Danielle Mulvey
If you have five star employees, you've basically worked yourself out of a job because you've got people who are doing the work better than you. And they're taking the ball and they're running with it. And so then I think, you know, one of my friends said, Oh, I've worked myself out of a job, I was like, No, you've worked yourself into the best job. Because now you can just love and nurture and take care of your people and go all in on them. And when you do that, they'll go all in on you.
Jeff Ma
Hello and welcome to Love as a Business Strategy, a podcast that brings humanity to the workplace. We're here to talk about business, we want to tackle topics that most business leaders tend to shy away from. We believe that humanity and love should be at the center of every successful business. I'm your host, as always, Jeff Ma. And we're here to have conversations with real people and hear stories about real businesses. And my guest today has cracked the code on recruiting, hiring and retaining what she calls, five star employees that dedicated game changers that really carry a company's core values with them and have the qualities and skills that really make a difference. While running and scaling several companies. She has also spent the last decade developing, improving the All In company community, which helps other entrepreneurs in attracting and hiring five star employees. She's authored the book, The Rapid Read guide to the five star employee rating system and hosts the Profit First Nation podcast. Welcome to the show. Danielle Mulvey. How are you?
Danielle Mulvey
I'm doing great. Thanks for having me, Jeff.
Jeff Ma
Absolutely. And I love your background, the All In company, I'm going to get to that for sure. But I want to start with you on a much more personal note. Something I always am curious about every person I meet is it starts with passion. I think passion is important in life. And I always want to know what drives people. So Daniel, what is what is your passion? What is your purpose?
Danielle Mulvey
Well, I you know, I think my my passion is helping other people just be confident about what they're doing, and sharing their gifts and talents with the world and realizing that they are worth more than they think. And I think we all just need like cheerleaders in our corner. And funny is I was a cheerleader in high school, and, and in college too. and such. So I've just always had this like cheering on people aspect about things and such. So I really love working with other entrepreneurs and just I get it, there's ups and downs twists and turns. Sometimes you're upside down being an entrepreneur. And so, you know, it's just kind of getting getting us through that and getting us to, to realize you know why we're here and what we should be doing.
Jeff Ma
Can you share a little bit about your, I guess, journey? I know. I read up on you. And there's many steps along the way. But many could you give kind of could you give kind of the Cliff's Notes on kind of what got you to what you're doing to today?
Unknown Speaker
Absolutely. So at the ripe old age of 25, which was almost 25 years ago, I started my first business, it was advertising and marketing firm in Nashville, and we grew fast, quickly, we were turning over a million dollars back then, in our first year in business and growing. And I was 25. So my hiring strategy was to hire people younger than me. Because if they were younger than me, they had no other professional experience necessarily to compare me against. and such. So that was that was my strategy. And it worked out. You know, my first few hires were were pretty good. And then I hired someone. And this individual, I'll just refer to him as Jr. I woke up when Monday morning and was like, Can I call in sick to my own company, because I did not want to go in on that Monday morning and face and deal with Jr. for another week. He was making me miserable. I know he was annoying my staff. And that's when I was just like, Okay, I need to get serious and grow up about hiring and understand what I need to do because I don't want to hire another Jr. Again. And so really, that was the moment that has just set me on this obsession with hiring the best employees and at the time, you know, back then, this is late 90s. I mean, GE is still you know, one of the most admired companies in America. Jack Welch is running it and he was following top grading so I just dove all in on top grading and and really, you know, kind of learned that that was the whole like A B and C employee and such. But a lot has changed. I mean A top grading hasn't changed and, and over the last 25 years, you know, we've got the internet, we've got automation, we've got applicant tracking systems, we've got a lot of different things. And so I have evolved by recruiting and hiring process to leverage technology leverage smart ways about doing things, and such. And so that's where I am today. And I am the host of the official profit first podcast Profit First Nation Profit First was written by Mike McCallawitz, we're obviously good friends and, and we both actually were like Big Top grading fans back in, in the late 90s. and such. And Mike's books are sort of an evolution of like, what the entrepreneur is going and his readership and such. So actually, we're collaborating on his next book that will come out in December 2023, tentatively titled All In how to get your employees to act like owners, and a lot of it is about, you know, having the right people in the organization. And how do you find those right people, what we what we've coined the five star employee, for your organization. So that's, that's been my 25 year journey.
