Guests: Vic Tanon, Daniel Ramsey
Recorded: January 15, 2020

Excerpt

As California’s leading local HR Services Provider, Emplicity is the simple choice for employers with up to 250 employees. Founded by Vic Tanon nearly 25 years ago, the firm has grown from a startup into a PEO powerhouse – and helped streamline the HR, compliance, payroll, workers comp, benefits, and much more for clients across the state in the process.

Join Vic Tanon as he shares insights into the long game for building a successful PEO and explains exactly where the industry is going and why so many businesses are outsourcing to Professional Employer Organizations (PEOs). PEO client growth has doubled in the last few years, and Vic will explain what’s driving this trend and how PEO organizations are capitalizing on it.

Vic is more than just the founder of a successful PEO organization – he’s also a board member of NAPEO, serving to help steer the organization & support the burgeoning PEO industry.

He shares NAPEO’s vision to represent an industry-recognized as providing the best workforce solution for businesses looking to grow and thrive. NAPEO advocates for the interests of PEOs at all levels of government and provides robust member resources, vital networking and referrals, relevant and timely education, and effective public relations and marketing support.

“We owe a great deal of our success throughout the years to NAPEO members and staff who provide the legal and educational resources. Emplicity needs to take care of our clients and their employees,” Vic says, “I can’t wait to see where the next 25 years takes us.”

A big part of Vic’s role involves education & advocacy for PEO organizations, and he says, “people out there have heard the term PEO, but can’t quite articulate what we are and what we can do for them.” He’s working to change that through his role as the founder of Emplicity & his seat on the NAPEO board!

Transcript

00:00:07:05 – 00:00:36:15
Daniel Ramsey
Hey, everyone. Daniel Ramsey here with myoutdesk. I’m really excited because today we’re going to talk about why he’s not into you, why exactly every single employee you’ve ever had has left you and what you should do to stop it. So I’ve got a really cool guest today. His name is Victor Cannon. He is the chief simplicity officer at implicitly, his whole thing is to make business simple for business owners like you and me.

00:00:36:15 – 00:00:39:23
Daniel Ramsey
So I’m really excited to have you here. Rick, thanks for joining us today.

00:00:40:03 – 00:00:40:24
Vic Tanon
Thanks for having me.

00:00:41:04 – 00:00:53:00
Daniel Ramsey
Okay. So we’re going to dove in. But first, before we do want to hear your story, my understanding is that you own a pillow company and that you’ve been in business for 25 plus years. Is that right?

00:00:53:04 – 00:00:53:23
Vic Tanon
That’s correct.

00:00:54:01 – 00:01:05:14
Daniel Ramsey
I love it, man. And you have over 7000 employees in your system, which makes you one of the largest CEOs in the nation. You like that, don’t you?

00:01:05:14 – 00:01:09:15
Vic Tanon
Yeah. You know what? It’s not about what you’ve done. It’s about what you’re going to do.

00:01:09:20 – 00:01:28:17
Daniel Ramsey
I love it. I love it. Okay, Vic, you and I are in Sacramento, California, which is awesome. So we’re neighbors. And today our topic is actually kind of interesting because you had an experience. So I want to start off first tell tell your story. How did you get in the space? And, you know, kind of how did you start your business and all that at Daniel.

00:01:28:17 – 00:01:54:08
Vic Tanon
So in 94 I was working for a large payroll service and helping small businesses with outsourcing one of the functions they hate to do, which is payroll and taxes, but they had to do it. And so, you know, as I was in that business, I realized an opportunity kind of ran into the the PTO business, which at the time was fairly new, was just gaining acceptance and awareness.

00:01:54:16 – 00:02:20:01
Vic Tanon
Yeah, the there was an association I dug in to learn about it and I just realized that it was the future of how people would address their employer responsibilities and how they would really take care of their people. After all, business owners, I mean, you know, the plumber starts a contract and company, the lawyer starts a law firm, the marketing guy goes on tour interviewing billionaires.

00:02:20:01 – 00:02:48:10
Vic Tanon
You know, I mean, people find out what they’re good at and what drives business. And they don’t do that just to learn how to be a good employer or how to be an expert in h.r. So i saw the opportunity and started helping small businesses in the nineties with the one thing that they hated to do and that simplicity, i mean, it’s, it’s really about simplifying their experience as an employer and our typical client is someone that really kind of hates h.r.

00:02:48:10 – 00:02:55:06
Vic Tanon
Can’t stand it, doesn’t want to deal with it, realizes they kind of have to and is willing to outsource it to a company they can trust.

