There's No Talent! The Struggle To Find Experience

Where did everybody go? Business owners are having difficulty finding people for skilled positions. In the past, we spoke about skilled trades, but it is so much more than that.

Everything from accounting to architects, and operations to finance are in short supply. For some it is the last straw. Companies are closing due to the lack of help.

Maybe it's time to look at how we tap into the labor pool differently. Fractional work is gaining popularity and can be a cost-effective way to get the skills you need to help your business grow.

[00:00:00.07] - Alice

Books in the Biz, a podcast that looks at both the financial and operational sides of success. Please welcome our hosts, Dan Paulson and Richard Veltre. Dan is the CEO of Envision Development International, and he works with leaders to increase sales and profits through great cultures with solid operations. Rich is CEO of the Veltre Group and a financial strategist working with companies to manage their money more effectively. Now on to the podcast.

[00:00:29.18] - Dan Paulson

Hello. And welcome to the Books and the Biz. I'm back here with Rich. Rich, how are you doing?

[00:00:34.14] - Rich Veltre

I'm good, Dan. How are you?

[00:00:37.25] - Dan Paulson

Well, by the sounds of it, before we got on here, doing a little bit better than you are. Got a little bit of insanity going on, but that would be why we do what we do. Well, welcome, everybody. If you haven't seen our post for the day or what our subject is about, we're going to talk about employment again. Rich, what's going on? Big topic.

[00:01:00.11] - Rich Veltre

It's crazy out there. Trying to figure some things out. Look, it's great for the outsource market, but there's this disconnect, if you ask me. I'm not sure which screen you popped up there, but I've been seeing an awful lot of disconnects between the employer and the staff and just matching up pay level with task level and who's doing what. It just seems to be a very jumbled non-communicative discussion discussion going on. And I'd really like to see that fixed somehow, but I don't know. Hopefully this isn't a trend.

[00:01:37.29] - Dan Paulson

I think it is a trend. I don't think it's going to get any better. So on my end, similar situations to you, but I run into more of the problems where I'm working with the owner. We go through and lay out everything that needs to be done. We start prioritizing it, and then he gives me or she gives me the blank stare and says, now who's going to do all this? Because it can't be just me. And I'm like, well, who else do you have on your staff? And they might have employees, they might have employees with some experience, but they don't have employees with what I call senior experience. So Our discussion today is really more about filling those executive level talent shoes or somebody who is more than just like a entry level or midterm. What I've seen happening in the economy is it It seems like the hourly employee thing is straightening itself out. But we don't have enough people with years of skill set built up that can fill key leadership roles in companies. And what you pointed out earlier, I pulled up an article here. So for those listening, this is from mercer.

[00:02:52.11] - Dan Paulson

Com. And the statement basically says, if a recession is not a barrier to growth, a talent shortage is. 50 % of executives anticipate they will struggle to meet demand with their current talent model. Another 35 % of executives feel confident that they can quickly scale talent needs up and down. I will question that. And 57 % organizations are planning to let staff go, especially those operating through competitive environments. So it's a mixed bag out there. But I think when you're looking at one and two companies, don't believe that they can find the staff necessary to fill their talent model. That should be of concern to everybody.

[00:03:44.05] - Rich Veltre

It is a concern I think it should be a concern. I think everybody should be putting up some alarm bells because it really does question... I mean, I don't think it necessarily questions why this has happened, because you and I have been talking about it for months now. So to be back on the employment topic is a wild ride to still be coming back to this because usually there'll be some ebb and flow and you're like, Oh, okay, everything's getting better. But I don't see that. And to see that still continuing or forecasted that it's going to continue to be that way, that's really scary. I'm definitely running into it on the The accounting and finance side. I can only imagine what's happening on more of the operational side or manufacturing side, warehousing side. There's just this lack of... I don't know whether it's that the people were never groomed to be at that next level, but you're winding up paying the executive level salary for someone who can't do the job. So it's very frustrating, as you can probably hear my voice.

