HR Compliance Tips for Your Business

Navigating HR and Payroll: A Conversation with Stephanie Pratt of Exodus HR Group

In this debut episode of Minding Your Business, David Praet and Scott Merritt are joined by Stephanie Pratt from Exodus HR Group. Stephanie shares her journey from a psychology background to managing complex HR challenges. They discuss the crucial role of HR in small businesses, common pitfalls business owners encounter with payroll and compliance, and the importance of employee advocacy. Learn valuable insights on how outsourcing HR can alleviate administrative burdens and enhance company growth while ensuring compliance and employee satisfaction.

00:00 Client Success Story: Overcoming Payroll Challenges
00:37 Welcome to Minding Your Business Podcast
01:39 Meet Our Guest: Stephanie Pratt from Exodus HR Group
02:05 The Role of HR in Small Businesses
03:22 Stephanie's Journey into HR
05:09 Common HR Challenges for Small Businesses
08:58 The Importance of Employee Advocacy
13:50 Recruitment and Hiring Best Practices
21:43 The Role of Technology in HR
24:02 Affordability and Value of HR Outsourcing
27:27 Conclusion and Contact Information

https://exodushrgroup.com 

Transcript

Stephanie Pratt: 0:00

We did experience a situation like this with another client who had outsourced their payroll tax wage reporting and filing to a different outsourced company and they were filing very delayed or intermittently. And our team did such a thorough job of researching this and true them up as quickly as possible. And now they're at a zero balance and all of their reporting is going to be timely because they've moved it over to us. And they were so grateful for that too, because they had no idea that all of these, literally thousands of dollars of penalty fees were stacking up on the back end.

David Praet: 0:48

This is minding your business, the podcast, exploring the minds of successful business leaders and industry experts to uncover strategies and insights to elevate your small business. Hi, I'm David Preight with co host Scott Merritt. Join spotlighting aspiring guests who will empower you with practical advice and insights. and fresh perspectives to help your business thrive. Now, let's get started on your journey to success. All right, Scott, episode number one.

Scott Merritt: 1:23

First one, always the best one.

David Praet: 1:25

The hosts may stumble through this one but we did not skimp on the quality of our guest.

Scott Merritt: 1:30

We start with the very best, starting with a very high threshold that everybody else is going to be expected to meet. Absolutely. Scott, do you want to go ahead and introduce our guest? So with us today, our very first episode is Stephanie Pratt with Exodus HR Group. Stephanie is a, an HR manager with Exodus and she's got a very amazing background in HR and she makes a huge impact on her clients. So Stephanie, welcome. Thank you. Stephanie,

David Praet: 1:58

great to have you. Can you explain a little bit about what your role is at Exodus HR? What you do?

Stephanie Pratt: 2:05

Yeah. Basically after the client has been completely implemented and whether or not they choose to use payroll services, they'll drop into my lab and we'll immediately address all of the potential gaps or challenges that they have. Successes that they've had any pain points that they may have with compliance or employee advocacy benefits Other HR administrative items the list could go on but we basically take a client from having zero Infrastructure to having everything they need to be compliant

David Praet: 2:37

Yeah, HR is such a big topic for small business owners. I know when I talk to small business owners usually one of the main pain points has to do with You People, right? It's like the the old joke of the two business owners that ran into each other and one asked the other one, how's business? And he said, it's great. This is a great business if it weren't for the customers and the employees, right? So it's always it's always people issues, right? People are messy and

Stephanie Pratt: 3:07

management is difficult,

David Praet: 3:08

right? So I'm sure that's where you guys come in. How long have you been with Exodus?

Stephanie Pratt: 3:12

Just over a year. Yeah, it's been a great experience. A little bit of a turbulent start, but I think that actually benefited the team in a really great way.

David Praet: 3:22

What is it that kind of drew you to working in HR? Because I don't think everybody's cut out for that role.

