How Fractional HR Works: Ep. 55

Speaker A: Hi and welcome to this episode of HR and Cocktails. HR and Cocktails is a podcast about all things hr, from the strategic to the tactical. Today I'm joined by Amber Trail.

Speaker B: Hi.

Speaker A: Yes. Amber is the managing HR consultant at Prescott hr.

Speaker B: I am.

Speaker A: And today we are going to talk about how to fully utilize fractional hr. So, Amber, welcome back.

Speaker B: Thank you so much.

Speaker A: Yes. So just for those that may not, um, know you, tell me a little, tell us a little bit about you and what you do at Prescott hr.

Speaker B: So I am the managing consultant and my role is interest. Um, it keeps it fun. So I have my own clients that I serve as their HR consultant and then our HR consultants, I support them. So any of their needs that they want to, you know, talk through any challenges or need ideas, things like that, that's what my role is, is to help support them.

Speaker A: Yes. And we truly appreciate it because I think that anybody who knows me knows that they probably shouldn't report to me. You probably would say the same thing. Like, I don't know. I don't. Maybe I don't. Do not recommend. So thank you. And thank you everything that you do. Of course. So, um, Prescott hr, we are a fractional HR firm. Right. And I think that the word fractional has been tossed around a lot over the last few years. So what does fractional mean? Before we even get into the HR part, what does fractional mean?

Speaker B: So it can have many different meanings. And for me, how I, you know, when I'm speaking with someone about what fractional HR is, is we basically will take your in house, your typical in house HR role. But it's outsourced. Yes. So we can do almost everything that an in house HR person would do. But let's say you don't necessarily have a need for a part time or full time HR person. So that's where we come in and we are outsourced. So we're doing fractionalized pieces of your HR and we support the client and whatever their needs are.

Speaker A: Yeah, absolutely. And I think that HR is a concept that sometimes is difficult for people to understand as a fractional function. You know, um, people, um, are okay with, you know, a fractional, um, controller, a fractional cfo, a fractional, you know, bookkeeper. Because they're like, oh, I don't need someone in house. I don't have a lot of financial transactions. I'll just outsource it. They'll do my bookkeeping, they'll do my CFO work, or even marketing, branding. They're so they're very used to that function. But then when it comes to hr, a lot of times they're like, but who's going to talk to my employees? Uh, how are they going to know. To talk to you? How, how are they going to know all these things? And so sometimes it's difficult for them to understand how HR can be fractional. So I think that that leads us into what is hr, because if we have a clear understanding of what HR is and how it fits into the organization, then we can wrap our minds around how it can be fractional. So how would you describe hr?

Speaker B: HR is. It's fun. Um, so HR is really there to support not just the employer, but also the employees. We really want to make both parties successful. And how we do that is we show up as a guide, a support system, a strategic advisor. And like you just said, you know, a lot of times they, anyone would believe that HR is there to do the terminations, to do all the disciplinary actions. And that's not necessarily true. We will help guide you. We will help train the managers on how to do that. But, you know, know, even if we were in house, we're not there with the employee every day. We don't know what they're doing every single day. So it's really up to the manager to be trained to know. Okay, this requires disciplinary action. This is what our steps are. Or maybe it's a performance improvement plan, but it should truly be the manager that's actually giving that and that feedback. But we are there to support them and help guide them and help, you know, if they write it, we can always help, you know, rearrange it to the way it needs to be written, um, to be the most effective.

Speaker A: Yes, absolutely. And we'll get into more the role of HR and supporting the managers. And I just want to give this and, and, and, and I want this to be its own separate, uh, spotlight. We are not saying that employees should not come to hr, that HR is not here to support the employees. I just want to say that because I will honestly say that I got dragged the last time I had this conversation and we talked about HR being an escalation point. So HR is a support for the employee. It just looks differently than some people think it should. But before we get into all that, Amber, I think we should get a drink.

Speaker B: I agree.

Speaker A: All right, what drink would you like?

Speaker B: It is a Hotel national, and I hope I pronounce that right.

Speaker A: Yeah, Hotel Nacional coming up. Okay, so our guest, Amber, chose a Hotel Nacional for your drink. Tell me why you chose that?

Speaker B: So this particular rum is bottled in Puerto Rico. And when I went to visit Puerto Rico, Ah. We did a tour of Casa Bacardi. And they, um, had us make this particular drink.