[00:05:03.03] - Dan Paulson

Well, I think it's frustrating for all of us because, as I mentioned, you're trying to help a company along. You know they have talent needs. They start to become aware they have talent needs. To your point, I think there has been limited training on how to move somebody into an executive leadership role in a lot of companies. Not all companies. There are some companies I work with that have a very good career track for for people who do want to move into more of a upper level management role. But those companies, I would say, are few and far between. If we look at the bulk of businesses that are in the US, most of them are relatively small, small to medium-sized companies. In a lot of cases, they don't have formal training. They don't have any methodology for moving somebody out of their current role. In fact, when you talk with a lot of business owners, they like when people stick in the role they're in. As much as I hate to say that, but if somebody is doing a really good job, they know what a challenge is to replace that person with somebody else and then move that person up, and then that person is doing two different roles, and they get burned out.

[00:06:15.13] - Dan Paulson

Again, because there often isn't a real good training programming in place. There isn't a passing of the baton, if you will, to the next level of leadership coming in. And to me, that's what I see is probably being one of the bigger I pulled this article up from aesc. Org. The article is implications of a global executive talent shortage. So in this one, they're talking about global, not just US. And they even highlighted this, the shortage of executive talent is amplified by similar business needs across organizations worldwide. So again, it's that whole supply and demand thing. We have more jobs, and we have people to fill those jobs. The demand for new roles, where 20 years or more of relevant experience is just not feasible, and we find ourselves in a candidate's market. So what's your thoughts on that?

[00:07:15.28] - Rich Veltre

Well, I guess we have to go. I mean, you could really pick that one apart. So the global part of it just adds more complication, right? Because I can find people that have domestic talent. I can find people that have talent overseas. But the combination of both, the skill set's missing. I happen to work for a very large firm. International was not foreign, to make a joke, right? It wasn't You could see it. You were always dealing with somebody who was shipping or was dealing with something that included foreign countries. But when you get to the smaller firms, they never saw it. If you were in a You were a smaller accounting firm doing accounting work, you were doing domestic accounting work. And way back when, you were only working in your state. It was like you didn't even see things that went across multi-states. So how do you get people now that have that experience that included those states. You work for a bigger firm? Fine. You probably did see it. But if you work for a smaller one, which there are a lot more smaller ones than there are big ones, then you might not have seen it.

[00:08:28.16] - Rich Veltre

You didn't have the experience. So now someone has to pay you to take that upper level role, and you have to figure it out. And the employer has to pay you to learn, which they don't usually like to hear, that I have to pay you to learn the job. I'm paying you at the salary level of the job, and yet you have to learn how to do the job. They don't like that. That's the myth that I'm seeing, that you have to pay someone to learn how to do it, and they should already know. So that's the hard part. You're trying to force something that's not necessarily workable.

[00:09:08.09] - Dan Paulson

Yeah. I mean, we're always paying somebody to learn their job. I don't think that's an unusual part. But what you said that was key to that is you're paying somebody a salary that they should already know that job. So you're trying to get somebody with maybe 5 to 7 years of experience to get to 20 plus years of experience in in about six months, which really doesn't work too well.

[00:09:33.14] - Rich Veltre

Yeah. And I think to add to that, your point is well taken, right? That you are always paying someone to learn the job as it applies to your company. So if I'm hiring somebody to come in, they have to learn my company. They don't necessarily have to learn how to add one plus one or how to add... The core competencies that they should have should be there. And some of those do come with a year of experience, and some of them with putting your neck out a little bit, putting your foot out a little bit. I didn't get to where I am, and I didn't How do you get to advise companies without at some point sticking my neck out and saying, God, I hope it doesn't get chopped off. You're taking that leap of faith that you have enough skill set, but you're going to jump into something too make sure that you learn more. I go into every job expecting I'm going to learn something that I can take to the next job. And where I'm missing it is when I see somebody that as well. I was in a CFO role. Okay, what did you do?

[00:10:43.29] - Rich Veltre

What did you do in that CFO role. Give me some examples. And when they're not there, that's not the person you're going to hire.