Jeff Ma
I love it. And I think we can all relate to Jr, I guess, or the experience of Jr. in one way or the other. So, let's dive into it. What is a five star employee?
Danielle Mulvey
Yeah, a five star employee represents the top 15% of available talent in the market for the role at the given rate. So that means one out of seven candidates is a potential five star employee. So it becomes a numbers game, when you're looking at recruiting and hiring five star employees. I mean, you need to have at least 25 applicants to have three potential five star candidates. And so what what we find most often with entrepreneurs, and hey, I've been there, done that, you know, like Jr, landed on my doorstep, he had pulse. So he had the degree of graphic design, you know, he was, he was actually Oh, my gosh, he was a brother of someone, one of my friends from college, and he was a fraternity brother of one of my employees. So it's like, oh, this should be like a no brainer. And such but, but but obviously it wasn't. So it's really understanding exactly what you need for the role. And so we actually have a five star employee rating system that helps you objectively assess your, your your known talent, and potential talent for each role.
Jeff Ma
So one of the things that I see in recruitment, as you mentioned, with more technology and more accessible tools and things like that, you mentioned the term numbers game. And I think part of the problem that I often see is that a lot of times the numbers game removes the kind of human element out of it, or it looks at a lot of factors, which are important skills, things like that. But you're not always getting, you know, the fit, or the the values across or just the, you know, just the behaviors of a person that like the way they're going to act or treat others. So obviously being Love as a Business Strategy here. What, how does that play into your, you know, five star rating system?
Danielle Mulvey
Oh, my gosh, love plays into it in so many different factors. And, and the first thing is, is that you want to get someone who loves what they're doing. All right. And so you want to make sure that you're that when you hire someone, it is a really good fit for them. And it's not just, you know, they applied to a job and are going to be collecting a paycheck. So here's an example. I'm a five star entrepreneur. But I am a two star bookkeeper. I could get a job tomorrow as a bookkeeper, no problem. I could sell my skills Sam, a bookkeeper. And I could get hired as a bookkeeper. But I would be a two star bookkeeper, because I don't love bookkeeping. I can do it, but I don't love it. And so I would be a bad hire. Because although I say I can do it, and although I have the skills to do it, I wouldn't love what I was doing. So I wouldn't be a five star bookkeeper. Does that make sense?
Jeff Ma
Yeah, absolutely. And I think love for the work, love for the roles in the job is is paramount. Also, I'm curious, though, is what about love for each other or I guess the environment and things like that, that really the things that really make a culture because I I don't know Jr. But a lot of what Jr did wrong, that that made you not want to go into work that morning was not necessarily the reports he filled out? Or, you know, it's probably more likely the way he talked to you and the way he responded. How does that how does that factor in?
Danielle Mulvey
I guess so. So so. So there's five criteria in the five star employee rating system. And the first one is probably the most important, it's like, where do you have to start? And are you aligned with the core values. So the core values are the core values of the owner. They're not like accidental values, or aspirational values, they're like, the things that are true to me 100% of the time. And, you know, one of my core values is, is delighting others. So I do want to give people what they want, I do want to delight them. And and you hit the nail on the head, Jr, although he was a graphic designer, wanted to just do it his way. And if the client had to change, he would scoff at it. And he would be combative and argumentative with me about making the change that the client requested. And so that is the opposite of delighting others. So, I mean, I won't go on but but we just weren't in alignment with our core values. And, you know, how did I know now what I had I know, then what I know now, I mean, he wouldn't have been hired. Because the first and most important thing in the five star employee rating system is making sure that an employee is aligned with your core values and those core values, you need to not only list those core values, just like three to five. But you also need to have clarifying statements of exactly what you mean by that core value. So so it's really crystal clear about the expectations of what delivering on that core value is and, and you start talking about those core values in the job posting. So, you know, I mean, that's going to attract the five star employee for your organization, because they're gonna be like, Oh, my gosh, yes, this is me, this is, I love this. This is this is this is who I am I want this is the company I want to work for. Why? Because you're really aligned with the core values. So you start with core values.
