It's Not About The Money

Human Resources Operations, with Vanessa Gutierrez
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[00:00:00] Steve: Hello there, dear listener. I am Steve.

[00:00:09] Tyler: And I'm Tyler and welcome to another episode of It's Not About The Money. The podcast where we help you gain the clarity you need to run a successful small business.

[00:00:18] Steve: Tyler has a financial coaching practice. I run a tax business. We are both small business owners like you and this podcast. It's Our Exploration of Entrepreneurship, One Episode at a Time. And this is another episode in our series, The Many Hats of an Entrepreneur, where we cover business functions that every business has, even the small ones, even the tiny one person ones, uh, but where you, the owner might not be the expert.

Marketing, IT, sales, finance, stuff like that. And today we're excited to welcome an expert in human resources.

[00:00:51] Tyler: That's right. Vanessa Gutierrez is a seasoned human resources operations professional who specializes in providing strategic HR [00:01:00] solutions to early stage companies. She has a deep understanding of the startup landscape and focuses on helping companies stay agile and focused on their core objectives while navigating the complexities of HR.

Welcome Vanessa.

[00:01:14] Vanessa: Thanks for having me, Steven Tyler. Happy to be here.

[00:01:17] Tyler: We're glad you're here as well.

[00:01:19] Steve: Do you want to tell us a little bit about who you are? How you got into this business, what your background is, uh, what's your, what you're doing now kind of thing.

[00:01:27] Vanessa: Yes. So I have been working in HR for about 17 years and how I got there was working in startups and doing it all. One thing you'll notice is most startups don't know what they want or what they need. They just have a product and they want to build that and get it out to market in people's hands as soon as possible.

But there's a lot of business functions that are kind of overlooked as one is building the product. So, um, having worked in startups for the past 17 years, it's been a really great [00:02:00] opportunity to see which areas are being overlooked and providing support in that, primarily when it comes to the people operations function.

So that involves Your talent acquisition, your learning and development team, your payroll, your benefits, total rewards, everything in between. And operations is a function of HR, which helps support all those different functions. So, the past couple of years, I've been primarily working in HR tech stacks for global organizations to unite their operations onto single platforms. But I have worked as small as two founders in a small office, scaling that to about 200 employees in two years, for an acquisition to coming on board to a 500 person team and hiring another 500 within three months.[00:03:00]

[00:03:00] Steve: Oh, wow.

[00:03:01] Vanessa: yes, it's, it's a lot of work, but there's an operational mindset that comes in overlooking all the processes and procedures of an organization and ensure that they could scale effectively.

So that's where my operations expertise comes in.

[00:03:19] Steve: Okay. That, that sounds like a lot of people to hire. Even just the 200 in 2 years, that's like one every week, but then 500 in 3 months. And

[00:03:29] Vanessa: Yes.

The role of a fractional HR expert
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[00:03:31] Steve: so now, that you have your business doing fractional HR operations, is your focus, also on startups there, doing the same kinds of things, or can you tell us a little more about that?

[00:03:43] Vanessa: My focus is on startups. And I will say most of the time startups already have some sort of seed funding or series A or B where they have the funds to pay for a fractional HR person, although fractional HR is more economical than a full time [00:04:00] person. But, um, what you're doing with a fractional HR operations expert is you're bringing in the expert a handful of hours a week that helps you to get to where you need to be.

Versus hiring an entry level full time person, which most likely costs the company more, and they're figuring it out, right? I've been there, I've done that, and I know that it's, it's sometimes slows a team down, but the fractional HR expertise comes in to help you scale effectively.

[00:04:31] Steve: That makes sense. So being able to take just a little bit of your time as a seasoned expert, you've already been in the field for almost 20 years. You know, you've been around the block, you know how these things work, uh, and rather than hiring a, uh, an entry level person and, uh, and helping them figure it out on the job.

[00:04:50] Vanessa: And I think it also takes an entrepreneurial spirit to work in a startup because things are always changing and nothing [00:05:00] is ever the same and you're always building, building, building, building. So I feel like each of the organizations I've been at, they've been, you know, Like my company as well. So, um, takes a unique spirit to work in tech startups, primarily.

