For our latest webinar, we discussed “How to Lose an Employee in 10 Days,” outlining major mistakes an entrepreneur or CEO should avoid if they want to hold onto valuable employees. I was joined in this webinar by Matt Rissell, the CEO of TSheets Time Tracking. If you’re not familiar with TSheets, they are a cloud hosted time tracking system. Their mantra is “We love employees,” and this mantra really fits their culture. I’ve known Matt and many folks on his team now for about a year and a half, and we’ve partnered together several times with them.

Matt has done an amazing job of creating a culture as an entrepreneur and building his company from the ground up. Our topic for this webinar is what not to do if you want to keep good employees, so this topic is extremely relevant to anyone who is starting or running a business. Matt has built his business to combine his high tech experience with his friendly, real world insight into small business ownership. With that, it’s my pleasure to turn the webinar over to Matt Rissell, CEO of TSheets.com.

The full audio and slide deck are included above, and the full transcript can be found below:

Matt Rissell: How to lose an employee in 10 days. I don’t know if you’ve all had the chance to see the movie. I’ve seen it a couple of times just recently when we drove the idea, the title for this topic. It’s a movie about Matt McConaughey and Kate Hudson. I’m always a romantic, which I know Caroline is a big romantic. For you guys that are out there in the tech world, I highly recommend the movie, believe it or not, even though it’s romantic. It’s funny. It’s really funny. It’s a play off of basically two people with alternate agendas that end up trying to trick each other to push each other away. One of them is supposed to keep one. One of them is trying to push the other away, and then they end up, well I can’t tell you the ending. Great movie.

The concept of “How to Lose an Employee in 10 Days.” I’m probably preaching to the choir at this point, but getting the right employees in your organization is incredibly difficult. I’ve heard from and talked to other entrepreneurs, and even I have made these mistakes where I didn’t actually listen to mentors and to other people about doing things right when you finally get the right person. The cost of losing a good employee is absolutely unbelievable. It’s more than just financial.
It’s the cost of having to train. It’s the cost of your reputation, whether it be in the community or when you’re trying to recruit other people. Even the reputation that you have with your customers if you’re constantly introducing them to, oh, here’s Joey or here’s Sally our new employee replacing the last one that was only here for 10 days. The impact can be tremendous to your company and can literally stunt the growth of your company.

If you think about what is lost when you lose a really good employee, the impact is tremendous. My goal for today is literally to, if we spend the next few minutes together and you get one thing, a new idea, something that you’re going to change when you hire somebody or when you interview them, and it helps you keep one of your good employees. The ones that you really want to have in your company that you see being a part of your company long term. I would count this as a huge success. If it’s more than one, that’s even better.

One of the concepts that I think is becoming more and more evident, and the statistics show that millennials actually don’t leave because of money. It’s because of something else that happened in the on-boarding process that causes people and causes employees to leave. The way we’re going to go through this is we’re going to go through it quickly. Basically giving you a benchmark at the beginning. I’m not going to go in depth on how to interview or who to hire. We’re going to touch on it so that we make sure that we get the right person in. Those alone could really be a webinar in and of itself.

Then we’re going to get into, okay, so now that you’ve hired or what you’ve done in the interview process. How do you keep them? And that’s where we’re going to spend the majority of our time. Then throughout, please ask questions.

We’re going to kick this off. Are you ready to hire? You’re just starting off as an entrepreneur. You’re starting a new company. How do you know that you’re ready to hire? Well first, from a financial standpoint you have to have enough revenue. Don’t get me wrong. No one would be able to hire anybody, or even would be able to hire a couple of employees if you had to have cash, but you’ve got to have a run rate and a forecast that you can comfortably do it. Not just their salary. Not just their taxes. You got to think about the resources that they’re going to need as well.

Sit down and plan out what it is that it’s going to completely cost you to hire this person. There’s actually an MIT study that’s an estimate. I think this is a little on the high side, but this is their numbers. That between training, on-boarding, and the amount of time that’s spent in getting a new employee up to date is between $9000 and $19000 to get somebody on board. Make sure that you’re prepared to make the investment into it.

One of the most frustrating things, when I said resources for employees is when you sit them down. Whether it be a landscape company. They say, you sent them out to go to a job, and they have dull pipe cutters, let’s say, or a lawnmower that doesn’t work. In a tech company, you say, yeah, you’ve got to work, but we really don’t have internet for you or a computer or headphones. That they don’t have the actual resources that they need to be successful.

Don’t forget that. This is one of those places the way I’ve personally done this. Look, I’ve made a lot of mistakes. I’ve made a lot of these mistakes, and I’ve built six companies so far. All of them so far have been successful, but not without. I’ve made extraordinary mistakes. Sometimes I’m embarrassed to say that I continued to make them. One of the things that I do, and I still do to this day, is I have a proforma. That’s one thing that Liveplan does.

