Natasha Hawker, founder of Employee Matters, on how exceptional HR practices directly impact small business growth, the current employment relations landscape and the red flags to be aware of when outsourcing.
@Natasha Hawker founder of @Employee Matters discusses the importance of employees in small businesses, and the impact they have on business performance. Natasha emphasizes the need for exceptional HR practices and the role they play in driving business growth and sustainability.
She also discusses the current employment relations landscape and the importance of compliance. Natasha provides insights into the red flags that small business owners should be aware of and the benefits of outsourcing HR services.
She concludes by discussing the significance of employee ownership and the role it plays in business success and potential sale. The conversation explores;
Natasha made it very clear how your employees have such a significant impact on the performance and success of small businesses. This short video beautifully categorises the 4 types of employees and provides a framework for business owners to better manage their #employeeassets.
https://share.vidyard.com/watch/qVFVgq3EKyYakjSjQkGCEN?vyetoken=fa04c069-8443-4adb-b9b9-c9ca0dae4ae4&portalId=20625731
Takeaways
Michael (00:00.354)
Welcome into edition 143 of the Small Business Banter podcast. Natasha Hawker, welcome in today.
Natasha Hawker (00:07.316)
Thank you Michael, it's fun to be here. I haven't done a podcast for ages.
Michael (00:11.902)
Yeah, well, we're just talking about having a doing this on a what seems like a modestly sort of quiet Friday that just after ANTAC day. So yeah, a bit of a, perhaps a bit of a lot of people have taken a long weekend, but you and I are hard at it, recording and we're going to be talking about what your business your a lot of the topics are going to be around
employees in small business, the outsize impact they have on the performance of the small business, on the owner themselves, how we might deal with that. So how about you give us some, a bit of a summary of Natasha Hawker and your business employee matters and your role in the employee space with small businesses particularly or small and medium businesses.
Natasha Hawker (01:04.444)
Yeah, yeah, so my career actually started in banking and finance working in dealing rooms, which is a long time ago when late 80s, early 90s when greed was good and that was quite an awakening to all sorts of employee issues straight out of school into that. I then became a. Yeah, I wasn't the trader, I was the settlements client, but we were trading millions of dollars. And I can remember thinking, Michael.
Michael (01:23.682)
So you were trading on the desk, the FX or...
Natasha Hawker (01:31.54)
they're talking another language. Like I had no idea what I was doing. And we would be back late at night trying to find money to balance, you know. And that's when people used to run around the city with checks, handing them over to exchange stock, whether it was a semi-government bond for, you know, $5 million. It was, it felt like pay, play money, but it wasn't obviously. And it definitely wasn't when we were still trying to balance the books at 10 o'clock at night.
Michael (01:58.251)
Yeah, and from there, what was the...
Natasha Hawker (02:00.688)
Yeah, so there I moved, I became a recruitment consultant. And that's how I learned how not to run a business. It was very aggressive. You know, we used to run a book on how long the latest recruitment consultant would last. And it could be anywhere from one day to three weeks. And it was fascinating. And it was just a very cutthroat industry in those days. It was all about the sales, all about putting bottoms on seats and taking a fee for that.
Michael (02:18.21)
Wow.
Natasha Hawker (02:29.504)
And what I learned there, which was fascinating, was that I wasn't good at cold calling, but once I had a client, I had them for life. Like I was really good at the relationship side, both from the candidate side, but also from the client side. So I did that and then I got my lucky break. I joined Accenture and I got to travel the world. I was with them for the best part of 12 years. I was in APAC roles. I traveled up over Asia, delivering training.
I was lucky enough to go to the US and roll out a new executive hire to new managers that have been hired from all over the world. And then I transferred to the London office. I worked in the London office for a couple of years in the resources market unit and then went down to India and was the interim HR manager down there when we were hiring 500 people in five weeks.
fascinating experience. I had a whole team that had never worked for a woman before and they were all going to get married before me but none of them had met their partners yet and I'd happened to meet my now husband who you just met in the green room and was sorting out my IT and I'd met him and three weeks later he proposed and then I ended up on a plane to India to work for the next couple of months but that's a story for another time. My husband and I started Employee Matters Michael gosh 12 and a half years ago now. We have
Michael (03:44.959)
a good one.
Natasha Hawker (03:51.512)
17, I think 18 people across Australia, New Zealand and the Philippines. We provide HR recruitment, HR information systems support to small to medium businesses who either don't have a full-time HR resource nor do they need one or they do have a junior HR resource and they need some extra level of expertise to help with some of the more tricky matters. And as you know, at the moment, there's so much in that ER space.
And I think, you know, I'm really passionate about HR. I believe that exceptional HR doesn't just fix or even prevent employee problems. Exceptional HR is your competitive edge for more profit, more growth and the sustainability of your business. So we're very business focused. It's about results and who doesn't want more of that?
Michael (04:38.254)
Yeah, well, and if you're going to get results in a small business in the main, you're going to have to get more from your employees, engagement, productivity, enjoyment, you know, willingness to come and turn up. So, yeah, and you're squarely in just under the, I think you said up to 17 or 18 employees with a few outsource. But, you know, that traditional definition of under 19 is where we
cut off the small medium enterprise size.
Natasha Hawker (05:10.024)
Yeah, from a HR perspective, it's 15 and under, and that includes casuals. You know, so a lot of the legislation has small business and typically, you know, it just means you get more time to implement the stuff that the bigger end of town has six months and you've got 12 months, you know, before you need to implement. So that's the advantage of being a small business there or that you don't, for example, have to pay redundancy if you're under 15 heads. That's a good one, you know, because redundancies can be very expensive.
