go meditate on a rock and come back and have the enlightenment done so that you know, you figure it out? How do you get going on that?
Rhamy Alejeal 14:48
It's a process, man. It's not even- it's a checklist and it blows me away that people don't follow it. We worry about compliance a lot in our world. You know, employees are wrought with lawsuits. And I tell my clients, "Compliance is a spectrum. I want you to meet every letter of every law out there. But right now, you could put in 20% of the effort and get you 80% of the way there." Don't pay people under the table. This is an easy thing, right? Get the easy stuff out of the way and have a huge outsized impact. And then from that growth, now we have a little more time to deal with the, you know, compliance, A/B testing of your communication material. We'll get to that one day. For now, let's like hire people as employees instead of independent contractors. When the government says their employees, right? Let's get the easy stuff out of the way. I think with HR, the general process is to first think about, I'm sure it is when you design an automated process and an app, what are you trying to do? So we start with a goal. Then we evaluate the procedures or the things you do. Some people don't really have a process. They just have, "Well, when I hire people, I do these six things sometimes and these six things sometimes." And it's kind of a brainstorming idea to start with. But we figure out what is it you do now. And then we look at that goal. Perhaps the goal is to have a quicker time to reliability or usefulness for your employees. Maybe the goal is to keep employees who've stuck around for a while and managed through osmosis to figure this stuff out. We sure don't want them to leave now that it's been three years and they've learned everything. Whatever that goal is, look at what you do. And I think most business owners, 99%, they're not stupid. They may not be smart in the traditional way, but they're not stupid. If they take even 20 minutes to say, "What's the goal of any given, what we call, an employee event, whether that's onboarding training, annual performance evaluations? Heck, why do we have parties, like what's the goal of this thing?" And then look at what they do, they'll immediately see a gap, right? We hire people and we tell them we care about them. And we go to lunch with them on the first day. And then they ask Jeff in the cubicle next to them, you know, "What happens if I get sick? Like, where do I tell people that?" Like they don't have any process in place, or a way of communicating that they care about the employee. They complain, you know, business owners may complain, you know, "Every time I leave the office, nobody seems to get any work done, or they're constantly calling me and saying, 'Hey, boss, man, what do I do about this? What do I, you know, where do I make the... How do I do this? What's the right answer here?'" And then you go, "Okay, so the goal is that people can be more independent, and they can make decisions like you would if you were there to do that." They're going to need to know the actual skills, which maybe they already do. But they also need to know, what is your guiding principle in making these decisions? Perhaps we should communicate that. So we write it down. And I mean, I'm a tech guy, but I start by "What is it? What the heck is it we're going to try to do? What are the steps we're going to follow? Let's turn it into paper." And then we automate it. I'm sure with an app, it's a similar thing. What are the forms? What's the database design? What is it we're trying to accomplish? Set a goal. And then we're trying to turn that into simplicity and automation.
Tim Bornholdt 18:20
Well, yeah, it's like I always say, with app development, it's like, if you can take out a piece of paper and write it down, that's gonna take you, you know, 10 minutes. And if you try to put that into Photoshop, it's gonna take you, you know, an hour or two hours, and then if you try to put it into code, it's gonna take 10 hours. So you have to kind of start small, and just having it written down, I'm sure, is like a huge first step to actually getting things going.