00:02:55:20 – 00:03:10:10
Daniel Ramsey
Well, and the challenges you and i are both in california, so the regulatory burden is so huge if if you’re on any of the coast, west or east coast or even in the Sunshine States, I mean, it being an employer nowadays, it’s it’s a little crazy.

00:03:10:24 – 00:03:36:20
Vic Tanon
Yeah. California is I believe it would be the fifth largest economy globally. Right. We were our own nation. But it’s funny, as big as we are, we are sure hard on our employers. Tip of the hat to Gavin Newsom, our mayor or our governor. You know, it’s it’s hard to be an employer and make everyone happy. Yeah, there’s a lot on your back in terms of compliance.

00:03:36:20 – 00:04:09:14
Vic Tanon
There’s certainly many burdens you have. The awareness level in California is extremely high, which makes it a great state for the PEO business. Right. Because employers all know, you know, whether it’s the MeToo movement, Obamacare or something on the front lines of political discussions, employers are being hit. You know, on both sides by increasing regulation complexity. So that makes it good for us.

00:04:09:14 – 00:04:12:03
Vic Tanon
And there’s definitely a lot of work for us to do.

00:04:12:03 – 00:04:33:21
Daniel Ramsey
Yeah, I love it. And okay, we were talking earlier. You’ve been in this space a long time and we were kind of chit chatting about one of the biggest challenges that you’ve faced in your personal business. And I love the topic, but he’s not really into you. Why your employees leave? Like that’s a big deal and I think you articulated it so well.

00:04:33:21 – 00:04:41:19
Daniel Ramsey
And so that’s the topic today. Vik, let’s bring the audience through what your experience was like starting in 2000. What happened?

00:04:42:11 – 00:05:05:13
Vic Tanon
Yeah, so I had been in business for, I mean, five or six years and you know, I mean, certainly I was involved in all aspects of the business, but to grow the business, I had to build a team. And so I had a group of executives and managers. Yep, that I think at some point I just dropped the ball on.

00:05:06:18 – 00:05:36:06
Vic Tanon
And what I mean by that is I, I allowed misalignment in the company and I think in terms of leading and growing a team, you have to really stay in tune with your people. So, so a group of it was actually three managers that gotten together and started their own competing business right underneath our roof. Jeez. Yeah. And almost unashamed about it.

00:05:36:19 – 00:06:06:10
Vic Tanon
Yeah. And, you know, when I first found out about it, it was like I almost felt like I’ve just discovered I had cancer. Yeah, it was. I was going through the state of denial. I couldn’t believe it. I just felt like, oh, my gosh. I just felt the most enormous amount of mistrust. And I became defensive. I definitely was on my knees in prayer every night just asking for help because I was in shock that someone would do this.

00:06:07:21 – 00:06:42:23
Vic Tanon
And as that process painfully worked itself out and people started to go work for my competition, which I mean, these were people that I put in business, right? I started to realize that, you know, you can’t blame people for doing what’s best for them and their families. Yeah. Somewhere along the lines, I, I, I lost alignment. It was a misalignment of visions and purpose, and I lost that.

00:06:42:23 – 00:07:14:16
Vic Tanon
And as a leader, I realize, and especially as someone in the h.r. Business, when you lose that, you lose the trust of your people and you can’t blame them for doing what’s best for them and their family. So I learned a valuable lesson and continue to learn as as I run the business. But staying aligned with your people, what their goals, their objectives are is so critical in running an organization you can’t scale if you’re people are leaving you left and right because you’re having to replace that talent.

00:07:15:03 – 00:07:16:17
Vic Tanon
So it’s really important.

00:07:17:01 – 00:07:39:00
Daniel Ramsey
I want to unpack something, though, because here’s the thing. If you’re an entrepreneur for any amount of time, you’ve lost great people. I I’ve made I can I remember one gal her name was Michelle. She was a marketing person for us. I hope she’s listening right now. Michelle, if you’re listening. I’m sorry. I just didn’t know how to be a good leader.

00:07:39:00 – 00:07:59:09
Daniel Ramsey
I’m. I. And I know what I did. I know what was wrong in my mindset. Yeah, that caused me to lose Michelle. I wish she was here today because she was a she was a culture fit. She was a hard worker. She was smart. I just was a bad leader at that time. Vic, what was the mindset that was going through your head when you lost that group of three people?

