The Power of a Fresh Set of Eyes
Introduction:
This week, Jay Goltz, Jaci Russo, and William Vanderbloemen discuss their experiences bringing in outside consultants to review their business operations. Before the holidays, Lou Mosca, who runs American Management Services, offered to have his team take a look at any of the businesses owned by the regulars on this podcast. Jaci took Lou up on the offer, and she shares here what she learned. Jay declined the offer, and he explains why he declined it. William, meanwhile, has had two experiences with consultants that went well—and one he won’t talk about. Plus: The three owners assess what they think the coming mix of regulatory changes, tax cuts, increased tariffs, and mass deportations might mean for their businesses. They also offer their views of the state laws that forbid businesses to ask job candidates about their salary histories. “I’m sorry,” William says, “but if you believe what people tell you when you say, ‘Tell me how much you’re making,’ you need to stop.”
— Loren Feldman
Guests:
William Vanderbloemen is CEO of Vanderbloemen Search Group.
Jay Goltz is CEO of The Goltz Group.
Jaci Russo is CEO of BrandRusso.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome Jay, Jaci, and William. It’s great to have you here. I want to talk today about what it’s like having an outside consultant, a fresh set of eyes, come in and take a look at your business. All of the regulars on this podcast received an offer from Lou Mosca, who runs American Management Services, a consulting business that focuses on businesses like yours. He reached out and offered to review the inner workings of your business, just as he’s done for thousands of others. He’s a regular contributor, as you may know, to the Morning Report. The offer was that Lou would have one of his consultants take a close look at the way you run your business and see if they have any suggestions. Jaci, you took Lou up on the offer. I’m really eager to hear, how did it go?
Jaci Russo:
I thought it was awesome. I immediately thought that he would probably not pick me, because I’m the smallest, in terms of revenue of the companies. And, you know, he gets to travel to cool, glamorous cities, so I wasn’t sure that Lafayette, Louisiana was going to be on his bingo card. And so we jumped on a call together and had a delightful conversation. And I thought I could lure him with the temps of warm weather, until he informed me that he was in Florida. I was like, “All right, well, I don’t even have that going for me.” And we had a great conversation. He requested a ton of information that I knew he would want, and I sent it over under an NDA.
Loren Feldman:
What kind of information, Jaci?
Jaci Russo:
Financial, starting with a P&L, three years; balance sheet; and maybe something else. And then the organizational chart, kind of a detailed organizational chart of team members, who they are, what they do. And then I just took the liberty of sending some extra things.
I don’t think I’ve ever really learned how to read a financial sheet the way that other people probably know how to do it. And so, in the early years of the company, I created these Excel sheets, that are now Google sheets, that tell me what I think other people can see when they look. Like, they look at a P&L, and they can immediately pull out stuff. I don’t see that. I see the numbers, but they don’t translate for me.
So I have these Google sheets of projections and forecasting and revenue and a breakdown of sales versus greatest profit. So I think it’s probably the exact same information. It’s just translated into a language that makes sense to me, and so I sent that to him. They did not use that, I will say for the record. They used all the real information. And then they surveyed my team. They sent out a really nice, thorough survey to every employee to ask them some really good, specific questions.
Loren Feldman:
What kinds of questions?
Jaci Russo:
Things about what’s going right and wrong with the company, how they’re being supported or not, what they feel are our strengths, where we could improve—the things you would want to know. And because it was done through an outside third party, I think my team was incredibly forthcoming, and it was kept anonymous, so I don’t really know who said what. Now, a couple people outed themselves in the way they phrased answers, but I appreciated their candor and their honesty.
And then I got back a very comprehensive, thorough report of the highs and lows of our financials, the highs and lows of the team. I would tell you, of the 17 questions, we had incredibly positive, like 92 percent or above responses, on 14 of the questions. The other three were not yes and nos. They were more detailed: Give me the three things you feel or the three things you want. And so those three, I thought, were very thoughtful, considerate, specific answers to the questions by the team. We’re having a state of the union on Friday where we’ll go through it together, as well as some other things we’re going to talk about that we do in our regular professional development sessions. And I’m excited for the year.
Loren Feldman:
I want to ask you a little bit about what you feel you learned from this—but as always, Jay and William, if you have questions, please don’t hesitate to jump in.
Jay Goltz:
I do have a question. And I have the utmost respect for what Lou does, and I know he’s very successful with it, everything you just said. I just have a problem with, personally, just the way I run my company, the way I’ve built it—you know, I’ve got 130 employees. I’ve got lots of key people with me for 20-30, years. The second I hear the word “anonymous,” I cringe, because my whole essence is about, “Work with me. Tell me what’s on your mind. Be honest.” And I believe I’ve built a corporate culture like that. So I cringe at the idea that people are going to make comments and be anonymous.
And then you just used the phrase “professional development.” In my mind, professional development is telling people, “Say what’s on your mind to me. Tell me what’s going on.” And if I was in your situation, I would, in the next meeting you have with this, encourage people: “Feel free to take ownership. I’m going to read you some comments. I’d like you to all get to the point in your careers, in your relationship with me, that you’ll feel comfortable saying, ‘Oh, that was me.’” Because I’ve got a real problem with having people at this level that won’t just tell you the truth.