[00:05:17] Tyler: So I've worked for really large organizations with like 10, 000 plus employees, and I've worked for kind of smaller startups and, you know, I've just, I've got my own solopreneur thing going on right now. So I'm aware that there are a lot of different functions of HR, whether that be recruiting or like, you know, taking care of, uh, benefits maybe, or, and everything in between, um, How, how do you approach that with, are you doing that all yourself?

Are you connecting with other providers of these services, uh, to source some of those functions? I'm just kind of curious how that goes as, as a business owner, like yourself.

[00:05:54] Vanessa: Typically coming into an organization, you're a small, I've been at HR department [00:06:00] of one many times. And what that requires is working closely with the executives to understand how they're going to, how they, Plan on scaling their business and thinking of what type of HR tech stacks do I have to bring in?

Sometimes you don't need any. I have some companies or clients that are about 20 employees and they've hired all these people off of spreadsheets.

[00:06:25] Tyler: Huh.

[00:06:25] Vanessa: That's what's worked for them, right? But there comes to a point I, we plan on hiring 50 people in the next year. That's when you probably want to look at some ATS system to bring into your organization.

And I feel like some of the softer sides of HR, which are extremely important, like learning and development, those are ones that are, I guess, more acted on as the company gets larger.

[00:06:52] Tyler: Yes. That,

[00:06:53] Vanessa: gets larger. It's not right away.

[00:06:56] Tyler: Yeah. That's interesting because yeah, I working at one of those larger places, right. They've got [00:07:00] all kinds of programs to help employees, whether that's like a wellness program or, you know, dealing with growth and leadership development, all those kinds of things, but you know, I experienced nothing like that at the smaller company.

It was just like, let's see if we can get some revenue

[00:07:15] Vanessa: Yes.

[00:07:16] Tyler: and pay your payroll. So yeah,

[00:07:18] Vanessa: Exactly. Uh, have to pay the payroll, keep your employees happy, but, and not only happy, but it's the law

[00:07:27] Tyler: yeah,

[00:07:28] Steve: Yeah,

I'll bet compliance.

is a huge part of this, right?

[00:07:31] Vanessa: Compliance is a huge thing. And I think my role in HR is very unique. I work closely with legal. I look at the compliance. I review our contracts that we're sending out. For offer letters, NDAs that are coming through, making sure that people who are interviewing are signing those NDAs, and, um, also working closely with IT, right?

The procurement process of equipment, uh, deprovisioning, [00:08:00] access to systems. All that really falls into the HR operations realm. A lot of people think HR is just hiring and firing, but there's so much more in between. Yes! Um, Yes!

When is it time to hire for a solopreneur to hire?
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[00:08:12] Steve: So if we focused on, say a solopreneur, they've built a business on their expertise, it's grown well enough so far, but they're starting to realize like it's, it's a little too much for them. They might need to bring somebody on. How do they, what are the signs that they're at that point? If, and like, how do they figure out what role to hire for?

Whether that's like, uh, bring on another technical person, bring on an admin, get a manager, those, those sorts of things.

[00:08:40] Vanessa: Being a solopreneur, does get overwhelming, especially as your business starts picking up. And I think one of the most important things to realize is it's okay. This is a part of the journey and it's, a part of your success, but you need to be aware, even though you're [00:09:00] feeling overwhelmed, I think being overwhelmed is the main thing and unable to keep up with the workload doesn't mean you're failing in what you're great at in the work that you're doing, but if we're looking at the overall like signs that may indicate you need help is, I mean this happens sometimes, you're missing deadlines, you know, or providing subpar service. due to some of your capacity constraints, those are big ones. Um, and also, oh, here's a red flag. If you have to turn down new business opportunities due to a lack of bandwidth, that's a sign that you probably need to bring someone else on board to help you, in those areas. But I think the most important thing to realize is as an owner you should really analyze your workload And identify which tasks are taking up most of that time and causing your bottlenecks, because if it's a technical, if [00:10:00] you are missing like some specialized skills, like, I don't know IT, right, you need a technical role for that.

If they're like, routine tasks, you need someone with administrative skills to come in. So really evaluating, like where are the bottlenecks? What is the challenge? And then at that point you decide, what role do I need to fill with an organization?

[00:10:24] Steve: Okay. That's a good point because when you're doing it all, it seems like this is all my work. I just need to hire another one of me to do all of these things. But really you can, you can systematize a lot of the things like the invoicing and the billing. So you could have an admin do that part of it. Or, uh, I need somebody to manage my cybersecurity.