Speaker A: All right, awesome. And, um, it was funny when you told me about it, um, because my best friend bought me this exact same two years ago when she went on the tour. So good. Yes. Awesome. So we're going to start with our lime juice. So you all know I love freshly squeezed juice. So please, if you can squeeze some fresh juice. So we're going to start with one part lime juice. And I feel like we need a little bit more one part lime juice. All right. And then simple syrup. Awesome. We're going to do half simple syrup because we're going to be adding some sweet, um, to what we're doing. So we don't need as much, um, of that. So we'll do a half part of simple syrup. We're gonna do, um, some pineapple juice. All right, so pineapple juice. 2 parts pineapple juice. And then we're gonna do some apricot liqueur, which I had not had before. So when I saw that, I was like, oh, I hope I can find it. But I was easily able to find it. No problem at all. So we're gonna do one part of the apricot liqueur, and then we're gonna go to the star of the show. Exactly. The Bacardi Extra Rare 10 Year Rum. And we're gonna do three parts of that. I might get us a little extra. Cause it's really good. Oh, my gosh, it smells so good.

Speaker B: It does.

Speaker A: Whenever you go to, um, a rum distillery, just smelling the molasses, smelling all of the good stuff in there. Oh, yes. It's just so, so, so good. Right. All right, so you all know whenever we have fruit juice, we do what? Shake. We shake it. So that's what we're going to do.

Speaker B: All right.

Speaker A: We're going to shake it, and then we're going to strain it over ice. Oh, my goodness, it smells so good. So we're going to shake it over ice. It's so pretty. All right. I know, I know, I know. So, all right. Cheers.

Speaker B: M. That is good.

Speaker A: It is good. Yeah. So, Amber, this drink is awesome. Thank you. We. I don't know that we've had a rum drink. I don't know that we've had a rum drink. So this is exciting. I know. So this is very exciting. So thank you. All the way from Puerto Rico. Thank you. So we Were talking about the role of hr and really, what is hr? And you know, I say all the time when I'm talking to clients, when I'm talking to prospects, when I'm talking anywhere, um, that HR is advice and counsel, advice and counsel to the employees, advice and counsel to management and leadership. Um, because the manager has the responsibility for managing.

Speaker B: Right.

Speaker A: That's their role. Having those conversations with the employees, setting those, um, expectations and having those difficult conversations. So, you know, leading us back around to how you can have fractional hr, if the managers are having those conversations, then having an outsourced HR person does not, um, does not impact that.

Speaker B: Right.

Speaker A: Negatively.

Speaker B: Right.

Speaker A: And because I think a lot of people think that HR is, you know, hugging and, you know, throwing parties and. Yeah, exactly. And it's like, you know, you should have an employee committee for that. Right. And again, I know I'm going to get eaten alive in the comments, but I will, I will take it. Um, but I really do think that the more we educate managers on how to manage, the reality is, is that those employees will have a better experience, that I hate my manager. I have a horrible manager. Experience can get better if we're holding managers accountable and we're not swooping in and constantly doing the dirty work. Right. Um, so from your experience, what does it look like when a client does not understand how to integrate, um, fractional HR into their organization?

Speaker B: So a few things, um, a lot of times they truly believe, like, if we don't set the expectations up front, they truly believe we are there to just terminate the employee. And quite honestly, if you think about it, if an employee is coming into the office and sitting with HR or virtual, um, then they're quite surprised and upset that they're not meeting with their manager. Their manager is not the one terminating them. It is someone who they hardly have any contact with. And it really, it really. They lose a lot of respect and trust in that organization. And it's completely understandable. And, you know, another part is we will, uh, our, our clients sometimes will send out our information to the employees. And then what happens is the employees reach out to us for everything. And, you know, one of the main things is they want to complain. Well, that's okay, great, what's the problem? And then if it is about their manager, my first question is always, have you talked to your manager? And most of the time they'll say no. And I will go back and say, what do you want to happen? I need them to understand if they haven't talked to their manager, that should be their first step because the manager may not even know what the issue is. The manager may not know the problem. So how can they fix it if they don't know the problem? And then the manager is then caught off guard if HR swoops in and takes care of the problem. Because the manager's like, okay, do I not know how to do my job? Why didn't anyone tell me this was an issue? So we really need that rapport to build with the manager and the, um, employee. Um, we are definitely there if there's sometimes there's a concern or issue that the employee doesn't feel comfortable going to the manager. And yes, certainly we're there to listen, we're there to see how we can help support them. But, but you know, employees also need to recognize that most of the time we can't support them unless the organization or the manager knows what's going on. So we typically want them to go to the manager first because then we can help support both parties.

