In an era of automation, it’s easy to forget the people behind the scenes. Today, we are joined by Kyle Hartman, director of operations at HardHat Workforce Solutions, to discuss his role in the family business and what makes it so unique. Tuning in, you’ll hear about Kyle’s interesting career, how he transitioned into the staffing industry, the tangible impact he’s made on the business, and so much more. We delve into how they are approaching automation while balancing it with the human element needed in this industry before discussing data analysis and metric tracking. Kyle even tells us how creating a transparent relationship with clients has helped build trust between them. Finally, our guest tells us all about the challenges HardHat faced when scaling, and where he hopes to see the company in the next few years. Thanks for listening!
[0:01:13] DF: Hello, everyone. Thank you for joining us for another episode of The Staffing Show. Today, I am joined by Kyle Hartman, who is the director of operations at HardHat Workforce Solutions. Kyle, super excited to have you on the show today.
[0:01:26] KH: Awesome. Excited to be here, David.
[0:01:28] DF: Just to give you guys a little bit of background, HardHat has tripled in size over the last three years. It’s not because of luck, but because of a disciplined operations process optimization and a focus on quality. Kyle stepped into a 20-year-old company and played a key role in turning it into a national leader in skilled trades staffing. I’m really excited to unpack how you’ve done that, and I want to talk about the history of the organization.
This talk today for the audience, we’re going to be going into different ways of looking at operational excellence, different ways of making sure that you’re analyzing your business correctly and making strategic decisions. If you want to learn how staffing firms are growing and putting that in place, this is going to be a good one to listen to. Kyle, to kick things off, could you tell us a little bit about HardHat and the history of the organization?
[0:02:18] KH: Yeah, absolutely. HardHat is a family business, and I remember, as an 11-year-old kid, my father left a steady job at a competitor of ours, a company called Trade International, to start HardHat. Now that I’ve got three kids, I realize the challenges and the complexities of trying to do something like that, and the amount of courage it takes to walk away from something steady and try to step into an unknown path. But I had a brother and sister at the time, and my mom was an entrepreneur. She was a real estate attorney that worked in her own practice. I still remember them working together to try to start this business. My dad sat out for a year to honor his non-compete, and during that year he worked for my mom’s real estate business to obviously help put food on the table, but also, just to build the bones of the business so that they could be successful long term.
Growing up, obviously, HardHat was a topic, a conversation at family dinners, at family gatherings. It was near and dear to us. The amazing thing about that transition was even going through the recession in ‘08 and some slowdowns in the economy, you never heard a peep about anxiety and fear around the dinner tables. It was all about just the optimism and the opportunity. I really credit both my parents with building that entrepreneurial spirit, and myself, my brother, my sister.
To answer your question more specifically, we’re not just a family business in the sense that we’ve got fathers and sons working in the business. We’ve got uncles, we’ve got sets of brothers, we’ve got sets of all of those, we’ve got mom and daughter combination, we’ve got aunts and nephews, and that’s just not in our family. That’s across other families and other locations. I think that’s what makes HardHat amazing.
[0:04:04] DF: That’s incredible and great story about the business itself. Why don’t you tell us a little bit about your transition, because your career is a little bit unique in terms of how you got into HardHat, and that was a family business. Why don’t tell us a little bit about that background?
[0:04:17] KH: Yeah, absolutely. My career has been a little bit of a winding road. I was always intent on going out and trying to build my own skill set before returning back to the family business. It was always an option, and I think having that option, I think, David, gave me the courage to go out and build my own career, without being fearful about the steps that I was taking, when he gave me a lot of freedom and flexibility. I remember leaving college in 2012 and driving out to a dude ranch in Wyoming to work as a makeshift cowboy for a summer. I realized pretty quickly that that probably wasn’t going to be my line of work. I don’t think I was tough enough for that business. But it did open a door for me, and I met a gentleman out there who invited me down to Birmingham, Alabama to interview for an investment bank.
I remember leaving the ranch after the summer internship, or summer job finished up, and I drove from Wyoming to Birmingham with two buddies in the back of my Forerunner. We got to Birmingham, I shaved in a parking garage, I bought a suit with some of the money that I’d cobbled together with tips over the summer, and took the interview. I realized pretty quickly that my specialty was more in financial services than it was ever in roping and riding. But that led to a 10-year career in financial services for me. That was a point for me to go out and build my own skill set. But it got to the point where I was at a pivotal point in my career. I was up for promotion at American Express to become a director. I’d been in financial services for 10 years, and I knew at that point that if I took that director role, then I probably wasn’t looking back.