You can outsource that to an IT company or.

[00:10:44] Vanessa: Yes. And I think that's where I know we hear that the majority of businesses fail, and it might be because we feel we're inadequate, right? But it, we have to realize we can't be an experts in everything. [00:11:00] And, I want to say hire people who can help you, but also build out your network. And there's people who are willing to share information for free.

So, um, reach out to your network, ask questions, and you'll find an answer to help support you in those areas that you need.

[00:11:19] Steve: That's good advice too. I know you, you and I met Vanessa through a networking group locally here in Austin. It's been really great so far.

[00:11:27] Vanessa: Mm hmm,

[00:11:28] Steve: kind of sharing ideas and, sort of business growth strategies, but also like how, what's your experience been with pricing? For example, we had a discussion about that a little while ago of like, how do you price these things?

And anyway, yeah, networking is great.

Contractors vs. employees
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[00:11:43] Vanessa: Networking is important. Um, and also realizing there are resources out there like Upwork and Fiverr. I think that is extremely overlooked when I talk to people about some of the challenges that they're experiencing. I ask them [00:12:00] if they ever thought of outsourcing and they have automatically think it's going to be too much money, but you could really find some good talent on Upwork and Fiverr, and I've used them a handful of times for different tasks. So, let's not overlook those services.

[00:12:17] Tyler: and that would be considered contract work, not employees. Is that right? If you were to use one of those services. Okay. So do you consult your clients on that kind of trade off as well? Like what's the, what's the benefits of going through a contractor versus actually bringing on a full or part time employee?

[00:12:35] Vanessa: yes, that is something that we talk about. So just so people are aware, a W 2 employee is someone that's actually hired and a part of the organization and the employer is responsible for withholding tax and if they offer benefits, running the benefits through payroll and adhering to labor laws. And then we have 1099 contractors, which are [00:13:00] self employed individuals.

They're responsible for their own taxes, their own benefits, and they also have more flexibility in their job. And we talk through exactly what the need is, and do we really need a full time person, or can we just do a contractor?

[00:13:17] Tyler: That's great.

[00:13:18] Vanessa: and it depends on the type of business, right? If it's someone that you need full time, let's hire a full time person. It's just a short term project. Go with the 1099, right? But I think that, decision really depends on the level of control that the employer needs, right?

The duration of work. I think those are the main things to consider is the level of control because a contractor doesn't have to be there nine to five or whatever hours that you want them. A contractor is just responsible for delivering upon the scope of work that's laid out in the initial contract.

[00:13:53] Tyler: That's right. And, uh, you have to be careful not to treat a contractor too much like an employee, right? Because then, yeah, that's, that's [00:14:00] something that comes up in my job is, you know, we're an agency and we work with a lot of 1099s and so we're very focused on compliance and making sure that we're always in line with the labor laws and not treating contractors like employees.

Um, so something to think about.

[00:14:15] Vanessa: Yeah,

Hiring overseas
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[00:14:16] Tyler: So we recently talked to somebody who worked for a company who, uh, was involved in like basically connecting companies here with labor overseas. And so that's one question I think we had is, you know, what, what should a business owner consider when it comes to like hiring on location or locally versus remote or offshore even?

[00:14:38] Vanessa: I hate this answer, but it all depends on the type of business,

[00:14:42] Steve: I give that answer all the

[00:14:43] Tyler: Oh, we love that answer

[00:14:44] Vanessa: right?

[00:14:45] Steve: that's like my bread and butter.

[00:14:47] Vanessa: Um, all depends on the type of business. If you need those face to face interactions in order for your company to progress in business, of course, you're going to hire [00:15:00] locally, right?

And if you're a smaller business too, and your reach is actually within, you know, your state or your local area, you'll hire local. A lot of things changed when it came to COVID, as we know, COVID changed a lot of stuff. So remote hiring really allows you to check out talent throughout, you know, outside your state borders or even in other countries.

Um, some of the great things about that too, it also lowers your overhead. That's true. Um, that's one of the things that's great, but then you have time zones and communication that can be an issue, right? Um, but if we're looking at offshoring, what's interesting, we've had Upwork and Fiverr for quite some time, but I'm seeing a lot of companies now who are marketing.