Jeff Ma
How do you go about measuring that? I know, like, it's a rating system. So I guess in my head, because I haven't seen or I haven't looked into the specific, you know, rubric, or how it works and the mechanics of it. But how do you go about like, I can just I agree with you love it. But the challenge in a lot of like, fit equations here of like, of coming into this space and matching your values is that sometimes it's not as quantifiable as we want it to be?
Danielle Mulvey
Yeah, so the core values again, you know, when you start with, so the job posting, it becomes that attraction and repelling factor. So you're going to attract the five star employees who love everything that you're saying. And you know, like in the job posting, you're gonna list like, Here, here's how we measure success for the job. These are your three to five key responsibilities and, and we need you to hit 98% Financial accuracy, we need to hit Have you hit 95% procedural accuracy, and we need for you to process 42 claims a day, will someone who doesn't want to be held accountable, someone who isn't like gamifying, their work and such is going to look at that job posting and go, This isn't for me, because I've got 20 other jobs out there that appear, I can just collect a paycheck. And so I'm gonna apply to there. But for the five star candidate who loves the challenge, who loves puzzles, and things like that, this is going to attract them. And they're going to really want this job because it's very clear and the expectations match with, with what they're aligned in. And then so that's the first thing is like that, that attraction factor in the job posting and being very clear and upfront about the about the core values. And then and then over the course of what we call your hiring gauntlet, you know, the multiple touches and experiences you have with the candidate over your, your, your interview process, and such will allow them to kind of demonstrate, do they live these core values?
Jeff Ma
Is that something that I guess you prescribe as well like the, the process of interviewing and how to properly vet through these candidates? Or is it more about the upfront process of weeding them out?
Unknown Speaker
Well, you know, it's just it's not one thing. It's the sum of all things. So, so So through your process, I'll kind of go through the rest of the five star employee rating system. And then and then we'll talk about the gauntlet that you're using to take people through and evaluate them in the five star employee rating system. So the first criteria as I mentioned, is alignment with core values. The second is the what we've coined as the 11 universal qualities of a five star employee. So we've identified 11 qualities that are just universal, no matter the role in a five star employee. And two of them out of the 11 are coded green, which means they're relatively easy if someone's not meeting the minimal rating for that, to coach them up on that. Two of them are also coded red, which means like, those are red flags, if if someone is is so the two that are red are limber and listen. So you know, you you if especially if you're a small business, you need your employees to be limber, you need them to be able to change, pivot, do whatever you need to do, because you're a small business. And that's kind of the nature of, of small businesses. And then you need them to listen. And they need to be an active listener, they need to listen with all their senses, they need to be observing, they need to really be paying attention, they need to be taking notes, they need to be doing all those things. And so if someone's not demonstrating that in your process, then you know, those red flags come up. And that's where they stop in your process. And then the other seven are coded gray, which means if they're not meeting the minimal acceptable rating that you have for each of those qualities, well, you know, can you coach them up on it? Are you gonna go all in on them, and help them get better in, in those qualities, because it's possible, but it just requires some, some intention and coaching on your part with the employee. And, you know, back in March, I had an interview with a candidate, and we were only a couple minutes into the interview. And I'm like, She's not answering my questions. So then I was like, let me just kind of ask a little slower, we'll just not a complex question. And she still was not answering the questions. So at the five and a half minute, Mark, I said, You know what, I'm gonna cut this short, I think we're good. And I just don't think that this is going to be the right role for you, thank you so much, have a great day. Because the red flag was there. She she didn't listen.