Stephanie Pratt: 3:29

I have a background in psychology. I actually went to college for neuropsychopharmacology and then the OCHEM went a little over my head. So we redirected to IO psychology and I think that was a perfect shoe in to this role.

David Praet: 3:42

Yeah.

Stephanie Pratt: 3:42

Yeah. Really understanding how people behave and the motivators behind that really helps to Handle situations very calmly.

Scott Merritt: 3:53

Stephanie, you'd mentioned your educational background and why you ended up in the world of HR. Tell us about your first HR position. What was that about?

Stephanie Pratt: 4:02

Yeah, I'd love to. So I actually worked with parole and probation in college, and I was a case manager for very high risk offenders, and that job taught me quite a bit about people management on a one on one level and neutrally managing high level, high risk situations. So it seemed like a natural flow to go into something that might be a little less stressful. And that became bookkeeping. So I was processing payrolls. I was also contributing to the recruiting efforts. Then I moved into a corporate recruiting role for a restaurant group and that was incredibly fun. I love talent management and sourcing. Went from that to benefits management and payroll processing for an IEP boutique law firm out of Portland, Oregon. And then moved to Nashville where I found myself at Exodus.

David Praet: 5:09

In your role, when you guys meet with a new client typically what are they looking for? What are the issues that they're having? Why are they calling you guys?

Stephanie Pratt: 5:20

They typically reach out to us because I think the primary concern is, are they compliant federally or state or local jurisdiction wise? So we do a deep analysis of that first by going through a huge questionnaire and really going into every single workflow and process that they have. What kind of documentation do they have? What, how do they talk to their employees? How do their employees talk to them? Are people being treated consistently? And that seems to be the biggest issue. Honestly, most of the time, it's going to be that consistency piece and the labor law, federal, state compliance piece.

David Praet: 6:00

So everything you said just made my head swim a little bit. I would imagine probably a lot of times you go into situations where you've got a business owner who's really good at what he does, right? And he is so good at it that he wants to hang out his own shingle and do it on his own. But the thing he's probably not good at is paperwork compliance, HR issues. Is that pretty common of kind of what you guys see?

Stephanie Pratt: 6:29

We do have a lot of clients that are deeply specialized in exactly what the industry, their business falls in. It's maybe not a situation where they're not good at it, but they don't have the time or the bandwidth to deal with those items. So they come to us to get some support there.

Scott Merritt: 6:47

Do you see a lot of these business owners? I know that speaking from personal experience, when I'd hire people and I had a file on an employee, I just threw everything in that file because I didn't know what to do with it. So I just use that as a placeholder. Is that something you guys look at? And what do you guys do about that specifically?

Stephanie Pratt: 7:05

That's a great point. There are a lot of unspoken, if you will, documents. Or file retention and organization laws. And that's one of those very specific things that people may not know about without some guidance.

David Praet: 7:21

What's the one thing, based on your experience, what's the one thing that every small business owner is doing incorrectly? What's the one thing that they're they may not know about? And. That you guys come in and can meet immediately make an impact and help them with

Stephanie Pratt: 7:40

I think that I don't want to make a broad generalization and say all small business owners. The majority Of what we see are payroll related gaps, payroll tax related gaps unemployment claim related gaps outside of that we may see that the business owner considers the bottom line as What their financial metrics are alone and they they don't stop to consider The employee or employee advocacy as being a portion of that

David Praet: 8:11

if you could give one piece of advice to all small business owners and I know it's very specific to their situation. I'm sure but if you could give one broad piece of advice what would come to mind? Hire an HR outsource company.

Stephanie Pratt: 8:27

Yes.

David Praet: 8:29

I like that advice actually.

Stephanie Pratt: 8:30

Hire an HR company.

David Praet: 8:33

Don't try to go it alone, right?