Jaci Russo:
I think that’s very fair. And I have a much smaller team. We’re 18, and I have a much younger team. I don’t have anybody who’s been with me for 30 years. I have some 12 and 14 years, and I have some remotes, and so we have some differences there. What I feel like came through this that would not maybe have—because we do twice-a-year reviews one-on-one, and then we do the once-a-month team gatherings—for whatever reason, maybe they didn’t think about it until the way this question was prompted, so I can own that: I’m not asking the right questions to get these answers.
There’s some insight that came through—I have a member of my creative team that I have just discovered does not like going on photo shoots. I had no idea. Honestly, I’ve always thought they were kind of a reward. You get to travel to cool places. You get to go out to eat, you get to stay in a hotel. She hates them, and I don’t know that I would have known to ask a question to get that answer. So I think you’re right, and I’m glad I got this information.
Jay Goltz:
No, for sure. I just think you can take it and move to the next level of getting them to realize, “Hey, there’s nothing here that anyone said. I don’t take any of this personally. It’s good input.” I believe that’s our job to get people over their fear of the boss.
Jaci Russo:
Right.
Loren Feldman:
William, what do you think? I mean, you can’t have a close, personal relationship with 135 employees.
Jay Goltz:
Well, I certainly don’t. I don’t even know some of their names, frankly.
Loren Feldman:
Not everybody is going to be forthcoming.
Jay Goltz:
No, I’m talking about the top 20.
William Vanderbloemen:
You know, years ago, back in a previous career, when I was a pastor, and our church had a lot of corporate leadership in it—I mean, a lot—I had one friend say, “You’ve got more CEOs and COOs and you’ve got some EIEiOs.” But a younger COO of a very large company, like Fortune 50, came to me. He was being asked to consider a CEO position at a smaller company, but a very substantial one, and he’d always wanted to be CEO. And he asked me my advice, and I said, “First of all, you need to find better advisors.” But I said, “Why are you hesitant at all at taking the job?” And he said something to me that I didn’t understand at the time, and I get it now. Here’s what he said: “William, have you never heard: The first day you’re the CEO is the last day you hear the truth”?
That sat with me, and I think I understand it better now. And I think the bigger the organization, the more true that is. But, you know, we’ve got 40 people, and I don’t hear the truth from all of them, whether I know their name or not. So any time I think I can find someone who is telling me the truth—and oftentimes that has to be an outsider. What’s the old line: “What’s the definition of an expert? Someone who lives more than 30 miles from here.” You know, even if it takes that, even with the pain that comes with that and awkwardness, I find that that third set of eyes is critical to my ability to hear the truth. And I hope that’s what we’re taking as a value-add to many of our clients.
Jay Goltz:
No, I totally agree that it was a good exercise. And certainly, you know what? I’m probably wrong. It’s not 20, it’s probably 10 people that I can count on. It is 10 people. But I think we should all strive to get people who, if they don’t say it to you, at least they’ll say it to their supervisor, and it can filter its way up. Because that old expression, which I certainly have heard, “The day you become CEO is the last day you hear the truth,” we should all be working against that. I mean, that that should be one of our goals. That’s a horrible thing to accept and to not try to fix.
Loren Feldman:
All right, back to the main show. I want to know what Jaci learned from this process. What do you want to tell us about first: what you heard from the employees or what they made of your financials?
Jaci Russo:
Well, let’s do the financials first, because that’s the part where I think I had the most lessons. They highlighted for a trending three-year some places where some expenses have gotten out of whack. And so that was illuminating. It’s sort of like, I kind of knew it in my gut, but it took a big old spotlight and shined it right on it. And I thought, “Oh yeah.”
Loren Feldman:
Labor expenses?
Jaci Russo:
A little bit under labor expenses. We got a little out of whack there, and I know that. We’re a couple clients down from where I want to be, but also, you know, I’m enjoying that four-day week, and you’ve got to have enough people to get a lot of work done in 32 hours, as opposed to a 40-hour, five-day week. But we knew that going in, that that was going to have some impact there. And so that was good. We did a big remodel of our building, and I love it, and it’s gorgeous, but we have more building space than we really need right now. But I feel like we’re growing into it, if the trend keeps going.
But I have to balance that: Who’s working in the office versus who’s working from home? Do I need a space this big? So that was illuminating and good. As always, I think with an outside consultant, they brought a fresh perspective to something that I just take for granted or have glossed over or don’t really pay attention to, and they held my eyes open and forced me to look at some things. And I’m making some choices that are all going to be positive, and I think really not impact the team as much, but they’re going to impact my bottom line. And I feel good about that.
Loren Feldman:
How are you going to do that? What are the steps you’re considering?