Danielle Mulvey
And so so the second criteria is the 11 qualities of a five star employee. The third criteria are the attitudes and skills specific to the role. So So there's about almost 30 aptitudes. And so the attitudes that you need for a role are going to vary from role to role. And so you need to identify which aptitudes you need for the role and then you're going to ask questions and be able to give a rating on those that that candidates aptitude that's needed for the role, and you're also going to test them on their skills. So you know, I mean, so many companies are hire bookkeepers, for example, because someone says, oh, yeah, I can do bookkeeping. I'm a bookkeeper. But there's no certification for bookkeeping, anyone can call themselves a bookkeeper, I can call myself a bookkeeper. But you had so important to test for the skills that you need for the for the role. The fourth criteria are the success metrics. So you need to define the three to five key responsibilities. These responsibilities are what is driving the revenue, and and then what are the success metrics? How are you going to measure that person being successful with that responsibility. So for example, in one of our businesses, we have people that process long term care claims. And so you know, as part of that, that job and how we measure their success is they have to hit 98% Financial accuracy 95% procedural accuracy, and they need to be processing 42 claims a day. Those are the success metrics for being a claims examiner. And then the fifth criteria are is return on payroll. So you need to make sure that the employees value in the organization, what they're getting paid, produces a 3x return on payroll, because you need to stay profitable so that you can grow your business and be sustainable. And that's kind of like where we've gotten to, in addressing this topic about recruiting and hiring because most businesses, especially with 10, or more employees, and million dollars or more in real revenue, struggle with their profitability, and that that struggle is in their payroll because they have too many one two and three star employees. Because it takes two or 312 or three star employees to do the work of one five star employee for the same rate. So why pay to average ho hum are worse employees $50,000 A year each. So that's costing you $100,000 When if you would just hire one five star employee you could pay that person $50,000 a year. So now you're saving 50% on on payroll for that role, because you because you because you only you never settle for less than a five star employee.
Jeff Ma
Oh, that makes a heck of a lot of sense. I'm going to zoom in a little bit out of all those things, they all sounded very practical and they all sounded. I love it. I'm zooming in obviously my bias towards the the love as a business strategy branded thing parts that I'm hearing. And I want to know more about, you know, once these fives, like everything you described about a five star employee sounds magical on paper, obviously, they're fitting, they bring you profit, they're doing the job, right. They know what they're supposed to be doing. And then you have this added component of like, I think a lot of the businesses I've worked with that we've seen a lot of the, the problems that we set out to solve stem from people who, again, who haven't done this rating system, or haven't actually passed the five stars, I don't know what kind of how many stars they are, but it would seem on paper, a lot of them would would pass some of these, I wouldn't say all of them, but pass many of these these metrics, even even when it comes to the red flags, right, like listening, some of them are very good at listening. Some of them are very good at being I think, pliable. I don't remember the word you used - limber- sorry. But but then I think conflicts arise, I think people become people and then humans in pressure situations have often, but maybe not a different side. But a real side that comes through that isn't always captured in I won't say the five star but just in any kind of initial, a lot of the pain points we hear all the time is that, you know, everyone was hired, you know, as the best person for the role, but you put them all together. I'll use an example is I won't use a specific example. But we work with a lot of nonprofits. And I think nonprofits are interesting, because I think for many of them, they check that first box right away, like people who come to work at nonprofits really love the mission, they have strongly the company's values, usually right there in their crosshairs. So it's usually a check, check right there. But shockingly, some nonprofits have some of the kind of most just bluntly say, kind of toxic cultures within their work space, because everyone's so focused on kind of this mission, this doing good outside the walls, that nobody's kind of examining and working on how they treat each other. They become barriers, they become barriers and obstacles to their own kind of objectives and goals. Exactly. I don't know, the specific question I'm getting to with all that. But what are your thoughts on I guess the, the kind of cultural aspect of five star employees and how they fit together?
