Recruitment and Selection Process with Danielle Mulvey

Hey what’s up? This is George G. And the time is right to welcome today’s guest strong and powerful. Daniel molvi. Danielle, are you ready to do this?

Unknown Speaker 0:22
Let’s go, George,

george grombacher 0:23
let’s go. Danielle is a former flight attendant turned entrepreneur, who has cracked the code on recruiting and retaining what she calls five star employees. She’s the host of Profit First Nation. She’s got a book coming out the end of 2023. Daniel, tell us a bit about your personal life’s more about your work, why you do what you do?

Unknown Speaker 0:44
Oh, my goodness, well, I am a wife and a and a mother. So I have two children that we are both very proud of they play very high level competitive waterpolo. They were both named to the US national team this past year, for the respective age groups my son played in Budapest representing Team USA. So we are just on a pool deck on any given day, so

george grombacher 1:12
amazing. And professionally, how did you? How did you get inspired to do the work that you’re doing?

Unknown Speaker 1:18
So Oh, my goodness, I kind of had an opportunity to start my own advertising and marketing firm, when I was 25 years old. And I took advantage of that opportunity. And what’s funny is is I I was you could say lucky with my first hires, they were great. But my hiring strategy being a, you know, 25 year old entrepreneur was to hire people younger than me, because they would have no experience and they wouldn’t know that I didn’t know what I was doing. And that strategy worked for a couple of, you know, maybe a couple of years. And then I had an employee who just, let’s just say I woke up one Monday morning saying, Can I call in sick to my own company, because it was just I was dreading having to come in and deal with him for another week. And that was really like, where I drew the line in the sand. And I said, this is, this is crazy. Like, I need to understand how to not make this kind of hiring mistake again. And so at that moment, I just kind of went all in on understanding and really improving and in creating a process and a system around recruiting and hiring the best of the best, like the top tier, what we term five star employees, the top 15% of available talent in the market for the given rate. And, you know, 24 years later, here, here I am with the fruits of those labors. And I’ve built you know, we’ve got multiple cavities, my husband and I, that do over $15 million a year annually. And I really only have to spend about 10 hours a week overseeing the operations to those businesses, because we have five star employees who, you know, just do fantastic work and a fantastic job and do the job better than myself could do in any of the tasks and such. So now I’m at a position and and hosting Profit First Nation, you know, where I, Mike and I, the author of Profit First, in talking to entrepreneurs who’ve implemented Profit First, but still struggling with profitability, what we found with 10 or more employees a million dollars or more in real revenue, their their biggest expense was payroll. And the biggest problem with their payroll is that average ho hum. Or worse, one, two, or three star employees were are dragging down their payroll, increasing that expense, which is killing their profitability because one five star employee does the work of two or 312 or three star employees. So when you settle for less than five star employees, you are just like, can I cuss? Please? You’re just pissing money in the wind. I mean, so so so that just kind of became the AHA. And Mike’s books are sort of an evolution with entrepreneurs. And so, so so our work with all in and that book that’s coming out in December 2023 is really kind of like okay, this is this is, this is a real problem for entrepreneurs. They’re really everyone’s just kind of ad hoc doing it, copying and pasting other people’s job, job descriptions and their postings and etc. And it’s just a bunch of just useless gobbledygook that doesn’t do anything to attract and retain five star employees.

george grombacher 4:56
The the pain of hiring the wrong person Sandwich you’ve nicely laid out and the costs are astronomical yet it’s so common, it’s wild.

Unknown Speaker 5:09
It is crazy. And it sort of becomes like a prisoner’s dilemma to I mean, one of the reasons why I just like, again was like, okay, like, I guess I can start another company and, and help entrepreneurs with this was with my dad and his business. I mean, he’s been in business for over 45 years. And my stepmother was just like, this person’s gotta go, everyone in the organization was this person’s gotta go. He had, you know, his part time controller quit, because she said, I can’t work with this person, this person’s gotta go. And, you know, my dad felt stuck. And he’s just like, but like, at least I know, what I have to deal with. Like, what to say that I would make the same hiring mistake again, let you know, and, and I sat in on interviews with him, and his CPA firm. And he picked the we had four great candidates. And he picked the guy who was fresh out of out of college and played volleyball at UCLA. But, you know, he kind of like, looked and acted like my dad to a certain degree, you know, 40 years earlier, so. And that’s what my dad went with. And it was just like, oh my gosh, like, it was he ruled out probably the best candidate because the guy poor guy wore a suit to the interview. You know, until he was two, he’s most most people subjectively hire. And we’ve got to get away from subjectively hiring. And so, you know, using something like the five star employee rating system gives you an objective way to assess talent, and move away from that subjectivity, which tends to lead to miss hires.

george grombacher 6:54
That’s so funny, I, it’s so identifiable, that we want to hire people that are sort of like us, or we perceive to be like us, and just be totally subjective about that. And then hold on to people that just, you know, the devil that I know, is made better than the devil that I don’t know. And, I mean, I like to think about and talk about behavioral finance, well, it’s essentially, you know, we all have these blind spots, and unless we’re paying attention to them, that we have no idea that we’re, you know, experiencing and doing the same thing over and over again. So being objective having this process, that, obviously, the more we can have processes, and be objective about something, the better. So tell me about, tell me about the five star program.