Jaci Russo:
Well, we’re putting in a little bit of a double verification on some expenses, because there’s some things that people are just kind of passing through and not looking at the way they need to. So I’ve got two pairs of eyes now on everything, and that’s going to clear up some issues.
And we’ve talked about this, actually, I think, probably two years ago, on a podcast [episode]: subscriptions. We had some subscriptions that we signed up something for a client, because they needed it for something they were doing. We don’t even have the client anymore, but the subscription is still ongoing, and we paid for it. And so we’re putting in a new process to stop that from happening again. Things are better connected to clients now. And there’s a third thing that I’m introducing on Friday around some of our discretionary spending. You know, we stock the kitchen with food and snacks for people, because they work through lunch a lot, and we cater our meetings and little things that add up. We pay for parking. There’s a ton of stuff we pay for that we’re going to pay for differently that is going to provide some savings.
Jay Goltz:
So you have 18 employees. Was it basically 18 people, and you had 18 feedbacks, or something like that?
Jaci Russo:
I got 16.
Jay Goltz:
Okay, 16. So my question is, on any of the feedback that you got, did any of it take you back a little bit and think like, “Wow, I can’t believe they didn’t say something”? I mean, were you taken aback on some of it?
Jaci Russo:
Well, the one thing I just said: Yes. And the other thing that really kind of threw me, and because we’ve talked about it on the show, I was very intentional for an entire year of raising salaries. We started at the beginning of the year of: What do you want to make? And then how close can I get you to that, realistically, for what still works for our budget? And I got just about everybody there. And so under the last question of: What are three things you would change about your job? I think of the 16, 12 or 14 of them said: more pay. And I thought, “Okay?’
Jay Goltz:
What a surprise!
Jaci Russo:
But you know, I thought I had done a really good job of getting us to a really good place. And so, I was surprised that that still made the list when I look at all the other things we provide. So I had to take some soul-searching time of recovering from my emotional reaction to it. Michael had to take some soul-searching time for his emotional reaction to it. And then we had to get down to like, “Okay, this is how people feel. I would always like to make more money, too. That’s not a shock, but what’s reality?” And so I pulled numbers on national averages by industry, in our industry, by job type, and then I pulled regional, because we’re a small market, so that makes a difference. And then I charted out where everybody here falls in those numbers, and we’re mid to high on every single one. So on Friday at the state of the union, we’re going to be discussing: Yeah, we’d all like to make more money, but this is reality.
Jay Goltz:
Can I throw this out? I have to tell you, from what you’re telling me, and a lot of them are working from home—
Loren Feldman:
Is that true, Jaci? Are a lot of them working from home?
Jaci Russo:
So, I would tell you that the creative team comes in every day. The other half of the company—social media strategist, PR strategist, account managers, researchers—they do at least one day in the office. And the others are optional. And then I have four who actually live out of town.
Jay Goltz:
Okay, so my question is, did they specifically ask: How do you feel about what you’re making? Or did that just come up?
Jaci Russo:
It came up. It was: What are the three things you would change about your job?
Jay Goltz:
Because I wouldn’t leave myself open for that. Because I feel comfortable that I’m paying the right market wages. And then, all it does is put you in a situation where you have to go, “No, I’m right and you’re wrong.” But if it was just an open-ended thing, you know, what are you going to do?
Jaci Russo:
And if one or two people had said it, I would think, “Ugh.” But to have gotten that many? Okay, well, we need to have a conversation.
Jay Goltz:
Yeah, for sure.
Jaci Russo:
Because both things are true. We are paying the top, and they want to make more. And those two things are both accurate and real. So now what?
Jay Goltz:
Well, you can show that you’ve at least done your homework. Your job now, obviously, and you’re doing it, is to just illustrate: I believe we are paying market wages. And let it lie where it lies.
Loren Feldman:
It’s not inconceivable that some of those people were asked: What would you change? And their reaction was, “I’m happy with my job. I’m happy with what I’m paid. But if I could change something, I’d be paid more.”
Jaci Russo:
Yeah, I would have written that if I thought that was an option. [Laughter]
Jay Goltz:
So maybe you have to go, “What would you like to change—except for your pay?”
Jaci Russo:
Exactly, exactly. “Except for the things I can’t control, what would you like to change?”
Jay Goltz:
In my wholesale business, I’ve got 18 independent reps, and I called every single one of them—who I barely know, if I know them at all—just to follow up: How’s it going? Thank them for the year. And it was extremely insightful, and the most insightful one was one guy just let it all out, told me everything that’s wrong: blah, blah, blah. And I thanked him profusely. And I said, “I’m surprised.” He goes, “And so-and-so called me,” one of the other reps. “He’s a wuss. He wouldn’t tell you the truth.”
And he’s right. And then the guy who he said that about sent me another email, because he must have talked to him—and he apologized to me! He said, “Listen, I have to apologize. I should have spoken up more.” So I am training all of them: Please tell me what’s on your mind. It’s a really healthy thing, and I absolutely appreciate that. That one guy gave me more information than the other 17 combined.
Loren Feldman:
William, have you ever gone through the process of bringing in an outside consultant, a fresh set of eyes, to look over your whole operation?