Michael (05:35.07)
Yeah. Interested. The 15, like the, the size categories have been around for some time, haven't they? And then we get another one, which is probably, you know, being under 15 for those laws. And, you know, another question for me, you know, what, you know, what, why can't we, you know, these are some of the things that just make it just a little bit more tricky.
you know, as to where you sit. Anyway, the motivation for you and Mark to start employee matters, you went from trading, you know, trading room to almost like trading people that sounded like in the, you know, the HR firm, it was pretty brutal. And yeah, yeah. Yeah. And it was that, did that seed this desire to start something and really, and help, you know, small business owners get more from
Natasha Hawker (06:17.354)
Yep, I run a temps desk. It literally was trading people trying to get people into jobs.
Natasha Hawker (06:32.328)
Yeah. Yeah, I mean, we started, as I said, over 12 years ago, I could see that there was a gap in the market and I knew that what I knew could help small to medium businesses do it more easily. Like I have a friend and I often quote her because I think it's very real. I can I'll never forget she said to me one day, Michael, she said running a business would be so much fun if I didn't have employees. And she's not alone. A lot of people think that.
Michael (06:32.706)
their business more from their people, employees.
Natasha Hawker (06:58.908)
And I could see there was a real gap in the market where SMEs didn't have access to HR and recruitment. And that limited their success because you may be in business because you're passionate about whatever your business is, but once you start getting people, you potentially get problems. So Mark and I actually, he had a career in banking and finance. He worked in Coots in the UK, Macquarie Bank out here and leveraged equities. I think I look back at it now and it's like.
We sold our brand new Kia Carnival. We had three kids, four and under to start the business. We then sold our house in French's forest to continue it. And you know, it's very much a husband and wife team. And I've had a lot of people, Michael, that say, God, I could never work with my husband. Oh God, I could never work with my wife. Mark and I are quite lucky. We are both very good at what the other one isn't good at.
And I think, you know, starting and building and sustaining a business is really, really hard. And I think to be a business owner, I think you need to be incredibly resilient. You've got to take those knocks, quickly get up, dust yourself off, and get back to it. I think you have to be incredibly optimistic to know that with hard work and effort, it will turn out okay in the end. And I think you need to be a little naive because I think if we knew then what we know now, we may
Michael (08:19.594)
Yeah.
Natasha Hawker (08:21.928)
You know, I think that naivety is key, because I think a lot of people, you just don't know what you're getting yourself into. You really don't.
Michael (08:28.838)
Yeah, look, you've made you both have already made significant sacrifices and that, you know, mentality psychology of it's just around the corner, you know, there's a bit of naivety maybe but You know, that's what fuels a lot of small businesses. But I think to your point what you know continues to Intrigue me deeply is
what it takes to be an owner and a founder and to continue through all the hard times, I think can also be a biggest negative when it comes to your expectations of others. When you're working with family, you know, that's maybe you have a, maybe there's established communication channels and it can be a bit easier. But fundamentally, when you're
going so hard and you make those kind of sacrifices you both made, selling a house, selling a car, a carnival, then how do you then kind of deal with employees who might like their job, might be pretty good at it, but probably aren't going to go the extra mile and the extra mile and the extra mile again to do what you might have done as an owner. That's, you know, seems to be the root of a lot of
challenges for me with, you know, owners and their businesses.
Natasha Hawker (09:53.8)
Yeah, I think, you know, it's interesting. I've got two general managers in the business and both of them have said to me even recently, I could never have done what you do, in terms of the risk that you took, particularly with a small family. And think about the statistics, Michael. I think it is 50% of businesses fail in the first 12 months, another 50% fail in the next 12 months and only one percent of businesses in Australia get over a million dollars worth of revenue in the first seven years. And we did that.
But to your point, I think you have to recognise that when you're in it and when you own it, I often joke over the years I think I could have earned more flipping burgers at McDonald's than what I have. But equally, I'm passionate about it. I mean, I have an office at home that's well set up, that's what you're seeing here, and my husband often has to come and drag me out because I love what I do. I come and tinker here, you know, and it's building something and I get such a buzz.
Michael (10:36.246)
Yeah.
Natasha Hawker (10:52.6)
out of the learning and such a buzz out of seeing where we were even 12, 18 months ago, six years ago. I think with the people side of things, I have, I firmly believe that your employees are your greatest asset, they're also potentially your greatest liability and should be treated as such. And I think what we've done really well is build a team of people that really value
Michael (10:52.866)
Yeah.
Natasha Hawker (11:22.508)
and we treat them well, you know. Christmas for example, we said, you know, we actually picked individual presents for everyone in the team. So for example, Peter who's our BDM, he's got his RV, you know, he and his wife have bought an RV and they want to travel around Australia. So we bought them like a, those big four caravan park things, like a voucher for that so they can do that. David, our GM, had a sickly dog so we bought him and Marissa
Michael (11:46.314)
Oh yeah, yep. Yeah.
Natasha Hawker (11:52.056)
a couple of days away to a place that could take dogs. So, I think being thoughtful like that really helps, but then we're also about giving back. So we got them to everyone to do a half day, which we paid for to go and do a charity of their choice. So, but at the end of the day, Michael, employees are different, they have a different mindset. I share an enormous amount with my team, which often worries business owners. Like we have a dashboard, shows our revenue.
Michael (11:54.977)
Yeah.
Natasha Hawker (12:19.228)
shows what we're billing each month, shows everyone's chargeability, and people are like, oh my God, why would you give them all that information? And maybe one day someone will take advantage of that, but the lift that you get from being open and transparent and the engagement increases, I think, is far higher. And at the end of the day, I always say to business owners, if someone's not doing their job, it's perfectly reasonable for you to performance manage them, and you might want to performance manage them out of the business.
and then you'll probably find everyone else goes, Michael, why'd you take so long to do that? We should have done that ages ago.
Michael (12:51.214)
Yeah, yeah, yeah. Well, yeah, that's that is a challenge. I think there are some owners that are probably, you know, more naturally inclined to be able to deal with that scenario conflict potentially, you know, to get someone out of the business and others just maybe step over it and hope it goes away. Yeah. But see, that's the environment we find ourselves in now and
Natasha Hawker (13:08.516)
Ignore it. La la la.