Rhamy Alejeal 18:44
Exactly. So if I could give your listeners advice, they say, "I don't want to read this guy's book. I don't wanna check him out. I just... here I am listening. I gotta get this crap straight." I know that. I feel the same problems: I've got employees but they're not growing. They're either not sticking around or if they do stick around, they don't seem to be getting better fast enough. I can't trust them when my back is turned. Here's what you do. I want you to take out a piece of paper and I want you to write recruiting, onboarding, training, evaluation. And then you can put compensation over there on the far right. Compensation's hard for small businesses, because they're kind of limited in that, a lot of times, like "I tell you what I can man. They all make more money than me." And if you're in that boat, then just put compensation over on the right; we'll come to that one day. Go look at each one of those four steps: recruiting, onboarding, training and performance evaluation. And think about what your goal is. When you're recruiting, what is your goal? Is it to get a body? Is it to get the best possible, most experienced, already knows everything, walks through the door and takes over person? Or is it my goal is to find that diamond in the rough that I know I can't, you know, I can't steal them from IBM, but I gotta get somebody who I can train. So I need someone that's moldable who's trustworthy. Write your goal, then below that, write or pull your pieces of paper out or go look at your online system, what do you do now? And then I just want you to write under that, what's two things that you could do to get you closer to that goal? If you need help, you can always reach out to us but but most people, again, they're not even at that. They haven't even done that little bit of effort that will give them an outsized impact. They'll immediately go, "Oh, you know, what we should do? When we recruit people, we should actually, like, tell them what the job is that they're gonna do in detail, right? We should have a job description that covers the legal side of things, but we really should talk about in what we're recruiting, the way the employee will be judged. And maybe we should talk about with the employee or in our job description, what the goal of the position is, like, what's the guiding like? I'm hiring you to do the following things. And the reason is, I need to to get the hell out of this office by 7pm on Friday." Tell them. Put that in there and just by looking at each one of those steps, recruiting, now go with onboarding. Now you've got a hire. You've figured it out, you got somebody on, what are we going to do for onboarding? What is it you do now? Write that first; compare it to your goal. Is the goal of onboarding to get them to be useful to you as soon as possible? Is it to make sure that they can make decisions when you're not there? Is it to create a harmonious atmosphere and make sure that they, you know, we know maybe it's a position that they're... There's no way they're a brain surgeon, you're hiring them, the goal is that in three years, they don't kill people. Okay. All right. Cool. Cool. Cool. So the top goal of onboarding then is make sure they don't leave in three months to go be a farmer. It's to make sure that they are willing to stick out the three years of crap pay where we just have to train them. What are we going to do here? So put that goal up there, look at what you do, and you'll come up with three things during onboarding. You know what we really should do? We should do these things. So look at those sections, write those down, and you've got to start. You've got something that you can improve; you've already made a process. What did you do before? That's hard enough for a lot of people. What are two things that you're going to add to or replace to improve it on each one of those? And you'll already be well on your way. Once you start scaling, and you're having to do each one of those things 10 or 15 times a quarter, you've got onboard people or hell a year, whatever your organization requires, then you start thinking about, "Alright, those are the steps I follow. I've improved them. How do I stop making them be a time sink, so that I can actually improve them further?
Tim Bornholdt 22:39
I jumped into business at a weird time, like very young, and I just wanted to build apps, right? Like, I didn't think that there would be a whole lot of sales process or any of this stuff, you know, and it's funny because you'd think as a developer, where all day I think in systems and I think about algorithms and how to make things work efficiently within apps, I would apply that same principle to my business. But you know, we just didn't, for whatever reason, and we decided one day that we should actually go into a whiteboard and just write out all of the sales prospects that we have. Cause my business partner and I, whoever was looking at the email at the time, would just respond to it. And, you know, two different processes. It was just whatever. We go in there, and we decided, you know, why don't we just make a list? And it was like, you know, 30 people deep of "Oh, yeah, that guy reached out to me six months ago," or "Oh, yeah, that guy, or this girl." And we ended up making a list. And that process turned into a Google doc or a Google Sheet that then we were like, well, we could build this into a