Building Inclusive Communities, Diversity Efforts, and Creating HR Infrastructure For Startups

Intro

SecureVision CEO James Mackey recently sat down with Erin McCann, senior vice president of People Operations at SevenFifty, to discuss building inclusive communities, diversity efforts, and creating HR infrastructure for startups.

Erin and her team of four are responsible for everything related to the people at SevenFifty. Including hiring, career development, onboarding, retention strategies, how they hire, how the pay, inclusivity and diversity efforts, and more.

To listen to this conversation as an audio podcast, please click play below:

Building Inclusive Communities

James Mackey: So Erin, one of the things that you're really passionate about is building inclusive communities. Can you tell us a little bit about that?

Erin McCann: It is one of our passions at SevenFifty and it is really important to us. As we started to hit a growth phase, we were about 50 folks in 2020 and now 115, we were doing a lot of hiring. We really wanted to make sure that our population at SevenFifty mirrored the population of New York City, which is where the company was founded.

In order to get to that diversity piece, we realized we needed to focus first internally and create a community where all different walks of life would be welcome and feel like they had a home.

We really put our intention into building a team that was genuine and hospitable. We created several employee resource groups, where folks have safe spaces, affinity groups, and we also built out equitable processes for doing career development, career management, and compensation reviews. So everyone has equal access to opportunities once they walk in the doors of SevenFifty.

How to get started

James Mackey: That's great. For the growth-stage companies that want to start doing this but don't know where to start, what are the top three things they should be thinking about when it comes to inclusion, equity, and diversity strategy?

Erin McCann: The first thing is just acknowledging that everyone has room for improvement. There are always things that we can do better to support the people that are within our organizations. The earlier that we can start building out equitable, inclusive practices, the better.

For growth-stage companies, whether your headcount is 10, 15, 20, 50, 100, or 150, starting earlier is better. Start thinking about how you're rewarding folks, because we want to give equal opportunity to promotions, regardless of race, gender, creed, etc.

For example, how are you paying people? How are you sharing your salary bands? At SevenFifty, we believe in a transparent process. We have bands for every single role in the organization that are set to market and that means they're fluid.

When we hit the great resignation, which meant that a lot of companies increased their base salaries by 20%, we could also make that fluid and give raises off cycle because we realized that the talent market was changing.

But we did that in a way that was across the board, not just by one manager's view of performance.

The second thing is to consider how you're hiring. Folks who are of color may not feel comfortable having a first zoom call so that they're not judged right away by the color of their skin and might prefer to have a phone call.

We partner with Greenhouse, which is our applicant tracking system, and they send out emails saying what are your preferred pronouns? How would you like us to refer to you? How do you pronounce your name so that internally, our hiring managers, and our talent acquisition folks can address candidates the right way from the very outset.

The third thing to consider is the language that you're using. One thing you'll hear me say a lot is “folks”. We intentionally got rid of the term “guys” because there was this general view that guys addressed a whole bunch of people in a room. When in fact, you're cutting out at some 50-60% of our population when you're using that term.

We have a Slack bot that if someone posts in a Slack channel “hey guys”, it says, “Hey guys is a gender term, here are some other things you can use to refer to people”. Whether it's folks, or team, or all, or whatever.

Job Fairs

Erin McCann: When you start to go out to diversity job fairs, or some of the sites that are open for diversity hiring, you can point to the efforts that you've already made as an organization. Otherwise, it's going to be very clear that those efforts aren't genuine. And you're just trying to hire a diverse population of folks without understanding why that's important to your company.

James Mackey: At the end of the day it all comes down to just having a really healthy people first culture that empowers everybody.

Non traditional HR background

James Mackey: In your background, prior to your current role, you had experience in customer success, customer client experience, and other non-traditional HR roles. I think that experience translates quite well into creating an amazing people-first culture. If you can create an environment where everybody can thrive, it's going to produce amazing outcomes for the company.

Erin McCann: Having a non traditional HR background has helped me a ton. I learned how to present on a call from my sales background. HR, people operations, and talent acquisition folks are selling every single day. You're selling a candidate, you're selling a team on a process that you have to roll out, you're selling an individual who's not getting that promotion on why it's okay to not get that promotion, why it's not their time, there's a lot of sales that goes into human resources and people operations.

The other thing is having empathy for a lot of the roles that we're hiring for. Seeing the backgrounds of folks and the jobs that they're doing also gives me a really interesting insight into how they're thinking about their own career development. For example, when I’m talking to a BDR, I've done that job so I can accurately address the challenges they’re going to face.

Company Values Matter

Erin McCann: At SevenFifty, we are a values-first organization. I helped create the first set of core values two months after my start at and they're still with us today. We use them a lot in how we give feedback, how we hire, how we promote, and how we reward at the end of the year.

