In this practical episode, DeeAnn Palin, Founder and CEO of ONPOINT Business Solutions, shares why treating HR as pure overhead keeps founders stuck and how to turn people strategy into a real growth lever. If payroll feels like your biggest expense yet you’re still leaking talent and time, you won’t want to miss it.
You will discover:
– What the real math of turnover and misallocated rewards is costing you every year
– Why treating HR as pure expense creates hidden leakage and blocks the next growth stage
– How to know when fractional strategic HR support becomes cheaper than doing nothing
Episode Transcript
Scott Ritzheimer
Hello, hello, and welcome, welcome once again to the Start, Scale, and Succeed podcast-the only podcast that grows with you through all seven levels of your journey as a founder. I’m your host, Scott Ritzheimer, and way, way too many founders treat HR like a necessary evil that they can just hand off to a bookkeeper, or probably more likely just keep ignoring altogether.
Scott Ritzheimer
But once you’re leading managers, once you’ve reached a certain level of success, in particular, the people problems you’ve been in ignoring start to compound. The new higher revolving door-you experienced that yet, or the empty seats that you just cannot, for the life of you, figure out how to fill, or or even the key leaders who you don’t realize it, but they’re already looking at other job offers. There are some really big challenges and opportunities all in the world of HR, which for many founders is brand new territory. So, with me today, my guest helps founders turn HR from overhead into a growth engine. Deanne Palin is the founder and CEO of OnPoint Business Solutions, where she partners with CEOs and boards to help growth-focused companies navigate critical transitions. With over 20 years of executive leadership experience and more than a decade as a business owner and coach, she brings both strategic insight and operational expertise. She’s known as the CEO Whisperer, and Deann helps leaders solve complex HR and organizational challenges while preparing their companies for the next stage of growth. And she’s here with us today, Deanne. Welcome. So excited to have you here. I want to start off with with you know. I was telling you when we were starting, I was just having this conversation with a client, but many of the founders I work with think HR is just a big waste of money, or even worse, a bad word. You know, it’s like just don’t talk about that. It’s not a good thing. Why do you think that HR has such a bad reputation with so many entrepreneurs?
DeeAnn Palin
Oh, we could spend six hours on that, but I’ll start with just a couple of key things. One is it HR doesn’t really show up on the PNL other than like salaries and benefits, right? And for most companies, when you hit a certain size, that’s their number one, number two, or number three expense line. So it feels like an expense to companies, but what we’re missing are the opportunities to really create behaviors in a growth engine for companies. And the other thing that we’re facing is the leakage on the profitability side with turnover. The things that you mentioned; those are real problems for companies, and a lot of founders just think they can, you know, shoulder through the hiring process and the issues, and just write the check and build it in as an expense line, and are continually frustrated, feeling like they’re pushing rocks up a hill. It’s the place where I see most founders not be able to graduate to the next level of growth, whether it’s 1 million to 5 million or 5 million to 20 million.
If you don’t crack this code on people management and people strategy, it does feel onerous, painful, and like something you should avoid because most of the time CEOs of things they’ve tried aren’t working, so it just feels like a waste of effort. The other thing that I see a lot of times is a CEO will have their controller, their office manager, their spouse running HR, and so it feels very tactical, transactional, and and frankly not fun. You know, a lot of CEOs, I joke with, gosh, running a company would be fun if we didn’t have to have employees, right? And that’s not what you want for a company. Most CEOs want to build a legacy. They want to create a lifestyle for people. It’s not just about making the money. It’s about building a culture and and having a really good purpose. And the way HR is run to a certain level doesn’t set it up for that kind of success. And a lot of times, a person that we’ve got working on HR in the company, even that first hire, they they do what I call going native, where they forget that they’re trying to help a CEO grow a company, or they’ve never had the skill to do that because a company can’t pay for it, and they end up just being a tactical person that ends up advocating for employees and causing more hardship for CEOs rather than not.
Scott Ritzheimer
Yeah, well, it’s it’s interesting because there’s a certain extent to where a CEO needs the skill of picking the right person, but needs to have you know hopefully not experience the wrong person, but like needs to have experience to be able to do that. And so it’s a little chicken and the egg to some extent. Like, how do you know what the right person is? How do you help folks to recognize? Let’s start just with. The opportunity of what a great HR leader would do for their organization.
DeeAnn Palin
Yeah, I’ll start off by saying, a strategic HR leader isn’t usually the first hire a CEO should make on an executive team because, frankly, they’re too expensive, and if you don’t have 200 employees, it’s a hard position to rationalize, right? Usually, companies that are at this growth stage need every nickel they’ve got to invest in the business. So, oftentimes, we serve as a fractional support to help them build the right executive team in the right order, and fractional support is a huge way to do that on marketing, on HR, on finance, oftentimes. But what we can do with and for a CEO is really help them build the correct strategy. And if they’ve already got a great business strategy, align an HR strategy around it. And that means what’s your workforce plan? What kind of skill sets do you need to have to build your company? You talked about it, Scott, with the different layers of leadership. When is it the right time to add a person or a function or a skill? And I use tools.