00:07:59:10 – 00:08:10:08
Daniel Ramsey
Was it that you were too busy, you didn’t have the right mind? Like what was the thing that caused you to be misaligned or choose because you subconsciously got misaligned? Oh, but why?

00:08:11:23 – 00:08:41:19
Vic Tanon
I think at the time it was the type of business we were going after. It started off with a really talented sales and marketing professional, and he was going after high risk business, which is very lucrative, especially as the worker’s comp industry was hardening. And I was going in a different direction and we did not reconcile that. So what happens, you know, we find love in other places.

00:08:42:24 – 00:08:45:16
Daniel Ramsey
And so so he found love in other places.

00:08:45:16 – 00:08:49:11
Vic Tanon
So yeah, eventually you know, he went to where he needed to go.

00:08:49:15 – 00:09:04:04
Daniel Ramsey
And I think that’s a bad strategy for your business at the time because you’re the owner and the boss and you know, the financials and you’re the only one that knows the global view. Was that wrong for you and your business or was it just a different strategy?

00:09:04:18 – 00:09:25:18
Vic Tanon
It was it it was the right thing, at least, I think, for for the other side and as well as us, we needed to part ways. We had a difference in how we wanted to run the business and who we wanted to serve, the clients that we wanted to serve. I’m a lot more conservative. I didn’t want to take the risk and I had everything to lose.

00:09:25:18 – 00:09:59:09
Vic Tanon
Honestly. So it was a painful thing. But looking back, I mean, I unfortunately, I have a few friends that have gone through a divorce and you know, at the end of it, there’s sort of this sense that there’s was maybe the right thing, that, you know, I’m happy now and I know every situation’s a little different. So I’m generalizing, but I look back and say, that was one of the best things that ever happened to me is, is when you’re not on the same page, when you don’t have that same vision, cut it off and move on, as painful as it is.

00:09:59:19 – 00:10:22:17
Vic Tanon
And that’s going to happen. So you mentioned something you said if you if you’re an entrepreneur or you and you’ve been doing it for any length of time, you’ve gone through this, you’ve had your Michelle was my Travis. I had a really great employee, super talented, hard working is one of the greatest guys I’ve ever worked with. And I don’t think he lasted six months with me.

00:10:23:05 – 00:10:48:13
Vic Tanon
Right. Because we were just misaligned. Yeah. He wanted to kind of really start his own business. And so you’re going to run into that. And, you know, at some point you’re an entrepreneur, but once you start the business, you’re not an entrepreneur anymore. You have to switch and turn into an executive manager, leader or some other role that your company needs you in to drive the business.

00:10:49:00 – 00:11:10:20
Vic Tanon
So, you know, so doing that and making that transformation and that change isn’t easy. I saw outside help and you know, I’m glad that I did because at the very heart of it, I have that entrepreneurial spirit. But sometimes it holds me back from from growing and scaling the business and operating the business.

00:11:11:07 – 00:11:33:18
Daniel Ramsey
I love it. Okay, so you just did it and we’re going to definitely jump into how you can stop them from happening, like stop them from leaving. And I want to hear all of your kind of tricks and tips specifically because you have 7000 employees like most people have never had that many employees never onboarded that many employees that you kind of serve.

00:11:33:18 – 00:11:56:07
Daniel Ramsey
So what’s what’s important about this is that we’re teaching the audience the things that you’ve now learned. You know, being in the business 30, 20, 30 years. So how do you stop them from leaving? And let’s go back all the way to the interview process and what you now do to keep and retain and really scale a business.

00:11:56:23 – 00:12:35:01
Vic Tanon
Yeah. So it starts off with really the identity of your company. We spent some time after that big breakup kind of reconciling who we are and we literally got a marker board out and wrote down probably 15 different 50 different words that described who we are. And we boiled it down to four things. And those are our core values and how your core values play out every day and every week and every month depends on how you want to manage it, but it really gives you a platform to hire from, to look for and to attract people.

00:12:35:10 – 00:13:07:12
Vic Tanon
Ultimately, our identity as an employer will attract, you know, people in. And so why are they coming to work for you? What do they offer? Where are their you know, what’s what are their goals? And they’re their vision for the future. So finding the right people is really important. And that’s, I think, half the battle. Yeah, it’s hard because interviewing and selecting, it’s some there are definitely some tough odds that we all face.

00:13:07:13 – 00:13:32:14
Vic Tanon
I mean, yeah, one of the best people that I know in terms of interviewing and hiring great people, the guy that hired me at ADP, he said, Vic, I’m right half the time. Yeah. And which kind of blew my socks off because I mean, that’s someone who used to interview, you know, 30 or 40 salespeople a week. You just you realize you don’t get everything initially.