Speaker A: Yes, exactly. And again, I know, um, some of the feedback is, well, my manager is the problem. If I go to hr, I'm going to get fired anyway. It doesn't matter. Um, and quite honestly, um, there are organizations where that is true and it's very unfortunate, and those types of organizations have high turnover and their ability to be successful is limited. But I do believe that those organizations are the exception and not the rule. Right. M Prior to me starting Prescott hr, I had a lot of jobs. Okay. Tenure was not my middle name. Okay. I had a lot of different jobs. And I will say that that type of culture, out of all of the organizations that I work for, there was only one where I felt like if I say something, it's going to be a problem. I think also that the important thing to note is that, um, uh, you have to be productive. To your point, what is it that you want? Being clear on what your challenge is and what your ask is. My good friend who's in hr, she'll always be like, what's the ask? What's the ask? Right. And so when we think about that with clients, you know, small businesses, we hear all the time, especially when it's an owner led organization, they're like, I don't, I don't want to do any of it. Like, I just want you to come in and do all of it. And it's like, that's not how it works. Right. And so we really have to set the expectation around we can do a lot of the things, uh-huh but the actual management of people has to be done by the leadership team. That's something that's very important for them to understand is that it's not going to be, um, an organization. Well, listen, there may be organizations that come in and do that, but when done correctly, HR should be, um, a place where leaders get empowered, employees get empowered, and that they get the information and the resources that they need to, to manage through the challenges.

Speaker B: Right.

Speaker A: But employer relations and people management is just one part of what HR does.

Speaker B: Right.

Speaker A: Um, so what are some other elements that an organization, let's say a small business, 15, 20, 30 employees. What are some things that, um, fractional HR can do for them?

Speaker B: The first thing I always start with is a company handbook. It has to be reviewed regularly. And when I say regularly, at least every year, it has to just be looked at, make sure it's still compliant with federal and state laws. Making sure that, you know, if there's been any challenges that they, you know, that is then addressed into the handbook. Um, and of course getting the employees to acknowledge that they have received the new handbooks. Um, we, we help with onboarding. So whether that is creating a job description. Um, you know, we've even helped get it posted and sift through resumes that look like they have the qualifications to meet the job. We can do first round interviews. We never will do an interview completely the whole way through. Because if this individual is working directly with, you know, other team members of the organization, managers, leadership, they need to meet this person. Um, and we definitely want to make sure that they hire the right fit. And one question that recently came up for me was, okay, here's my candidates, here's what I'm thinking. I've met with each of them. Um, what do you think? And I said, let me ask you this, I flipped it and said, which one do you think would get the job done well and work best with the team? Because I can't answer that for them. Um, we also will help create the disciplinary action, whether it's a verbal written warning, the performance improvement plan. Um, we've even helped create, um, uh, performance evaluations. So your, you know, 60 day, 90 day, and then your year yearly evaluations, we don't conduct them because that's, we're not working with the employee, but we help support the manager and how, what that process looks like, how it should be completed. Um, and then, you know, just compliance trainings too, making sure that everyone is up to date with the workplace and sexual harassment trainings. Um, we've Done culture surveys. Just really anything from, you know, high level strategic planning, um, from an HR standpoint, all the way down to helping onboard offboard an employee.

Speaker A: Yeah, absolutely. And I think that it's important, um, a couple of things because. Yes, that is, ah, you know, those are all things that hr, um, and fractional outsourced HR can and should be doing when you engage them. With regard to the handbook, I think in so many times we'll have. Well, we, we got one on online. We don't need help with a handbook.

Speaker B: Right.

Speaker A: You know, the reality is, is that unless you understand the size of your organization and the laws that apply, you could have policies in your handbook that you don't have to have. If you have, you know, 10 employees, you don't have to have a lot of policies in your handbook because, you know, Cobra doesn't apply to 20 employees, quite honestly. EEO laws don't apply to 15. FMLA doesn't apply to 50 until you have 50. So you could get a handbook online, have all of these things that you're obligating yourself to that you don't. That you don't even need to. Right. The other thing is, is that one thing that I'm not sure that a lot of organizations understand, especially when they don't have someone who's trained to do hr. And while I appreciate taking HR classes and sitting through seminars, there are still a lot of things that from a practical perspective, you may not. And one of them is, is that it doesn't matter what state you're headquartered in. It's where the work is performed. So many organizations don't know that if they hire remote employees that work in a particular state, that for that employee, they have to follow that state's law. So if you hire someone in Washington and they're working from home in Washington or California, you have Washington responsibilities. You have California responsibilities. It doesn't matter where you're headquartered.

Speaker B: Right, right.