It was at the same point when my father sat us down, my brother and I, and just said, “Hey, I need to know if – I’ve tried to give you a lot of flexibility to make your own decisions, but I need to know if you’re going to come back.” We looked at each other and we said, I think we’re ready. We’ve done our own thing. We’ve built our own skill set, and it’s time to try to steward a family business that’s meant a lot to us and given us a lot of opportunity in life, and try to take it through the next generation.
[0:06:12] DF: That’s incredible. The investment-making world to staffing. I’m confident that’s the first I’ve heard of that, after well over a hundred of these conversations. What are some of the things that surprised you jumping from that world into the staffing industry?
[0:06:28] KH: It was a unique time to enter the staffing business. There were a lot of tailwinds. You have the onshoring and manufacturing. I joined it in 2022. You had the onshoring and manufacturing, you had the Chips Act, you had the Inflation Reduction Act, you had low interest rates. There were a lot of tailwinds pushing success in staffing, but there are also a handful of headwinds as well. You had an aging workforce, and you had a sizable gap in supply of labor versus the demand for labor.
I felt convicted at the time that if I was able to take some of the things that I’ve learned in strategy consulting and investment banking and pair those together and help HardHat build a stable foundation for growth, then I felt convicted that we had a massive opportunity ahead of us. It’s turned out, and I mean joined in ‘22, and the businesses has just about tripled in the last three years. I’m excited to have played a part in that, but clearly not the only part in that. We’ve got a lot of great team members and folks that have helped me drive that success.
[0:07:26] DF: I mean, tripling in that timeframe is really incredible. What are some of the things that – you had your experience with AMEX. Are there any specifics that you feel like, from the strategy world, the investment world skill sets that have been especially applicable, or useful in terms of how you’re approaching staffing?
[0:07:45] KH: My role in HardHat is more on the operational side. In investment banking, they teach you a sense of urgency. They teach you attention to detail. I remember many of the late nights when we were getting feedback on slide decks that would come down to the size and style of a footnote. You pair that with strategy, and a lot of the work that I did in strategy was dissecting complex problems, leveraging data, and then communicating actionable recommendations to a leadership team. When you pair those together, I think it’s a pretty dangerous pairing, especially when it comes to trying to modernize the operational side of the business.
Those are the things that I’ve tried to take to a space that I didn’t know much about. I think I had to pair that with the fact that I was coming in as a newcomer. It took me several months to wrap my head around the staffing space and how to speak the lingo, and how to understand some of the terminology that goes into staffing as well.
[0:08:38] DF: Yeah. So, you’ve taken that strategy, operational excellence that you learn outside of staffing, just from a business perspective, and how do you apply that problem-solving here. I know you and I have talked about, with HardHat, when you joined, your focus on building a stable foundation for growth, how do we really dig in? What did that mean for you in terms of practically, how did you approach that?
[0:09:00] KH: When I joined HardHat, we had – the company had been around for about 20 years. In the first 16 years, the company mainly had locations in just North Carolina and South Carolina. In the four years prior to me joining, they’d open offices in D.C., Baltimore, Maryland, Virginia, and Florida. Now, two locations in Florida, one in Tampa and one in Orlando. The team was lean and agile, but they were in growth mode. They were solving challenges as they arose.
I think, sometimes, what was best in the moment was maybe not the right long-term solution when you’re thinking about scalability for a business, and I can share a few examples. One I like to tell people is our entire company, when I joined, was operating off of personal Microsoft shared licenses. You buy a license, and then you have up to a certain number of devices that you can share that license on. We were having data sharing problems between a sales rep in Greenville and an operations manager in our Orlando location.
In addition to that, we had sales reps that were mainly pricing on instinct, which can make sense when you know a market and you’re intimate in terms of what the workers comp is, what the SUTA rates are, what the FUTA rates are. But when you start to grow beyond your core competency, it’s really key that you understand all the factors that go into that price. In addition to that, we were hiring to keep up with demand. We were adding sales reps, but we didn’t have a limited – we didn’t have a structured training curriculum that allowed us to drive the most value out of those reps.