We have career maps for every role in the organization. Take a junior-level BDR as an example, they know the things that they need to do in order to get to a very senior level role from a core work perspective, from a teamwork perspective, from a collaborate with others perspective, from an execution perspective, project management perspective, from a values perspective, allowing others to share their ideas, moderating conversations and meetings, attributing ideas to the idea owner, etc. We find having this level of clarity increases the inclusivity that folks are really craving at a company.

James Mackey: That translates for us as well. Making sure that everybody has access to opportunity and knows exactly what they need to do to advance within the company, and how we treat people and how they treat each other, we make it very clear from the initial interview process that we're employees first and that we take care of each other.

We believe that's going to allow us to create an environment that does actually produce incredible experiences and outcomes for our clients as well. The focus is on our people and that's been a huge driver.

The Pros and Cons to Referrals

James Mackey: When you take a people-first approach to business, you see positive things happen from a talent acquisition perspective. You see referrals skyrocket when you take care of people, and you put them in a position where they feel appreciated, heard, and they know what they're accountable for, and how to continue to advance in their career. They're ultimately going to bring more people to the organization as well.

You should strive to have your employees proud of where they work because they want to share that with their network and the people they’ve worked with in the past. It is a huge advantage for companies that are willing to do the work to actually put people first.

Erin McCann: There are pros and cons to referrals. If you already have a diverse population of folks in your organization, referrals are wonderful because they have a diverse set of networks that they're within. If you don't have that diverse organization, referrals can almost make it harder to create a diverse population of people. So doing that early on and having intention behind how you're hiring from a diverse population is really important as you grow, because otherwise it gets much more difficult as you scale it backwards.

For those folks who are doing talent acquisition, having data is critical. For example, we have X NPS score at our organization, we have career maps for every role, your manager will be able to objectively rate your performance based on a series of criteria.

We are very transparent about how we pay and our compensation packages. Being able to have that information for your talent acquisition folks will set them up for success and be able to increase your close rate when it comes time to offer because you're in this market where candidates are comparing offers.

Socialize Change Quickly, Early, and Often

James Mackey: That's a great point. The sooner that companies can start to implement this, the better. Because the more it spirals, the harder it is going to be to actually make the changes you need to make within the organization.

Erin McCann: Try to socialize things very quickly because doing things is much more difficult the larger the company becomes than if you're doing it when you're just starting out.

James Mackey: Yeah, absolutely, and mention why you are doing it. At SecureVision, we are providing RPO solutions to growth stage companies and what I tell them is half the battle is pulling people along. The bigger the organization, the bigger the challenge it is to actually get people to go along with the plan and to implement the change that you need to see within the organization.

It’s definitely worthwhile to get started earlier rather than later.

HR infrastructure for growth stage companies.

James Mackey: This leads us to the third item that I want to discuss with you today and that is how to build out the HR infrastructure for growth stage companies.

Starting with earlier-stage companies, maybe around 30-50 employees, when they're starting to scale to 200-500 person plus organizations, what are the biggest challenges or holes that you see that they could fall into, from an HR perspective? And how do you build processes around preventing companies from falling in these holes?

Erin McCann: I’m fortunate to have started with a company as employee 13. In several other experiences, I have also joined as employee number 50 or less. For growth-stage, the experiences are similar but different when you're 13 people. You have such a great opportunity to come in and say this is how we do things and I'm going to set up structured recruiting.

That's one thing that I would suggest that any newly minted people-operations person at a startup. Or if it's the CEO, in some cases, managing those first hires, start with an ATS. And use that regularly because you're going to start to introduce biases. Otherwise, if you're just hiring the folks that you really like on a first phone call, start to get some scorecards invested in like a Greenhouse solution for example.

PEOs

Erin McCann: We've been on a PEO at SevenFifty since we were started; we're on Justworks. And from an HR perspective, having an all-in-one solution for benefits and payroll is really critical because you don't want to have to hire in-house benefits and payroll folks at this early stage. It's just like one thing you don't have to manage. And as a distributed organization for us, it just makes sense to have someone else doing the taxation for all of those folks.

As you get to about 250. That's kind of the tipping point where you want to consider bringing those people in house and also benefits providers because your cost savings, the cost benefit of a PEO starts to dip. So it's one thing I would recommend at an early stage is to get on a PEO, it makes your life so much easier. Most people probably already know that at this point.

We also started to do performance management fairly early in both orgs when we were recently interviewing some executive level folks, and I was sharing our people infrastructure. They commented we have way more setup than we do and they are at a 300 person company. We wanted to start doing career maps, and very standardized mid-year and year-end feedback reviews, and engagement survey data, and using data to really inform the decisions that we were making was really important for us. And investing in tools to help us to do that early on was helpful.

James Mackey: I wanted to ask you about PEOs because that's something that a lot of growth stage companies are using but a lot of them don’t understand the value. Particularly now that a lot of companies are remote-first cultures and have employees distributed throughout the entire United States. It's becoming even more and more necessary from a compliance standpoint. You really need somebody that can assist if you're hiring employees in all these different states.