William Vanderbloemen:
I have, twice.
Loren Feldman:
How did it go?
William Vanderbloemen:
Well, the first one, I’ll tell you guys offline after the podcast [episode]. [Laughter]
Loren Feldman:
Come on.
William Vanderbloemen:
No, it’s a mutual friend that I’m not gonna…
Loren Feldman:
No identifying characteristics.
William Vanderbloemen:
So, the second one, we brought in to try and do—there’s a process called StratOps. Do you guys know this process?
Loren Feldman:
Say it again?
William Vanderbloemen:
StratOps. So it was a fellow named Tom Paterson who developed an implementation of vision called StratOps. Tom was Peter Drucker’s right hand, and so he’s developed this: “Hey, here’s how you understand what’s coming.” And then Tom was smart enough to certify people in training StratOps, and so forth. So we had one of their senior people come in, and it was really helpful. I think the most helpful piece to me was hearing what my lead team thought when someone else was asking the questions, and just hearing their perspective.
We were a much younger company then, and you know, we were somewhere between bootstrap and second-stage growth. And our facilitator, Doug, said, “So William, what’s the strategy for new initiatives out here?” And I said, “Well, you know, I like to think,” and I say all the time, “we’re really good at jumping out of the plane and building the parachute on the way down.” And everybody laughed. And then my director of marketing said, “Hey, Doug, I think we’re actually just pretty good at jumping out of planes.” And so that’s a microcosm of a longer thing. And then, actually, there’s a third one that comes to mind that was pretty helpful. Are you guys familiar with StoryBrand?
Jaci Russo:
Oh yes.
William Vanderbloemen:
So Don’s a friend of mine for a long, long time. He’s from here in Houston, and we’re about the same age. We brought in one of his senior people to do a StoryBrand for us.
Loren Feldman:
Tell us what that is, William.
William Vanderbloemen:
StoryBrand is—Don Miller is—a whole company called StoryBrand. In fact, there’s no affiliate link here or anything, but his book, which I think has sold slightly fewer copies than the Bible—
Jaci Russo:
Only 3 less.
William Vanderbloemen:
—just came out with StoryBrand 2.0, I think it just dropped—we have the same publisher—maybe two or three days ago. But it’s basically, how do you tell a story? What are the key elements of stories that resonate? Don studied movies. There’s a hero, there’s a guide, there’s a Yoda, there’s a Sherpa. There are all these key characters, and the stories that really resonate with people. How do you tell your company’s story in a way that’s really going to resonate with the public?
And I won’t bore you with all the technical blocking and tackling. I will say, if you’re listening today and you don’t know anything about this, it probably is worth going to get a copy of StoryBrand, because it will open your eyes—it’ll ruin every movie you ever go see, because five minutes into the movie, you’re going to know how it ends. So, it’s a pretty scripted thing. Jaci’s laughing because she knows. This is your world, right Jaci?
Jaci Russo:
Oh, yes. I think Donald Miller is brilliant. And one of the things that he’s done so well is gotten companies to stop talking about themselves and start talking about the problems they solve.
William Vanderbloemen:
That’s right. You’re not the hero. Make the customer the hero, and you provide a path toward solving their problems. But that was helpful. Now, because we’ve known Don, and we’re very familiar with the story, we had already done a lot of that legwork.
So when we brought the consultant in, I think it was Aristotle who’s quoted as saying, “The greater part of instruction is being reminded of the things you already know.” So we kind of heard things we already knew, and, “Oh, good, we’re doing this right.” I have a friend who’s a pretty well known therapist, and I said, “What’s a good day for you at your job?” She says, “Oh, it’s always the same. People walk out saying, ‘So, I’m not crazy.’” So when Don’s team came in and reminded us of things that we already knew, and we saw that we were doing things congruent with his method, we’re like, “Oh, we’re not crazy.” Those would be the two that I’m willing to talk about.
Loren Feldman:
Jay, you could have taken Lou up on this offer, and you chose not to. Why is that?
Jay Goltz:
Because I believe—I know it’s broken, and I’m working on fixing it. And, you know, I’m not saying I would never do it, but I got the triage going on. I’m still getting my accounting department back to where it needs to be from the transition of a 20-year CFO retiring and then hiring the wrong person after that. I just think it would take some time, and I just don’t think he’s gonna—I think I know what the issues are. And I have been doing it for 46 years. I think I have a handle on it. Now, I would never tell you that I would never do it, but right now, I have to first clean up the obvious stuff that I gotta take care of.
And I have PTSD. I’ve hired consulting firms over the years a couple times, and oh my god, that’s all I can say. Oh my god. I had, back in the early days, I was probably 30, the place was out of control. I didn’t have a mentor. I’d never had a job. My father had one employee. You talk about building the parachute on the way down, I was completely out of control.