website. And then we turned it into our own custom website that worked for our process. And then it's like, hey, well, we can turn that into an app and that's what we're working on now. And it's like that exact process of just start by just documenting it. What do you do now and even that, you know, it's probably painful. It was really painful and embarrassing for us to be like "Oh my god, why haven't we been doing this the whole time?" But then you see the benefits of just even writing it down so that if you get sick and your business partner needs to take over for you or whatever, like just having it written somewhere and out of your head is exactly, like you said, it's the exact right first step to getting something automated and then from there, you can improve and find out what sucks in your process and how can you make it better
Rhamy Alejeal 24:25
When I started, and even now, my board of advisors we call it is primarily my little sisters, my little brother and my parents and then like some people who over time we've added some great clients and friends but the board started as "Guys, I got crap in my head and it's not going anywhere." I think that people, not everybody, but I think by... "There's thoughts in my head. I have words. I know how we do things." But by explaining it to another human by talking out loud, it cements it. It gives you, "Okay, that's what's actually happening." And then by writing it down, it forces your brain to go, "Oh, that's what's happening." And now again, if you're a, you know, 500 man company and you obviously already know a lot of processes, maybe the place to start isn't with a blank sheet of paper and figuring out where you did, and maybe you need more indepth stuff. But I think for the majority of businesses out there, 95 plus percent, it's just that the owner hasn't turned - and you're probably in this boat, Tim. You built a company. Your first few years, you're just out there trying to get business and as the CEO or the founder, it's like, "My job is to go out there and get business, make promises and then come back and hopefully fulfill them. Do my damnedest to get them done." And eventually they turn and look at the process itself of delivering the product. And then they start going, "Oh, okay, I can hire somebody. They could handle this little piece or they can handle this piece." And you start growing and scaling through that amazing power of labor arbitrage. I mean, it's outstanding to hire other people to do parts of your business. We love it. But it's still an external focus. It's still, how do we deliver? It's still, what's the problem with the process or the product itself? Over time, that problem becomes much more a "who" problem. In businesses, you can be a like an Uber driver. You can be a self employed, you know, single client person. You can be a person who owns their own job, like maybe you're a concrete contractor and you own the truck, and you ride, and you bring in help, but you're still at every job. You're still the guy, but eventually, every problem becomes a "who" problem. Who's gonna do this? How do I find someone who's gonna take care of it? How do I make sure they're set up for success? And when you start moving to that view of "who", that's when turning those HR automations on, making sure that you've got this straight. Just it'll blow you away how quick you've grown. I have a law firm that started with us three years ago with nine employees, they have 120 now. I can't turn on the TV or drive down through my city without seeing their billboards. They're everywhere. And the reason is, well, a pretty dang good lawyer runs the company. Absolutely you've got to be good at your job. Right? He very early on was thinking, "I'm not doing this. No, no, no. They can come to me like one out of every 500 cases, but man my job is to build a company. And the company is people who are gonna do this." So he was very "who" focused from the very beginning. How do we get people? What are they going to do? Who are they? Where do I find them? What do they need when they're here? And as the CEO he focused on "who" and I mean, that guy, he's killing it. And most successful businesses I see that make it out of that 5-10 man slot or less, they make that switch to "who" and that is the power of HR. It's the power of your people that you bring in.
Tim Bornholdt 28:17
Well, that leads me to my next topic that I wanted to talk about was, we've been kind of on the early stuff here of like, how to get started, writing down on paper, like you identified. You know, that works well at a small scale, and it works well for us. And I highly recommend if you're at that scale that you should be doing that. But I would imagine that, you know, people listening to this episode, some of them might work in large entrenched organizations that, like you said, have already got process in place. But you know, I think anyone that's ever worked in a large company, they'll typically complain about something, efficiencies or bureaucracy or something. If I'm in a large organization, and I see some inefficiencies with the process, or I want to start introducing automation in more of a larger organization, I would imagine it's not as easy as writing down your goals and trying to steer towards that. How do you advise people starting to see these problems? How do you get them to be able to use automation and become more efficient?