Michael (13:18.526)
and then where your business employee matters sits. It must be a lot of opportunities for you to help owners migrate through all of the, I don't think we've got time to go into all the, the challenges and the legislation and the, compliance requirements. That's probably not the purpose of the podcast, to dig into those things, because people can...
You talk about that on a regular basis, and I encourage people to have a listen. I think you're on ABC recently. And, you know, but the point of, you know, what we're trying to do is to kind of encourage owners to think about, they don't have the bulk to, in most cases, to have a full-time HR manager. There are lots of issues, challenges.
there is a solution and it's called outsourcing or outsourcing to someone like yourself. So what are the kinds of things you do for typical small businesses that might give an owner listening a bit of a sense of maybe that this is something I ought to think about?
Natasha Hawker (14:35.132)
Yeah, good question. I mean, it's interesting, Michael, most people come to us with a problem. You know, somebody's done something at the Christmas party they shouldn't have done, or someone is not performing and I need to make them redundant. It may actually be a performance management issue. And the other big one, and I encourage all of your listeners to think really hard about this because I am concerned, is there is the most employment relations
changed since fair work was introduced back in 2009, I kid you not. And the vast majority of businesses I'm coming across Michael are not aware of that. So just at a really high level, you know, there's people at work, respect at work. In the past, you just put a policy in place tick, made sure everyone knows about that. This time the legislation has been changed to be super.
proactive. So you actually have to do a risk assessment of what's Natasha's risk of getting sexually harassed and then ask Natasha and other team members what their risk is and then mitigate those risks. So typically what we do is we come in to help a business. We have a tool called employee metrics. It's a diagnostic tool. We actually won't work with anyone, Michael, unless we've done that diagnostic first. And the reason for that is that we have something called accessorial liability. So if I come into your business and I say,
Michael, I think you're underpaying your employees and you go, yep, Natasha, I'll fix it. And I keep working with you and I know you haven't remedied that. I am also personally liable. So it's pretty major. And so as an example, that legislation change I'm talking about, if you have not done that and most of it was required to be done, some of it as far back as 2022, the fines for you personally are up to 19,000 and for the business up to $90,000 per breach. So
But most business owners are not going to want to sit there and read through pages and pages of e-ilegislation. I wouldn't want to either. So what we do is come in and do that for the business. So that tool metrics will say, I think you need 10 hours a month. You can increase it, decrease it or kill it at any time if you're not getting value. But what we're doing is transferring that knowledge to your managers too. So they understand how to hire, manage and accept better. And that really helps because we talked about productivity at the beginning. All boats rise on the tide. If your managers...
Natasha Hawker (16:52.868)
aren't confident in those skills, then there's going to be an issue.
Michael (16:56.91)
Right. So what would be the top couple of things that really are red flags? I would hazard a guess that a lot of the owners I work with, I'd say mostly really do care about the employees, run a reasonably successful, sustainable business, may not be
It doesn't have to be hugely profitable. It might have been around, mostly they've been around for 20, 30 years. So they're doing something right. But I feel like there's always going to be things that just, for whatever reason, don't get on their radar. What are the ones that you would say they ought to worry about and do something about properly more than worry about?
Natasha Hawker (17:42.28)
major red flags.
Yeah, so there's a couple of quick ones at the moment just because they're so topical. Pay secrecy. So everyone literally flinches when they think about this but in the good old days we used to have a gag clause in all our contracts that said on pain of death like who you cannot tell anyone what you're earning. Now that has to be removed from the contract otherwise you're in breach and I can actually ask you and say Michael what is your salary that you're getting paid?
Michael (18:02.924)
Yeah.
Natasha Hawker (18:12.46)
And you don't have to tell me, but if you do tell me and we're doing exactly the same job and I actually think I'm performing better than you, then I need to be paid either the same or better than you. So I think for businesses, the first thing is a salary audit to make sure that they comply from a legal perspective around are they paid correctly under their awards, but also a bit of a salary audit that says if we've got two people or three people or four people doing the same job, are we paying them correctly?
Michael (18:31.42)
the award.
Natasha Hawker (18:39.824)
I think the other big red flag for me is going to be around this respect at work and the people at work legislation. People at work is very much around mental health in the workplace, their psychosocial hazards. So you can't overwork anyone anymore. You can't underwork anyone. You actually have to give people feedback. Having great job descriptions so that people are really aware of what they can and can't do. A couple of weeks ago, I was talking about right to disconnect on sunrise and
you know, that is going to be a piece of work that businesses are going to have to do because you can't just call people up at nine o'clock at night because you feel like it. Not that everyone does that, but you can't do that anymore. But there are reasons why you can call someone. So, you know, I think there's just a lot happening in the space. It's still a very tight applicant market, although I see that starting to change. We're seeing with the recruitment we're doing, the volume of applications is increasing, which means there's more people floating around.
Michael (19:15.914)
Yeah, yeah, yeah.
Natasha Hawker (19:35.176)
looking for work. The other big one is getting people back to the office. So I think, you know, a lot of organizations are really trying to put their foot down and go, we want everyone back five days a week. I think if you do that, you'll lose people. So it's really key that there is an attraction strategy around and some thought around why do we want people in the office? Because people are like, well, I did it from home for the last 12 months or eight months or two years. Why could, why do I suddenly have to be back in the office now? So, you know, that collaboration piece and
gamification around why you come to the office is important. I think most businesses are really getting stuck around two or three days. That's about as best they can do.
Michael (20:12.278)
Yeah, okay. Yeah, look, one of the things is that, would you typically do a diagnostic, that diagnostic you talked about, just to set the scene for an owner or owners? Yeah.