I allow that proforma to control and make decisions for me as I plan out who and when I can hire them. If you have a proforma, and this is exactly what Liveplan does. You can plug into a line item and say, okay, I’m going to hire Bobby. These are my revenues. These are my expenses. I’m going to hire Bobby. I can put all of Bobby’s expenses into that column, forecast it out for the next year, and I can see how that’s going to affect my business.

If you don’t have a proforma, my recommendation is to go to Liveplan. They will walk you through setting one up for yourselves. You can look online, and you can get a spreadsheet, which is a much more manual process. Allow that. Don’t make big financial decisions without a proforma. Allow it to really control your company. Another-

Caroline Cummings: Matt, I want to pop in with a quick question for you.

Matt Rissell: Yeah?

Caroline Cummings: A technical question about what you mean by run rate?

Matt Rissell: Good question. A run rate is when let’s say a company was doing in the month of January. Let’s say they did $10000 in a particular month. Well you can say, well my revenue is going to be $120000 this year. That would not be a run rate. That would be if you were to forecast out your current revenue.

A run rate is let’s say you did $8000 in December, $6000 in November. So you had six, eight, ten. And let’s say your run rate then is to do 12. And let’s say you’re forecasting out a big March, and you’re going to do $15000 in March. Basically your run rate is the increase of revenue based on historical and future happenings. Hopefully that answers your question. It’s a great question.

Be honest with yourself. A big mistake that can be made is if you’re doing your run rate. You have the over optimistic entrepreneur, right? Where you’re like, oh it’s going to be an amazing March, and you get yourself in trouble. Make sure that when you’re forecasting out and you’re getting your run rate, it’s conservative and you’re basing it on some conservative numbers. If you say, yeah, I’m ready to hire an employee because of this great thing that’s going to happen in three months, and that great thing doesn’t happen, you still better be okay. That employee has to be able to eat and feed their family. It’s a lot of responsibility to take on an employee. It even goes up, like it or not, when they have a family.

A few other just quick points that you know when you’re ready to hire is number one, do you have a new channel that you’re developing? You’re looking at your business. You’re like I’m not sure if I’m going to hire somebody. Do you have a new channel that you’re trying to develop? Are you able to keep up with your current work? In other words, there a lot of companies out there, entrepreneurs, that stunt the own growth of their company, because they’re like oh, I have to do everything. I’m just going to work myself into the ground. They limit themselves by themselves.

The last thing is are you turning down work? Are you turning down projects if you’re a contractor? Or you’re a landscaper, or you’re a construction company. If you’re starting to turn down. Now make sure it’s profitable work. Make sure it makes sense. Again, allow your proforma to make the decision. Those are a few ways to know that you’re ready to hire your first company.

Something that I recommend so much is to get a payroll company. Before you hire that person, have a payroll company like ZenPayroll, that works great with TSheets by the way, or a PEO that will take all of the logistics and the taxes and the legal part of hiring an employee. They absorb a lot of those liabilities. That makes it so much easier and not daunting. I can’t recommend that enough.

Now quickly, before we get into how you lose one, who do you hire? Again, this could be a topic in and of itself. I would be remiss not to just go over a few of these points. First of all, who you hire? I tell this to people all of the time. It’s something that I do for myself as well all the time. That’s interview yourself. Literally, go get a chair, well two chairs. Sit down in one of them. Face the empty towards you, and start interviewing yourself.

When you start asking yourself questions categorize the things that you’re doing into three different categories—things that you absolutely, positively should not be doing. Things that you can do, but you may not enjoy and they’re not your sweet spot. Then the things that you can hit it out of the park.

For me, I’m not technical in nature. I’m not an engineer. I don’t think that way. I can do it, and I’m good at math. Technical is something that I absolutely know that I should not be doing. Any of the companies that I have started, I always, before I even start the company I go bring somebody technical with me. Now if you’re a technical person, I want to combat this often mindset that people have, and that’s that people think that, oh, I can’t lead my company because I’m a technical person. I’m a technician.

That’s not at all accurate. I’m a believer that you can lead your company from any place within an organization. In other words, you can be on the legal side. You can be on the financial side. You can be on the marketing side. You can lead your company. Don’t think that because you’re technical you can’t be the CEO or leader of your company.

After you interview yourself, how else do you know who to hire? One of the best ways to recruit a new employee hands down, all the statistics show is that you hire somebody from somebody that you know. Hire a referral. I’m going to give you a quick stat. The average length of employment for all initial hires after two years, if an employee has come from a referral, after two years there’s a 45 percent retention. From job boards, it’s 20 percent. 20 percent of them from job boards stick around after one year, and only 14 percent after two years. That’s staggering statistics.