I hired the accounting firm, their consulting division, to come out. And back in the day, it was always $12,000. So they give me a whole big booklet, and they tell me, “Your receivables are out of control.” So I said, “I’m a retailer.” I did give credit to some people. I go, “How many accounts do I have?” Obviously, I should have known that myself, but okay, I told you I was out of control. “How many accounts do I have?” And he said to me—I’ll never forget this phrase—“That’s beyond the scope of this audit.” So, $12,000!
Loren Feldman:
All right, but that was—
Jay Goltz:
I got it.
Loren Feldman:
It’s funny that you mention that now. I mean, that was a long time ago, a different person. You know Lou.
Jay Goltz:
I got it. No, no, Lou’s extremely—I have the utmost respect for what Lou’d do. I’m not saying that he’s like that at all. I’m just saying—
Loren Feldman:
It’s a fresh set of eyes. And Jaci, he did this free of charge, right?
Jaci Russo:
Yes, and in a matter of two weeks, maybe two and a half weeks, during a holiday. And I will say this: brilliant on his part, because it gave him access to everything in the company. If there was a place where he could come in and help solve a problem or provide another service or do whatever, I’m all in on the Mosca train. Like, I will follow that guy off a cliff. I’m so appreciative of what he did and the insight that he gave me. And it’s little bitty things, but changes we’re gonna make here that are gonna make a significant difference long-term.
Loren Feldman:
I have to ask you one thing, Jaci. Did he have any comment about the four-day work week?
Jaci Russo:
He did not! [Laughter]
Jay Goltz:
Thanks for asking, Loren. No, you know what? I have six things that I need to fix here. And frankly, here’s the real truth: I don’t need three more to weigh on my head. I already got six key things I need to work on: my pricing. I need to work on accounting. I’ve already got six things that I know I need to get on top of, and I’m working on it. I’m going to fix it. I don’t need any more on my plate, at this point. So I’m not saying I would never hire him. I’m sure he’s got some insight that I don’t have, because he’s dealt with hundreds of companies. But, yeah, I need triage mode. I’m still there.
Loren Feldman:
All right, I want to move on to something else. There was a piece in The Wall Street Journal recently that I highlighted in the Morning Report that talked about the optimism of business leaders heading into 2025 and their plans to hire more people. Let me just read a little bit of it to you. It quoted somebody who runs a very big staffing firm. He said that his company filled twice as many human resources openings for clients in November of 2024 as it did in November of 2023. And why does that matter? Because, he says, “I look at our HR placement business as a bellwether, because if companies are hiring in that department, they’re generally getting ready to hire in other areas.”
This piece also reported more than three quarters of CEOs who run large companies expect the global economy to improve in the first half of the year, partly because they anticipate lower taxes and fewer regulations under the incoming administration. That’s way up from the 45 percent of CEOs who made the same prediction before the start of 2024. And then it reported: Nearly two thirds of U.S. employers plan to add permanent roles in the next six months, according to a Robert Half survey. William, you’ve often seen trends emerging before the rest of us. I’m curious, does this line up with what you’re seeing at your firm?
William Vanderbloemen:
I don’t know that I’m the right person to ask on this. You know, we serve all kinds of organizations that are values-driven, whether that’s kind of the Chick-Fil-A’s of the world or nonprofits. But the backbone of our work is helping churches find a pastor. And we’ve got different verticals that cover all these different things, but the—
Loren Feldman:
You saw the Great Resignation coming.
William Vanderbloemen:
I saw the Great Resignation coming. But the thing about religion: It’s kind of like alcohol. It does well in boom or bust. [Laughter] I am hearing from clients that are interested in how taxes are going to be in a better spot, irrespective of how they vote, that they’re looking to do a whole lot of things in the next four years. I was just on the phone with a merger and acquisition company yesterday that said we’re going to see a lot of recapitalization over the next four years. I think it just depends on what you’re in. You know, if tariffs are going to hurt you, then that’s a different thing. I don’t know how to predict it.
Loren Feldman:
Well, what about for you?
William Vanderbloemen:
I’m very bullish for us, very bullish. And that’s not just dependent on the election. There are a lot of contributing factors coming together at once that would take a whole podcast [episode]. But I read the article, I saw some emails going around from the panelists on this podcast, and kind of depending on what business you’re in and what your perspective is, it’s either, was it the “Tale of Two Cities” that said, “It was the best of times. It was the worst of times”?
Jay Goltz:
This is out there, I believe: They say X amount of employees in the world work for small companies. What percentage is that?
William Vanderbloemen:
Very high.
Jay Goltz:
Very high. Okay, you just quoted—I think you read it word for word—they said “two thirds of companies.” Of what companies? They’re only talking about these gigantic companies. They’re not talking about small business.
William Vanderbloemen:
Yeah, and Jay, I’ll interrupt you, since I’m good at that—if the definition of small companies is 500 or fewer employees, that’s the bulk of our work. And they’re all pretty excited about what’s coming.
Jay Goltz:
Well, I can tell you the typical small business, according to, I believe, the SBA, or whatever, is less than 100 employees.
Loren Feldman:
Actually, the SBA says less than 500.
Jaci Russo:
Which is dumb.