We do offshoring. You could get an assistant for $6 an hour, right? So, I think that is [00:16:00] beneficial for more smaller administrative tasks, or maybe, content writing, or getting your website layout designed. Stuff like that works really well because you don't really need to be working at the same time. The offshore, professionals could be working, your night time, and you wake up, you have something in your inbox, you give them feedback. Yeah. So, I think it's good. Offshoring is great for tasks like that.

[00:16:29] Steve: that kind of echoes what we just talked about with the W2 employee versus 1099. If you can define the scope of work really well, and it's just a project, then that might also be a good fit for, it doesn't have to be somebody here locally that I'm hiring full time. I can just, I can find an expert in that piece of it and pay them for that project sort of thing, whether they're local or offshore,

[00:16:50] Vanessa: yes.

What policies and procedures do you need before you hire?
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[00:16:51] Steve: Interesting. If somebody does want to hire a full time, part time W2 employee, what kind of Policies or [00:17:00] procedures or paperwork to do the, does the owner need to have in place before they start that hiring?

So they can stay on the right side of compliance and labor laws and all of that.

[00:17:09] Vanessa: So number one is the job description. It's not just, you don't really need a job description to hire, but it's really important for you to know what you're hiring for. Writing that down, composing that, kind of like a business plan, right? You see everything from high level view. Job description is really helpful to know what you're looking for, what those requirements are.

From there, there's this big thing about employee handbook. However, I will be honest, and this is probably not popular opinion, I would like HR to start driving away from an employee handbook and just do policies folders. One of the reasons for that is you have an employee handbook. You make one change on there.

It's, you need to, communication. Our employee handbook has been updated, your revision. [00:18:00] I prefer policies and that's what I tend to do at organizations. I'm really big on document management as well and shared drives. And what I like to have is a policies folder where we have every single like labor law policy or policies that are pertinent to that organization in one folder. It's easy for employees to find, it's easy to make revisions, and just an employee handbook just seems so overwhelming, but the information is super important to disseminate to employees. I mean, um, well, that's the employee handbook.

I don't want to talk too much about that one, but you, you do, you do need, of course, your I 9s, you need your W 4, and, um, For example, in California, we have a DE4 for the state taxes. Texas, we don't have a form similar to that because we don't pay income taxes here. Um, I think non disclosure agreements are super important as well.

Depending, well, depending on the type of company you are. If you're a tech [00:19:00] company, those NDAs are super important. Have your workers compensation insurance and any other insurance requirements, and make sure you are on top of your labor laws. So many organizations really overlook that, and the EEOC actually hired 45 new investigators this year.

I know labor laws apply to different Federal divisions or state divisions and the EEOC is only one, but employees are becoming more aware of their rights. And so it's important for employers to start doing what is right. And one of them is posting labor laws, which they are not doing. And I've been a part of organizations where I join and they're not posting labor laws.

So they're out of compliance.

Posting labor laws
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[00:19:48] Steve: That's, that's a lot of things to keep track of.

[00:19:50] Tyler: Yeah.

[00:19:51] Steve: So this sounds like, this sounds like a good fit for, um, like I could do all of this myself, but I would actually rather just hire somebody who knows all of this [00:20:00] and can tell me what needs to happen.

[00:20:02] Vanessa: Yeah. I mean, this has been an issue I've been seeing my entire career. And when I talked to my fellow HR professionals, they said, what? No, we're not posting those. Oh yeah. I think someone's downloading them and the labor laws and putting them on our intranet.

Well, did your employees get it? Do they know where it's at? No, I don't know.

[00:20:25] Steve: on there somewhere.

[00:20:27] Vanessa: somewhere, so, um, also when employees are terminated, when employees are terminated, they're forgetting to give them their, unemployment information that's pertinent to their state. That is a requirement that employers are forgetting or HR teams are forgetting.

So I'm actually working on labor laws online, and I am working with a team, also outsourcing. You know, there's other people who are better at [00:21:00] AI and scraping websites and also building out websites to build out, um, and gather all state, all federal, all local jurisdiction labor laws and putting those online.

Um, it will not suffice for every state. To have labor laws online, you'll still need to have, if you are, if you have a building or an office that your employees go into, you still have to have those posted. But being able to have one dashboard that your employees go to and have all their labor laws that really just covers your butt, right?