When all the offices were in close proximity to each other in North and South Carolina, our President, our CEO, our VP of sales, could spend multiple days of a week in that market training sales reps, training managers, training operations managers. When you expand to Baltimore, Maryland, and then as far south as Florida, that training becomes harder to wrap your arms around. For us, it was about building more consistency across the board in each of our offices.
[0:10:57] DF: Yeah. You looked at as like, just where are the gaps in terms of standardization, consistency, things that actually will scale. What are some, any specific actions that you took in terms of that that have had an out-weighted impact, things that you’re like, “Wow, we put this in place and the results of this have been meaningful and have been sustainable over the long run”?
[0:11:19] KH: Yeah. I think just going back to the examples that I gave, happy to share, obviously, on the podcast that we’re back in compliance with all of our Microsoft licenses. We have business standard licenses across the board for all of our personnel looking to expand that to business premium. But we built the IT infrastructure in a way that was more modernized for a company of our size. We built tools, like a sales pricing calculator that’s dynamic, that allows multiple different inputs from per diem, to inflation reduction cost, to the ability to accrue sick pay. Then we built a training structure to train our recruiters, to train our sales reps. That walks them through the milestones to success, so that we could more easily put somebody on a path to success. Then, also, we could easily identify poor performance as well. Just addressing those three examples that I gave, and the list is endless in terms of some of the things that we’re trying to do to continue to build that stable foundation.
[0:12:15] DF: Yeah. One that you told me about previously that I thought was especially interesting is the twice-yearly roles and responsibilities review. This one actually stuck with me, because that’s just such a basic operational thing, just to have clearly defined roles and responsibilities, and also something that I think gets overlooked so frequently at small businesses, because it’s just easy to not do, and it’s easy to assume that people know what they’re doing. Tell us a little bit about what that exercise looks like and how that’s impacted the business.
[0:12:48] KH: Yeah, it’s funny. I’m sure some of my team members would agree and argue that some of the things that I’ve learned in investment banking and the attention to detail have carried over into a maniacal approach for certain tasks, but it was really important. Part of the reason is since I’ve joined, we added more offices. We added Atlanta. We added Austin. We added Palm Beach, Florida. Our team and my corporate operations team is dispersed across multiple offices. That’s given us certain advantages. It gives us access to talent. It gives us presence in local markets. We can hear what’s going on at the ground level. But it also creates challenges in terms of communication and prioritization.
For me, scaling efficiently meant clearly defining roles and responsibilities. Our ops leadership team meets twice a year. One part of that prep is identifying all recurring tasks for members of their team and then categorizing those tasks across effort and impact. Our goal is simple. We want clear delineation of roles and responsibility, so that we can fine-tune the prioritization of people’s time.
[0:13:56] DF: You also, I think when we had talked about this I think it was interesting as the not only looking at effort and impact, but then looking at the, if I remember correctly, it was the high impact, the roles where you’re like, “Well, we have to make sure that we have back ups for this and make sure [inaudible 0:14:09]. You’re being really, really strategic about the work to be done, who does it, and making sure it’s defined, so you don’t have the overlap and actually have the foundation to scale from.
[0:14:22] KH: We define every task in terms of effort and impact. We’ve got certain roles that play into which tasks are high effort, which tasks are low impact, etc. Really, what that helped us avoid, David, was we wanted to avoid a single point of failure. We wanted there to be a backup plan if somebody was out of the office and wanted there to be an SOP in place, so that the backup had a reference guide to completing that task. In addition to that, we wanted to avoid the tragedy of comments. We wanted clear ownership down to the person who was responsible for executing a certain task.
There are a lot of tasks that were shared, and that’s too difficult for us to assign responsibility. Each task has a primary owner and a secondary backup. That allowed us to continuously operate seamlessly.
[0:15:10] DF: That was great. I think these are foundational items, but so important for scaling and actually getting into position to be able to scale. What are some of the areas when it comes to automation that you’ve dug into? Maybe just share a little bit about your approach to that and how you’ve – any wins you’ve got on that front as well.
[0:15:29] KH: Yeah. I think one of the things that that exercise allowed us to do is it allowed us to figure out which tasks were ripe for automation. We started with tasks that were low impact, but high effort. We were spending a lot of time, but if that particular person that was the owner of that task was out of the office for a week and that task could wait, then we were defining that task as low impact. We wanted to figure out which tasks were high effort and low impact and try to figure out, how do we free that person up so they can go do something that’s more critical for the business. We started there.