Natasha Hawker (20:25.952)
Yeah, it's great because what it does, Michael, is it gives them a traffic light report, green, amber, red, and all the recommendations, some of which they go, oh, I didn't know that, but now I know that I can go and fix that. I don't need employee matters to fix that. But what we do is we do that at the beginning of an assignment and then we do it at the end of 12 months and we can say, well, you were all red and orange when we met you, you're now all green. So it's an accountability piece for us, but it also produces a people HR roadmap.
Michael (20:30.602)
Yeah.
Michael (20:38.27)
Yeah.
Michael (20:47.063)
Yeah.
Natasha Hawker (20:51.836)
So it then says, right here, all the things we need to do in Q1, Q3, Q4, whatever, to make sure that you're compliant. So it's much more about being proactive around your HR, because what I find is if you're proactive, you get less of the reactive stuff, which is the time consuming, expensive stuff.
Michael (20:57.004)
Yeah.
Michael (21:01.738)
Yeah.
Michael (21:08.266)
Yeah, I think it's getting those unknown unknowns into the, you know, you don't know category. But, but also I think, um, like I, you know, the most of the work I do is with owners of businesses and they've been at it for 20, 30, 40 years, or they're, they're fast growing and they get approached out of the blue to sell their business. But I look at their numbers and, you know, no, no surprises. The,
the percentage of revenue that comes or is allocated to salaries is the highest, other than in really high-end manufacturing. But largely, you've got this. And so therefore, and it's like it's this cost, but it's also that's where you're going to potentially drive a lot more from the business. And so things like you just mentioned before, doing an org chart and
something as simple as that, I'd like to characterize that as a bit of infrastructure. If you haven't done it, and it's driven by compliance, that's okay, because the payback can be... This is... You've got a better feel for the way your business is structured. You've got job descriptions flowing from it, which you can feed into performance reviews, into budgets, into success. And so...
You know, no doubt some owners will think, you know, this is another piece and it is, there's another piece of legislation I've got to worry about, but also how do we flip that around so that you're on the front foot and complying, but also, you know, getting a return on that, you know, that time and money you spent on it.
Natasha Hawker (22:49.276)
Look, I think, Michael, one of my concerns, and I built my business to sell, I have been quite strategic about it and intend on selling and I have my exit price and all of that sort of stuff. I think what many of your listeners may not realize is this isn't an investment in getting maximizing the price when they go to exit. Like the first thing they're doing is due diligence and they're going to go through those contracts and they're going to go through those people and work out.
what it looks like. I think one of the great we use a little we call it an employee ROI calculator. And one of the best things your listeners could do is okay, what's my revenue? I'm going to make the math easy for me. So it's $100,000 a year. And I've got 10 employees, then at the moment, the view is that you should be getting a three to four return on each employee on average. So if you've got 10, yeah, exactly. So if you've got 10 employees, and you're owning 100,000, that means you're only getting
Michael (23:33.994)
Another in sales that is, revenue per employee.
Natasha Hawker (23:42.768)
$10,000, you should be maximizing that. Why isn't it $30,000 return or a $40,000 return? Obviously, your sales guys are gonna have a higher return rate than what your admin person is. But I think it's really, really important that businesses see their people as an investment. And if they are looking to sell, it's really, really important that they're compliant, that there's no risk sitting in that business, because otherwise it turns the business that's potentially the buyer off.
Michael (23:47.798)
Yeah.
Michael (24:10.851)
Well, yeah, look, you know, in a lot of businesses, you know, the employees are vital today and you can get more out of them. But certainly on transition of that business from one owner to another, it's where this is really a tricky point where the owner's got to go through all of that stress about thinking about selling. What am I going to, you know, how am I going to make sure that
all my customers stay with the business because the deal won't go ahead or won't be priced the right way. But it's always, not a word, in a lot of cases, staff has such a massive influence on the outcome of that sale process. And we do want to get to talk to this idea of employee ownership, which is kind of been, it's been around for a long time.
I'd love to get your perspective on how you see that helping businesses sustain themselves. I just wanted to reintroduce and mention we're chatting with Natasha Hawker today from Employee Matters on the podcast. So with that said, this idea that you're going to invest now for
you get your return when you get a better sale price. What about that period, you're an owner, you're driving with Mark to get this business ready, but when you're maybe 10 years away, I'm not sure where you are in your thinking about that, but if you're still 10 or 15 years away from a potential sale, what's your thoughts for an owner thinking about spending money now?
Natasha Hawker (25:58.732)
actually I actually think you never know when that offer's gonna come so you actually want to make sure your business is ready to go no one picks the time when someone's gonna tap them on the shoulder I've already been approached a couple of times now it hasn't come off yet and the interesting thing is Michael and I'm sharing this under the kind of silence with you know your listeners is that everyone thinks we're bigger than we are and I think that's interesting because then perception that whole perception versus reality
Michael (26:20.196)
Yeah.
Natasha Hawker (26:25.02)
So what do you need to do? I think, you know, if you were getting a business ready for sale in 10, 15 years, I think you actually need to get it ready for sale now so that it makes the sale more likely to go through. I think you don't want them opening or going under the hood and they will go under the hood in a lot of details and finding your contracts aren't right, your policies are out of date. They've still got five days domestic and family violence leave when it's 10 days now.
You have not you've got a group of B players. We call them. I'm going to actually send you to put in the show notes, Michael. I've got a little video on the employment employee commitment model. And it talks about prisoners and conscripts and volunteers and trainees. You want to have as many volunteers, superstars in your business. You don't want the new business owner coming in and going, my God, there's a whole lot of D players in here. Why am I dealing with these people? So I don't see it as a future thing. I see it needs to be done now so that.
Michael (27:03.413)
Yeah.
Michael (27:12.33)
Yeah, yeah, yeah.