We talked about how expensive it is to turn an employee over. Make no mistake. That’s how TSheets has been able to grow is that we’ve been able to get a group of employees at TSheets that believe in what we’re doing. They’re having a good time. They enjoy their work environment. They’re recruiting their friends. As a matter of fact, we sat as we were preparing for this with a group of my employees. I asked them. I said, can you name a single employee at TSheets that hasn’t come from a referral? No one has left us. We’ve had almost a zero turnover. We may have lost two people in the last couple of years.

Another thing to consider is that if the employee does not come, or the recruit doesn’t come from a referral trusting your gut isn’t even close to being enough. Statistically, 40 percent of all resumes and job applications are based on completely false, or at the very least over-inflated information. In other words, you have no idea who that person is in front of you if they haven’t come from a referral. If they come from referral and it’s somebody you trust, I mean you’ve gained a tremendous advantage in that recruiting process.

Caroline Cummings: Matt, I’ve got a question for you here.

Matt Rissell: Yeah.

Caroline Cummings: The stat that you were sharing earlier about the percentages of employees that are turning out from job board versus referral, did that study breakdown baby boomers versus Gen Y or was it more general?

Matt Rissell: That’s a good question. That was a general. It wasn’t generational specific, but that’s a really good question. I’d actually be interested in seeing if it’s changed.

Caroline Cummings: Okay. Thank you.

Matt Rissell: Great question.

Then when it comes to who to hire, my recommendation, and this is who I am, is always be recruiting. ABR, always be recruiting. When you’re going out to eat, just as hard as you sell your product or your service. When you’re as passionate, and you’re talking about your widget or you’re talking about your service. You’re selling with everything you’ve got. Do the same thing when it comes to recruiting.

I’m a firm believer. It’s a foundational principle I think that the potential of a company is limited by the sum of the potential of each individual. In other words, the people that you get to be a part of your organization, even if you’re a rock star, if you’re getting people with really low potential, the ability and the mountains that your company can climb will be reduced dramatically.

We all want rock stars. To get rock stars, you always have to be recruiting. I’ll even hire people, A players, and get them on my bus when I don’t necessarily know the right seat for them to be on. If I can afford them, and they’re amazing, and they’re looking, they’re already employed typically, I will get them on my bus. I will find a way to afford them. When you get really smart people with a great attitude that are passionate about your company, they find a way to contribute.

As often as possible hire people that are already employed just as I had just said. Stay away from close friends and family as tempting as it is. I’m still tempted often, because a lot of people want to work here at TSheets to hire good friends. I have burned more relationships, and it’s just not worth it. Family makes it even worse, because of the emotions that get involved. Stay away from those.

Caroline Cummings: Matt, just to jump in. I’ve been in that same situation having had a couple of tech companies on my own and been caught in that route. It’s a difficult one to do, but you really have to kind of have that as a mantra and stick to it.

Another question for you, and you might be getting to this in your talk here is do you have some recommendation on the hiring process? When you go through the interviewing?

Matt Rissell: Yes. Actually, that’s the very next step. Thank you for asking.

We don’t go into depth. We do not go into depth on the interview process. Again, there’s a whole bunch more here. There’s been books that have been written about this. I’m going to give some basics, and some of things that we’ve done that we know are right. In this case, because it’s now basically started how to lose an employee in 10 days. It definitely starts with the interview process. I’m glad you asked. Yes.

Number one, and this may seem simple, but, don’t be transparent. If you want to lose your employees in 10 days, don’t be transparent. You’re like, oh, that’s not that big of a deal. Of course, that’s basic. Not really. I’m going to give you some really practical examples as to why and how I deal with this.

Number one. A good employee or a good prospect for an employee will be interviewing you too. I mean especially the good ones. They’re going to be interviewing you. If you think about the movie in this case, it’s a great picture because this is an image of when they all decided to do this, how to lose a guy in 10 days. If they would have been transparent with each other, obviously there wouldn’t have been a funny movie. It would have been a funny movie, because there wouldn’t have been an issue through the dating process.

The same goes in the interview process. You’re going to be tempted when they start asking you questions to tell them what they want to hear. I highly recommend you don’t do that. That means you have to prepare going into all of your interviews as to who you are as a company. What it’s like to really work there. What will make them successful, and what won’t make them successful. Like what are the big things? What the people are like. There’s different cultures in different organizations. What the work ethic is like.

I’ll tell you what I do. In my interview process with employees, and this is every single interview, I still, because we’re only at 40 employees, I still interview every single employee. I’m the last in line to interview folks. I sit down. After we chitty-chat for a second, just basically small talk, whatever pictures are on the wall or whatever. I start to ask questions. Then I stop them. I say, the agenda for the meeting is I’m going to ask you some questions. You’re going to have some questions for me. I say, my goal for this is when you go to ask me questions, I commit to you. I tell them this. I commit to you to be absolutely transparent. The last thing that I want to have happen is that at the end of three months, six months, is for you to start looking at this company going, wait a second. This isn’t the company that I signed up for. This is completely different.