Some of the tasks that we started with, for example, were on the data collection side. Safety is paramount for HardHat. It’s a shared responsibility across the board from our leadership team to our sales reps, to our recruiters, to our general managers. Part of the way that we ensure safety is via site safety evaluations. We conduct a safety evaluation of sites that we put our employees out to work.
Historically, that was a manual process. The sales rep would walk onto a site. They would use an app. They would complete a thorough site safety evaluation. They would save a PDF. They would attach that PDF to an email. They would email that to our corporate safety team, who would then review the information, save it in the right folder, and rinse and repeat. Now with things like Power Automate and Power BI and Copilot, we can build that form in a more digital format. We can set it up so that once you hit submit on that form, it’s automatically emailed to the right team. A PDF is automatically attached to an email. It can CC the sales reps managers that they know that the form was submitted, can be sent directly to our safety team.
The format and the questions can be structured, so that we can easily use Copilot and Power BI to make sense of the data, digest the data, and present it back in a format that we can start making actionable decisions.
[0:17:21] DF: Yeah, that’s really great. It’s how you really get into the details on how do we operationalize this in a way that will drive value for the organization and you’re being strategic about how you approach it. One of the areas that we talk about in the podcast all the time is what to automate and what not to automate to make sure you keep the human element in, because we’re staffing, we’re into the people business.
[0:17:44] KH: Sure.
[0:17:44] DF: Everybody constantly talks about the going to automate the mundane stuff. How are you approaching that to make sure you’re not replacing the human connection? How are you approaching in a way that is creating value, but also still facilitating the human element?
[0:18:00] KH: Yeah. That’s a great question. We’ve noticed a lot of our competitors in the space closing up brick and mortar locations and trying to centralize operations. We’re staunchly on the opposite side of the camp. We want to keep human connection to the fullest extent possible. The goal of automation for us and AI is to –
[0:18:17] DF: Continue to extend branches locally.
[0:18:19] KH: Yeah, we’ve never been a company that wants to put lights on a map. We’ve never been a company that wants to continuously grow for the sake of growing. We want to grow opportunistically when we have an opportunity to capture a great talent, or if we have an internal employee that wants to go start a new location for us. That’s how a lot of our locations were historically started. For us, if we’re going to have multiple offices, multiple teams and offices, then we want to make sure that they’re working efficiently.
For us, the goal of automation has been, how do we unlock the capacity and potential? How do we alleviate stress points and take the administrative burden off of our teams, so that they can focus on what they do best? Recruiters can recruit, sales reps can be on job site selling, managers can manage, and the automation can handle some of the backend tasks that were slowing them down historically.
[0:19:09] DF: One of the things that I remember early on in our relationship is you built one of the best ROI models I’ve ever seen anybody build for Staffing Referrals in terms of how to apply that. How are you looking at the ROI of software? I mean, it sounds like you’re looking at the impact and effort; are you building on ROI models out for all of your software implementation? Yours was hands down the most advanced in all the years of working with staffing partners.
[0:19:35] KH: I’ve been known to overanalyze a decision to a point where you start to become a little bit – you can slow yourself down if you’re not doing it correctly. I’ve got to balance that quite a bit with just the practicality of making decisions and pushing forward. We do analyze different software when we’re looking at making a new decision. But one thing that we also try to do and as importantly for us is analyzing the data behind, is making sure it’s going to work well for our teams.
It’s very easy as a corporate team to try to think that you know what’s best for the business. For us, it’s about listening, it’s about working with our sales reps, our recruiters, our managers to figure out what their pain points are. That’s why if you go back to having our leadership team dispersed across multiple offices. Yeah, it can create some issues on the communication side. You have to be very conscious not to get meeting fatigue and sit on Teams meetings day in and day out. What it also gives us is it gives us an ear to the ground in our local offices to understand some of the challenges that they’re facing and then try to build solutions to solve those challenges.
[0:20:35] DF: You’re doing the ROI math on it, but you’re also making sure that you have the – at the ground level, everybody bought in and they’re solving the real problems that they have, the day to day. One of the other things that you and I talked about briefly is that you’re bringing data into your decision-making in a more meaningful way and that you just recently hired a director of business intelligence, which is a new area for you guys. He’s just talking a little bit about what are some of the first actions you’re taking in the data discovery, data analysis and how do you see this unfolding and unlocking growth for you guys going forward?