00:13:32:14 – 00:13:55:24
Vic Tanon
So spend your time do a thorough a thorough interview process, have three people interview that candidate in three different places. Yeah. Three different times of the day to try to to weed that person out, do your best. I think Zappos even offers employees five or $10,000 to leave.

00:13:56:09 – 00:13:58:19
Daniel Ramsey
To not to not take the job. Right.

00:13:58:19 – 00:14:22:13
Vic Tanon
Yeah. Which is crazy because it’s all about about finding and whittling down and investing in the right people. And that’s a constant process. No matter how good you are at this, no one has zero turnover. It’s impossible, right? Yeah. So. So spend your time on the front end and know who you are and know who they are and seek that alignment upfront.

00:14:23:17 – 00:14:49:17
Vic Tanon
And then, you know, in the process of that, after you do hire that employee, it’s really important that you you pour and invest in your managers, not just education and courses on being a better manager, but who you are as a company. God, you’re your management staff, your executives and supervisors. They’re really the ambassador to your employees. They they kind of where they come.

00:14:49:19 – 00:15:19:14
Vic Tanon
And if they’re jerks, if they don’t pay attention to or seem to care for their employees, that’s going to be reflective to the company. And and unfortunately, people leave bad bosses. So it’s really important that you stay on top of it. Most, most supervisors and managers out there really shouldn’t be supervising and managing and leading people. Right. But yet they do because, you know, the awesome sales guy became the sales manager.

00:15:19:16 – 00:15:20:07
Daniel Ramsey
That’s right.

00:15:20:15 – 00:15:41:04
Vic Tanon
The person that had the highest output became the operations manager. And maybe that’s not the best role for them. Right. So you constantly need to evaluate that person’s management talent and their ability to lead and to because it’s just not for everyone. It’s tough.

00:15:41:10 – 00:16:01:23
Daniel Ramsey
We talked a little bit about employee annual reviews and I love what you said. You said maybe there needs to be an annual vision alignment review of some sort. Talk to me what that would look like if you were to implement that and why you think that would be a big deal in retention and keeping your best employees.

00:16:02:07 – 00:16:22:22
Vic Tanon
Well, first of all, Daniel, wouldn’t it isn’t it crazy to think that I mean, because when we think about an annual review, we think of, hey, let’s let’s tell you all the good things that you’re doing, show you your performance statistics. And then let’s also talk about areas you fell short and need to work on. Yeah, so and let’s do this once a year.

00:16:24:08 – 00:16:39:15
Vic Tanon
Isn’t that crazy to think? Yeah, I mean, people need direction and most people need supervision and direction on a daily basis. I mean, how often do you get sidetracked and you’re doing something totally uninvolved with your whole core purpose?

00:16:39:18 – 00:16:52:07
Daniel Ramsey
But I’m I’m so busy. I can’t, I can’t manage my team. I, I’ve got sales meetings, I’ve got operations things. I’m working on this book and this marketing thing. I don’t have time for that. What do you tell those guys?

00:16:52:17 – 00:17:17:21
Vic Tanon
Yeah, you’re like you’re like me. You have, like, serious A.D.D.. Yeah. I mean, it’s beyond political, and we’re all kind of like that in some way. We all have stuff going on. I mean, in this day and age, I mean, who doesn’t have their phone on their desk or in their pocket while they’re working? Yeah. Who isn’t getting Facebook updates, texts, or calls from their children or their spouses or their friends or a joke sent through an email?

00:17:17:21 – 00:17:41:08
Vic Tanon
I mean, there’s a lot to distract us, so so we need that feedback on how we’re doing every day. Some company, a few companies are pretty good at identifying those KPIs. You know, in those core numbers that we want to follow. But most of us need someone to stay in touch and say, Hey, Daniel, how are you doing?

00:17:41:17 – 00:18:03:12
Vic Tanon
Yeah, how’s it going? How’s your output? How many calls have you made today? And we all kind of need that. I still need that. And that’s that’s kind of what’s tough about owning your own businesses. You don’t have somebody knocking on your door and calling you to stay in touch. And we all kind of need that. The annual review should at least be a review of kind of what the person’s goals are.

00:18:03:12 – 00:18:25:13
Vic Tanon
You know, when they first started here, where their vision is, and that may change over time depending on their experience on the job, something they’ve seen or maybe something they’ve seen their peer go through. They may have they may want to go into operations and leave saying or vice versa. Right. Staying in touch with where they want to be, with what their future goals are is really important.