Then I’ll say, and I just ask the same from you is that you’ll be transparent as well. We’re going to ask questions so that we don’t get down the road three to six months, and we go this isn’t the employee that we hired. Basically when I commit to being transparent with them, that relaxes them. They start being transparent with me. Then I start asking them, what is it that you really want to do? All of a sudden it’s amazing what happens. Their guard starts to come down. They’re like, this is really who I want to be. This is really what I want to do. It starts, and it lays the foundation for a great conversation.

I’ll give you one of mine. One of the things that I know that as a qualifier at TSheets to work for TSheets is, you might get some value in this. I say, look, when I started TSheets I know for a fact something that I’m not good at, and that’s micromanagement. I’m not. People often say, oh I don’t like micromanagement. I don’t want to work for a micro manager. That’s not a good or bad thing, but they just need it. Those are great employees to have in a government or a larger organization where there’s lot of bureaucracy. Folks, there’s lot of levels of supervisors that can be watching over each others’ shoulders.

I said there’s nothing wrong with that. That’s fine. At TSheets you’ll have clear expectations. You’ll know exactly what you’re supposed to be doing. You’re not going to come in every day and have somebody be telling you what to do. You’ve got to be very self-motivated and be willing to come in, and while we have a lot of fun, you have to work your face off. You have to hustle. That’s just who we are.

The only employees that have ever left TSheets quickly, or we’ve had to remove employees from TSheets quickly, are those that didn’t get that, as funny as it seems. I won’t go into that any more.

Caroline Cummings: Matt, I wanted to jump in and also share what’s worked for us here at Palo Alto Software with interviewing. When we didn’t have this process that I’m about to tell you, it wasn’t as successful. We have really a five-part interview process. First thing it’s particularly if I’m hiring, because it’s for business development and sales folks on the team. We do a phone call, because I want to hear how they are on the phone. I want to hear how they handle themselves. We exchange some emails and see how they do email communication.

I then assign them a homework assignment where they have to do a presentation and use Google Docs and use some of the technology that we use. I’m already trying to pretend like they’re on the team and see how that fits.

Then they do an in-person interview first with me for about 30 minutes. Then they actually present their homework to my entire team, because they’re going to be working on my team. I’m starting to see culture check, culture fit, how they interact, how they handle pressure.

Then I check references. I always check a peer, a subordinate, and someone that they reported in to so we get a good overview of what folks have said about them that have worked with them in the past.

Then finally, if they make it through all of that, we then do a culture check with the management team. I like that you have people come in, and ultimately at the end they have to interview with you. So that we hit on all the touch points. By that point you know for sure if this person culturally is a good fit.

Interestingly enough, 50 percent of the people don’t ever even do the homework assignment. It helps weed out a lot of the people and saves time and money like you were talking about earlier. It’s very expensive to do hiring.

Matt Rissell: That’s a great five-step process, and we do as well. I didn’t want to go into, just I would like to ask you even questions. It’d be great to compare and contrast some of those steps and what we do as well. Thank you for sharing that.

Caroline Cummings: That’ll be another webinar for you and I to do.

Matt Rissell: We should do it. We really should.

Another one in the interview process that I have, just basic concept. Just don’t mislead them. These are some of the most common mistakes that I see that people leave right away from companies or very quickly. Like in the first three to six months. When people make promises that they can’t keep, or don’t intend to keep. It really frustrates the employees. I’m telling you this now. If you’re telling people those things just to get them inside your company, it will cost you more down the road if you have to tell somebody that’s not the truth about your organization. So don’t mislead them. Don’t promise promotions and raises that you can’t give them. Just like when you’re selling your product or service. Don’t under promise. I mean under promise and over deliver.

One of the best ways that we can recruit really good candidates is when they’re employed somewhere else. And they say something like, you know, I was told that there was upward mobility and that I could grow into an executive position. I’m currently a senior manager. They have no intentions of hiring any kind of diverse group. You have to have the certain look, a certain gender type to fit on the executive team. Those are the ones that are fantastic. That are just prime for picking. Something that you can be tempted by, and don’t mislead them.

After you’re hired them, and they’ve signed on the dotted line. How to lose an employee in the first 10 days. The first thing is if you want to lose them quickly, just don’t have a plan. I’m talking to you probably folks that only hired one or two or three or four employees here. Cause if you’ve hired four or five employees now you know, geez, I need a plan. If you haven’t, and hopefully this will help prevent you from feeling like geez, why did I have a frustrated employee right out of the shoot?

Now I’m not expecting for you to have a Google, or Amazon level, or Zappos level on-boarding plan, right, that’s filled with trinkets and toys and really expensive trainings. I’m not expecting for a fully [inaudible 25:46] system, but here are some must-haves for your plan.