I’ve used DISC, Predictive Index, Culture Index. I am 100% aligned around Aptiv Index. I’ve become a national reseller for them. It’s an index tool that helps a CEO know that they’ve got the right people in the right seat. It DNA maps the skill sets to make sure people are equipped to do the jobs that you’re hiring for or need. A lot of what CEOs are scared to hire around is, what if I fail? What if I hire the wrong person? What if they don’t achieve what they need to to achieve? It’s expensive, and so doing everything we can on the front end to make sure we define the role clearly, we understand what the success factors are, we know the types of skills and behaviors, and and frankly, like DNA personality assessment to have the right person in the right job, and then onboard correctly. Those are really really important, and most CEOs don’t have the skills or the experience to do that.
Scott Ritzheimer
Yeah, DeeAnn, one of the things that you’ve words that you’ve used quite frequently, and and I think for good reason, is that this is expensive. And not only is it expensive, but it feels expensive. Payroll can be one of the biggest expenses in on a PNL, but for a lot of founders, hiring the the right people to help make the most of that payroll feels even more expensive. How do you help folks figure out when when it’s the right time to start bringing in some outside help?
DeeAnn Palin
So the first thing I will tell you is if you’ve got if a CEO’s got more than 20 employees, they’re going to need some level of HR, administrative, tactical support somebody to process payroll somebody to help them with the benefits enrollment somebody to help onboarding employees hiring that kind of thing that’s a very different role than changing HR into a strategic lever if that makes sense so there’s part of the blocking and tackling of HR to create a legally sound team to make sure you’re fully staffed to execute the day to day. When it becomes an expense that is not smart anymore is when you get to an employee size where you’re not leveraging your total rewards package, meaning all of your payroll, your perks, your compensation plans, your benefit plans. If you’re not 100% that sure that that’s driving growth for your company and altering behaviors. If you’re just writing a check because you were given a 20% or 14 or 30% increase on your benefit plan, and you feel backed into a corner, and you haven’t looked at the strategy and haven’t looked at your workforce to say who do I need to attract, what what matters to them, how do I execute high performance here?
What compensation plan will attract the best people and help us retain and drive productivity? If you’re not having those thoughts and you’ve got an HR person, then your HR function is tactical and it’s an expense center. And I’ll give you an example. We had a company that we just went into not too long ago. 85 employees, manufacturing organization, and like any company I’ve been in, and I’ve been in 25 different industries, their payroll and comp and perks were one of the top two expenses in the company. We got in, looked at their benefit plan immediately, and they wrote a check to have us come in. Obviously, we we come in as an advisor and support to them. Within 30 days, we found $500,000 of misallocated benefit design, and you think about that from an organization and their profitability. 500,000 can hit really, really hard on the PNL, but it wouldn’t show up as leakage, right? It shows up as an expense, and that’s why I’m saying you got to look at it bigger than an expense.
What is our strategy? What behaviors is it driving? What’s the best model to deliver what we need, and even on compensation, you know, a lot of CEOs think of it as I have to pay at market for every position, or way over, or they don’t even know what market rate is for a position. And having someone who’s got the experience and the background and the tools to go do comp analysis and really look at your turnover, look at your higher challenges to identify which jobs are key jobs that we need to overpay to get the best there are, versus which are the jobs where we either have great retention, steady hands, they’re not as critical. You know where can we, where should we leverage our comp and and build plans to drive behaviors and really leverage and harness our key talent? So it’s those kinds of thinking and decisions that matter a lot. And and I’ll give you just another example.
I just presented to a Vistage group last week about the math equation of people issues, and if I had a CEO who was working 70 hours a week, and I know this is a lot of these founders, they’re working 70 hours a week, and they don’t know how not to. Okay, and they feel like they can’t afford a new person or some help, whether it’s an EA or you know a next in command, whatever that that next biggest function is, and I’ll have them really, really, really identify what’s the highest and best use of me, whether it’s biz dev, whether it’s product development, whatever the industry and the expertise that CEO has, and then I’ll say, “What was your take-home pay last year? Write it down. Write that number down. Okay, now divide that by 2080, and that’s how many hours in a given year for a 40-hour work week. And we know they’re not working 40 hours; they’re working 70, right? But you say, okay, look at your calendar last week. How many of those hours were not on your highest and best use?