Natasha Hawker (27:18.884)
If somebody does tap you on the shoulder, you are good to go. I'm always looking to buy a business. You know, I'm still looking for businesses all the time to grow my business exponentially. And it's a great time to do that at the moment because so many baby boomer businesses are being exited from.
Michael (27:35.586)
that I think you're absolutely spot on with that observation. And a lot of a lot more of the work I've done in the last few years has been and it's because I've started to focus on it there. Unplanned, there's, there's a really negative unplanned exit where someone has, you know, a catastrophic failure in the business or they just give up or, you know, it's too hard or whatever. But then there's other things which is happening if you've got a
a reasonably high performing business, there's no question that in a lot of the industries that we'll come across, there'll be a bigger player eyeing off, just like you said, smaller players, or even, you know, similar size to take advantage of opportunities. So for all the good work, and you should obviously think about when you're-
Ideally would want to exit and what you should do to drive a better outcome for you, but you just got to be ready because That you know the opportunity may just come completely out of the blue and it does it does all the time and then it's um You don't have to dive into due diligence straight away But you if you if you get caught on the hop because you haven't done Any of this stuff yeah, yeah
Natasha Hawker (28:55.004)
just affects your price. The end of the day, evaluations decrease, you know, you know, one of the reasons and they even think about it, like one of the reasons why we have products that are monthly reoccurring revenue kind of products is because that increases my valuation. Professional consulting firms are two to four times. If you've got monthly reoccurring revenue, that's more like 10 to 14 times. So that is a great example of something that I've implemented early because I want to increase my valuation price at the end.
Michael (29:24.466)
Yeah, yeah. You know, it's clever and smart and, you know, I guess it's, and it's also, you know, you've got to have that nice balance between, you know, paying the bills now and, you know, invest, because it's not easy to, you know, to, you're almost running like a SaaS or a software business, you know, maybe it's a quasi software and, you know,
almost like a professional services thing. So yeah, it's excellent to hear that. With regards just generally getting employees involved in some way, whether it be as an owner or as part of an incentive plan, open books, what's your thoughts on that? Because it can get, it can get, well it does always get tricky if
if your employees feel like they're being, they're uncertain about their job going forward if the business is sold. But I've seen often where key employees, and there's always some really key employees, and they can have a major influence on whether a business sale goes ahead or not because they're carrying the responsibility for key activities in the business when the owner's not there. So your thoughts on getting them
involved now as in owners or
Natasha Hawker (30:50.112)
I think, yeah, I think the key, the key from my side here, Michael, is that there, you build in systems and you build in tools. So an automation. And if you can systemize as much stuff as possible, that also helps you as the business owner exit more quickly, rather than being handcuffed into the business for a long time. I do think it's really interesting around employees and their buy-in and they are critical because...
The only way you can grow a business is to delegate. Those owners that keep everything to themselves reduce the ability of their business to scale. And that's challenging letting go too because you've got to trust people. So hire well, it's absolutely key there. So I think in terms of your questions, did you want to talk about share ownership now? Is that where we're going?
Michael (31:27.999)
Yeah.
Michael (31:34.228)
Yeah.
Michael (31:40.126)
Oh, look, I think so because, you know, it's been around for, you know, different forms of worker employee ownership has been around for a long time. But, you know, I kind of look at the numbers of SMEs. At the moment, I think we're, you know, call it 2.5 million or something, but 60% or more of them are zero, you know, employees and I champion the idea that you'd be self sufficient but and then
you know, in the end is not, there's, I think they did 8% of the 2.5 were call it 5 to 20 employees, right? This is roughly speaking. So the belly of these really strong, emergent, small businesses, there's not an awful lot. And I wonder if people, some owners just saying, I never want to grow. So I'll just stay by myself. That's okay. But where, what's
To get that smallish number of small businesses up to being a medium or a large, it's going to take more than the owners, the current owners.
Natasha Hawker (32:45.02)
What do we need to do? Yeah, I've got a very strong view on this. I have invested personally well over a quarter of a million dollars in my own business education and I would not be sitting here today if I hadn't done that. And that's everything from negotiation skills to business coaching to my AICD course to media training, you name it. And I because when I started my business, I was great at doing HR.
Michael (33:08.834)
Yeah.
Natasha Hawker (33:12.444)
And I often say when people come to me now, like, and they go, I want you to do my HR. And I go, no, you don't. My team are infinitely better at it than what I am. I've been off the tools for a while. So it's really, really interesting. And I think that is holding businesses back because they don't know how to grow their businesses. They haven't invested in themselves or invested in someone that can take them to the next level. In terms of that employee ownership part, it's a really interesting one because...
Michael (33:18.038)
Yeah. You're off the tools as they say. Yeah.
Michael (33:31.767)
Right.
Natasha Hawker (33:38.304)
I think that it can be very attractive at the right time for the right employees. Now you don't want to offer it to everyone because you want to hand pick the people who you think are long-term employees who are adding value, who are going that extra mile for you. And obviously, I think the business owner has always got to have that mind of, okay, well, I can get my business to this size on my own with no investment.
And potentially if I do an employee share scheme, whether it's them buying into the business or it's a gift, however you want to do it, I'm going to be giving away a small chunk of my business. And mentally that can be a little challenging for some business owners, but if it's a piece of, you know, it's a 5% piece of the pie and the pie's worth $10 million versus $1 million and you own all of it, then there's some food for thought there. I think from an employee perspective, nothing gives them greater...
Michael (34:15.895)
Yeah.
Natasha Hawker (34:33.44)
pride or motivation or initiative than actually owning a small bit because most business people come to me and they go I could never start my own business. I could never do what you're doing. This is a way that they can do it in a very relatively safe way but it will definitely make them go above and beyond and maybe call out you know a workplace health and safety issue because they are they're in the trenches with you. It's part of their business and it's
Michael (34:42.486)
Yeah.
Michael (34:56.514)
They're part of it. Yeah.