Um, and that is something that I'm working on in this, all across the board, whether you're a small mom and pop shop, whether you're a large organization, a restaurant, or tech startup, anything in between, you need to be abiding by these laws. So I'm just trying to make it easier for [00:22:00] organizations. Oh,

[00:22:01] Tyler: that's really cool. And that's, you know, I've seen those posters hanging around at past employers and things, but I bet, you know, when, when a certain portion of the workforce went remote back to the COVID Shift that you mentioned. What was, yeah. What's the replacement for having that hanging up in the break room?

Right. That's interesting. I can see how that could have fallen through the cracks pretty easily.

[00:22:25] Vanessa: It did with many employers, but even prior to that, I noticed many times it wasn't being done. Just trying to make it easier for all, all employers.

[00:22:36] Steve: Yeah, that's a great idea. Just have a, have a central resource for any employer to be able to plug in and say, I'm, I'm in Texas. Just show me all of the stuff and I can send that to my employees.

[00:22:48] Vanessa: Yeah, I think you put a link to it on your intranet or you send it to an employee, you know, with their welcome email. And there, you've kind of covered your [00:23:00] butt. You did it.

[00:23:01] Tyler: Yeah.

What are the bottlenecks in your business?
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[00:23:02] Tyler: Oh man. Yeah. I, , Steve had mentioned that this might be one of those areas where. You might think, Oh, I can do this myself. I actually am not having that thought right now. I'm thinking I could probably get through like working with some 1099s, you know, on my own.

But if I were ever going to think about hiring an employee, I feel like I would definitely be wanting to talk to, I don't know, a lawyer, someone like yourself, at least to, you know, cause I've had, I have zero experience hiring a W 2 employee. What, where would you recommend someone start? Like if they're just They're, they're starting to encounter some of those questions, right?

Like, Ooh, I'm feeling overwhelmed. I'm having to turn down work. Uh, what's like step one? Would, would you recommend talking to someone, uh, in like a consultation basis, uh, like yourself, or maybe just jumping right to Upwork or, or Fiverr or something, trying to find something there. And I know it's going to depend, sorry, but,

[00:23:56] Vanessa: Well, it, it goes back to [00:24:00] identify which tasks are taking up the most time. What is causing your bottleneck? And start from there. And I think sometimes people will overlook, uh, contracts and legal, but I do have contracts reviewed by a lawyer if you're, you want to implement NDA contracts. Also, your offer letters is something you might want legal to just review, depending on what state you're hiring in.

It's worth it.

[00:24:33] Tyler: Yeah,

[00:24:34] Vanessa: It's worth it. Just have them review. And then you have your template ready for your future hires. Yes.

[00:24:42] Tyler: You know, I love that you came back to that, uh, comment about which tasks are taking, taking up the most of your time. It reminds me of a great book I read a long time ago called The Effective Executive. I think it's by Peter Drucker. Anyway, the point is that's one of the, the first things that he, and it's an old book,

relatively [00:25:00] speaking, in the business world. And he talks about that. He's like, every once in a while, you should take two weeks and I'm, I'm paraphrasing here from the book, but basically like keep track of what you're spending your time on and then use that information to adjust your own, like personal operations accordingly.

Right. And that might look like, Oh, I could outsource something, or actually I've got too caught up spending time in this type of meeting and it's not really being the best use of my time. So I don't know. I think that's, that's really a great piece of wisdom that you've shared. And it reminded me of that.

[00:25:35] Vanessa: And I, I go back to, I think what we started talking about prior to recording is, just because things aren't working doesn't mean you can't do it. So go back, really evaluate. Yeah. Because I think we, we are all gifted. We are gifted and I mean, I know I can't build a website, so I'm hiring someone for that and that's okay.

Doesn't mean my idea [00:26:00] can't come to fruition. It can. I need to find the resources to make it happen.

[00:26:06] Tyler: Well, and isn't that part of being a great leader or a manager is knowing and using your resources appropriately? I mean, I think that's beautiful.

[00:26:15] Vanessa: I think that's what makes a great leader. You identify the strengths in people and typically those strengths are things they love to do. It's not a burden for them, right? So you, you give them those opportunities. I think I've been blessed with some pretty great managers early on in my career, um, where I was doing lots of things for the first time.