Number one, have a job description. Take the time to write out what they’re supposed to be doing. Then agree with them. Make sure that they understand it completely.

Number two is introductions to team members. Walk them around. I don’t care if your employees are coming in and out and you have mobile employees. Let’s say you have sales employees or a service company where you have folks coming in and out. Take them around. Spend the time to take a day and introduce them to people.

The third one is assign a trainer or a mentor to them. Basically, they don’t have to be the person that trains them on the product or the actual trainer if you have a corporate trainer or something like that. It’s somebody that can basically be their, in a sense, big brother or big sister that will shepherd them through the first couple of weeks at least. That helps them on-board. They’ve got somebody to introduce them around. They’ve got somebody to take them out to lunch. As the CEO or entrepreneur, you don’t always have the time to do that. Have somebody that basically is their shepherd for the first couple of weeks.

Then, have an idea of how you’re going to train them. I mean even if it’s only an organized list of reading and planning for job shadowing. Have a plan of how they’re going to get the training that they need to be successful at their job.

Which the next one is have a clear 30, 60 and 90-day goals. Now the 60 and 90-day may be a little bit stretch. Your goal for this, if you can get a goal for this, is to get them to be successful. If you can get an employee, especially the ones you want to keep successful right away, success I promise you will breed success.

Have somebody that can take care of all of your HR documents, so that when they come and they go, do I need to sign a W2? Have all of that stuff pre-planned.
Another one. This has been a huge difference-maker for TSheets is lunch with the founders. We’re going to talk more about this in a minute. What we do is we sit people down. Take them out to lunch, and we say, look, you’re already over the threshold. We’re here. Ask any questions that you want. It’s crazy some of the great questions that they ask. It’s a great opportunity for us. We tell them the history of TSheets. We say, gosh, it was only a few years ago that we couldn’t afford taking people out to lunch, right? And so kind of make sure that they always have that perspective of what it was like at the very beginning.

Next thing is make sure that they know your mission and your vision, who you are as a company and where you’re headed. It’s like, I’m a pilot, it’s like somebody getting on my plane with me, and they have no idea where I’m going. Make sure that they know exactly where you’re headed as a company, and what you’re hoping to accomplish as the CEO.

Lastly, when you communicate that vision, make sure that they know whatever they’re going to be doing on a daily basis and how that will affect the vision. In other words, how what they’re doing, their piece of the puzzle, fits into the big picture. I’ve got a story to tell you, but we’ll have to do that next time.

Next, so after hiring. You got them in. How to lose an employee. If you set unrealistic expectations, you’re going to lose your employee. If you make them unsuccessful right out of the gate, or if their expectations are unclear. Unless they have the wherewithal and the self-initiative and really the confidence. They got to have balls. They got to have guts to come up and ask you and say, look, what do you expect of me? Which happens, unfortunately that people have to do that. Don’t make them do that. Sit down with them and work on what it will look like at the end of 30 days if it’s successful. Make them clear, and set them up again for success. Another great way to recruit an employee is find somebody in their first year in another company that wasn’t set up for success. That’s still a rock star, but again, didn’t have the tools. Didn’t have the clear goals.

The things that we do is that we set expectations. Chunk it up into, if you’re going to developer and you brought them on, learn this section of code base. Things that they can do on their own.

Another one is for like customer service. We say, you’ve got to be able to give a demo to one of our other internal customer experience reps within two weeks. Here’s an example of one, and we show them. Then it’s up to them to walk through and learn the product and be prepared for that.

So expectations. After hiring them, if you want to lose them in 10 days or quickly just haze them. Now you’re going to be surprised. Like yeah, this isn’t a fraternity, right? Where you send them out and probably do keg stands or something like that for 30 seconds until they pass out. That’s not what I’m saying. What I am saying is there are a lot of practical examples. You may be laughing. It still happens all of the time. What it does is it breaks down trust.

I can actually give you several examples, personal ones, where when I was in college I got a job as a server. It was my very first day on the job. You may not think this is a big deal, but it broke down instantly the trust. Everyone thought it was hilarious. One of my jobs when we were closing down the restaurant, they were teaching me how to go through the close list. They looked at me and they said, Matt, we need you to empty the hot water bin. I’m like, well what do I use to empty the hot water bin? They said, well go get one of those big tubs over there to empty the hot water bin. I spent like an hour emptying bucket after bucket of the hot water bin. Well it turns out you can’t ever empty the hot water bin. It just continues to go on.

So anyway, they thought that was hilarious. To be honest with you, it didn’t work. Now I actually think though that there are some great ways to initiate. I actually recommend initiating your employees, but you have to prepare them for it. One of things we do, and I recommend it, is we have a staff meeting every other week. It’s all hands staff meeting, so all 40 of us get into a room, and we all talk. One of the things that happens is that all of the new employees have to have our core values memorized. They can’t word for word repeat our core values back to us, well then their manager has to do 20 push-ups. If they do recite them word for word, then I have to do 20 push-ups.