Stephanie Pratt: 8:34

Yes, that's exactly it though. Don't try to go it alone. There are people who can help you. Even if it's not a full, broad spectrum HR administrative company, there are people who are in the industry that can guide you and direct you and to really guide you. Take their advice, especially when it comes to employee advocacy and compliance very seriously, because the compliance portion especially will get you into trouble. And I keep bringing up employee advocacy because as we noted, people management is the most challenging part. And if your employees don't feel like you're advocating for them, the relationship is more likely to go sour. And that's where you run into legal trouble.

David Praet: 9:13

Yeah, that's a great point. And quite frankly, it's a term. I'm not familiar with so employee advocacy, which is hard for me to say. Can you expand on that and maybe explain and give examples of what that looks like in the workplace?

Stephanie Pratt: 9:31

Sure. I think in its simplest definition, it's just making sure that your culture and your employees are happy and getting the things that they need to succeed within your business. So if that's a simple benefits package, if that's one on one meetings. to make sure that they're feeling comfortable and heard if that's conducting stay interviews if that's Providing a little bit extra PTO for them to get some mental health days and all of those things qualify

David Praet: 10:01

so it sounds like all the things that Make people enjoy going to work, right? because we've all had those situations where You don't have that and the alarm clock rings you And you don't want to go to work, right? Hit that snooze button one more time because We've

Stephanie Pratt: 10:20

all been there.

David Praet: 10:22

Yeah, and it usually comes down to i've always heard the old adage that People don't quit companies They quit their manager, right

Stephanie Pratt: 10:31

exactly and

David Praet: 10:31

it's probably because These things are not happening. These things are not taking place There's not the employee advocacy And of course that feeds right into turnover You

Stephanie Pratt: 10:43

Exactly. And I think another portion of employee advocacy is maybe indirectly, what purpose do the employees feel instilled with? What are they doing to drive revenue? What are they doing to drive the success of the company is also a critical piece of that as well.

David Praet: 11:02

Yeah, I feel very strongly. I think everybody at their core wants to be involved in a mission. Something they feel like it's bigger than them. Because I think we all go to work for more than just a paycheck, right?

Stephanie Pratt: 11:15

Absolutely,

David Praet: 11:15

you want to feel like you're contributing and you want all those Good feelings of you know that you're making an impact at the company and the company that you know, sees that and values that Yeah, I think that's huge So I would imagine that a lot of situations when you go into a new client situation They've probably struggled with trying to handle HR on their own, right? And that's one of the reasons why they bring you guys in. So what's the feedback that you get from them after they finally let go of that and they finally turn it over to you guys? I would imagine there's a huge sigh of relief.

Stephanie Pratt: 12:02

Yes. And a very deeply guttural. Thank you. We actually have received a lot of feedback very recently. Interestingly that That they've actually called our service invaluable and they don't know what they would do without us. And they're so glad that they partnered with us for HR and payroll. Success, which is so great to hear. It feels really good to hear those things. And it could be guidance on as something as little as. Again, those payroll taxes where you're just missing one little portion of it, but that could have huge implications later, or something as large as an employee termination.

David Praet: 12:38

Yeah, you definitely don't want to mess with the government when it comes to penalties, right?

Stephanie Pratt: 12:44

They'll find you.

David Praet: 12:45

They will find you. And they want their money and they usually are pretty good at getting it.

Stephanie Pratt: 12:51

That is the truth. Yes, they will. They will get their money. We did experience a situation like this with another client who had outsourced their payroll tax wage reporting and filing to a different outsourced company and they were filing very delayed or intermittently. And our team did such a thorough job of researching this and immediately letting me know what we could do to correct it. And we communicated this to the client and true them up as quickly as possible. And now they're at a zero balance and all of their reporting is going to be timely because they've moved it over to us. And they were so grateful for that too, because they had no idea that all of these, literally thousands of dollars of penalty fees were stacking up on the back end.

David Praet: 13:40

One of the things that I hear when I talk to small business owners as one of their major challenges, we're all competing for the same talent, right? And how you find the best people everybody's trying to find the magic bullet on how do I attract the best employees. At Exodus HR, is that something you guys help with in terms of onboarding, hiring people, how to find the best people? Is that part of what you do?