[00:10:51.16] - Dan Paulson

Exactly.

[00:10:53.27] - Rich Veltre

So I guess to summarize it, higher, yes, understanding they're going to learn your company. But They should have core skills.

[00:11:02.26] - Dan Paulson

Correct. They should. They should. Often that, again, is what's lacking. And part of that, I think, is in the demographics of what's happening here. I pulled up another article. This was in cornferry. Com, K-O-R-N-F-E-R-R-Y. Com, if you want to look it up. In the United States, the majority of baby boomers have moved out of the workforce, will have moved out of the workforce by 2030. And to me, that right there is a key indicator of the situation we're in, is the people with the most experience have either retired or are retiring within roughly the next six years. And at that point, you have Gen X, which is a smaller generation. You then have the millennials, which I think is a pretty good size generation. But are they getting the experience they need? Because there's fewer managers or fewer senior leaders. And then, of course, you'll have your You're Gen Zs that are coming up as well. We're losing a lot of highly skilled people to retirement, old age. And I just haven't seen where we've done a really good job of replacing that skill set with the next generation is coming up. Now, if you're a millenn or anything like that, and you want to post an argument, please feel free to do so.

[00:12:23.26] - Dan Paulson

But I'm just not seeing.

[00:12:26.26] - Rich Veltre

No, I'm not seeing it either. And there's a little bit of a disconnect, right? I mean, the baby boomers, and I don't mean to stereotype when I do this, but I'm seeing that tech divide, where you've got the older school Baby boomer types that they were set in their ways. They knew how to do things process-oriented, very process-oriented, not so much tech-oriented. Some of them are. So I don't want to... Don't call me up yelling at me. Okay. Some of them are very tech oriented, but not to the level of the people behind us. The people coming up grew up with technology. You and I saw it come in. You and I watched it implemented over our lifetime so far.

[00:13:15.23] - Dan Paulson

You were the bridge.

[00:13:16.21] - Rich Veltre

I left college and basically had my first computer. So now kids have five of them, and everything they operate with has a hundred chips in it doing something for them. I can only imagine how many chips are in my kid's car. So the technology piece, I think, is a big divide. And I think those people behind us have an idea that's following the tech path. So how do they get into... How do we get those people to realize that some of you have to go and take over what's been going on for the baby boomers who are now leaving And you have whole businesses looking for places to go because they can't get over that tech divide. So I think there's a matching chasm there between the two pieces.

[00:14:13.25] - Dan Paulson

Agreed. I also see that there's been a lot of talk about AI and AI replacing certain jobs or certain tasks. I struggle with AI becoming too much of a crutch because AI is only as good as the person who taught the system, if you will. The person who initially wrote the code is really the limitations of what that AI can do. We have generations that are now becoming so dependent on technology doing stuff for them that I believe we're losing some of that critical problem solving skills that really what made the boomers and Gen X pretty strong. They were resourceful in other ways, not necessarily through technology. I mean, you think of the stuff that we created back in the '50s and '60s, everything from the Saturn rocket project to take us to the moon. I remember reading about the SR-71 fighter that was created. It was done off a slide rules and drafting paper. There were no computers involved, and they actually ran it through a computer, and the computer couldn't do it any better than the drafters could that created that project well ahead of of where computers took over. So you start losing a lot of skill sets, and you start assuming that technology is going to make up for it.

[00:15:37.08] - Dan Paulson

I think we're running into a situation where we're on that cusp of we need people with skills, but we're running out of it. And the people coming up are using technology to replace the critical thinking and learning that we need to succeed.

[00:15:53.27] - Rich Veltre

I definitely worry about that. I have the same fear Especially when I get an email that still has blocks in it, like dear applicant, dear... Nobody took the time to check. Nobody took the time to make sure that it's working well. Ai did it. It's all good. I've read some of the AI articles that have come out, and I'm amazed that somebody let it go the way that it reads. I've had AI rewrite some of my stuff, and then I'll I'll reread it and say it changed what I was trying to say. Grammatically, it was correct. It was a good piece, but it was a paragraph and a half, and all of a sudden, that wasn't my point. It changed the focus of the article to something else. All the words were there, but it changed the focus and basically told everybody something almost the opposite of what I was trying to get across. So I had to rewrite it. But if that means that some of the stuff that's come out that I've read was done by AI, how do I know that it really is the thoughts of the author? How do I know that it really is something that they wanted to tell me?