Needless to say I actually end up doing a lot of push-ups as part of my workout regimen. It’s a lot of fun, and it’s something that we do for everyone. Again, it sets them up to be successful in front of everyone, which again, I can’t encourage you to do that enough. Even large companies, I think, fail miserably at that.

Caroline Cummings: Matt, that’s a really fun thing to add to your culture. I love that.

There’s another question here for you that’s actually a really good one. If you’re constantly recruiting rock stars out there in the world, does that open you up to having other companies steal employees from you?

Matt Rissell: Oh my gosh. That is a phenomenal question. Really good question. The answer is absolutely. As a matter of fact, over 50 percent of my team this year alone has been recruited from an outside company. A lot of them, because they’re rock stars, and they are. They’re the best I can get my hands on. I mean literally, they’re the best I can get my hands on. Everyone wants them.

What’s interesting is that most of them, from my knowledge, at least what was told to me, they were offered more money. But we have not lost a single employee to outside and to another company. The reason, and I strongly believe this, is that we’ve got a great product, but that’s not it. It’s our culture. I actually have a whole presentation wrapped around how culture basically trumps everything. I mean culture trumps strategy. Culture trumps whether you have a great product or a bad product and how people believe in it. It’s a part of your vision. It’s a part of your mission. It’s part of what happens when you walk into the door.

This is an interesting about having rock stars. Really smart people and really good high-performing people, as long as egos are checked at the door they also want to be around other smart people. I mean birds of a feather, and it’s true. The more rock stars you get, the more rock stars you’ll be able to keep and be able to get more of them. They’ll want to be around each other.

Caroline Cummings: That’s a great answer, Matt. Thank you.

Another question that’s also really excellent is particularly in startups or smaller businesses where you have a nimble environment. You’re trying to run your business in a really lean way. What do you do if you hire someone for one position, and then you have to change their job description? Or you end up piling additional work on them that wasn’t in their job description? How do you handle that? I know you guys are very lean. You guys run a really tight ship. How do you do that if you have to change someone’s job description?

Matt Rissell: Well number one, that is another great question. Yes, it does. It happens all of the time. As a founder, an entrepreneur, or a senior leader you know that’s part of your job description. It just happens like every day.

Number one, is what we do when we have to change that with somebody, and one of the things that I learned on a little bit of a side note that may answer your question. If we do have an employee, I didn’t put this in here, but if we do have an employee that is under-performing but I know that they have the capability of over-performing, don’t always think that it means that they need to be fired, or that they need to leave.

One of my lessons that I learned, and I’ve learned this the hard way and then I got lucky. It’s hard to know the difference. They’re on the right bus possibly, but they’re just in the wrong seat. That’s something that we have done and I have done. If I look to somebody, and I look at their potential and who they are as a person, and I love all of those things, and I love their skill sets and their capabilities. I am now, because of my experiences, much more willing to just move them into a different seat. Did that answer the question, Caroline?

Caroline Cummings: Yes. I think that’s great. Thank you.

Matt Rissell: Great question.

Okay. So don’t haze them. Next is don’t allow them to ask tough questions on their first few weeks. Personally, I thought that this part of the movie was absolutely hilarious. What happens basically, they’re only three days into a relationship and the dating. They already go to couples therapy, which actually this person is not a therapist. Have you seen this, Caroline? You ever see the movie Caroline?

Caroline Cummings: Yes, I have. Yeah, I have seen the movie. It’s hilarious.

Matt Rissell: Yes. Anyway, this particular part it ends up that she’s not a therapist. She’s one of the girl’s friends. It’s basically setting him up to fail once again.

Essentially what I’ve seen happen is that new employees will come into a company, and they start asking really difficult questions. Listen to me, it’s going to happen. What I see most entrepreneurs do is they get pissed, or they feel like threatened by these hard questions.

If you want to lose good employees, because good employees will ask these tough questions, just minimize them, or make it what we quote/unquote call “a thing” out of every question or something that they challenge. What we have done is that we embrace them. We actually encourage it. As a matter of fact, we always tell all of our new employees is ask questions. Usually the questions comes up, it sounds like this. Why do you guys do this this way? A lot of times the answer is well because we’ve always done that, or because we couldn’t afford to do it any other way. Great question.

They will provide you a new perspective on your company, a new perspective on your product, a new perspective on your processes. We actually ask employees, what ideas do you have? After you’re here for a week before what we call you getting cursed with the knowledge of TSheets. In other words, once you get in here it’s not a curse. It’s not a bad thing. Basically it removes your ability to become unbiased and get an outside perspective. As you’re coming in, you’re getting immersed into our culture. Ask questions about why we do things, how things began, because that’s how we’re going to get challenged, and that’s how we’re going to get better. Embrace those questions as difficult as it can, because most likely as the entrepreneur or leader, you’re the one that created those things in the first place.

