Why cloud-based HR system is cost-effective
Hello, it’s Scott Trevethan here from Scott Partners. I recently had the pleasure of interviewing Chris Smith from Happy HR. In this interview, Chris discusses how he helps businesspeople with his cloud-based HR system where small business entrepreneurs can get started really quickly, work with a team of actually HR-qualified professionals to get their business targeted towards their strategic goals and actually be HR compliant and also process compliant for a low fee per month, like Xero.
Happy HR website – www.happyhr.com
Email Address – http://[email protected]
Contact No. 1300 730 880
SCOTT: Hi, and welcome to the Small Business Heroes Show, the show that we talk about everything to do with your small business. Today I’m talking to Chris Smith. Chris is from Happy HR, and he’s going to tell us all about why he created the fantastic app called Happy HR. But first, before we do that, I’m going to go into a little bit about who Chris Smith is and what he’s all about.
Chris is the Chief Executive Officer of Yolk Agency and also Happy HR. In 2000, age 23, Chris hung up his chef’s apron to establish a lean manufacturing plant in gourmet food operation called Valley Produce Company. Chris was able to take Valley Produce Company to the world, doing a fantastic job of bringing great success to that company itself.
In 2011, he hung up that apron from that company and started Yolk Agency, an integrated management consultancy service. Then in 2014, obviously a prolific entrepreneur, Chris founded Happy HR. Happy HR is a software service product designed to be the world’s most efficient and easy-to-use human resource and performance management platform.
Chris Smith, welcome to the Small Business Heroes Show.
CHRIS: Thank you, Scott. Nice to be here. Thank you.
SCOTT: Chris, tell us: what was it around? Why did you invent Happy HR?
CHRIS: It was a long but a short story, so I’ll take the short version today. In Yolk Agency, my other company, we were doing a lot of HR consulting. I quickly found out a lot of SMEs, like they do with accounting partners, wanting tax compliance because ASIC says X and you have to do Y – HR compliance was something they wanted to do, but it was actually incredibly expensive to do. Getting a lawyer to draft contracts, getting policies that are legally compliant, getting position descriptions actually aligned to your strategic goals, and then performance managing to that was all just yuck, yuck, yuck. It was just too hard.
So I said, “You know what? Let’s change this.” I was watching Xero’s success in Australia, and they were just going through this great program with their product. And obviously being in the cloud, I started to investigate what’s the next generation of business, being in the cloud? Just like you have with your practice. I thought, let’s put HR in the cloud for a fee that makes sense, so people can get started really quickly, work with a team of actually HR-qualified professionals to get their business targeted towards their strategic goals and actually be HR compliant and also process compliant for a low fee per month, like Xero.
SCOTT: That sounds fantastic, Chris. Tell me something, since you mentioned Xero. Payroll systems have gone so far in Xero and also in MYOB and QuickBooks and others; is there really a need for a small business to have a HR system as well?
CHRIS: There really is. The Australian Fair Work Act 2009 – obviously there’s other legislation – clearly stipulates that you need to have your workplace in check. That means contracts that govern the employee/employer relationship, policies that actually govern the behaviors of people, and position descriptions that are clear and reasonable. So if things do go a bit pear-shaped, you’ve got essentially a reference point to go back to and say “Are they doing a good or a bad job?” There’s no gray.
That’s the reason why so many businesses end up in the Fair Work Commission, is they play in the gray, and that means – like many businesses, last year it was 37,000 plus cases, $185 billion paid out – it’s a big problem. So having your HR in place is a legal requirement, and frankly, it means you’re going to engage with your staff a lot more, and that’s going to be really, really important.
SCOTT: Absolutely. That’s fantastic. Maybe you can explain to our small business audience what the difference is between payroll and human resources.
CHRIS: Absolutely. Payroll is obviously getting your employee details, getting their correct payroll information like their award summaries and all those types of things, paying Monday to Friday rates or Monday to Friday before seven. What Happy HR does, it actually payroll, and that’s the money coming out in the payroll, and Happy HR is the law behind managing your staff. That’s the real difference; you need to actually run your staff, which is really important.
SCOTT: I see. A lot of small businesses that we come across in our travels, and I’m sure you do as well, we’ve used a very old legal agreement that we might’ve found from a previous employer to employ our staff, and then we don’t really have any sort of updated terms and conditions of that employment apart from what the employee’s been doing for the last couple years. So Happy HR takes care of all of that side of things.
CHRIS: Absolutely right. Happy HR is a fantastic product in regards to first off, employment contracts. Like you say, how many subscribers come onboard and they’ve actually drafted their own contract? That is really dangerous, because not only they’re not lawyers, but if they did end up in hot water – generally, they end up in hot water. Or they might need a restraint of trade because they want to protect their business and their current employees who still work for the company. All these things need to be written by a workplace lawyer, and obviously we have an in-house team, etc., that does that.
So every single subscriber to Happy HR gets access to an incredible employee contract that’s fair for both the employee and employer, to take that side of things forward – which is extremely important. It means that for a low fixed fee, you can actually get that rather than paying expensive lawyers. So you get the two-in-one, which is very, very important.