Would you say that it's pretty safe to assume organizations between 50 to 200 employees should go with a PEO? That's how I'm learning and that's one of the things that I'm advising my clients because they're starting to get to that point of scale where they're starting to get overwhelmed with all the onboarding and compliance.

Erin McCann: There's no reason not to. The cost benefit analysis of weighing a PEO or doing things in house is pretty obviously pointing to the fact that a PEO is going to be a time saver, a legal advisory so you don't have to call your legal team every time.

Using a PEO solves a lot of those problems. And there's some really great ones out there, we personally use Justworks. Sequoia is also one that we've investigated, because they have a solution where you can kind of navigate off of a PEO onto their more long term, large scale solution. So that's another option.

But whichever you choose from, the most important thing is that it's very user friendly and is easy for your team. We have a team of folks who help do compensation changes. The UX is really nice. And also for new hires, the visuals are easy to understand. Think about how you are pre boarding folks and how they are getting necessary emails, and what do those look like? Because that's the first impression that you're sending to the new newly hired person.

From a compliance perspective, we have folks in Florida and California, and there's two different employment laws. The folks in California get sent PDFs of compliance posters related to minimum wage and health insurance, because it's a different loss out there than it is in New York or Florida or Illinois. So having to manage all of that if you're the only people operations person, or one of two is nearly impossible. And you're setting yourself up for some real legal challenges that are extremely costly, so better to invest in something like a PEO, which will save you a lot of heartburn in the end.

Is a full service PEO worth it?

James Mackey: From an employee experience perspective, people are going to know if it's put together nicely and that a lot of effort and thought has been put into it. Specifically for their situation, where they live, etc, versus if you’re not able to provide people what they need based on where they live, people are going to notice the difference in the onboarding experience.

So, your team is working with Justworks. I'm curious why you decided to go with Justworks? From my understanding, it is a lighter PEO when it comes to implementing some of the playbooks and employee handbooks. They'll provide advice, but a lot of that heavy lifting is still in house from what I understand as opposed to a TriNet or an Insperity.

What would you say to executive leaders, people up operations leaders that are making that choice right now between going the Justworks route versus a full services PEO.

Erin McCann: I'll be candid, I didn't choose Justworks. It was the solution when I started at SevenFifty. But I would not change it. The level of service that I've experienced with Justworks has been higher than the level of service that I experienced with TriNet. Justworks does have employment counsel that you can lean on and they can give some advice.

They also have a suite of benefits that are more human-focused than TriNet. So they offer one medical 100% paid for every person that signs on, they were doing CitiBike memberships, ClassPass memberships, they had a lot of ancillary benefits that seemed to be really appealing to the startup community that we were hiring in from. And that's going to be a differentiator between you and another person hiring you. We've also never had any issues from a payroll perspective, with Justworks everything has been very clean. Their support team has been great. With Justworks, I have a full service solution.

James Mackey: You need to bring in expertise to make sure that you have the right resources in place to be compliant to make sure you're creating a great people-first experience for new hires. You still want to own some of that process in house to make sure it's done in a way that does reflect your values. A PEO is a healthy middle ground.

Hiring Internationally

James Mackey: One of the things that we're seeing that's becoming a lot more popular, these sites like Deal, or remote.com, allowing companies to more easily hire internationally.

Erin McCann: Yeah

James Mackey: I'm curious, is your team starting to work more international hires into the roadmap, given how much easier it's becoming? What are you hearing out there? Do you see more people doing that?

Erin McCann: I definitely do. That is one downside with Justworks, we can't do payroll for anyone that's not in the United States. So if we were to go through the route of working with folks outside of the US, we would have had to go to a different site to have them paid. We have had some conversations about using outsourced help from outside of the US. But we haven't talked about hiring anyone from France who would work in France, and we would pay them from the US because it would mean setting up an entity there. So we personally have not investigated in the short term, outside talent.

James Mackey: That's something that we're starting to get into. We do have a subsidiary in Romania, that we actually built. But we're also starting to look into hiring in South America and in Canada. And to do that, I think the provider that we've landed on is remote.com.

The rate varies depending on the country. It’s a charge of anywhere from $200 to $600 a month per employee. The way these companies work from my understanding is they essentially created entities in all of these different countries. They act as the employer on record. And when it comes to benefits or perks that people are looking for through employment in those countries, they're able to offer those as well.

So we're going to give it a shot, and we're actually going to be starting to push for more hires internationally.

Wrap Up

James Mackey: Well, I just wanted to say thanks, once again, for joining me here today. This was a ton of fun. And I'll definitely keep in touch. And we can do this again, hopefully six months to a year from now.

Erin McCann: Thank you so much for inviting me. I hope I gave your viewers everything that they were hoping for. But I am also happy to answer questions if folks on the call wanted to reach out to me directly on LinkedIn, or whichever way they find me is totally fine.