Jay Goltz:
Oh, okay, whatever it is. They’re acting as though they’ve talked to these big companies, and that’s the entire—completely ignoring small business. They made the comment, “two thirds of businesses”—no, two thirds of large businesses.
Loren Feldman:
That’s why I read it, and it was clear about that. That’s who it was talking to. And my point in raising it is that these are people who run large companies, yes, but they’re assessing the economic environment. And that’s why I’m raising it with you guys. I’m eager to hear if it resonates with you. I gather, Jay, it doesn’t.
Jay Goltz:
I don’t think what’s happening in Fortune 500 companies is absolutely a reflection of what’s going on at smaller companies. So I believe if you were to do that same survey with smaller businesses, I don’t think the results would be the same. I think that people are very nervous between tariffs and interest rates and the shortage of employees, which has been well-documented—10,000 Baby Boomers retiring every day. I think those three things mixed together are like the perfect storm, and we don’t know where it’s going to end up. And I don’t know that I’m hiring more people this year. I’m waiting to see how January, February goes, frankly. So just because Fortune 500 companies are ramping up doesn’t mean that I think the small business people are, and I will tell you—ask Ami this.
Loren Feldman:
Not everybody knows who you’re talking about, Jay.
Jay Goltz:
Ami Kassar.
Loren Feldman:
He’s a small business finance expert.
Jay Goltz:
Yeah, he totally is on the same—if you talk to people who are involved in small business, nobody’s having a parade right now. I think that there’s a lot of anxiety in the small business world that doesn’t necessarily exist in the big business world. The idea that, “Oh, taxes are going down!” is not getting small businesses excited. I’d love to pay taxes. I’d love to have an unbelievable tax bill next year because I made so much money. That is not driving anything in my world.
Regulation? Same story. Really? Oh my God, they’re going to get rid of regulations on picture framing. Great! Business is going to boom. I mean, so those big picture things that some of the Fortune 500 companies are salivating over really don’t have any effect in small business. So I think there’s a lot of anxiety, for lack of a better word.
Loren Feldman:
How about you, Jaci? Are you looking to hire this year?
Jaci Russo:
We are. I think we’ll hire two people in the next week or two that we’ve been interviewing, and then we have two more positions that we’re hoping to get filled, probably into the first quarter.
Loren Feldman:
And are you generally bullish on the way things are headed?
Jaci Russo:
Yeah, we signed some new clients at the end of the year. We have some more new clients we’re about to sign this year. I mean, for all of the opportunities for improvement that Lou and his team presented to me, we still had the best year we’ve ever had. And that’s the fifth in a row.
Loren Feldman:
From what standpoint, Jaci, profitability?
Jaci Russo:
No, revenue. Profitability, we were pretty flat. But we had 20 percent, 18 percent, and 23 percent the three years before that growth in profitability. I made the connection for somebody the other day that most companies look at marketing as an expense, and they approach it with kind of the same mindset that people approach fitness.
Instead of, “I’m going to be healthy,” people say, “I need to lose weight.” And so they just focus on losing weight. And if we did exactly the same thing, they would stop eating—the same way they stopped spending money on marketing—and then you die. And so, instead, we approach it as a whole body, whole health fitness. And so we look at all of your marketing expenditures, and we find ways to pay for ourselves through the money they save and stop doing stupid things where they’re wasting it. So it’s a win-win situation.
Loren Feldman:
I want to go back to hiring a little bit. I want to revisit a topic that we’ve discussed here in the past, and that’s the practice of asking job candidates for their salary histories. Apparently, according to another piece that I highlighted recently in the Morning Report, a lot of hiring managers are still asking for those salary histories, and they’re doing it even in states where it’s illegal. As I recall, William, when we had this conversation—I don’t know, maybe two years ago—you told us that when you do searches, at least as of then, you always follow the laws in the state where you’re operating. But your preference was definitely to ask for that salary history. I’m curious, has anything changed for you?
William Vanderbloemen:
No, I’m gonna get the number wrong, but I think it’s 18 states, something in that ballpark, that say that you can’t ask these things. So we want to be compliant. And even though I think it’s a stupid rule, it’s the rule. So we’ll follow it.
Loren Feldman:
The purpose of that rule, ostensibly, is to even the playing field and not punish people who haven’t had good salaries in the past, especially women.
William Vanderbloemen:
Okay, here’s the thing, Loren: I think it’s a stupid rule, because people lie when you ask them the question.
Loren Feldman:
Hm, well I’m sure that’s true.
Jay Goltz:
I think it’s just very difficult to hire. It makes hiring more difficult. And I understand the intent behind it, and I respect that. But you know, if you’re hiring somebody for a job, there’s a gigantic bandwidth of what they could be making, and you find out that the last employer, or the last few employers, were paying them that level, then they know more than you do about the person. Then they might be worth that. I think it’s valuable information for an employer. And I really, really, really do not like the fact—and Illinois is one of those states where you can’t ask—it puts me at a tremendous disadvantage to assess people.