Unknown Speaker 7:39
So the five star employee rating system is based off of five criteria, and it allows you to objectively assess talent. And so you know, when you when you go through it, you either know, someone is a five star employee, a one star employee or a three star employee. And so the first criteria is core values. And so it’s really important that you want to clone yourself, well, then the best way to do that is at the foundation, and making sure that your that your new hires are aligned with your core values. And we’re talking about like your true core values, not the aspirational values, but the owners values that are just like steadfast and they’ve always been the same. And they’ve always been true to that individual. And you know, what’s funny is, is once you start to, like, really look at and think about, okay, you know, if these are my core values, and you want to make sure that you have clarifying statements around those two, so everyone understands exactly what you mean when you say delighting others, if that’s a core value of yours. And it’s important to like, again, think about the people that you’ve that, that have worked in your organization before that were not so hot, they probably weren’t so hot and not a fit, because they they didn’t align with your core values. So that is the first, the first criteria. The second criteria is the 11 Universal qualities of a five star employee. So we’ve identified 11 Universal qualities that are just no matter the role, no matter the position, these are the qualities that are are steadfast and true for a five star employee. And out of these 11, two of them are coded green, which means they’re relatively easy to change. Two of them are coded red, and then the rest of them are coded gray, which means that they can be adjusted and coached on you know, with that intention, about helping them improve those qualities. But you know, the two that are red, those are like red flag deal breakers. If if someone doesn’t meet your, you know, rating for those criteria, those qualities then that they’re not no longer a viable potential five star candidate. So there’s two read qualities are listen, and limber. So we let don’t like to use the term flexibility, we suggest all business owners all hiring managers never use the word flexibility. Because what you’re meaning when you mean flexible is you’re really meaning limber. And when an employee sees flexible, they think it’s something else, they think it’s all about them. And you really need people to be limber, you need people to be able to be amenable to change, to pivot to be, you know, able to just do whatever it needs to get done. And be be limber, not flexible. And then the second read is listen. So you want individuals who can listen with all their senses. You know, there are people who take notes, there are people who observe things, there are people who, you know, just again, use all of those senses. I had an interview back in March with a candidate, and I was like three and a half minutes into the interview. And she wasn’t answering my questions directly. And so I’m just like, okay, she’s not answering let me let me kind of like, simplify, make more simple questions. And literally, at about the five and a half minute mark, she still wasn’t. So I just was like, I’m sorry. But I don’t think this is going to be a fit. I didn’t try to make it work. It was just like, okay, when when this has a clear red flag, which she’s definitely, you know, demonstrating that she doesn’t have the quality of being able to listen, then she’s out as a candidate.

george grombacher 11:34
I love it. And that is, I feel like, like, when we’re hiring people, we ignore red flags. And we do that at our absolute peril.

Unknown Speaker 11:44
Because because we’re subjective about it, you know, it’s like, I mean, there’s, there’s no, there’s no measurement, you know, it’s just like, your your gut. And so when you use something like the five star employee rating system, you know, it forces you into that objectivity and, and getting honest with yourself instead of just keeping it in your head. And that’s typically what we do we, we don’t necessarily write down those red flags, or we don’t, we don’t have a litmus test that we can bump it up against. It’s just like, Well, I mean, I don’t want to, I want to give them the benefit of the doubt. And, you know, that’s, that’s the hard part. And why we have to be more objective in our hiring is we want to see the good people. And that’s, that’s amazing. That’s great. But, you know, just because someone’s not a five star employee for the role that you’re hiring for, doesn’t mean that they’re a five, not a five star employee for another role. I mean, I like to say that I could get hired as a bookkeeper tomorrow, no problem easy, but I’m gonna be honest, I would be a two star bookkeeper, because although I could do the job, I would hate it, I wouldn’t enjoy it, I would procrastinate. I would, you know, do all those things. But I mean, I am a five star entrepreneur. So you know, it’s really about the problem is, is that when someone applies for the job, there could be misalignment there to have they think that they can do it. And that’s why it’s important to test for it. But let’s continue on, if that’s okay, with the five star. So number three are making sure the candidate has the appropriate aptitude and skills for the role. So as I talked about, you know, it doesn’t matter if you can say it, it matters should you do it. So it’s really important to create testing that specific to the skills that you need for the role. I mean, of course, you could use like basic Excel and, and then 10 Key and typing tests, and accounting and bookkeeping, tests, etc. But you know, I also like to create other tests, you know, like, if I’m looking for attention to detail, or if I’m needing them to do something that’s repetitive over and over or be able to follow a list and a checklist, etc. So we also create tests in our organization. But then there’s over 30 aptitudes as well, that that we’ve defined and, and you want to interview around those aptitudes, and then make sure that you’re rating that individual on those on those aptitudes and kind of like, what is the rating that you need for someone with with those particular aptitudes. The fourth