[00:17:11.25] - Rich Veltre

How do I know it's the right thought? How do I know it's the right advice? So that's what scares me as well. Just I can't let things go that way. But I guess that goes back to the point of what's the age difference, too? I'll send a text message, and I'm looking for, did I put a comma in the right place? Did I put Did I close the sentence? And then I'll deal with somebody on the younger generation who's texting me. There's no punctuation whatsoever. So I'm left to figure out what they're saying. Because they have their own language, they've come up with their own way of doing things. So again, back to that chasm between how things went before and how things went now, what does the future look like?

[00:17:55.04] - Dan Paulson

That is a very good question. I think that's something that we have to try and answer, not necessarily just you and I, but I think as the generations start leaving the workforce, we've got to figure out how we give people critical thinking skills, research, development skills, things like that, that are really not passed along as much as they should. And I don't know what you're seeing in finance, but to me, well, I mean, we both do it, really. It's the fractional stuff. We need to tap into that talent level that maybe doesn't want to work full-time, but maybe still doesn't want to golf seven days a week and get them involved and get them to help in this transition and help get a new generation prepared for senior leadership. And I know you do it from a fractional level as a CFO. I do it from a operations level. I think that becomes an even greater part of what we do over the coaching and consulting part.

[00:19:00.26] - Rich Veltre

I think that's part of the reason why the fractional has grown at the rate that it's grown. I think there's a lot of people out there who talk down about it, saying it's not the right way to go, but I think it might actually be the right way to go. There's enough people out there against it, saying we just like it traditional. But the traditional, I don't think solves the problem. I think traditional is somewhat the problem, because you're not going to get the younger generation focused in the same way as you are. So staying traditional and saying, my method is the best method, I think somewhere along the line, you're going to have to open up your mind and look and say, I have to adapt at least somewhat. And I think the younger generation has to do a little bit of the same and say, well, I have to adapt somewhat. And maybe I can find a way to take all the tech and everything I really like and apply it to the larger, instead of just saying, I just don't want that, which seems to be the common answer. I don't want that.

[00:20:06.20] - Rich Veltre

I don't want to do what my father did, I don't want to do what my father did. Okay, we get that. So change it. Be the change influencer that's going to allow you to do that.

[00:20:19.28] - Dan Paulson

But then have somebody with experience who can hold you accountable. That's the part that's missing.

[00:20:26.17] - Rich Veltre

Yeah. So I think there's definitely work to be done. I think Fractionals is going to really continue to grow. And I think trying to simplify it into just being, well, it just means part-time. It's just a fancy word for part-time. No, it doesn't. It means that you're part-time, but you're part-time bringing a larger skillset, or bringing a leadership role, as opposed to, well, look, if you want to call it part-time, go ahead. But if you're going to call it part-time, I'm going to call you a bookkeeper, or I'm going to call you a staff So if you're looking for leadership at a fractional, at a part-time fractional, that makes sense, because you're tapping into a resource, you're tapping into a leadership, you're tapping into a knowledge base that allows you to get across that. So I think if I really had to say what our role is, you and me, I think our role is bridging that chasm that I keep talking about today. I think we have to be the ones who are going to bridge that and say, guys, at your You want to retire, and you're going to go down this path.

[00:21:34.10] - Rich Veltre

In order to do that, you need a suitor. Okay, how do we find you one? How do we tell somebody, you're going to be the suitor for this business, and here's your opportunity to be the next Elon Musk, or something that comes up with a technology that's going to help you do this job in a different way than your father, your grandfather did. I think there's work to be done on our end that will allow us to bring those two together.