Stephanie Pratt: 14:11

We do help with a piece of recruiting. We primarily screen resumes and there are very nuanced things to look for within a resume that may be an indicator of a high performer. Our specialists and almost all of us have a recruiting background, so we all go in and see exactly the metrics or the qualifications and how they meet the requirements of the role at a very scrutinized level.

David Praet: 14:42

Resumes are still important?

Stephanie Pratt: 14:44

Yeah, they are. They very much are.

David Praet: 14:46

Which kind of surprises me that we're in 2024 and we're still doing paper resumes and cover letters.

Stephanie Pratt: 14:53

Yes, the cover letters, maybe not so much because we're seeing I think a paradigm shift of those switching over into an AI created document, but it's hard to create a really great resume, I think, personally.

David Praet: 15:10

What makes a really great resume?

Stephanie Pratt: 15:12

Longevity. Correct spelling. If you're going to have an objective that it directly applies to the job that you're applying for. I can't tell you how many times I read an objective and it has absolutely nothing to do with the role that we're recruiting for. So those are almost always a pass. We really take every single word at its core. We also look for certifications, education. Did you actually complete the degree or did you just go? And then as we're vetting people later. Does everything match up to exactly what you're saying on your resume?

Scott Merritt: 15:44

I've seen a lot of people when they look at resumes or when they're submitting their own resume, you can tell they're faking it. So how do you, as an HR manager or recruiter kind of decipher that and Because I don't know if you've ever had that experience where you hired that person that was going to be an all star and that person that you interviewed never showed up to work. So what do you do in that situation? How do you tip the scales in your favor as far as selecting the right people?

Stephanie Pratt: 16:14

I will say that there is always risk with every hire and you never know who somebody is until you're actually in there with them, but I think there's a tendency to use very popular buzzwords. that you know will attract the recruiter. And as soon as I see those, I look at the context surrounding them. And does that seem sincere or genuine? And then when we do that first phone screen, I ask about those things and how they've operationalized them. And if they can't come up with what I think is a substantial answer, then we pass.

Scott Merritt: 16:47

So Stephanie, I want to elaborate a little bit more about when you select the wrong person. And a lot of companies have a probationary period, things like that. And you'd also mentioned earlier about stay interviews. Can you expand on those things for me, please?

Stephanie Pratt: 17:02

Of course. I'll touch on the probationary period first, since that's what you listed first. I think it's critical for the supervisory team to create reasonable metrics but very specific expectations for that person to meet. Now just because you're in an at will state doesn't change the fact that you can just terminate somebody for no reason within a probationary period, but there should be an understood and acknowledged expectation that if they don't meet the set metrics within those first 90 days that you may part ways with them. Further down the line, maybe you would conduct a stay interview, which is very similar to an exit interview in that it's very structured and formal. And typically you would want somebody who's not the employee's direct supervisor to conduct that meeting because they may be more truthful, especially if they're experiencing issues with that supervisor. So that's where we come in as the HR representative to offer a completely neutral platform for them to speak to their feelings. And then we condense that and provide that feedback back to the employer.

David Praet: 18:14

So you guys come in and play the role of the bad guy.

Stephanie Pratt: 18:18

Yes. Always.

David Praet: 18:19

Yeah. Keep the business owner looking like the good guy.

Stephanie Pratt: 18:22

Yeah.

David Praet: 18:23

That's good.

Stephanie Pratt: 18:23

That is the challenging part of the role.

David Praet: 18:26

But ultimately at the end of the day, it's their decision on what they're going to do with the advice.

Stephanie Pratt: 18:32

That's exactly it.

David Praet: 18:33

That you bring to them.

Stephanie Pratt: 18:34

Yes. Yeah. And we do, that's actually a part of our philosophy is that we'll bring our expertise and our advice to you, but it's still your company and you're at liberty to do whatever you'd moving forward.