Rhamy Alejeal 29:19
Well, I have two ideas on that. The first is a pithy answer, which is, I wrote this book called People Processes. And when I wrote it, originally, it was 400 single-spaced pages of a HR training manual. It was like, "Let's crush people processes". And my publisher and editor said, "Rhamy, what are you trying to do with the book?" And I'm like, "I want, you know, HR people to be able to take this book and do all this stuff." And they're like, "Well, okay, but that's a textbook. Is that what you're trying to do?" And what we settled on is we want a book that an HR person can read. And everything in my book, it's going to give you a great outline and a place to start. The real purpose of it is, hand it to the - Read it. Make sure you know it. But it's short and quick. And it explains how to do things, but more importantly, why to do them. So some of our largest clients have come because the small HR person or you know, entry level guy, or someone else, gave my book to the board, to a board member, and they went, "Oh, this is why we scale up. This is how we do these things, and it's worth an investment." So I guess that's my quick plug. If you really are in a large organization, check out my book. It's not really for you if you're an HR genius, and you're running a 1000 man shop. It's gonna be, "Oh, God, yeah, you're right. I need processes." But if you hand that up to someone who's not focused on it, they're gonna think about it. They're gonna go, "Oh, okay." It's a great primer for that. It will take them an hour and a half to read. In a larger organization, there are many stakeholders. There are many different pieces. We're doing an RFP right now for a university. They have an accounting system that doesn't talk to their personnel system. There's a lot of manual entry data. Their benefits are completely divorced from anything related to payroll outside of like, they're getting, you know, paper applications, going to a chart and keying in expected deductions. When an employee's terminated, it triggers a series of events that takes hours, like 50 to 60 labor hours to generate Cobra documentation, follow up, explain what they're going to do. Especially in the case of an involuntary termination, firing, the process is ridiculous. I mean, you could fire 20 people a year and that's a full time - Or if 20 people a year quit in a 1000 man organization, and it's a full time job just to handle that. And I'm thinking, "What is going on here?" And it's because their systems don't talk. It's because they have no automation in place. And because of that, and this is the key, almost every step in the process sucks. Almost every step in their process doesn't accomplish the goal they want. They spend a crap ton on benefits and yet their employees don't think it's very good. They onboard people and give them an employee handbook in paper. They have specific policies they want them to read. And yet, HR is inundated by calls, and even department managers, chairs, assistant chairs are constantly asked about, you know, "Hey, I'm getting pregnant." "You know, I'm pregnant, what's my maternity leave going to look like?" "How does this work?" Why they have people leaving to go to work at other universities for marginal pennies, you know, a $2,000 a year pay raise on a 60 or $70,000 job with crap benefits, with much less investment in flexible scheduling, and these sorts of things. When you have all of these disparate systems and no automation, the real problem is not that it takes a ton of labor, it's that normally the individual steps don't accomplish their goals, because no one has time to really communicate well why working at the university or your business is worthwhile. So I would say when you start seeing that, when you start not just seeing that this is a time sink, though, that's enough of a reason, if you're a 40 man shop, it's almost always worth it to start investing in this stuff, heck a 20 man shop. But especially when you see not only are you spending a ton of money and time, you're not even accomplishing the basic goals of each system, then you really know that things are falling apart. And you need to be investing in automation, because even with the money and the labor you're throwing at it, it's not accomplishing the goal.
Tim Bornholdt 33:46
Well, so take that example of that large organization you're talking about where they have none of their processes talking to each other. All their systems are disparate, and that's crazy that one person could have a full-time job just by dismissing 20 other people in the organization. So looking at that kind of rat's nest of a process, how do youget, like, what's the first thread you pull to start unraveling things?
Rhamy Alejeal 34:13
A good question. So in a large organization, and I'm sure any of you people who are working in there, massive change is hard, right? And especially things like HR, payroll, benefits. It's almost, it's really hard to do test cases, right? You've got 35 locations with 50 employees at each one of them. And it's like, "I'd like to do - I would like to try out your benefits communications method at one of the stores." It's like, "Well, okay, but they're the same benefits everywhere and you need to turn over your benefits to a new broker." There's like a ton of stuff, most of the time, to handle that. What I would say is, when you're working in a larger organization, you have two options. One is a long roadmap and moving a lot of things at once to suddenly unify, which is scary as hell. There's a great case study, FedEx, huge company, about two years ago, changed from their internal systems to Workday, which is a great software platform. I think at the time, they only took companies with more than 1000 employees. Their ramp was two and a half years, like literally two and a half years from when they signed the contract is whenthey're gonna take over. Yeah. And on the day that they took over, everyone's payroll history disappeared for like two weeks. It wasn't just exactly