Natasha Hawker (34:59.844)
you know, it gives them cause for actually making sure that the business does do better because they're going to get rewarded out of it.
Michael (35:07.05)
Yeah, I think it's the I don't think you and I would disagree. I thought there's a lot of other small business advisors that would it would violently agree that if you could get that high hyper level of engagement through some level of ownership or sharing in the rewards of the business that you know, everyone's better off but it the interesting conundrum sometimes is that
And it's the power of doing exoplanning for you as the owner, because often employees are the natural, can be the natural owner or next owner of the business. And so that can be, you know, a way to kind of mitigate all of the potential risks we've talked about. So bringing them in early with a share, knowing full well that they're...
they have a fairly good say so on who ends up buying the business if not them. And so then you're exit planning to the employees or the key employees. So that's really about the owner saying early days, having a look at who's going to buy, who should buy the business, who should be the natural next donor and what, you know, what, this be brutal, what if I don't sell it to the employees, what's going to happen to the business?
Natasha Hawker (36:31.136)
I think there's another way of thinking about it too, Michael, and it's been a strategy I've been playing and it's helped me grow my business 20 to 40 percent year on year is around partnerships. So working with people who have your clients before you do. And for small businesses, they're often hamstrung by the fact that they don't have great marketing budgets or they don't have a marketing person and they run out of connections. And you know, an example of, you know, if you work in professional services, you might talk to an accounting firm.
and partner with an accounting firm and they might start sending you clients their way. They might also potentially be a purchaser of your business.
Michael (37:02.326)
Yeah.
Michael (37:07.678)
Yeah, yeah, no fair point. And this, this comes from being active and, and not falling for the trap of, I'll sell when I'm ready down the line. And, you know, in that thought, you don't, you don't have to commit to doing anything about selling a specific time, but you do need to be, you know, you need to be a couple of steps ahead. That's, that's all we're, that's I guess what we're saying. What about
Natasha Hawker (37:18.932)
the
Michael (37:36.61)
Just to slightly shift the conversation, how ready are employees to, you know, how willing to become owners, to be owner ready if there's, I'm just throwing out a term there, but, you know, because you mentioned someone just a minute ago that I couldn't have done what, having gotten, you know, intimately aware of what the owner went through, I couldn't have done that. But
Is there something, you know, that whose responsibility is and how do you get employees who might have this idea that they might be an owner one day? How do you how do we kind of make that happen faster?
Natasha Hawker (38:20.828)
I think many business owners undervalue what keeping their team close and investing in their team and mentoring their team members to start to sprinkle the idea. If you've got your superstar employee who you've identified as your predecessor, sorry, your successor, then maybe take them out for dinner and start to...
Michael (38:42.638)
successor.
Natasha Hawker (38:46.772)
sprinkle some ideas with them because they may never have thought about it. You know, it does take a certain type of person to start their business but you know start to have those conversations with them. Start to help educate them, invest in their professional development, give them books to read that are around you know business ownership. Get them if they're great technically on one side of things get them to understand the financial side of things you know.
Michael (38:48.948)
Yeah.
Yeah.
Natasha Hawker (39:14.12)
bring them into the business and understand, you know, the P&L and the balance sheet and what impacts that has, because they'll probably stay with you for longer, because even if they don't end up becoming, you know, your successor, they're going to be much more bought into the business. And if they have that broader skill set, much more useful to you in the business as well, rather than the narrow thing they're doing at the moment.
Michael (39:14.743)
Yeah.
Michael (39:36.318)
Yeah, well, it sounds like you do have that open book to a large extent anyway. And, you know, and we're, you know, I, there's a help create a sense that we're all in this together. Cause the business is striving for something and when, and pretty much every moment of the day, you can, you can move the dial if you, you know, if you're thinking about it, you don't have to wait till the end of the quarter.
Natasha Hawker (39:39.699)
Yep.
Natasha Hawker (39:58.768)
Absolutely.
Michael (40:05.123)
In terms of the, we've covered both employees, you've invested extensively in yourself personally as to become a better owner or more effective owner, you've got a plan, we've talked about employees. What's the, if there is a bridge
to cross between employees and employers is what are the things you talked about, open book finances, what other ways can you endorse to as effective to get them closer?
Natasha Hawker (40:46.141)
Yeah, I-
Yeah, I think, you know, if I think about what employers need to do to run their businesses better thinking about their employees, I think you need to have a very compelling employee value proposition, Michael, which is why your organization is a great place to work. This helps with recruitment as well, because at the moment it is still a very tight applicant market, which means there's still, it's changing, but it's still a shortage of those high quality employees that you want. So,
Those organizations that can not only articulate it and put that in their ad, but also their hiring managers are able to articulate why this is a great place to work because you're competing against your competitors who are also trying to employ this person as well. That's really, really important. I think organizations that are transparent, that train their people, I'm always at the view what doesn't get measured doesn't get done. So, you know, I think we did an amazing job of moving.
to working from home overnight during COVID. What we've not done is do it so well with those organizations or those individuals that are continuing to work from home. How do you measure that performance and make that happen well? I think that transparency and that mentoring, bring people on the journey with you. As an example,
We had our best financial year last financial year. So as a surprise, we had our team day, which we do every quarter and we bring our remote team together. And so we said to them, okay, we're going to do some professional development in the afternoon. And then you need to be at this point at this time. And next thing a large catamaran boat comes around and we take them out on the harbor for vivid. Now that, whilst that's an expensive little exercise,
Michael (42:29.526)
Yeah.
Natasha Hawker (42:33.86)
it does bring a lot of goodwill. You know, when I have to ask someone, can you pick up this extra client? I know you're a bit busy at the moment, but could you just do it for me? I need a favor. They're more likely to do it because they see that, you know, we appreciate what they're doing and that we acknowledge what they're doing.
Michael (42:44.94)
Yeah.
Michael (42:54.047)
Yeah, you're creating a great place to work. Do values, how much, yeah.