[0:21:10] KH: Part of the premise for hiring a director of business intelligence was we wanted to move from reactive decision-making to proactive decision-making. I think historically, we had been relying on data and on dashboards that were updated on a monthly and quarterly cadence. We wanted real-time access to critical incidents in our business, so we can make quicker data-driven decisions. That was the premise for the role. We started building dashboards around certain tasks — recruiting, accounts receivable, finance.
One of the first ones that we built was on the accounts receivable side. Part of the reason we did that was the metrics were clearly defined. Also, as you grow, it’s easy to loosen credit standards to keep up with the demand. If you loosen your credit standards to keep up with the demand, you’re ultimately going to have to face that problem. We wanted an AR dashboard that could in real-time, give us accurate metrics on DSO and our terms, so that we can more quickly address problem accounts.
[0:22:10] DF: That’s incredible. How’s that going so far? What’s the impact that it’s had?
[0:22:16] KH: Yeah. I think the impact for us has been, you take something that is historically done on a manual level, sent out at the end of the week, and you turn it into something that on a Tuesday morning, on a Thursday afternoon, our CEO, our president, our managers can start diving into on real-time and it’s updated on the hour, every hour. They can get a clear visibility into where we stand with an account.
Historically, it would take our credit manager connecting with a manager of an office, who then would have to connect with a sales rep, who then would have to connect with their customer to figure out where we stood on a certain payment.
[0:22:54] DF: It infers first quick action, better decision-making, faster decision-making.
[0:22:58] KH: 100%.
[0:22:59] DF: Yeah. You had mentioned previously as well that you’re embedding some of this into different tools that you’re using. Could you tell us a little bit about that?
[0:23:06] KH: Our ATS is TempWorks. We also use HubSpot as our CRM. One of the tools that we’ve been experimenting with lately has been on the Power BI side, building the dashboards. Our rationale for building those dashboards from the beginning is we want to build them and we want to meet the team where they work. Our sales reps are on HubSpot, our recruiters are on TempWorks. We wanted to make sure that they didn’t have to go to multiple locations to find the data that they need.
One of the first projects that our director of business intelligence helped lead was building the API connection to feed critical information from TempWorks to HubSpot. We didn’t want our sales reps having to, in the front seat of their truck, when they’re already in HubSpot typing in customer notes to have to tab over to TempWorks and try to figure out what the pay and bill information was for a particular employee. We wanted that information to meet them where they were and limit the amount of places they need to go for information.
Ultimately, the goal, similar to the premise of some of our previous questions has been, how do we free up more their time, make it easier for them to continue what they do best, which is having those conversations with superintendents, with foremen about their labor needs.
[0:24:17] DF: Have there been any aha moments, like big wins, prizes, whether it’s on the data side, operation side, any exciting moments you’ve had over the last few years?
[0:24:28] KH: I think an aha moment, we really started to see it when we started to look at the ROI and gross profit of individual employees. Especially when you start looking at the channels of acquisition for ad platforms to referrals. But one of the other areas that I like to credit when looking at business intelligence and analytics is it’s so easy to get buried in the metrics in staffing. There’s so many different metrics.
For us, the goal has been, how do we create four to five metrics and KPIs for each function of our business: sales, operations, recruiting, safety, finance? Then how do we properly train, manage, and incentivize the focus based on those four to five initiatives by function? Give everyone a sense of ownership of those metrics, which allows us to cut through the noise on metric overload as a business.
[0:25:20] DF: Any of those metrics you’re able to share? Any north star metrics that are internal that you’d be – the dashboard that has been most meaningful, or useful? Recruiter is interesting. I’ve not heard many people talk about it from that perspective.
[0:25:34] KH: Yeah, we look at, obviously, a gross profit on the employee level. We want to make sure that we are tracking metrics on retention, so average hours worked, average assignment link. But it spans multiple assets of our business. We want to look at, on the safety side, we want to look at incurred loss. We want to look at injury frequency and then we want to pair that to our site safety evaluations. We want to understand exactly where injuries are coming from. Then, we also want to know the length and tenure of an employee, know the trade that they’re working in. All these different data points help us make better actionable decisions for our business.
[0:26:07] DF: That’s great. That’s great. One of the things that I think is a major shift in the industry right now from a sourcing perspective that we keep hearing about is that kind of the importance of quality over quantity and the shift towards making sure you’re delivering the right people. I know you’ve mentioned that that’s a key thing for how you guys approach your sourcing strategy. Could you tell us a little bit about the evolution of your sourcing strategy and how you guys focus on quality?