payroll history. It was like all the stuff that went into it. Like, why does this person have this payroll? Like what's their pay grade? What are the performance review notes like? It was a disaster; they got it fixed and they're still on it, and I think they're quite happy actually. But doing it all at once is sometimes the only way to do it. If you're a true enterprise system, you're gonna have to swing for the fences sometimes to truly change something. And the answer for that is find a partner who's willing to invest the long time to actually get you there, live date, in a good time. If you're a 1000 man company and someone said, "Yeah, in 45 days, man, we'll just take over that payroll stuff, handle all your benefits things." Run, run. They're used to dealing with 7-man shops. That's not who you want. That's not what you want to do. The other alternative to that is to let people run test cases. We've run into this in some franchising organizations, and even some places like some fast food restaurants. And what they wind up doing is they'll say, "Alright, well, let's do an evaluation." It costs more. That's the downside, at least per person. But what they'll do is say, "Hey, here's one store. I can't give you the full authority. We can't lay everything out. But I want you to step in and the things that you normally would automate at an entire company level, the things that you would do to make this work great, I want to pay you for this 50 man shop like it were a 200 man shop. And I want you to do it there, because we're going to test this idea." And you'll find that that often works out a lot of kinks. It requires you find a good partner who wants to earn the whole company and is willing to invest the time. And a lot of times you can swing that from board approval standpoints or managerial approval, executive approval. If you're looking at one department, you know, we have a trucking company and they moved their logistics department only, not the trucks, though. They have like 900 employees over there driving trucks and 40 people in an office and they're like, "Look, we want to do the 40 people, even though we know that the main job is the truckers. We've just got to understand what's going on here." We did that for nine months and then we were comfortable taking over the rest of the organization. So those are really your two options if you're in a large organization, either a test case which is going to cost more per person, but gives you a real understanding, or a long ramp to switch the whole company where we do mini tests along the way, we pull in a bunch of stakeholders, we get lots of different opinions, that kind of world.
Tim Bornholdt 38:17
I could see that having the test case would work, especially if, like you said, with having to get board approval and everything. It's a lot easier to, you know, with having that large organization, it's a lot easier to get started with just screwing up in that one spot, as opposed to screwing up when you swing for the fences, because that does happen from time to time, right?
Rhamy Alejeal 38:40
Right. Well, and the other thing to think about is, you know, another way you can kind of adopt this, and this is just mainly HR, you probably can't do it with an app, is talk with some of the, you know, these vendors. Maybe it's our company; maybe it's another one. And say, "What is it you would do? Let's bring you on as a consultant." Like let's say I want to implement, like, I guess we could use your app as an example. We could say, let's automate this one little piece; we want to try it out. Maybe we can't get authority for you to do the whole thing in your organization. Or what we often find, and this is one reason we have our academy, an HR person can say, "Hey, I can get approval for a training course for a 13-week program that I'm going to apply internally. And it may not take me all the way there, but it's going to make huge improvements." And then we say, look, what we're doing is this HR company's process. Now that we've got the basics in place, I'd like to bring them in to bring in the tools and, you know, get rid of some old vendors and replace the new vendors. But you can also kind of internally pilot some of the things related to HR at least. I don't know how it would work in your world, but in our world, they come to us sometimes and say, "Hey, I can't get the whole company to move but I want to use your process in my little department. I'm going to do it. I've got my assistant here; we're going to take care of this. I want to change how we communicate our benefits. Can I bring you in? Can I take a training and figure out what we want to do?" So that's another way that we've wound up gaining very large clients. Just the internal pressure of it, we're already doing this. We're doing what this people processes outline says; we just want to now expand it out.
Tim Bornholdt 40:27
You know, one time, one thing I've been thinking about while we've been talking here is I think a lot of times people just want their problem solved fast, right? And what I'm hearing is usually doing through this HR, like making sure you have things automated and getting everything working together, it's like you can see the benefits, but it's gonna take a while and people just want things now. And a lot of times I would imagine when you have people on there shows, you know, that this would be the part of the program where they're like, "So what software can I use to really just put it in right away and get it all done?" But what I'm gathering, and I might be spoiling your answer here, but I would assume if somebody comes to you and says, you know, "What software can I use in my business to automate things?" Like, I'm sure you have your picks, but for the most part, it's probably going to be "Well, what's the point of the software?" Right? Or maybe I'm wrong; maybe there is, maybe I'll set you up here, maybe there is a silver bullet solution here that we can just implement and all of our problems are solved. Right?