00:18:25:13 – 00:18:46:05
Vic Tanon
And that alignment is is really critical. People change all the time. Sometimes people go back to school and there’s so many red flags because somebody is going back to get their master’s, you know, in theology. And, you know, let’s say they work in your operations department of your manufacturing, you might have some misalignment there.

00:18:46:05 – 00:18:47:00
Daniel Ramsey
Yeah, you might.

00:18:47:01 – 00:19:16:24
Vic Tanon
Oh, so there are a lot of red flags that we sort of ignore, but pay attention to your people. Pay attention to what’s important to them, what keeps them up at night where they see themselves in five years, because it’s just enough to to get an idea of where they’re going. You know, it’s really important. And I think it’ll pay dividends in terms of keeping your people engaged and looking out for opportunities and, you know, one of my best managers in the benefits department just actually was struggling.

00:19:17:09 – 00:19:29:07
Vic Tanon
And we found and repositioned him in our operation side in payroll and he’s doing awesome. Yeah. So sometimes it’s just a shift within within your company’s infrastructure.

00:19:29:15 – 00:19:52:22
Daniel Ramsey
Yeah, I love it. So your advice to boil it down would be get into an annual review process with some daily and weekly and monthly accountability. Yeah. And also make sure that the person is kind of aligned with the company vision still in that space. How does that conversation go? I mean, do you just sit them down and like say, Hey, Vik, thanks for working for me last five years?

00:19:53:22 – 00:20:00:09
Daniel Ramsey
Are you do you know what our company vision is? And are you still aligned with it? I mean, do you just ask them? I mean, how does that how does that conversation happen?

00:20:01:02 – 00:20:30:18
Vic Tanon
Yeah, you know, that the process can be formal, but what happens before the process is really more important. So the relationship that you have, you know, with the direct report, the time that you spend with them, maybe a lot of the time off the job. And I mean, your cues and the data you get and the feedback you get kind of help you to paint a picture where you think they’re going right.

00:20:30:18 – 00:21:00:08
Vic Tanon
Mentally, it doesn’t matter. You want to you want to have you want to have a direct and honest conversation. And that takes honesty on both sides. If they don’t trust you, if they don’t think you have their their best interests in mind. Yeah, this is what this is often the difference between a good and and great manager is great managers really have their best people interests in mind.

00:21:00:23 – 00:21:28:05
Vic Tanon
Right. It may not be aligned with the company’s vision or where they may need that employee to go, but they can appreciate that, you know, they really know where where their people’s hearts are at and what their goals are. If you can have that, I mean, really, you win. Yeah, you’re doing a great job and I know as managers, a lot of people kind of they beat on themselves.

00:21:28:05 – 00:21:47:17
Vic Tanon
Well, I’m terrible at doing reviews. And, you know, the the annual review process, the performance review process, it’s it’s a huge second to really having you and showing that you have your people’s best interests in mind. If you can do that. I mean, that’s 95% of the battle.

00:21:48:04 – 00:22:01:00
Daniel Ramsey
I love it. This has been a great conversation. Before we go, I want you to kind of tell the audience a little bit about your your company, what you do, what the services you offer and how you kind of love on your clients.

00:22:01:15 – 00:22:33:19
Vic Tanon
Yeah, I appreciate that, Daniel. So simplicity is a professional employer organization. We’re in the job of making all of those things that you do as an employer. Simple, because it’s not. We help small businesses from 2 to 2, really a thousand employees with all of the aspects of managing their people from payroll to benefits and administration and compliance to human resources, compliance and regulations, and then dealing with safety and worker’s compensation insurance.

00:22:33:19 – 00:22:46:23
Vic Tanon
So we help really kind of insure and empower your people through our our professional employer organization service. We’d love to talk. Just you can find us at Implicit Econ.

00:22:47:08 – 00:22:48:07
Daniel Ramsey
How do you spell that?

00:22:48:15 – 00:22:53:07
Vic Tanon
MP l i c i t y. Com.

00:22:53:07 – 00:23:07:21
Daniel Ramsey
There you go. In. And Vicky, you’ve been amazing. I really think this is an interesting, unexplored topic, and you and I both know all the pain we’ve had from losing great employees. So this has been an awesome topic. Thanks for being here today.

00:23:08:04 – 00:23:10:16
Vic Tanon
Thanks, Daniel.