[0:26:33] KH: For us, attracting and retaining quality employees is the key differentiator for our business. We define quality across a broad spectrum. We have internal rating systems that we use during the onboarding process that are based on candidate professionalism, skill set, experience. We do skills testing in all of our locations. I sit in the Atlanta office. We have an electrical board here, where we have candidates come in, and then pipe, they are required to have been a three-point saddle, a four-point saddle, a 90. We want to know from them touching the pipe vendor, how well and how their experiences matched up with their resume.
Then once they’re on assignment, we want to look at assignment length, we want to look at average hours worked, we want to look at feedback from customers, and we build that into a full employee profile, so that we’re properly matching that particular employee with the skill sets demanded by the customer.
[0:27:27] DF: You’ve actually, you’re measuring quality upfront and also when they’re getting it from the customer as well. Is this, do you think, the key differentiator for a HardHat? How important is this in terms of how you guys go to market?
[0:27:41] KH: I think it’s critical. We’ve always called it the eye test. We want to be able to sit across from a candidate, ask them open-ended questions, and have them elaborate on their experience. We want to put them through a test in our office, not only the physical test of bending the pipe, but also a written test to understand their competency when it comes to electrical basics and knowledge.
I think it’s a key differentiator. A lot of companies in our space don’t have that level of rigor when it comes to recruiting, which in certain instances can lead to maybe being quicker to market when it comes to placing candidates. We found that the more thorough that we can be on the quality side, the more longevity we’ll have with customers when they realize that the quality of the candidates that we’re putting out excels compared to the competition.
[0:28:30] DF: Just the other day, I was playing around with AI and ChatGPT, and I was just like, what is the biggest disruptors to the staffing industry? How is AI going to disrupt it? The thing that has been repeated on this podcast and also, what AI said, it was just like, the transactional quick, how fast can I get this person into the job, adding them and actually doing any of the extra effort, or value creation is going to move quickly towards AI models, because they’re going to do the transactional effort pretty quickly.
I normally don’t go into this in detail on this podcast, but you’ve been pretty thorough in terms of how you’ve approached working with Staffing Referrals and as a Staffing Referrals customer. Curious if you’d be open to just sharing a little bit about how you’ve – when it comes to the sourcing talent and the importance of referrals, talk a little bit about some of the aspects of that.
[0:29:19] KH: Yeah. David, to piggyback on the last comment that you made, Staffing Referrals, referrals have always been a source of high value for our business. We talked about one of the aha moments was realizing the value of referrals from an average hours work perspective, from a length of assignment perspective. Historically, it was always a manual process for us. We would write candidates on a whiteboard that referred their friend. The earnest was on the employees to actually follow up and check in with us to see if their friend hit the hours that were required for them to get that bonus.
Staffing Referrals has allowed us to digitize that entire process. It’s provided a platform, so that we can proactively communicate with employees. Employees are notified when the referral hits the required hours, as opposed to having to call in and check. And it just creates a lot more consistency for a more reputable program long-term. Our cost per hire for referrals are 80% lower than ad platforms. We’ve noticed that they’re twice as likely to go to work. On average, they work twice as many hours as well. We have been pushing it heavily internally. I think it’ll continuously be a critical factor for us when it comes to quality of employees, trying to figure out how we build our referral platform.
[0:30:35] DF: Obviously, I love hearing that, but also, your guys’ execution and implementation of it, thoroughness that – you talk about being maniacal about things, you ROI model, and then the thoroughness of getting everybody involved in the decision-making to your people were ready for, what a good rollout of software looks like. It’s something we learned from you on how to do that as well.
[0:30:56] KH: ROI can be there. But again, going back, if you don’t communicate it right and position it right with the teams, then it can still fall flat on its face. I think we’ve done a really good job. We’ve hired really great people to add to our training team to help us push out new technology initiatives, like Staffing Referrals. Then once you show the recruiters the data, once they’ve had a chance to play around the platform, see how it’s going to benefit them, we had recruiters that sat in on some of the evaluation calls to make sure that this was the right platform for them. Once you’ve shown the data on ROI, and on average hours worked, and on the percentage of hires, it provides a much easier sell going forward. Our recruiters are locked in.