Rhamy Alejeal 41:23
Right. Well, every person is different, every company is different, and every culture is different. So what we have at our company are our own tools and third party tools that we are, you know, that we've built into our ecosystem, however that you want to put that, some of which we developed internally ourselves, some of which we've, you know, bought off the shelf, timekeeping system and, you know, integrated it on the back end with our stuff. However, whatever it takes to put all these different processes in and what I think people don't understand is that we will automate anything you'd like. And we can help you learn what it is you should automate. But they're separate things. And I think small business people in particular often kind of go, you know... A big business, they're saying, "Here are all of our processes. We want them automated." And I got the tools for that. Call me up; we'll put together a proposal. You've got seven different vendors doing it. Let's get one. Let's make sure it all talks. Outstanding. But in small business, it's often that they don't even know where to start. They come to us and say, "I want a system. Where I can, you know, I want to make sure we're tracking people's time off requests. So I needed to go into payroll. I've got this handbook that I got off the internet three years ago. I don't have any benefits, but the Aflac lady comes out every six months. And I want to automate it because it's killing me. It's taking a ton of time." And I say, "Absolutely, we're gonna... Let's do it. We'll automate it and we'll simplify your life and you'll go from spending, you know, one of your assistants or you spending or, you know, the business owner spending 10 hours every payroll, trying to get this crap right, to spending, you know, 15 minutes, and that's great." But now that it's automated, what's the next step? And the answer is, you got to improve some of this stuff, you know? So it's a two part equation. What are we, you know, are we automating? Are we saving labor? Are we making it so that this isn't a time sink? I mean, you look at modern companies, and you got people doing grunt work, managers taking paper timesheets at the worksite, bringing them back and correcting them, sending them to some poor, poor person in the office, who then takes them all and types them into a spreadsheet that goes to approval, who then types them in on another website to pay the people and then they get an accounting report. And they go in, they send that to the bookkeeper who goes and types that in. What are you doing; that's a waste. I mean, but the only return of automating that stupid process is saving a bunch of time and hopefully reducing errors and all those other great advantages. But that's very different than, "Hey, why do I have these people on hourly? Why do I have some people clocking in and out and not others? What are the processes? What are the thoughts behind why we award certain amounts of PTO versus others? What sort of flexible time are we going to offer? You know, can people work from home?" And so it's really two sets of questions. Can we automate and what does that look like? And a lot of companies, they've got their stupid processes, and they want them automated. And we can do that. And especially in big companies, that's a lot of it. When you think about a company that's got 1000 or 2000 or 3000 employees, they know they need to improve the processes, but a lot of them come to us because they say, What we do is working. It's just crazy expensive and time and we make mistakes every third, you know, thirtieth time we need to do it and we need to do it every week." When you have that, like, automation's the answer there. But then you free up that time and I want them to then use that time to improve what it is they do.
Tim Bornholdt 45:00
Gosh, I could talk to you about this for hours. I think it's endlessly fascinating. And we've had, to your point, like, we've had people come to us before at our development shop and say, "We've got this process where people type out their timecard. Like they write it on a piece of paper, hand it to the foreman, they approve it, but then they have to type it into another spreadsheet, which gets approved by somebody else. But it's just this whole nightmare, where it's like, well can't this be a clock-in app? But you know, you've got to start somewhere. So I think people will be able to take a lot of what we talked about here in this episode, and at least get that first part down of actually writing down your goals and figuring out how you can make steps towards them. So do you have any final thoughts for me about how people can get started with this automation process or any tips or tricks that you want to leave people with here?