Natasha Hawker (42:59.24)
Values? Yeah, I think values are key. And I think a lot of people have values, but they don't pay any attention to them. And I think it's really important that your team are aware of what your values are. And we haven't been doing it so much recently, but we used to say, give me an example of when you've lived a core value this week. So ours are flexibility, employee matters, commercial.
and trying to get them to link back what they're doing that has an impact on the values. And hiring for values is really, really important. There's nothing gonna bring an employee-employee relationship unstuck quicker than when there's a values disconnect. And I think the classic example of that, Michael, and we see it happen often, is where a very senior person who absolutely can do the job standing on the head goes into an organization.
Michael (43:44.631)
Yeah.
Natasha Hawker (43:54.)
and shoots straight back out very, very quickly. And that's generally, it's a values issue or a cultural issue that they've got, this is not the place for me.
Michael (44:03.574)
So there's too much focus on the job description, the KPIs, but not enough about what kind of organization and people we are versus what, who you are personally. As an employee, yeah.
Natasha Hawker (44:17.32)
Yet people leave leaders, not organizations. So it's really important that your leaders are great leaders because they're the ones who are, and this is a bugbear of mine, you know, we touched on it at the beginning. I really believe most managers in Australia, and that's not all their fault, just don't know how to do three things higher, manage and fire better. And if they could just do those three things better, your productivity would lift. And a large part of that is that we haven't invested, we often promote people to their...
level of incompetence often, or we give them a management title and say, there you go, there's your team. And they're like, I've never run a team before. How do I do this? And so, you know, teaching them how to motivate people, how to train them, how to get the most out of them is really, really key.
Michael (44:48.222)
Yeah.
Michael (45:02.446)
Yeah, I think what comes through strongly for me is that you have spent a lot of invested heavily in your own development and therefore, you know, we don't have all the none of us have all the answers and we can all get better employers, owners, employees, every, you know, it's just creating that incentive. You've got a very clear one. You know, you're running a great business and for others it's
It's not so clear, unfortunately. In your team, you've got a mix of, you've got some outsourced, is that offshore, remote?
Natasha Hawker (45:41.896)
Yeah, so the team is my EA, Kathleen, who's excellent. I love Kathleen. She's based in the Philippines and she's worked with me for about two years. Amazing. I have team member in New Zealand and she's a contractor because she's in New Zealand. And then most of my team are Australian based and they're a mixture of casuals and perms.
Michael (45:48.62)
Yeah.
Michael (45:53.42)
Yeah.
Natasha Hawker (46:07.972)
The difference with us is our people come to us, Michael, and we say, how many hours a week do you wanna work? And they go, 24. And then we build a portfolio of clients around that. That is very different. Now, it was unique when we started it 12 years ago. Obviously COVID has meant businesses have become more flexible, but still there are very few organizations that say, you tell me how many hours you wanna work and we'll work around that. And we've seen...
people ever flow, you know, between having a baby and not having a baby or whatever. We have been very successful hiring people who are in that childcare rearing stage that just need to take a break from corporate because often what happens is they get a part-time job, they work full-time and get paid part-time for it. It is the risk. And then we've had a lot of very successful employee experts come to us at what I call the twilight of their career.
Michael (46:36.423)
Yeah.
Natasha Hawker (46:59.736)
and they're not ready to hang up their boots just yet and they want to keep delivering. And it's that transition into retirement which works really well as well. And the clients get the benefit of that 35 years experience.
Michael (47:10.827)
Yeah, well, there's a lot of, yeah, excellent. So yeah, you're very clearly demonstrating that the traditional hierarchical structure of full-time employees has just been completely unwound particularly in the last, since through COVID. And so you can tap into fractional resources, you can tap into, you can even say,
you know, how can he add value to my business, you know, and how many hours? So yeah, you gotta be creative. But I think if you know what you're after and what you're trying to achieve as a business, it probably makes that a bit easier. Just living the day to day is, you know, going in and smashing the head up against the wall is, you know, is hard work. And Natesh, I got a really insightful chat from someone who's...
Natasha Hawker (47:48.288)
Absolutely.
Michael (48:05.962)
an owner, small business owner who works with other owners. I'm sure a lot of that will cut through. I just wanted to give you the opportunity just to do a couple of things. There's sort of resources. You've written a book. Talk about that and talk about, you know, my audience that I wanna speak to and I wanna help.
directly by having them run a more sustainable business to, you know, on their terms, where would you, is it to go for personal professional development? What are your sort of top things to say to an owner if you're in a bit of a rut or you're not quite sure, do these few things or try these few things?
Natasha Hawker (49:00.833)
Yep. So from resources that could help from a HR perspective, yes, you're absolutely right, Michael. I wrote a book called From High to Fire and Everything in Between, and that is built around our nine-step employee life cycle, which is higher managed policy, well-being, engagement, training, measurement, and exit. I think that's them.
That employee metrics, that software that I was telling you about, that diagnostic tool, that's also built off that. So it's a great way to have a look under their hood and make sure you're compliant. I also have a podcast called Employees Matter. And so there's some things that you could get some help on our website. We have an ER, what are your top seven risks from an ER perspective at the moment? Really good for businesses to have a look at that because I would suggest many.
Michael (49:24.161)
Yeah, yep.
Michael (49:44.966)
Yeah, okay.
Natasha Hawker (49:48.656)
of our listeners today aren't compliant and it really worries me because a fine of something like that, and I'll give you a really quick example, and they were horrible employers. So it's a worst case scenario, but there was a tie takeaway in Sydney for shops. They had a lot of vulnerable migrant workers. They were systemically underpaying them, falsifying records and the HR manager was complicit with it. Their fine was $4 million.
for the business owners in the business and $105,000 personally for the HR manager that had done the wrong thing. So you've got to get this stuff right.