But they entrusted me to follow through on those projects and that just validated I'm capable and, um, it wouldn't have been possible without great managers. So great managers, leaders make a big difference.

[00:26:52] Steve: They do. Yeah.

Fractional HR vs. Fractional HR Operations
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[00:26:53] Tyler: I don't know. I just think Vanessa is awesome and I want an excuse to work with her. You know, that's, that's, [00:27:00] that's what I'm thinking right now.

[00:27:02] Steve: need to find an excuse to hire somebody

[00:27:04] Tyler: I know. Yeah. It's, Oh, it's

[00:27:07] Vanessa: Well, the great thing about fractional HR operations, and I want to say not just fractional HR. There's a lot of people talking about, I'm a fractional HR professional, but most of them seem to be targeting C level positions. But we forget there are a lot of startups, and that's why I'm focusing on fractional HR operations.

Let's really get down to the foundation of your business so you could scale successfully. And eventually you won't need the fractional HR, but you'll bring on a high level executive that will have the foundation set and they could really focus on that strategy to take the company to the next level.

So, that's why I focus on the operations side for smaller organizations.

[00:27:57] Tyler: based on our discussion today. I [00:28:00] feel like it's a very needed service that you're providing. I mean, like, as I think about growing a small business, this is one of those things that I would feel the least confident in and like, kind of like you were saying, you outsource your website.

This is something that I would be quick to like bring on some, some help for, because I think it's, uh, potentially fraught with all the labor laws and the compliance issues that can arise. And also you're dealing with people and that's a big deal and their livelihood as well. Right. So it can be sensitive.

I feel like as well.

[00:28:30] Vanessa: Oh, it is. It is. I think it's important to have grace with your HR professionals as well, if you've already hired you know, especially if they're a department of one. Um, there's a lot of, a lot of us out there and you're juggling not just a lot of different functions, but every person is their own individual, right?

And so we're constantly having to adjust based on whom we're talking to.

[00:28:57] Tyler: Yeah, yeah, well, great. [00:29:00] Is there anything that we haven't asked you yet that you wished we had?

[00:29:05] Vanessa: No, I can't think of anything right now. Maybe after we're off the call. Oh,

we should have talked about that. But,

[00:29:12] Steve: Uhhuh

[00:29:13] Vanessa: um,

[00:29:14] Tyler: great.

[00:29:15] Steve: Yeah. This has been a great discussion. I've learned a lot.

[00:29:18] Vanessa: yes. And I'm, you know, I'm available to help organizations, even if you're not a tech startup with funding. I'm really happy to help the smaller organizations as well.

[00:29:29] Tyler: how can people find you?

[00:29:32] Vanessa: People can find me at FractionalHROps. com. I'm also on LinkedIn. The dash at the end is Vanessa, your HR partner.

[00:29:43] Tyler: Great. And we'll put a link to that in the show notes for sure.

[00:29:46] Vanessa: Perfect. I appreciate

[00:29:48] Steve: And then, did you also have a link to the website you're building?

[00:29:52] Vanessa: It's not out yet. Labor laws online.

[00:29:55] Steve: Okay.

[00:29:56] Vanessa: in the next few months that'll be ready. Yes. [00:30:00] I'm really excited about that. It's needed by every type of business out there. Um, and I told my husband, but this information is free. He's like, they sell water. So,

[00:30:18] Tyler: got, there's a value in bringing it all together in one place that's easy to access. I believe that for sure.

[00:30:25] Vanessa: oh yes. Um, I was last in. As an organization, we were in, I think, 27 states and every quarter, whether it was myself or an intern, having to go to every single one of those states to make sure nothing had been updated. I mean, you're paying everyone way too much. Like, just sign up for a service where everything is automatically getting updated and your employees have the latest compliant labor laws.

[00:30:54] Steve: Well, that'll be great. I look forward to seeing that out in the wild soon.

[00:30:58] Vanessa: Yeah.

[00:30:59] Steve: [00:31:00] Okay. Well, thank you, Vanessa. We appreciate your time today.

[00:31:03] Vanessa: Thank you. I'm so happy to talk about HR and solopreneurship.

[00:31:08] Steve: And thank you everyone for listening. We will see you again on another episode of It's Not About The Money.