William Vanderbloemen:
Jay, I’m sorry, but if you believe what people tell you when you say, “Tell me how much you’re making,” you need to stop.
Jay Goltz:
Well, but you can verify it when you call the reference.
William Vanderbloemen:
You can verify it when you call the reference. That’s fair enough. But we’ve probably got 300,000 salary data points in our database now, and it’s amazing to me. This is what they said they’re making, and then you get verification later, and it’s like, no, it was higher. They reported higher than what’s what.
You know, the rule, I totally get. And Loren, I’ve got five daughters, so I totally resonate with the idea that people should be paid fairly, irrespective of gender, what have you. I feel like—and I’m going to sound like an old curmudgeon—the pendulum in the economy, the way I read it with my religion and philosophy degree, is it swings back and forth between whether the employers are in charge or the employees are in charge. The employer is in charge, and all of a sudden we realize we’ve got kids working in factories in the Industrial Revolution. Well, that’s got to change. So formation of unions was a swing back toward employees being in charge, and that pendulum will always swing. I just feel like it’s swung a little too hard toward the employees right now.
Loren Feldman:
Jaci, before you started your business, you had a successful career in corporate America. Did this issue occur to you back then? Did you feel as though you were paid fairly?
Jaci Russo:
I was paid very well, because I lied about what I was making when I was being interviewed, [Laughter] and used that to continuously scale up my revenue. There’s no reason in the world I should have been making six figures at 24 years old. That’s insanity!
Jay Goltz:
Did they think so after they hired you?
Jaci Russo:
No, they thought I was awesome.
Jay Goltz:
Okay, so then it wasn’t insanity. You know, it worked.
Jaci Russo:
But they could have had me for less. Don’t tell them, but you know, it was the mid ‘90s, and I literally was 24 years old. But I fibbed about what I was making at the job before, and used it to add a one at the beginning of my salary when I jumped to the next job.
Loren Feldman:
So now you’re on the other side of the table. Do you think it’s a stupid rule?
Jaci Russo:
I don’t ask, because I assume people lie.
Loren Feldman:
Is it the law? What’s the law in Louisiana?
Jaci Russo:
I have no idea, because I’ve never asked.
Jay Goltz:
That’s interesting.
Loren Feldman:
Have you found other ways to determine how people have valued the work of the job candidates you’re talking to?
Jaci Russo:
Well, you know, we talk about industry averages. We talk about all of the benefits. I try to sell this place long before we talk about money so they want it. And then we have an honest conversation about what I can afford and what they think they’re worth. And we find something in the middle that makes everybody happy-ish.
Loren Feldman:
William and Jay, I’ve gotta ask, you guys are both really smart, both especially really smart about hiring and checking references and the whole process. I struggle with the idea that there aren’t other ways to get the information you need to make the right decision, irrespective of a salary that someone else has chosen to pay somebody—and that might have been a bad call—as Jaci just established.
Jay Goltz:
I guess one could ask the reference. That’s not illegal for them to tell you. And you know what, I haven’t been involved in hiring in a long time, so maybe that’s the answer. I’m just particularly frustrated at the moment, because I did hire someone who’s gone now who I’m sure was not anywhere near what she purported to be. And, okay, I’ll do an admission here: I wasn’t involved. I wasn’t in charge of HR.
Loren Feldman:
You’re admitting it was someone else’s fault? [Laughter]
Jay Goltz:
Well, which is my fault. And I mean it. It’s my fault. She didn’t check the references like she should have, and I should have checked them myself. And I didn’t, and I paid a big price for it. So I’m taking my own advice. I should have absolutely checked the references myself. It was for a high-level person, and I didn’t. And maybe I could have gotten it from that person, and I didn’t.
So no, I screwed up, and I’m paying the price for it. I’m still standing on my thing, when I do business speeches to business owners, I tell them, “You should check references, period, every single time,” and people don’t. I’ve been in business for 46 years. I’ve been through hundreds of employees. Do you know how many reference checks I’ve had, the people calling me? I think twice. Think about that. Generally, people don’t check references. They don’t.
Loren Feldman:
William, let me ask you this. You’ve kind of been running an interesting A/B test. If I understand correctly, you must have data, since you operate in lots of different states. In some states, you do it one way. In some states, you do it the other way. Do you have a sense whether you would do a better job of picking candidates in states where you get to ask for the salary history than you do in those other states?
William Vanderbloemen:
Fabulous question. Our work-around has been, when you interface with us, it’s a very human to human experience, but there is some paperwork. And one’s a questionnaire, and one is—and I’d like to say we get this right all the time—but the baseline paperwork for every candidate is: If you’re comfortable, please list your current compensation. And then, in the states that it’s not a taboo, it’s not “if you’re comfortable,” it’s just, “Please list.”
I don’t know the answer to your question, Loren. It’s a great question. It really hasn’t affected our ability to—I can’t think of a time where we’ve taken a candidate to a client, they’ve gotten excited about the candidate, they’ve tried to hire them, and then find out they’re off by $50,000 or whatever the big number is. We try and cross-check. There’s tech out there that can help some, like Glassdoor. If you’re an employer, subscribe to the premium. You can look up previous employers of the person. You can see what the median pay is. Maybe they’re a top performer, maybe they’re bottom.