Scott Merritt: 18:47

What happens if they don't take your advice and it backfires? Do you say, I told you or do you say, okay, now that you've made that mistake, here's what you need to do to protect yourself. So what happens when they, Don't take your advice.

Stephanie Pratt: 18:59

It's a little bit of both. I might say, I told you so in my head, but yes, I think typically we approach that as a this was a great learning opportunity, right? These are the things that can go wrong when we're reactive about what our employees have been doing. And here's what we can do to course. Correct. Next time.

David Praet: 19:16

Yeah. And I'm sure that trust factor builds over time. The longer you work with a client, the more they. Trust your advice, especially if you've been proven right a few times. And at the end of the day, that's why they hired you, right? It would be like going to the doctor and the doctor tells you to quit smoking. You're like, nah, I don't really agree with that. He's just giving you the advice. Whether you follow it or not is up to you. So I'm sure working in HR. HR has the best stories, right? They can never tell anybody, but they hear the crazy stories that happen in the workplace. We won't go into that probably, but I'm sure you have some really good examples of situations where you guys went in and were able to really help a company. And without really getting too specific, can you share some of those stories of what the, what kind of a difference you've made?

Stephanie Pratt: 20:14

Yeah, I'd really like to speak to one of our clients who primarily uses the payroll function of our services, which, as we know, is an integral part of HR. They really struggled to understand reciprocal agreements between states related to payroll taxes and tens of thousands of penalty fees. were incurred as a result of that. And our payroll team really did a complete 180 on their structure and really sent the most informative messages I've ever seen, honestly, professionally, to their team to explain to them what happened, what they've done, and where they're going to be moving forward. They took that advice to heart. Incredibly fast and they immediately exploded as a company. They now went I think they went from one site, to maybe five or six satellite

Scott Merritt: 21:15

locations

Stephanie Pratt: 21:16

in months. Not even a year and their revenue exploded. So we're just so proud of them. Yes. Yeah. It's really great. That's probably the most profound. Success that we've seen.

David Praet: 21:31

Can you guarantee that with every new client or?

Stephanie Pratt: 21:34

Legally, I cannot make that.

David Praet: 21:37

Disclaimer. Allegedly. That's fantastic. When a company starts working with you, technology is in everything these days. What does technology look like in the HR world?

Stephanie Pratt: 21:53

We all really appreciate a robust HRIS system or software. And this is a software that integrates HR admin, benefits admin, and payroll admin, as well as recruiting, off boarding, I'm onboarding. I guess it needs to be said to all into one platform so that everything is completely streamlined. And we've, we do partner with one of the biggest names in the nation and possibly internationally. I'm not sure how far their reaches, but it's so helpful for keeping people on track because everything is in one place.

David Praet: 22:35

So for the business owner, that looks like a dashboard.

Stephanie Pratt: 22:38

Yes, exactly. And they can have a widget with all of their pay statements right next to a widget with their performance review modules right next to a widget with everybody's days off so they know who's going to be in and out of the office wow yeah it's great

David Praet: 22:54

i would imagine before you guys got involved that probably lived on spreadsheets and post it notes and

Stephanie Pratt: 23:00

absolutely

David Praet: 23:01

who knows what else so that's got to be huge to be able to have all of that at their fingertips

Stephanie Pratt: 23:06

yes yeah i think as incredible as Excel can be, we'd all prefer to just have everything in one place.

David Praet: 23:15

Now, does that technology also touch the employees in some way? What would it look like if I'm an employee of that small business?

Stephanie Pratt: 23:24

Yes, it does. So they have their own dashboard as well, in which they can request PTO, in which they can elect benefits if they have a qualifying life event. During which they can complete all of their onboarding, which is so critical to compliance as well because all of those onboarding documents need to be stored in a very particular fashion. And we have those immediately at hand to audit as well in that system.