Michael (50:27.018)
Was that, was that employee, that HR manager, not a, that wasn't an owner. That was a, like a senior. Yeah. Not an owner.
Natasha Hawker (50:30.92)
That was a HR manager. So here's the thing, managers are at risk. So if you are, for example, let's give another quick one, domestic and family violence, 10 days leave. But the key with this one is, Michael, that it cannot have on the payslip that somebody took domestic and family violence because that goes home to the perpetrator. So you've got to make sure, and it's on a confidentiality needs to know basis. So if breaches around that, you know, that would be a breach if it had it on the payslip.
Michael (50:54.478)
Yeah.
Natasha Hawker (51:01.344)
You asked me about what I would suggest has been the most successful or helpful things I've ever done. I think at the beginning it was business coaching because I hadn't, I didn't know how to run a business. At that time I was good at HR and had absolutely no idea what I was doing from a business perspective. So I think that was really helpful. For me, and I don't know whether this is more me as a woman business owner or a female business owner, I had to get better at negotiation skills.
So I read a book called Never Split the Difference. I then went and did coaching with one of their black swans, a guy called Derek Gawne who I absolutely loved. And I've just had a cup of tea arrive from my wonderful daughter, thank you. And I did negotiation skills coaching and that was amazing. Like I learned skills and that's given me a framework to manage conflict. It's given me, I get much more of what I want these days.
Michael (51:42.857)
Thank you partner.
Michael (51:48.022)
Yeah, yeah, yeah.
Natasha Hawker (51:57.232)
So I think that was really, really good. And I learned a hell of a lot at AICD, just general governance and good business practices. So they would be the key things that I would share.
Michael (51:57.538)
Yeah.
Michael (52:06.898)
Yeah, okay. Yeah, look, I, yeah. And being, obviously being present enough to say, I'm probably short here. I'm not gonna be too hard on myself, but I know, we can all, you know, compliment what we do well with, you know, other skills and learnings. One of the things I just, we've had quite a number of discussions on this podcast about the use of coaching, but leading into,
advisory boards, pop-up advisory boards, which is, you know, when particularly through a high, you know, in a high growth kind of, you know, company or a growth aspirin company or someone looking to exit to bring in that, you know, set of advice, it's not a formal board. And it's like,
Natasha Hawker (52:53.788)
really sensible, really sensible. Bring in, it was funny Michael, I said the other day, bring in the grey hairs, but I actually think it's more diverse than that. I think bring in some grey hairs, absolutely, people who've done it before, but I'd actually bring in some youth too, because if you think about AI and so on, you know, they reckon that, I think it was something like 45%, if you don't think your younger workers are using AI already in their jobs,
just without your knowledge, then you're actually a little bit blindsided. That's something I'm keen to do more of is advisory board kind of stuff. I'm in discussions with an organisation about that at the moment. I think it's a really clever way because I think as business owners, you also are fighting the risk of, it's the way we've always done it and it become tunnel vision. And I think it's really helpful to have someone to say, have you thought about it this way? What we're doing it this way?
Michael (53:21.543)
Yeah, yeah.
Michael (53:28.637)
Yeah.
Michael (53:41.686)
Yeah.
Natasha Hawker (53:47.712)
And, you know, in my experience, this is what's happened. And I think that is very powerful. I have had informal accountability groups where I get together with a bunch of ladies who run some very successful businesses and we share a problem. And just even the collective wisdom, and they're in completely different businesses to mine. One's in holiday rentals, one's in digital marketing, one's in mobile mechanics, and one's in, you know, a performer.
Michael (54:06.154)
Yep. Non-competing.
Natasha Hawker (54:12.512)
but they have a perspective that makes me think differently and can solve a problem very quickly. It's brilliant.
Michael (54:19.294)
Yeah, and it's that environment, whatever it is, there's more and more of them being set up, you know, where you can, you know, it's a curated group of people, could be an advisory board, could be some other informal, you know, they're also networking, but group where you can go. And everybody's there because they face similar challenges in different businesses and different industries and that's, you know, that's gold. Be open to that.
Yeah, I think I was, it was Louise Brockman from the Advisory Board Center that was on maybe 20, 30 episodes ago. And she came on twice. And we talked about the hierarchy of support right through from talking to someone who's another business owner, because it's lonely in there, find someone that you play golf, play tennis, have a coffee, you know, go for a walk, whatever it is, but then right, right the way through to, but it's all about tapping into others' interest.
in you, in the business as well as their expertise and just their incredible, their different take on the world. So, um, you know, stop, um, you just gotta stop thinking you can do everything yourself. And that's, you know, that's a something to be, um, yeah, yeah. Um, where do, where do people get ahold of you? And the station we're going to, we'll put, uh, we'll link in or
Natasha Hawker (55:36.064)
Ask for help.
Michael (55:45.058)
the things that you've talked about in, when this goes live in a few weeks or a month, but if they wanna reach out and.
Natasha Hawker (55:51.68)
Yeah, best way to get in touch with me is empl I also have a personal website, nata as I'm a professional speaker as well, which is where I have my fun, Michael, is entertaining audiences and scaring them, but giving them practical things they can do to turn these employees into assets and not liabilities.
So that's probably the best way or our number is 028021 4206 if they want to get in touch.
Michael (56:15.528)
Yep.
Michael (56:22.998)
Cool. All right. Natasha, thanks for taking time out of incredibly busy schedule. Lots of rich insights in there and I look forward to getting this live in a few weeks to a month and sharing some of those resources. In the meantime, if you know, and yeah, that's great. I'll get that organized and I'll be in touch. Thank you for your time, Natasha.
Natasha Hawker (56:45.248)
My pleasure. Thanks for having me, Michael. And to all your listeners out there, remember your employees really do matter.
Michael (56:52.734)
Yeah, excellent. All right. Thanks, Natasha.
Natasha Hawker (56:56.32)
Thanks Michael.