Speaker A: And so getting that type of practical advice and, oh, by the way, what are the laws in that state? Uh, what are your responsibilities? Oh, now I have disability leave. Oh, now I have a different type of pto. Oh, eight hours in a day, overtime. I didn't know that. And so that's why bringing in someone trained in HR is helpful. Can you do these things on your own? Can you wing it? Yes, absolutely. And it works until it doesn't.

Speaker B: Right.

Speaker A: Yeah. And so many times we'll have conversations and you know how many times we've heard people say, I, I've been in business 15 years, I've never been sued. Great. The goal is to keep you from getting that up. Yeah, right, right. And so it's like insurance, you know, you don't want to have an accident, you don't get in, you don't get insurance because you plan on getting an accident. Right. It's there. And if. Right, exactly. And that's what bringing in fractional HR does.

Speaker B: Right.

Speaker A: It protects you, it provides that extra layer, um, and really helps them. You know, with regard to onboarding, we have best practices. We work with dozens, you know, over time, hundreds of clients. Best practices, what do you need to do? What's the most efficient way? Automation. How do you do that? I think many times we come in and we're like, oh, wow, there's 10 steps here, we could do it in three. Right, right. So really optimizing. And I think on top of all of the things, just taking it off of your plate.

Speaker B: Right. And that's the biggest help. Like I've had so many of our clients be like, oh my gosh, thank you. Yeah, thank you. You just took that off my plate. And I'm like, that is what HR does. And like you just said automating. So many, uh, clients or you know, organizations out there have these HRIS systems and they're only using this tiny little piece of it when they're paying for this huge piece and it's realizing, oh my goodness, we can do this, this, this in there. And that would just save five hours a month. I mean, five hours a month, that's huge.

Speaker A: It is, it definitely is. And the good thing about fractional hr, ah, is you hire us for the amount of time that you need us. You know, you, you, you hire a full time HR person and they're there 40 hours a week and you probably don' hours worth of work for them to do. Right. Um, sometimes we also hear, well, I'll just hire somebody that can do HR accounting and be the office manager. What are your thoughts about that? Hiring that Swiss army knife and adding HR onto it.

Speaker B: My biggest pet peeve I've ever seen is when, um, I've seen job ads for bookkeeping and HR together. Bookkeeping? Yes, and marketing. Um, and I will tell you, not just from an HR perspective, but I recently connected with someone who is a CPA and they have bookkeeping within their office. And he said, doesn't that drive you crazy when they come to accounting or your bookkeeper because they think you can do hr? And I said, that is the exact same because, you know, then suddenly you'll start to get involved on the HR side with accounting or taxes or, you know, different things. I'm like, this is out of my wheelhouse. But it really. They are truly stuck. Separate professions. There is no certification for a combined accountant and HR professional. I promise you. If there is, I'd like to see it.

Speaker A: Yeah.

Speaker B: Ah, but there are. You have to. A cpa. They go and get their CPA license. We have our SHRM certification. So, you know, it's going and getting those. We have to study hard. We have to know best practices, we have to know the laws. So we specifically take those certification exams and stay up to date for hr, just like an accountant would for their accounting practice.

Speaker A: Yes. And there's no amount of reading and sitting through seminars that prepares you for the scenarios that come up on a daily basis. You and I did a whole episode on just all the crazy things that show up in hr. Right. And so, you know, it's really having that as your focus. Huh. So that, you know. And then also think about the amount of time when you don't know how to do something. So, for example, um, I can't remember what the most recent thing was, but, um, there was something that I didn't know how to do. And I was like, I'm going to go on YouTube university, because that's what people do. I went down a. Oh, I had to factory reset our, um, doorbell at home because we changed our router and I had to reconnect it to the Internet. And I was like, this should be so easy. I'll just take it off. I know what to do. Let me tell you something. I went down a rabbit hole for like an hour and a half trying to figure out how to factory reset this ring doorbell. If there. There are plenty of people who know how to do that. It would have taken them 35 seconds to do it. Right. And so the same thing with HR. Could you Google it? Go on YouTube University, Chad, GPT it. You absolutely could. But the amount of time that it took you to do it, the amount of time that you're thinking, is that really the right answer? I actually saw four different answers. Okay. Which one is the right answer? Do. Uh, I put them all together. By the time you do all of that, you could have engaged a professional for 15 hours a month, 20 hours a month, and have the peace of mind. That is just off your. It's handled.

Speaker B: Right?

Speaker A: That's what part of our tagline. It's handled. Yes. I love that. I love that.