Unknown Speaker 14:16
criteria in the five star employee rating system is success metrics. So it’s really important that you take the job description, and you kind of you need that formal job description that has everything in the kitchen sink in it, but but you also want to have the three to five key responsibilities highlighted. These key responsibilities are going to be what drives the revenue, what drives the profitability for your business. And even an admin is driving revenue and profitability for the business. And so with those three to five key responsibilities, you want to quantify what success looks like in that for that position, and those responsibilities and when I’d say quantify, you want to attach numbers, metrics, dollar signs to that. So for example, one of our businesses, we process long term care claims for the state of California employee pension and retirement system. And so, you know, throughout our recruitment process, starting with the job posting, you know, we say that, you know, you You’re, you’re processing, you’re adjudicating long term care claims, and you have to meet 98%, financial accuracy 95% procedural accuracy, and you need to be processing 42 claims a day. So it’s very clear, it’s very direct, you know, exactly what success looks like, in the role. And if you look at other job descriptions for other sorts of claims, examiner positions, there’s no mention mentioned a metrics. And what this also does is it tracks the people who are like, Yeah, I like to gamify my work. Yeah, I like to have a challenge. Yes, I like to know where I stand in terms of meeting goals and expectations. And it repels the people that are really not qualified or not wholly going to be going all in on the job, if they’re going to be held accountable to any sort of metrics. Nice, that makes a ton of sense. And then the fifth criteria is return on payroll. So this kind of goes hand in hand with the fourth criteria and return on payroll means that the individual should be producing a 3x return on payroll. So as I mentioned, admin, you know, a lot of people think, well, the admin is not contributing to, to revenue, they’re behind the scenes, and I’m like, Well, absolutely, they’re contributing to, to the revenue of the company, because each thing, they’re taking off the plate, at their rate of maybe $20 an hour, so that the person that they’re supporting, whether it be the president, or, or the, you know, Chief Financial Officer, etc, everything that they’re taking off the plate at $20 an hour, is allowing that other person to do their work that’s, you know, valued more in the 300 400 $500 an hour rage. And so that’s how you just make sure that everyone is in alignment with making sure that what they’re doing is producing that 3x Return on on payroll.

george grombacher 17:18
I love it. I love a good framework and process, Danielle, and this definitely is. So how hard is it for people to actually implement this?

Unknown Speaker 17:29
You know, it’s, it’s really a discipline. And it’s, it’s the discipline about never settling. So it’s not hard to do. It just, it just takes a little bit of time to really get clear on what you want, and craft questions around, being able to objectively assess if the person has the qualities, the aptitudes, the skills, specifically around what you need for that particular role in the organization. And, you know, we do it in a fun way. We get you and your team together, and we collaborate with actually other other teams and other businesses too. And, you know, it’s also important to think about like, what don’t you want what hasn’t worked before? Like, what are your pet peeves? And, and we make sure to prioritize those in the process, as well. So that so that that’s part of one of your filters is is not bringing, allowing someone in who is going to just not at you with one of your pet peeves.

george grombacher 18:38
Yeah, it’s funny. So tell us Tell me tell me what you really want an employee like well, I guess tell me what you don’t want this. This this this this?

Unknown Speaker 18:45
Oh my gosh, you’re exactly right. It’s it’s easier to go with like fixing the negative first. Absolutely.

george grombacher 18:54
Pain hurts twice as bad. So alright, we’re, anyway, you think everybody understands what I’m trying to say? Awesome. Well, Danielle, thank you so much for coming on. Where can people learn more about you? And how can they engage with you and implement the five star employee rating system in their company?

Unknown Speaker 19:11
So I think the best place I know I just kind of like dumped it all on on everyone here. But if you text never settle as one word never settle to 411321 so that’s never settle texting it to 411321 then you will get our how to hire five star employees guide. And what’s cool about that is we have just a quick litmus challenge that lays out the 11 qualities of a five star employee and it has you rate your one of your like most favorite best employees you’d like to clone against like the person that that that was a misfire in your organization. And so it really kind of starts to get that aha about like, Okay, well it’s not so bad when I have have something on paper to to help me through this recruiting and hiring process.

george grombacher 20:05
I love it. Well, if you’re just as much as I did so Daniel your appreciation and share today share with a friend who also appreciates good ideas, text, never settle to 411321 and take care of or take advantage of that assessment gone through the 11 qualities and find out if this rating system will help you start making great hires and avoid those awful ones that make you want to quit your job as the CEO.

Unknown Speaker 20:31
Thanks getting Danielle. Thanks, George.

george grombacher 20:34
And until next time, remember, do your part by doing your best

Transcribed by https://otter.ai