[00:21:58.25] - Dan Paulson

Right. Well, and this goes back to a point you made earlier. You said there's people getting paid at a pay grade that is well above their experience level. Do you know off the top of your head what the average CFO makes for a company? Is it in the 250 range?

[00:22:18.20] - Rich Veltre

I think that's a good number.

[00:22:21.26] - Dan Paulson

Here's the problem.

[00:22:23.13] - Rich Veltre

The problem is if you look at a different area in the country, and yes, I have looked at it, so that's why I'm feeling confident to answer you. So depending on the size of the company, depending on, to a certain extent, skill set, but for the most part, I would say it depends on the size of the company and location. I think a New York CFO and a Nebraska CFO will have a vastly different number. I think 250 is probably a good average. I Because I can see 250 even the New York range on a smaller company. But on a larger company, you might be looking at closer to 400 plus. You're talking about a public company. Public company, forget about it. It's a completely different conversation. Exactly. But then somewhere in the Midwest, in agriculture or something else, a different industry, you might be looking at something a little bit lower, but the task level is also a little bit different.

[00:23:23.19] - Dan Paulson

Sure.

[00:23:24.20] - Rich Veltre

So, again, not sure also what the growth potential is. If you're trying to get to an If you're paying an IPO, eventually, you're not going to be paying somebody $150,000. They won't have the skill set to be able to take it to an IPO level. So I think $250,000 is probably a nice little average number across the board.

[00:23:44.07] - Dan Paulson

Yeah. So even if you're saying 250, and even if we said, knock that average down to 150, let's just take the Midwest example. If you're paying $150,000 for somebody who doesn't have the experience to do the job, Is it really worth it? Yes, you got a body in there, and you are basically paying for their training up, but then they have nobody to learn from. So they're either got to be really smart and really resourceful and figure it out, or you're going to put them in a position of failure. And to me, that's where the fractional comes in, because you could pay that fractional person less than half of that 150, for example. And they could bring in the level of experience to help you get those people up to speed and at the experience level you need. So I don't think either one of us looks at a fractional job as being a lifetime sentence where we come work for you. And for 40 years, we're doing that fractional work or somebody else is doing that fractional work, because there's a number of companies out there that are doing it now. Having the fractional, what you're paying for is you're paying for the experience you can't get anywhere else.

[00:24:50.16] - Dan Paulson

And I don't know of a lot of small to medium-sized companies that are going to look at their payroll and say, can I really absorb somebody making a $150,000-$250,000 a year. It's the same on the operations side. If you're looking for somebody at a senior operations level, you are probably in the 180 to 200 range pretty easily. And then usually there's benefits and incentives and bonuses and everything else that goes into that. So you start factoring in that you can gain experience, yes, for a limited amount of time in your company, but I still find a lot of companies don't need somebody for you hours a week. They have They need employees that can do the work. They need somebody with the experience that can guide the employees to do the work and train up the ones that are going to take on a greater role in the future. So to me, that's a huge cost savings, especially when it comes to payroll, that you can really tap into experience as well above your pay grade without having to pay the full freight of that. So that's where I think fractional work is going to really take off, whether it's marketing, whether it's finance, whether it's operations, Even in HR, we're seeing H.

[00:26:02.17] - Dan Paulson

R. Come in at fractional levels. So you can get a senior H. R. Person instead of maybe just somebody in the front office who happens to like H. R. And benefits and handles that part of it. There's a lot of ways you can tap into these people to really make a difference in your organization.

[00:26:23.26] - Rich Veltre

Yeah. And I think the other thing is just as a passing add on to what you said, I think if people start looking at the task as opposed to the position, start looking at what do you want this person to do for you? If you can come up with that answer, then you can justify in your head, well, this person is going to come in. They're going to spend 10 hours a week, and they're going to optimize my process in the warehouse or in the manufacturing process. They're going to see where we can streamline, and then they pay for themselves in the cost savings of what process they gave you. And I do the same thing. I look for the opportunity that when I come in, I try to come up with something that pays for me, pays for me to be there. And it's not just to justify why I'm there. It's to justify to the owner owner that see, we already found this and we did it quickly. Because usually, there's just a fast thing that you can see, and you make that change, and someone says, Oh, I just saved that much money.