DeeAnn Palin
Right, and one example that just sticks out of my mind: I had a construction CEO, and he had grown up in the ranks as a project manager, and then you know ran the operation. He’s now the owner, and he had spent time moving trucks from one project to the other. Right? Sounds reasonable. Sounds logical. Sounds appropriate. I said, “How long did that take you? An hour and 45 minutes, because it was across town, and I said, “Remember that hourly rate you gave me? And I said, “So that equated to $325 for an hour and a half. I said, “What employee in your company would you pay 125 or $325 to move a truck? And he threw down his pen and uttered some choice words and had a very different perspective from there about whoa you know where should I invest money and I can give you math equations across benefits like I just described across turnover the cost of turnover for an hourly employee to lose one employee is point seven five times their base salary. So you, if you have 100 employees and 30% turnover, do the math on that. For a $60,000 employee, that’s over $1.5 million a year in lost revenue and leakage. That doesn’t show up on a P and L. So these are the things that we help CEOs see. If you can fix your turnover by even 20% by hiring a manager to lead that team and do better onboarding, you’ve saved yourself $700,000. It’s an investment in cost savings, and that’s per year. So those are just a couple of the math equations that CEOs don’t think a bout and don’t know to think about.
Scott Ritzheimer
Yeah, totally. DeeAnn, there’s this question because I could talk about this for a very long time, but I want to get to this question because it’s one that I ask all my guests. I’m very. Interested to see what you have to say, and the question is this: What is the biggest secret you wish wasn’t a secret at all? What’s that one thing you wish every founder watching or listening today?
DeeAnn Palin
Oh gosh! After coaching hundreds of CEOs through growth and sale, I would say the number one thing is don’t feel like you’re the only one that doesn’t know everything about how to run a company. We do not need imposter syndrome as CEOs. Every single CEO, myself included, running a outsourced HR company, know that you cannot be good at everything. Find the things you’re not good at and get help, and do that proudly. That is that humility is the success quotient for CEOs. The ones that think they have to figure everything out and they’re pushing rocks up a hill and they’re spending hours trying to crack a code that somebody else could do in 15 minutes is the worst cost savings and brain damage a CEO can have, and it’s it’s a soul killer, let alone a financial killer.
Scott Ritzheimer
Yeah, yeah, for sure, for sure. Deanne, there’s folks listening to this, and they’re like, “Yep, made that mistake. Made that mistake. Felt like that was expensive. There, there’s got to be a better way. How how can they reach out to you? How can they find more about the work that you and your team do?
DeeAnn Palin
Probably the best places on our website. It’s On Point Biz, so it’s O N P T B I z.com, and there’s a contact us button. You’ll get right to my direct email. We’d love to talk to you. I’ve got some tools that we can help CEOs with. I’ve got an Aptiv Index personality assessment that I’d offer to any executive team free. Really diagnostic about the skills that someone has, and we have an X-ray that allows an organization to look at what they’re great at and the stage that they’re in and help them prepare for growth. So I’d be happy to share either of those.
Scott Ritzheimer
Brilliant, brilliant. Head on over. We’ll put all of that in the show notes, so you can click or tap directly to it. You don’t have to go searching for it. Deanne, it was fantastic having you here. Thank you so much for coming on the show and sharing with us today. I really appreciate it. And for those of you watching and listening, you know your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did, and I cannot wait to see you next time. Take care.
Scott Ritzheimer
Hey everyone, Scott Ritzheimer here. Thank you so much for listening to the Start Scale and Succeed podcast. I hope this episode gave you exactly what you need for the level you’re in right now. If you want to discover what level you’re in, take our 10-question Founders Evolution Quiz for free at foundersquiz.com. That’s foundersquiz.com. It’ll pinpoint exactly where you are and give you tailored tips to move forward and reach that next level in your journey as a founder. If you got something out of today’s episode, don’t forget to subscribe, rate, or review. It helps us reach more founders like you, and let’s be honest, it means a ton to me, my team, and all our incredible guests. So keep starting, scaling, and succeeding, and I’ll see you in the next episode.
Contact DeeAnn Palin
DeeAnn Palin is the Founder and CEO of ONPOINT Business Solutions, where she partners with CEOs and boards to help growth-focused companies navigate critical transitions. With over 20 years of executive leadership experience and more than a decade as a business owner and coach, she brings both strategic insight and operational expertise. Known as the “CEO Whisperer,” DeeAnn helps leaders solve complex HR and organizational challenges while preparing their companies for the next stage of growth.
Want to learn more about DeeAnn Palin’s work at ONPOINT Business Solutions? Check out her website at https://onptbiz.com/
Contact DeeAnn Palin directly at https://onptbiz.com/contact-us/
Connect with DeeAnn Palin through her LinkedIn at https://www.linkedin.com/in/deeannpalin/