David Praet: 23:50

So you've shared a lot of really good things that I think any business owner, especially small business owner would really benefit from. And if I'm a small business owner out there, I'm thinking, this sounds great. And I would love to have all of these features and I'm sure it would help my business, but I probably can't afford it because I'm struggling just to meet payroll every month or every week. So I guess if there's a small business owner out there, Scott, that says, this sounds great, but I don't think I can afford it. But what would you say to

Scott Merritt: 24:20

that? Which is a valid situation, right? So owners, especially as they're beginning. They decide to do it themselves. Then they start to ask somebody to do some of the administrative stuff. And that's going to cost them a little bit of money. And now that person, typically it's either a relative of the owner itself, whether it's a sibling, a child, or a spouse. That person doesn't have any background in payroll, HR, any of that stuff. But they, because they've done some of those I9, required paperwork, they do their W 4s, all of a sudden they assume the role of an HR person. You're paying them for that and you're probably paying them a decent wage to do that work. The great thing about HR or outsourcing HR and payroll is that you're paying only for what you're using, right? So if you were to hire an HR manager let's just start with payroll. If you hire a payroll professional, you're talking 000 a year in Nashville. That's going to hold true. We're a little higher than most, but if on an HR side, you're looking at 75, a year, you're only paying for what you're using with us. It's. It's a fractional kind of comparison. You're going to get a better solution. Let's say you've got 20 employees. You can't hire that person. But for 20 employees, and again, we can talk offline about this. People could always call me and talk to me. You're only going to pay a very small fraction of that price. You can't afford not to do it. The penalties alone for not doing it right. is going to cost more than what the service itself costs. We're going to save you money in the end. So it's like compliance

David Praet: 26:11

insurance almost. Almost, yeah.

Stephanie Pratt: 26:14

That's a great way to put it.

David Praet: 26:16

I heard a saying one time, and I'm not exactly sure if I know what it means, but it's, the saying was you never hear the dogs that don't bark. And it's like you don't really know what you're saving when you're in compliance,

Scott Merritt: 26:30

you bring up a valid point, David. When you look at the compliance issues, failing to comply results in a penalty. So you know what that penalty is. The average penalty for violating certain things is going to run you in the tens of thousands of dollars. Our service for less than 20 people is less than that fine. Okay. The dogs that bark, you know what the problem is. The dogs that aren't barking, they're happy, content, and they're satisfied. And that's what we want to work with. Satisfied dogs. But, again, one of the great books I've ever read, a complaint is a gift. If I hear something, an issue, and we're going to fix the issue. Would that be fair to say? And When somebody has a problem they don't know about yet, we're going to highlight those things. We're going to find out in an evaluation of that company what they're struggling with. And then that's where Exodus comes in through HR through payroll and corrects those issues. Stephanie, I just want to thank you for taking the time out of your busy schedule. Sounds like you got lots of stuff to do with helping people manage their business. So thank you for taking the time to do that. If people want more information about Exodus HR Group and how they can work with Stephanie and the other professionals at Exodus HR Group, I would suggest that they go to the website at www. exodushrgroup. com. There's a form they can fill out to get more information about payroll, about HR, about safety services, and even about benefit administration. So go to the website and get some information. Thank you, Stephanie.

Stephanie Pratt: 28:04

Thank you for having me.

Scott Merritt: 28:09

Scott, that was a good one. That was great. Great first session. First episode. Stephanie is fantastic.

David Praet: 28:14

Yeah, I think a lot of business owners are really going to get a lot of value out of that because they're all struggling with HR issues. Amen. All right. I'll see you next week, buddy. Look forward to it. Thanks, David.

Judith: 28:46

“Thank you for tuning in! We want to remind you that while we share our thoughts and experiences, we are not legal or financial experts. The opinions expressed here are solely those of the hosts and are intended for informational purposes only. For any legal or financial advice, please consult a qualified professional. Your decisions should be based on your own research and judgment. Stay informed, stay motivated and always...keep minding your business!