[00:27:28.05] - Dan Paulson

Okay?

[00:27:28.10] - Rich Veltre

And then we move on So that's the task number two. So these could just be project-based. This could be, I'm just going to look at my finance process. I'm going to look at whether or not it makes sense. I'm going to look at the fact that one job I walked in, they had 16 people. I said, Why do you have 16 people work in the accounting department? Explain to me why there's that many people on there. So then once those people started to quit for whatever reason or move on because there was a big change in the world of where accountants could go for a there, we let them go, and we didn't replace them because we fixed the process. We didn't need 16 people. So you saved money when they left, and you didn't lose efficiency. Your process was still now working. So these are the types of things that people should use fractionals for, because once their project is done, they're off your payroll, too. I used to joke when I came in, I'm coming in to work myself out of a job, because I knew that eventually, you wouldn't need me anymore, or I'd be your resource when you did have a next level crisis, or next level question.

[00:28:36.29] - Rich Veltre

But for that point, I was working to the point where I was going to be out of the position, and I was fine with it, because that's what the role is. Now I'll go work for somebody else till you need me next time.

[00:28:47.17] - Dan Paulson

Yeah. Or you stay on as more of an advisory role with them. That changes the investment, too. You're now that guidance point for the people that you trained up. I see the same thing on the operations side. Systematizing what you do is probably one of the most tedious issues that most businesses address, which is why it's almost never done. It's just knowledge handed down from one person to the next, but it's never documented, nor is it never optimized. That is a huge, huge issue, which often leads to significant cost increases, makes the job that much more difficult, leads to employee burnout, because often they have to figure out what the previous person did and start from scratch. So if you look at it that way, that you have somebody come in to help you systematize everything that you do and find out where those gaps are and reduce the number of touch points or improve quality levels or look for other efficiencies, that can be a huge savings in and of itself that can also pay for that person to be in there. So we haven't solved the world's problems, but I think we've given a good case for why maybe you need to think outside the box who you hire, when you hire, what you hire, and how you have that person work for you.

[00:30:04.20] - Dan Paulson

While it's not necessarily a shameful plug for us, I will definitely say we can help with that. Rich, if they are looking for help from you, how do they get a hold of you.

[00:30:16.29] - Rich Veltre

E-mail is always the best at rveltre@veltregroup.com.

[00:30:21.02] - Dan Paulson

Excellent. And to get a hold of me, just go to danpaulsonletsgo.com, and you can check the boxes and get the information you need there. Either one of us can help you figure out how to optimize your business. The reality is, as we pointed out, if you're looking for a quick fix, AI is not going to be it. It's going to help in some areas, but it's not going to solve all your problems. If you're looking for those magic people out there that are miraculously going to spring out underneath mushrooms or ride in on unicorns, they're probably not going to show up, are they? I didn't think so. I was hoping for the unicorn solution, but that doesn't appear to be working out today. No. All right, Rich.

[00:31:03.19] - Rich Veltre

I'm in my box here. I don't see any unicorns. Okay.

[00:31:09.04] - Dan Paulson

Well, check again this week, and we'll see if we can come up with some next week. But thank you for your time. And we will talk again next week about a new and exciting subject.

[00:31:19.05] - Rich Veltre

Sounds good.

[00:31:21.16] - Dan Paulson

All right. Take care.

[00:31:22.23] - Rich Veltre

All right, Dan.

https://www.mercer.com/en-us/insights/talent-and-transformation/attracting-and-retaining-talent/how-executives-are-responding-to-economic-shocks-and-talent-shortages/

https://www.aesc.org/insights/blog/implications-global-executive-talent-shortage#:~:text=The%20shortage%20of%20executive%20talent,a%20“buyer%27s%20market%2C”%20the

https://www.uschamber.com/workforce/understanding-americas-labor-shortage-the-most-impacted-industries