Next thing is if you want to lose your employees don’t be relational. Again, I think this is absolutely foundational to a company and some things that we do. If you’ve seen the movie, one of the things that she does to be relational is she, anyhow, she’s trying to drive him away. She nicknames things like Princess Sofia or something like that. I actually think nicknames are a good thing, and a good thing inside the company. It gives people a personal brand inside your company. Like, what are our core values? They need to be appropriate nicknames. I love giving people nicknames, and people actually like it. I make sure it’s okay.

One of our core values is healthy, to work really hard and to play really hard. Everyone gets a free gym membership. We got a lot of people here that are in really good shape. We have a few of them here that we call fit and miss, and it’s one of the brands out there. We’ve got a lot of fun nicknames that we give people, and they love it. What happens is people feel like a manager or an entrepreneur. They’ve never had an employee, or they’re new to it. It feels uncomfortable. You can have a relationship. Even I would say a friendship with your employees. I encourage it. I do. Now you can’t ever confuse being a leader with being a friend. It doesn’t have to be friends like we go hang out on the weekends friends. You can still be a friend with somebody and be able to have a professional relationship. Be relational.

Caroline Cummings: Matt, I’ve got a question for you here. This is another good one. You’re getting some really good and tough questions, too. I don’t know if you’d had to do this in any of the companies that you’ve run where you’ve had to kind of set a culture when you have employees who are virtual or spread out in a wide geographical positioning. How do you set a culture in that way?

Matt Rissell: Yes, we have. As a matter of fact, when we first started TSheets we had remote employees. Matter of fact, we were all remote for about a year working from our houses. Then at Cartridge World we had four locations. So not everybody got to see each other really ever, cause they were assigned to certain locations. Even now with TSheets we’ve got some people out of state as well.

Some of the things that you can do in a remote situation is number one, if at all possible, get at least a few times a year face-to-face meetings. Nothing can replace it. Number two is over-communicate. You can see how hard it is when you’re in an office to make sure everyone is always on the same page and communicate. It is a multiplying affect in its difficulty when everyone is always remote. Make sure that you’re always communicating. Number three is be careful of email. It is really easy to miscommunicate over email. Number four, as an entrepreneur or leader, have group meetings still. Get everybody on so that they can hear you, when you give your presentation they can hear your passion, your mission, your conviction that you have about the success of your company. Whether it’s going through a great new opportunity or going through a downturn, they have to hear it from you to believe it.

Caroline Cummings: Yeah. That’s great advice, Matt. I would add to it too having had some employees in Ireland and in the UK. We made sure that every week that we actually saw each other through Skype or Google Hangout. That adds another element to the voice so that you actually get to see other in the conference room or where you are working from home so that you keep that personal relationship. Keep the vibe of the personal relationship going, because that’s all part of the culture. That’s a great question. Thanks for asking it.

Matt Rissell: Yeah. It’s becoming more and more prevalent. A lot more companies are going to remote employees, because they have the ability to connect in. Everything can be done remote. I do recommend though if at all possible have a home base, and get people in if they’re in the same area get them together.

Caroline Cummings: Great.

Matt Rissell: Next is after hiring, you have them on board. If you want to lose them don’t allow them to have some personal space. You may be a service company or a landscape company where they just come in and out. If they’re a customer service and they have to share a desk with somebody in any way, shape or form that you can do this, give them a place to nest in. Everybody has a different level of how they want to nest. We have all extremes here at TSheets. We’ve actually moved, in the startup, right? We went through three or four, depending on how you count it, go to market absolute failures. I mean bombs. Each one basically had a new location that we were out here in Boise. We had to move a bunch of times. You could definitely see the different levels of people needing to nest.

If you don’t give somebody that has a high need to nest, is what we call it, they’ll leave you. They will. They’ll be uncomfortable. It actually affects their security and their confidence if they don’t have it. What we’ve done at TSheets [inaudible 45:32] we just bought our own 14000-square-foot building so that people know that this is where we’re going to be. I didn’t see this coming. As a result, a bunch of our employees have actually started to buy houses around our building, because they know we’re not going anywhere.

From a nesting standpoint, we have somebody in our company I know all they need is literally their laptop and a cup of coffee, and that’s their nesting. We have others, however, that require curtains, walls, trinkets, toys, candy, several different buckets of candy, snacks that is not considered candy, paintings, pictures. They have their favorite spices, and I don’t mean like one or two. I mean like an entire drawer full. They have plants. They have chairs, like multiple chairs. They have things up like curtains and these walls are removable to affect the amount of light. I mean it’s amazing. It’s a little bit of like a home away from home. I love it, because the more that they nest, the more comfortable they feel. The more comfortable they feel, the more they feel free to work hard, work their faces off and hustle. They have fun doing it.

