From Zero to Sixty Employees Doug Blizzard CAI, Inc.

What is Pay for Performance? “Staffing is the most important decision you will ever make. When you have good people, your company can do anything.” Ed Ryan

STAGE I 1-10 Emp. STAGE II Emp. STAGE III Emp. STAGE IV Emp. The complexity of any organization is created because of the number of people, not the amount of revenue, you have. Money and processes are easy to manage compared to the dynamic impact that people bring to the table.

Employee… …the crabgrass in the lawn of small business anonymous

Stage I: 1-10 Employees Key Challenge: Survival CEO centric - 90% of CEO’s time spent as the specialist and selling while only 10% as a manager. Hiring: Critical that new hires “fit” the company – prefer a small startup philosophy.

Stage I: 1-10 Employees Key Regulations – FLSA– min. wage, overtime, child labor, exemptions, records. – OSHA – Safety standards, ensure safe workplaces – Equal Pay Act – equal pay for same work – Immigration Acts – verify legal work authorization – Polygraph Protection - Generally prohibits polygraphs at work – Other laws protecting jurors, veterans, union activities and health insurance portability – Various NC laws including unemployment, workers compensation, Wage Payment, Retaliatory Discrimination, New Hire Reporting, Identify Theft, Parental School Involvement, etc.

Stage II: Employees Key Challenge: Growing Sales, manage cash flow Still CEO Centric. But starting to “departmentalize” Hiring: replacing a few people you’ve outgrown – still focus on quality people. Key Regulations – Civil Rights Act (15)- Prohibits discrimination on basis of race, color, religion, sex (including pregnancy, sex harassment), national origin, & genetic information – ADA (15) – Prohibits discrimination on basis of disability

Stage III: Employees Key Challenge: Delegate or risk losing key employees; manage cash flow Enterprise Centric – CEO lets go or burns out Delegating, managing and team building begins Communication critical Hiring: Key Regulations – ADEA (20) – prohibits age discrimination – COBRA (20) - Provides Group Health Insurance Continuation

Stage IV: Employees Key Challenge: building internal processes; manage cash flow CEO spending 70% of time managing Hiring: – Experienced Managers Key Regulations – Family Medical Leave Act (50)

Key Themes As you grow it becomes less about you and more about your people. – Bad hires are devastating for small companies: The effects of poor performance felt throughout the company Bad hires are more likely to sue / file claims 80 / 20 rule Low morale / high turnover drain efficiency & profitability – Losing key employees affects many aspects of the firm. Gut Check: Are you ready to let go?

How Will You Find Great People?

What we see too often… We’re in a hurry – haven’t planned We let resumes define the role We ask predictable interview questions Interview prowess is more important than demonstrated success in hiring decision We don’t involve co-workers in the process We don’t adequately verify credentials We [may] hire the right skills, but the wrong fit We get to do it again…

How Will You Find Great People? …recruit employees like you do clients

Always be Recruiting… Hangout where the key prospects hangout Create compelling / engaging job postings Entice stars with Critical Success Factors Intelligently use referrals / Social Media “Show me” interviews: looking for past behaviors to predict future behaviors. Assessment tools and Background Checks 14

How Will You Keep Great People? Meaningful Work Stock Options Respect Appreciation High Standards Informed Great Pay Health Insurance Dental Insurance Vision Insurance Life Insurance Disability Insurance 401k Savings Profit Sharing Flexible Spending Account Medical Leave Paid Time Off Bereavement Pay Tuition Reimbursement Flexible Schedules Work from Home Holiday Pay Advancement Opportunities Fair Treatment Ethical Workplace Tools and Equipment Care To be Heard Clear Mission Vision Connection Consistency Wellness Programs Health Fairs Clear Job Description A Good Boss PTO

How Will You Keep Great People? Offer competitive pay and benefits Hire good people managers Outplace bad performers

From Zero to Sixty Employees NCBiotech Entrepreneurship Essentials “Human Resources Basics for the Entrepreneur” Doug Blizzard CAI, Inc.