Speaker B: And when you post something Even on chat GPT. And I'm, you know, wanting everyone to try. This is when you post something and it may be a legal question, it says, what about this, this, this? So it has all these different things that you need to think about. So then you need to dive into each separate thing, and then it dives into another five things, so it never really gives you a clear answer. And, you know, sometimes as HR professionals, we get thrown random questions, random things come up, and so we have to really dive into, okay, you know, thinking through our, uh, uh, you know, our brain power here. What pieces do we need to break down? What could be a risk, what could be an opportunity? And, you know, we've had the. So we can do that pretty quickly.

Speaker A: Yes, exactly. And there's like a set. There's a set series of questions that go through my brain when someone calls and said, hey, I want to terminate. So. And so I'm like, all right, are they in a protected class? Are they on any type of performance evaluation? What documentation did you have? Did they just come back from medical leave? Have they made any complaints? Have they? You know, so you're going through this list of questions to just kind of analyze risk. And at the end of the day, there's risk associated with everything. Right? But you're trying to manage risk, risk. Um, and I also think that it's important for, you know, when you're identifying what an hr, um, consulting firm could look like if you're considering it, you know, always knowing that you as the business owner, you as the business, you make the final decisions.

Speaker B: Right.

Speaker A: Having someone there is really just, again, advice and counsel. You make all the final decisions, but you're able to. To make those decisions, get those tasks done, and do it with a trained individual giving you that advice and feedback.

Speaker B: Right.

Speaker A: I know that, um, they say, uh, there's a saying that when you represent yourself in court, Right. That anybody who represents themselves in court has a fool for a client. Right. I've never watched a lot of court cam. And, um. And so, you know, I think that when you try to take on too many things and try to manage things that you don't know about, there are absolute implications to the decisions. While we are not legal counsel, we do not pretend to be legal counsel. We work in tandem with, um, employment lawyers. Um, but there are decisions that you can manage your risk that you just didn't have to have that risk if you didn't, um, if you had, um, gotten some advice and counsel.

Speaker B: Right.

Speaker A: So let me ask this, because we talked about what it looked like when it wasn't being utilized correctly. What does it look like when we have our ideal client? You have a couple of them that it's just clicking on all cylinders. And it is just a match made in heaven, if that's what you believe in.

Speaker B: It is like a breath of fresh air. And I know they would tell you that too. They feel like they can breathe, like their weight has been lifted. You know, they never have to worry about, well, is this being done? Is this being done? Is this being done? Because we're making sure that even in the background that all of their documents are, you know, updated. We're making sure that handbook is updated. We're making sure their employee files are correct. So even if we're not, and I have several clients I meet with weekly, but even if we're not talking during the week, they know things are getting done, because when they have an issue, I'm, um, on it. It is, it is taken care of. And we've already got processes in place to make sure that we help support them. And it's. You feel like, you know, even though we are outsourced or fractional, you feel like part of the team.

Speaker A: Yeah.

Speaker B: Which is great because we really, truly want them to view us as a part of the team, because I think it builds up their organization, their reputation with their employees for them. So being a part of that team and supporting them, it's. It's a good feeling.

Speaker A: It is, it is. And it also, to your point, building up, uh, credibility. The employees knowing that they're some. A third party, that the organization cared enough about them to bring in someone else to. To be another set of ears. Right. Um, and I think, you know, even have. Being that, um, in addition to getting all the things done, being that strategic partner, you know, when a leader is like, I'm just not able to move the needle on this thing. What are you seeing? We can look at things, and we do things outside of what most people consider traditional hr, because the reality is, is that human resources quite honestly, touches every part of the organization. And looking from a strategic lens at. Well, part of the reason why you continue to have turnover in that role is because there is no clear line of sight. There's no business process owner. Pieces of this process live here, here, and here, and no one's fully responsible for it.

Speaker B: Right.

Speaker A: And that's why you continue to see those things. So let's look at how is this function set up? How are these duties set up? Should we create this into one job? And having those types of conversations with them. And I don't know that a lot of times leaders even understand that that's also the role of hr, to take that, like, you know, pull up and take that lens and look at it from a bigger perspective. Because sometimes when you're in it, you're like, well, yeah, I. This is how it is. And you're like, yeah, but it could be structured differently. Right. And being that strategic and tactical partner to them, again, on a fractional basis.

Speaker B: Mhm. Exactly.

Speaker A: Yes, exactly. Well, Amber, thank you so much for joining today and having this conversation.

Speaker B: Absolutely. I love it.

Speaker A: Yes, exactly. And thank you for joining this episode of HR and Cocktails. Sam.