The next one, and this is so important. This gal here on the movie how to lose a guy, I mean she was a jerk. I mean she’s like a professional jerk. She’s in all kinds of movies. If you want your employees to leave, make your employees feel like you’re totally unapproachable. I think it’s absolutely ridiculous, and actually plays more to the fears of the executives than it does the employees. It makes everybody feel uncomfortable. Don’t just hustle people around.

I have an open door policy all the time unless my door is closed, which isn’t very often. People are allowed to come in, ask me questions. I want to connect with them, and they do too. They want to hear from you personally and have a personal relationship with you. I don’t care how big you get. Don’t remove yourself from being approachable. I think a great example of this, if you get the chance to meet Brad Smith over at Intuit, they have 10000 employees. He walks around. He hugs employees. I’ve seen like a supervisor kind of shuffle their employee away from them. Like oh, he’s a CEO and $24 billion dollar—he actually says no. He comes over, and he gives them a great big hug and says, hey, it’s nice to meet you. Welcome to the company. That goes miles. Don’t act like they’re unapproachable.

After hiring, plan their entire future for them. Let’s say you get a rock star, and just like that question that came in, you start getting scared. You start thinking, oh geez, I don’t want my employees to be recruited and to leave. You start trying to put all these handcuffs on them and try to corral them into look, this is what the next 10 years look like. If you saw the movie, she went and did cutouts of what their pictures of their kids would look like after being together for four days. Employees don’t like that. Employees want to feel the freedom to leave. If they feel the freedom to leave that means they’re empowered to make the decision to stay. You want empowered employees.

The last thing that you want to do in this case if you think of it is create a rut for them, that they can see all the way down the road straight ahead of them. It’s like going on a desert, and you’re on a drive. You were going to drive across Utah. You can literally see, I think, 40 miles at one point when you’re coming down a hill. There’s nothing out there except just this long road. Doesn’t look really exciting to them. Don’t plan too far ahead for them and make it feel like you’re suffocating them.

One of the last ones here, we don’t have a whole lot of time to go into this. If you want to lose your employee, don’t find out what’s important to them. One of the first things that I do and all of our executives here do at TSheets is that we find out what’s important to them. They’re already in. Are they big family people? We’ve got professional level road bike racers here. That’s what they do. Whatever it is that they are important, it’s like any relationships, act important to it. Don’t act like because you’re their manager that you don’t need to be important. That they need to be acting interested in what’s important to you. Do the reverse. If you do the reverse and you show them how much you care, they’ll work so hard. They’ll be so loyal to you.

That’s the end. This is a picture of TSheets. This is a smaller version of TSheets. This was done about eight months ago. We’ve since actually added another 25 percent of our employees. We have a golf outing. We actually do two golf outings a year. We all do dress up and have themes. We have a blast when we do it together.

I hope you guys enjoyed this. If you have any questions for me and also to get more information on how to be a CEO, decisions about hiring new employees, and I talk about everything from the financial side all the way through the soft side of being an entrepreneur. You can sign up at tsheets.com/ceo. So you go there. Also Bplans is a phenomenal resource for any information as an entrepreneur.

We have just like one or two minutes if there’s any other questions, Caroline? Actually, I think we’re out of time, but I’ll hand it back to you. Thank you again so much for having me on your webinar.

Caroline Cummings: Yeah. Thank you, Matt. That was amazing. I love that you took a really important topic and used a really fun movie, “How to Lose a Guy in 10 Days,” and created that parallel conversation. I always like presenters who share contents and tell a story. There’s so much of what you shared that I’m going to remember. I’m sure that the folks on the webinar are going to remember it as well.

We do have a couple more questions, but we have run out of time. Luckily, we were able to answer I would say about 90 percent of the questions. What we will do though, Matt, is we’ll shoot those over to you. We have been recording this webinar. I know that you would reply to those in the next couple of days. We’ll get this posted to Bplans.com. We’ll have the questions on there as well as the answers and the video so you can watch it any time.

I know there were a few of you that weren’t able to watch this with your business partners, and you wanted to have them join in. So you’ll be able to get to do. Matt’s offer to sign up for his newsletter and email him directly, he means it. He’s very personable. It’s really awesome to be able to have a direct line to a CEO who has built an awesome company, an awesome culture and making himself available. Thank you again, Matt. Thank you, TSheets. Thank you everybody for tuning in. Take care.

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Caroline Cummings
Caroline Cummings

Caroline is a two-time technology entrepreneur. She's co-founded and held the CEO position for two internet companies, OsoEco (social bookmarking/shopping site) and RealLead (mobile marketing for the real estate industry).