But at the end of the day, if you’re dependent on people self-reporting their income to make an employment decision, you’re probably going to get let down a lot. And I’m with Jay. The reference calling, that’s hard stuff, because, again, getting into legal requirements, most states have a rule that if you get a reference call, really all you can say is, “Yes, they were employed here, and they were employed from X to Y,” and that’s it. There’s no, “They did a great job. Here’s what they made.” They’re just not allowed to say that. Maybe you can get them to say those things, but smart reference people won’t give you that kind of information.
Jay Goltz:
But they’re not smart, and they do say stuff that they shouldn’t say. [Laughter] And I’ve had them tell me stuff, because the reality is, here’s the simple question—
William Vanderbloemen:
Well, Jay, I don’t prey on the people that aren’t smart, sorry. [Laughter]
Jay Goltz:
Oh, no, I do—for a reference. All’s fair in love and hiring. When you ask them, you say, “Is this person eligible to be hired back?” And then, they might say, “We don’t hire people back. It’s against our policy.” And then I’d say, “What if it wasn’t against your company policy?” A long silence? Not a good sign. I’ve learned that when someone left the company and left a real bad taste in their mouth, these people want to tell you. They want to tell you. Some of them do, and some have absolutely come out and said, “Oh, that guy? Oh, he’s a drug dealer.” I mean, I had someone tell me that on the phone.
I find that people want to tell you the truth, and I laugh at companies—I love when they send out the form for the reference check. Like someone’s going to really put in print on an email. I say to myself, “If you’re so lazy you don’t want to call to get the reference, I’ll just put whatever or not respond.” That is a tremendous opportunity for hiring to check references. And you know what, William, you gave me some great advice today. This is partially why I do this podcast. I learn from it. One, I didn’t realize most people lie. You’ve got statistics. That’s interesting. I would have guessed some, but I wouldn’t think most. And two, I didn’t know there was such a thing as Glassdoor premium. What is that?
William Vanderbloemen:
It’s just the upline of Glassdoor. It’s a subscription, and you get a little more information.
Jay Goltz:
I didn’t even know that existed, great. Thank you.
Jaci Russo:
So for everybody listening, Glassdoor is a place where employees go and provide a ranking and their thoughts on employers. And so if you’re shopping for a job, you go there to see what it’s like to work at that company.
Jay Goltz:
You also have to understand the people who are most likely to go on there are the ones who are pissed off at the company.
Jaci Russo:
Almost always.
Jay Goltz:
You’ve got to take that for, you know, factor that in.
Loren Feldman:
Well, since we’re talking about Glassdoor, I’m curious, how do you guys handle it—I’m sure this never happens—but if somebody were to leave a bad review of working at your companies, what’s the proper procedure? Do you respond? What do you do?
William Vanderbloemen:
Well, I don’t know how to respond. Anonymous never leaves an email address.
Loren Feldman:
No, you can’t respond to them directly, but you can respond on Glassdoor, right?
William Vanderbloemen:
You can respond on Glassdoor. I don’t know what we’ve done there. That’s a great question.
Jay Goltz:
I had someone we had to, you know, unhire, and she went on there. It wasn’t horrible. It was, you know, “Oh, blah, blah, blah.” What she said, from her perspective, was probably true. She wasn’t a good employee, and it wasn’t vicious. It wasn’t horrible. We left it alone, because it was kind of obvious, if you read it, that this was someone who wasn’t doing the job. It’s like, it is what it is. But I certainly knew who it was, because it’s not like I’ve got 8,000 employees. You’re probably going to know who it is, if someone goes on there complaining about you. If it was horrible, maybe you should reach out to them and ask them if they think that was a good idea, given that, would you like to use me for a reference?
Loren Feldman:
Reach out to them, or also just respond on Glassdoor so that other job candidates reading this don’t think you don’t care.
Jay Goltz:
Yeah, I’m sure that would be appropriate at times.
Loren Feldman:
Jaci, have you done anything like that?
Jaci Russo:
We had someone who, it was their experience, and we unhired them. They came in, they were very dishonest—not about their pay, but about their experience level and their ability to do the job, literally, to turn on the computer and operate the software for a graphic designer. And we realized they’d come from a very large agency where, obviously, they were able to—it was like old high school group projects. They had other people in the group do the work, and they got all the credit.
And so they left their thoughts on being unhired, and the rest of the employees here, very kindly, kind of rallied around and left their own comments to balance it out. And so I think that’s fair. The current employees said things like, “Oh, it’s intense. Oh, it’s this, it’s that.” So I didn’t ask them to give us glowing stars. I was pleased that they provided a fair analysis of the pros and cons.
Loren Feldman:
All right, my thanks to Jay Goltz, Jaci Russo, and William Vanderbloemen, always a pleasure. Thanks for sharing, guys.