SCOTT: That sounds great. The whole other side, of course, of Happy HR is the performance management side of the business, the KPI setting. Before Happy HR came along, we were always struggling – and I’ll confess, we use Happy HR here at Scott Partners as well – before we had Happy HR in place, doing performance management, we had lots of different manual templates and Word documents and Google documents and things that were floating around, but nothing in a single place and nothing that really tied it all together. What was the thought behind performance management with Happy HR?
CHRIS: One of the things I think is really important with HR, people say – even in our space, they say “We’ve got legal compliance, we’ve got legal-compliant documents,” but it’s actually not enough. Let’s look at it as an HR perspective. If you’re a business, you have strategic goals and operational benchmarks your business needs to actually meet. If you can monitor it, you can measure it.
What we do with a client is work with them to actually tailor their position descriptions to be aligned to their strategic goals. That takes a bit of time, and it saves our clients a lot of time. There is a consultation process they’re getting as part of the subscription. But that means they can actually have now position descriptions that are exactly right for that position in their company. So if they’re measuring all the different parts of their business, it means that they’ll grow much more effectively. People are more autonomous, people are more engaged.
So then performance management means that you can say “Are you doing a good job, or are you doing a bad job? Or maybe there’s room for opportunity for growth.” You can actually work with that person in order to actually do SMART goals and development plans, to put them on the right track and help them to hit strategic targets, which then means that they engage with that particular manager and/or business leader a lot more effectively.
SCOTT: Sounds great. Chris, a lot of small businesses that we come across would say to us, “We’ve got less than 15 employees, so all the having proper contracts and employment agreements in place don’t really apply to me. And as far as managing the staff and having performance indicators, we’ve got a small enough team that we don’t need to worry about that.” What would you say to those small business owners?
CHRIS: I’d actually say quite a few things, to be quite frank. First and foremost, this whole misnomer about “less than 15 employees and I’m covered,” that’s really not the case. At the end of the day, you still need employee contracts. You still need policies to govern people’s performance, because that’s a legal requirement at the end of the day. You need to performance manage people in line with the legislation and the Fair Work Act, because at the end of the day, that’s what governs employees within Australia. Obviously in some cases there’s awards that cover different circumstances as well, which is a big part.
At the end of the day, I’m now 40 and you’re 40 as well –
SCOTT: A little bit more than that, but thank you for the compliment.
CHRIS: We’re at a point now where we’re actually hiring millennials. There’s lots of businesses out there that are saying one of the biggest problems they have is finding staff and then onboarding staff, etc. It needs to be fast, it needs to be now, it needs to be in a process that’s much, much easier for the business owner.
So let’s talk about your employment brand. If you’ve got a cloud-based product that helps you quickly, with the click of a button, invite someone – they read their contracts, read their policies, say “I agree” to all of that, induct themselves into the company – now they understand the expectations of them. Then you can actually performance manage them to those processes, procedures, etc. Many of them are engaged. That’s actually just a small part of your employment brand.
Recently, I read some information that 78% of people in Australia now between 18 and 50 would not work for a business if they don’t live and breathe the values of that company. We have a freelancing workplace; people are more flexible. Because of technology, they’re working from home or other. So there’s a whole raft of reasons why you need to actually have tighter controls to allow people to be more autonomous.
By having these processes in place and clear expectations of your employees, you can actually develop a workforce that’s more flexibility. They’re way more accountable, they’re way more autonomous, and you’ll be more profitable. This is one piece of technology that can help with that.
So there’s lots of reasons I can give, but at the end of the day, you need to be compliant. You need to be able to drive your business to be accountable, and the only way you can do that is to have a system that drives your employees to have ownership over their KPIs that are mutually agreed. That’s one of the things that we do.
SCOTT: That sounds absolutely fantastic, Chris. You’d be crazy not to check out Happy HR. For all the small business people that are listening to or watching us right now, how can they go about contacting Happy HR?
CHRIS: There’s a couple ways you can do that. First of all, go to our website, which is www.happyhr.com.
SCOTT: Details down below.
CHRIS: Link down below. You can also go to 1300 730 880, or you can just simply email us at [email protected]
SCOTT: Absolutely. And if any of my clients are listening to this as well, please feel free – I can put you in touch with Chris as well. I thoroughly recommend having a chat to the gang at Happy HR to just sort this all out, because you’ll save a lot of money, a lot of hassle if something goes wrong with your team – but also, the better opportunity here is to get more out of your team, get more productivity, get more happiness, and make it a Happy HR experience.
SCOTT: Chris, thank you so much for joining us today on Small Business Heroes. We so much appreciate it.
You’ve been listening to Small Business Heroes, the show that talks about everything for your small business. I’m Scott Trevethan from Scott Partners. If you’d like to find out more information about Small Business Heroes, please go over to our Facebook page, Small Business Heroes, and you can join up on that group. Or you can go over to Scott Partners Facebook page or www.ScottPartners.com.au to find all of these fantastic interviews. Or you can just subscribe to our YouTube channel. There’s so many different places you can find us today.
Chris Smith, thank you so much for your time today. We look forward to talking to you soon.
CHRIS: Thank you so much, Scott.