Rhamy Alejeal 45:48
You've got to understand your processes internally first, so I recommend that. I mean, I just can't, I cannot stress how important it is that the owner, management spend some time looking at their internal actions and what that actually accomplishes. That's going to be your biggest return. A new piece of software, and look, we're a software company, that's what we do. But a new piece of software isn't going to solve underlying crap that if you treat your people bad, or you don't communicate with them, well, you know, the packaging isn't necessarily going to help. But having said that, most companies are already using an outsourced payroll provider, some sort of third party timekeeping system, an accounting system, a benefits broker, and none of those systems talk to one another well. When they hire somebody, they may be going on to six different 401k benefits websites putting in information. They are trying to figure out how that information, that person's costs, are going to be split up among accounting. Maybe 60% of the time they're over in this department, 40% over here, and that's a lot of manual work. They put them in. They then go and put them in a timekeeping software so they can clock in and out using their physical clocks. They have another system where they actually request their time off or allocate their time for budgeting. Maybe they don't, maybe it's in the same timekeeping system, but it doesn't allow them to, it allows them to request time off and keeps track of the balance, but doesn't actually know if they wind up putting more in on payroll than they did in the timekeeping. Maybe there's... The systems aren't talking that way. And then when it's all done, they put it all into payroll where all their labor costs are and then they have to turn around and do some ridiculous breakout giant spreadsheet to put it into their accounting system. And none of it helps them understand what's going on. That alone, if you're in that situation, and that can happen in a 10 man company, you're already spending a ton of money using all these different pieces. Your benefits broker, all these different things, have costs associated with them. And what we can do that I think is relatively unique in the market, is we can unify those, even in a 10 or 20 man shop, to make it a single point of contact. I don't want to call it one stop shopping. One of my favorite clients calls it one throat to choke. When something goes wrong with this, any of this crap, I know who to find. And that's what I can, that's what I can guarantee is that we can put it all in one place, make it all work. And it's easier to get started in a 20, 30, 40, 50 man company, even 100 man company, to make those changes than it is by the time you're at 500 or 1000. Every time you delay and you have these separate systems growing into their own monster for years and years, it's more work to unify them.
Tim Bornholdt 48:35
I think we found a good title for the episode of one throat to choke. I've never heard that one but one throat to choke.
Rhamy Alejeal 48:40
Yeah. Willis, Willis, if you're listening, I'll send you this episode. He told me that three years into my business and I've never forgotten it.
Tim Bornholdt 48:49
Those colloquiums you pick up over time, you know. They just somehow seep into my mind just from watching so much TV, but you know, I digress. So, one last time thing, Rhamy, where can people learn more about People Processes? Cause I'm sure there's lots of people listening to this where they're like, "Yep, I'm in that exact same boat. I need to talk to you." So how can people find you?
Rhamy Alejeal 49:09
I would love for you to go to PeopleProcesses.com. There's a Contact Us in the bottom right hand corner; you can live chat with us immediately. Let us know. You'll set a meeting. We're not a big company. We handle employee benefits and payroll and HR for 1000 man companies with our little team of about 20. So you're going to talk with me, if you reach out. I'd love to hear from you, PeopleProcesses.com. You can also find us on Facebook.com/PeopleProcesses, Twitter, and LinkedIn. We monitor all of those. We'd love to talk with you. And we do have our podcast, People Processes, available on iTunes, Google Play, all those places, if you just want more, kind of, hearing us chat and learning about compliance updates, interviews with other business owners. Feel free to subscribe on there. If you go to People Processes and tell us that you heard from us on this podcast, please let me know. I want to let Tim know that it came from you guys and we'll have some special deals just for y'all.
Tim Bornholdt 50:03
It'd be shocking if somebody was actually listening to this episode and came... No just kidding! I would be very pleased to hear that though. So yeah, please do let them know that you found them through Constant Variables and, Rhamy, thanks again for joining us today and we hope people took away quite a bit here on how to help automate their HR processes.
Rhamy Alejeal 50:23
Love to help. Thank you.
Tim Bornholdt 50:26
A big thanks to Rhamy Alejeal for joining me today on the podcast You can find more about his company People Processes on all the social networks, like he said, as well as PeopleProcesses.com. Show notes for this episode can be found at constantvariables.co. You can get in touch with us by emailing Hello@constantvariables.co. I'm @TimBornholdt on Twitter and the show is @CV_podcast. We're also on Instagram. I think it's ConstantVariablesPodcast so check that out. Today's episode was edited by the Jordan Daoust. One quick favor, if you've got a couple minutes, please head over to the Apple Podcasts app and leave us a review. I know everyone talks about that all the time. But that seriously is the way that people get higher ratings in the iTunes charts. And that really helps us grow our show. So take two minutes, head to ConstantVariables.co/review and we'll link you right there. You don't even have to worry about downloading that app or whatever, just go to ConstantVariables.co/review. Leave us a review. I would greatly, greatly appreciate it. This episode was brought to you by The Jed Mahonis Group. If you're looking for a technical team who can help make sense of mobile software development, give us a shout at JMG.mn.