[0:31:36] DF: I know one of the things that we have discussed on HardHat as well is about how you guys are approaching business from a transparent perspective, which is, I think, the future as well. How are you showing up with customers and giving them visibility into your operations in a way that actually creates value for them?
[0:31:53] KH: We have a handful of customers, especially on the larger customers, national businesses that ask for more detail when it comes to reporting. We have customers that ask for spend and headcount by discipline, by seniority level. They’re looking for leakage reports on tardiness, on absences, they want safety reports on injury frequency, on near misses, our safety training cadence, and in some cases, what comprises our market.
For us, when we walk a customer through our pricing top to bottom, when you start to look at the burden, which includes your SUTA, your FUTA, your FICA, your insurance, when you look at benefits, retirement, PTO, accrued sick pay, etc., and then you start to factor in things like turnover, HR, safety issues, the cost of PPE, the cost of onboarding, the time spent onboarding, I think it really helps solidify our sales point, which is, allow the customers to focus on what they do best, and their comparative advantage, and allow staffing to help supplement their workforce, and allow us to do what we do best. I think that mutual partnership has been really important for some of our larger clients.
[0:33:05] DF: It sounds like you’re moving in the direction of most of your customers are more of a strategic partner, than the “Hey, we need something now, we’re going to work with you for the next 30 days, and then that’s it.” Is that a fair assessment of your approach to business?
[0:33:17] KH: We definitely want to be that way. I think the way that transparency has changed some of our client relationships is it builds trust, and that trust promotes a level of retention and increases stickiness with the customer. If we’re providing them access to data on spend and headcount by discipline and seniority level, it enables them to make better decisions on their labor needs. It also creates a barrier to entry. They have a partner that knows exactly how they want to see their reports formatted, they have the right technology in place to be able to provide that level of data, their superintendents are comfortable with the employees on site and the sales rep that is servicing the account, and that familiarity and that level of reporting and technology, I think, only creates more barriers to entry when it comes to uprooting some of those relationships.
[0:34:01] DF: Yeah. How are you guys approaching – you brought this up just a moment ago, but the safety aspect of this and safety reporting, how are you guys approaching that and communicating it with customers in a way that makes sense?
[0:34:14] KH: Safety for us is paramount. I think I mentioned that earlier. But an injury on the job site impacts everybody. It can impact the general contractor, it can impact the subcontractor, it can surely impact us, especially if it’s our employee. We’ve got to figure out as a company how do we build safety as a brand differentiator. We’ve been in talks with a few customers on trying to create more of a two-way safety rating, where we can have our employees rate the particular safety of a job site, we can have our customers rate our employees on our job site. For us, we’re always looking for opportunities to try to figure out how do we make that job site safer for our employees to avoid that backlash of having that impact, our customers, our subcontractors, as well as general contractors.
[0:35:01] DF: Do you think that’s impactful in terms of the talent choosing to work with you guys as well? Are you meaning that’s a key choice, or is that more on the client side?
[0:35:09] KH: I would hope the talent as well. At the end of the day, our first priority is the safety of our employees. We want to make sure that they go home safely to their families. We feel like it’s our responsibility to help make sure that we’re putting them out in safe environments. Staffing for us, these employees are part of the family. We want them to feel like they have a culture where – and that’s exactly why we want to keep brick and mortars in some of these locations, is we want our employees to know that they can come to an office and address their concerns. They can come to their office and get more PPE. They have a place where they feel like they’re home. That’s really important to us, and obviously, ensuring that safety on the job site.
[0:35:50] DF: Yeah. I know we talked about this at the beginning, but you were in the process of scaling nationally, or have over the last few years. What are some of the biggest challenges you faced in terms of that, the growth and just scaling? What are some things that have held you guys back, or slowed you down over the last few years?
[0:36:06] KH: Yeah. I mentioned earlier going from a North Carolina, South Carolina company, the first 16 years of the business’s existence to the last eight, or nine going to – We’ve done business in 43 different states. We have 17 offices. We go as far north as Baltimore, Maryland, as far south as Palm Beach, Florida. We have an office as far west as Austin, Texas. I think the challenges to scaling for us have been, how do you build consistency and process? We lean heavily on the managers of our locations to build culture within their office. How do we continue to promote culture in the office built from the ground up, while also making sure that we have consistency in process, so that we can continuously do what we do best.