Danielle Mulvey
Yeah, for sure. So a couple of different ways to come out this because I promised I would talk about the gauntlet. So you know, what's interesting is, most, a lot of people, let's, I'm gonna put a number to this 90% of businesses hire people based off of in one interview, they make a decision based off of one interview. And, and so you've spent maybe 30-45 minutes an hour with someone and now you're gonna, you're gonna basically adopt them into your family, and just based off of, you know, showing up and being, you know, answering answering the questions, how, you know, someone could show up and kind of fake it for an hour. So that is why we suggest having a hiring gauntlet and the hiring gauntlet actually starts with the application and taking an assessment. So we have, we utilize an assessment that objectively identifies, you know, what is needed for the role. And so you create a benchmark in terms of like, the personality, the, the, the, the, the, the preferences of the person, their work styles, etc. And then, for each role, you, you, you, you create a benchmark, so when someone takes the assessment, you bump it up against that benchmark, and if they score 70% or higher, gets that benchmark and they move on to the next phase. If they don't score 70%, then they don't move on. But here's the kicker. Most people who apply don't even take the assessment, even though it's it's clearly stated in the job posting, you know, within 24 hours, please take this assessment. The assessment will be sent to you immediately upon your application. And the majority of people don't, don't do it. So right there, you're sort of weeding out the people and at that point, the people who score 70% or higher are Typically, it ends up being about 20 25% of the total applicants, then the next stage in our gauntlet is to do a screening interview. So we do like a 2030 minute interview, it's kind of a standard interview, you know, we're talking to them about their resume, their positions, you know, just kind of getting to know them. And such and, and we have like specific questions that we ask, and we have objectives that we're looking for. And so from there, if they pass that, then we'll usually give them some sort of testing. And then if they pass the testing, you know, we're putting to the skills work, etc, then we take them into a deeper dive interview, where we're asking pointed questions to help us evaluate them on the 11 qualities, and we're asking them very specific and pointed questions on evaluating them on the aptitudes needed for the role, then if they make it past that, there might be some more skills testing, but but we have a shadow day, and the shadow day is really that, you know, you're you're pretty sure that you're going to make this person an offer. And you can do shadow days in person, and you can do them virtually. And so it's really important for that person to kind of experience what a day in the life is, like, of being in this role. And such. And so, you know, we invite people to go with us to client meetings on Zoom or in person, we break bread together, we have lunch together, and I'll say this, we had a candidate one we, and these are this is make or break too. So I'll tell you about two experiences with candidates who did in person shattered days with our construction material supply business. And one person was in the cash, commercial, commercial real estate or property management. It was in property management. It was like, I want to get into construction, like exciting, fun, different. So, okay, great. We took him through our process, he got to the point where it was time for shadow day, we pay people for the shadow day, like it's, it's their time. And he actually came for two days. And then on the second day, he said, You know what, this is not for me, I thought this is what I wanted, but I think I'm gonna stay in, in property management. And it's like, great, like, it costs me, I don't know, 200 bucks. And, and, and if I would have hired him, he would have made, you know, probably $20,000 in payroll over, you know, three months or so four months, and then he would have left and because he would have hated the job and spent all that time of me paying him for three months looking for another job. Because he wouldn't have loved it. So it's really important. So heere, you talk about love factor, you know, do they love your culture? Do they are they going to really love what they're doing by spending a day in the life of doing it. And we had another candidate who, you know, came in, and we, you know, had lunch together, like we do. And, you know, at the end of the day, she's just like, because this office is in an industrial area, not many places to go out to eat, etc. It was small office, so everyone eats lunch together in the break room. And, you know, her her thing was like, so does everyone eat lunch together every day? And I was like, yeah, they they do they, they enjoy each other, they look forward to it. And that was a deal breaker for her. She's like, then I don't think this is for me, I kind of like, prefer to just kind of keep to myself. And, and so it's just like, Okay, well, this is yeah, this is this is not a fit. So, you know, it takes going through this gauntlet and, and at this point, you know, they've passed everything else from an objective standpoint. Now, like, let's put, let's let's them, let them test drive it, let them experience it and, and see if it really is a fit. Because a lot of companies, I have someone on our team who I recruited and hired in May, and she was not at her previous position for very long. Because she said it was like a bait and switch. They said, Oh, our culture is great and did it and all this stuff. But when she actually took the job and experience for the first time she felt it was a bait and switch. It was like it was not what they portrayed their culture to be at all. It was like, this was an aspirational maybe of what they'd like their culture to be, but it wasn't, it wasn't reality. So you know, by taking people through a gauntlet by spending time and investing going all in on your candidates will really you know, pay off at the end. Because Would you would you rather spend spend a couple 100 bucks to let someone test drive the job versus trying to force them into, you know, into taking the job and then them not really being happy in your culture or in the position or what they're doing. And you know, now you're paying them for three months. You're training them they're not super productive in those first couple of months when they're learning In the job and such, only for them to like, be looking for a job that whole time while you're paying them. And then once they find that job, they're off, and now you're back to square one.