Going back to some of the things I shared with investment banking. Some of our competitive advantage has been our attention to detail, our sense of urgency, our follow up. We want to make sure that we don’t lose those things as we continue to scale and that we still serve as customers as if we were a smaller local company.
[0:37:05] DF: Is there anything that you would do differently in terms of the approach and that you would have changed, or shifted the approach?
[0:37:13] KH: Yeah. You know what? I think personally, being a family business, there is a lot of emotion in what we do and what I do. There’s emotion and pressure that goes into stewarding a business into the next generation. I think for me personally, I want to be more thoughtful about enjoying the process, deepening relationships with our employees, with my colleagues and appreciating the value that we provide to our employees and customers.
I think on the professional side, we have tried to take a step back and started thinking about more of the medium-term strategic planning. I think from a long-term strategic planning process, we still have a lot of room to grow. Sitting as a leadership team and starting to think about what the next three, five, seven years look like for our business and then trying to take the steps in the near-term that allow us to get closer to that goal.
[0:38:03] DF: Any of those goals you’d be open to sharing? What is the three, five, or seven-year plan look like for HardHat?
[0:38:10] KH: We want to be able to service customers nationally, while maintaining a local feel. It’s easier said and done. A lot of companies as they scale, scaling is a privilege. We continuously talk about scaling as being a challenge, but scaling provides you an opportunity to invest in technology, it provides you an opportunity to make opportunistic hires, but it also brings in room for complacency. You can hire too quickly, you can spend beyond your means, you can loosen your credit standards.
For us, it’s about scaling in a smart way that allows us to stick to what we’ve done best and how we’ve served our customers over the years, but be able to do so in multiple markets across the country.
[0:38:50] DF: I love it. With that, we’re going to flip over to the lightning round up to this. What is the most underrated source of trade’s talent right now?
[0:38:59] KH: For HardHat, it is our own database. We’ve got 17,000 active employees that have worked for us in the past three years. We’ve got to figure out a way to maximize that value, improve the quality and format of the data in our system, and then leverage tools like AI and automation to unlock that value for our customers.
[0:39:18] DF: That’s great. What is one mistake that has taught you a lasting lesson?
[0:39:23] KH: I think when you say lightning round, you want a quick answer here. I had a former boss that said 90% of problems can be solved by communication and positioning. 90% might have been a little high, but –
[0:39:33] DF: I like that one.
[0:39:34] KH: That statement is always stuck with me. Early in my career, when I was a young financial analyst, I rolled out a commission plan for a company that had been around for 100 years, a financial services company. Soon after I sent the email, I got a call from a manager of our Baton Rouge, Louisiana location. I don’t know if you’ve ever been berated by somebody from Louisiana, but it’s something that sticks with you for a long time. I think that experience, without going into details, taught me the value of how you communicate things, how you position things, and how you build early support for initiatives, so that the initiatives that you’re rolling out are well-received.
[0:40:13] DF: That’s great. What book, or books have you given most as a gift, or have been most impactful on you, and why?
[0:40:22] KH: I love the book Shoe Dog, which feels like an easy answer, but I think it’s a great book on the perseverance that’s needed to start a business, to scale a business, and just the overall story on how Nike came to be.
[0:40:40] DF: Good suggestion. Go and close out there. Any closing comments for the audience you want to share?
[0:40:44] KH: No, I hope this was informative, David. It’s been a pleasure working with you on the Staffing Referrals side and seeing your business grow. For us, we want to partner with technology partners, with benefit providers, with network security, with companies that excel in the space that they’re in. That allows us to focus on what we do best, which is providing quality, skilled talent to commercial and industrial clients. If you’re in the space where you need help with your labor needs, we’d love to be the first call and look forward to serving you in any way that we can.
[0:41:15] DF: Awesome. Well, Kyle, I really appreciate you being on. One last question, where can listeners connect with you, or with HardHat if they want to get a hold of you?
[0:41:21] KH: We like to promote that human element. Pick up the phone and call us if you can. We’d love to chat. If not, you can reach us through our website, email, and across all the main social media platforms, LinkedIn, Facebook, Instagram, etc.
[0:41:34] DF: Awesome. Really, really enjoyed the conversation. It’s awesome hearing about your guys’ success, your growth, and just the operational rigor that you’ve applied to the staffing industry and your business. Thanks so much for joining today.
[0:41:46] KH: Thanks for having me on the show.