Jeff Ma
That makes a lot of sense. Love the gauntlet, I think it makes, I think everybody should be doing that for sure. It definitely gives the, you know, more so than than company that confidence to hire the candidate. But like you mentioned, it gives the candidate the confidence that they are making the right choice and not getting bait and switched at the same time.
Danielle Mulvey
Yeah. Can I say something else about kind of the the love concept there? You've got to you've gotta love wanting to have employees as well. You know, I've, I've talked people out of hiring, because their attitude is like, Oh, I don't want employees. And it's like, well, if you don't want employees, then then then then then don't bother having employees. Because, you know, if you have five star employees, you've basically worked yourself out of a job, because you've got people who are doing the work better than you, and they're taking the ball, and they're running with it. And so then I think, you know, one of my friends said, Oh, I've worked myself out of a job, I was like, No, you've worked yourself into the best job. Because now you can just love and nurture, and take care of your people and go all in on them. And when you do that, they'll go all in on you.
Jeff Ma
I love that. And I think so much of what's required for for success, and especially building the right environment is that mindset, it is kind of how leaders, owners, entrepreneurs, managers come to the table. And I love that you keep saying go all in on the candidate, because that requires that mindset of being like I'm in it to, to get this done, right. And I want to do that with and that requires a mindset of you know, it can't be begrudgingly, it can't be tedious, it has to be something that you're truly invested in passionate in. So I love it.
Danielle Mulvey
And the other thing about that about the process, too, is that you have to be really cognizant of if someone applied for the job, of course they want to they want the job, why would they apply to like not get the job. So people tend to like, say things that you know, to get the job because they don't want to be rejected. But if you really care about people, then you need to make sure that you're not making a mis hire, that you're not giving someone a job that is not going to work out because I can tell you, I wasn't showing up my like I should never hire Jr. I wasn't showing up as my best like it was it was painful, like so, you know, I should have done a better vetting process, I should have had a gauntlet, I should have put him through the five star employee rating system. And then I wouldn't have I wouldn't have made that hiring mistake. And and it's better to do it on on the on the front end than have someone come into the organization. And so you've got to be tough on on yourself. And you have to be tough on on candidates so that you don't you don't set them up for disappointment or you don't make a mistake.
Jeff Ma
Tough love as I always say, yeah, that's it. Danielle, before we part ways, first of all, thank you so much. But also can you share where people can reach you what they where they can learn more talk about, just remind us of your book and your upcoming book, can you just tell us a little bit of that stuff.
Danielle Mulvey
So actually, you can kind of get a preview, I know I rambled on and through the the five star employee rating system, and we didn't touch on all of the 11 Universal qualities of a five star employee. So if you text NEVERSETTLE as one word,NEVERSETTLE to 411321. So NEVERSETTLE, text that to 411321 Then you can get the how the five star employee Guide or the guide on how to hire five star employees. Sorry, mess that up. But where we outline the 11 qualities, and you can see it and you can go over it of yourself. So that is probably the best way to get in touch with me. And then there's a link there if you if you want to. If you want to chat. I'm such a nerd about this subject. So I take lots of conversations.
Jeff Ma
Absolutely. I think it sounds like an amazing resource. I do wish we had more time to cover all of that. But I hope everybody will take advantage of that really generous offer. So Danielle, thank you for being so gracious with your time and joining me today. I learned a lot. I think there's a lot to think about or rethink and relearn about how we are considering our candidates. So I truly appreciate all the insight you brought today.
Danielle Mulvey
Thanks, Jeff. Cheers to going all in.
Jeff Ma
Yeah, absolutely. Thank you to the listeners. Of course as always be sure to check out Danielle's book and be on lookout for I guess it's quite a ways away over a year away but but for the second book but while you're waiting check out her current book and our book of course Love as a Business Strategy available everywhere and subscribe rate the podcast if you haven't. Other than that we will see everybody next week.
