There's a Talent Shortage! Filling the Talent Gap.

Demographics are changing with our workforce and it’s making it increasingly difficult to fill critical roles with experienced leaders. According to data from SHRM, the number of executives with at least 20 years of experience has dropped significantly in the past decade, with a decline of around 12 percentage points, going from 31% to 19% of top executives.

That’s where we step in. Finding experience is still possible if you are willing to take a different approach to finding it. The Future Is Fractional…

[00:00:17.06] - Alice

Hello. Welcome to 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 Beltré. Dan Rich 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.

[00:00:48.07] - Dan Paulson

Happy Halloween. Happy Halloween, sir. Welcome to Bits of the Biz. Did you hear me now? Yeah. All right, good. Happy Halloween, everybody. Here are our Halloween music in the background, Rich.

[00:01:01.19] - Rich Veltre

I hear it. It's spooky.

[00:01:03.13] - Dan Paulson

What's going on in your place? We don't need to scare everyone. You're watching the World Series last night and you're a Yankees fan. You were scared enough, right, Rich?

[00:01:12.21] - Rich Veltre

Absolutely. It'll take me a year to recover.

[00:01:16.15] - Dan Paulson

You poor guy. Well, my brewer's got beat out a long time ago, so be happy you got that far.

[00:01:23.21] - Rich Veltre

I hear you.

[00:01:25.24] - Dan Paulson

Well, hey, we got some great news breaking today. We've been hinting about it for the last couple of weeks. We are launching something new. And excitedly enough for me is we're both going to be able to give the same email address and the same place to find us now. So that's pretty exciting. No longer have to try and figure out who you're going Who are you going to call first? Ghostbusters or us. Let me pull this up. So we, in our conniving little ways, have been working on this, which is XCXO. Because we are not current CXOs, we are ex-CXOs. So Rich, what's your take on all this? Why don't you explain to the group what we're working on here?

[00:02:10.23] - Rich Veltre

Well, I think that what people have to understand is that I am a big believer. I think Dan is as well. But I'm a big believer that what they call the gig economy is actually taking a lot of holds, and it's providing the ability for things to work differently than it used to. It It used to be that you would start a company and you'd say, I would need these level of people to do X, Y, and C type of work. And the problem is, you don't necessarily need those people for full-time. You need those people for their expertise. You need their keys. You need their ability to answer the questions that you will have, undoubtedly you will have, and you don't necessarily have the experience prior to be able to come up with a solution or an answer. So you want to have certain people in your court. And it could be for a project. It could be for ongoing leadership meetings and understanding how you want to actually execute a strategy. Or it could be just you have certain tasks that have to get done, and how are you going to cover them?

[00:03:21.01] - Rich Veltre

So what we're trying to do here is actually provide you with the resource to be able to say this is what we want to have available for people for the questions that we know you will have as you grow your company.

[00:03:33.16] - Dan Paulson

Yeah, I agree with you on that, Rich, and I would probably add a little bit more to it. I believe the gig economy is partially pushed for two reasons. One, exactly what you talked about, there isn't that need, maybe as much in some companies for a full-time person to do that. Actually, there's probably really three things. I think a number of people in the professional world have found that working in the gig economy gives them a little bit more freedom, maybe a little bit more money. I think that's another issue. But that's not necessarily going to be our target for this. And we'll explain a little bit more why. I think to me, the bigger issue is there just aren't enough people out there. And we've talked about this in the past several times, where when you look at what happened in '07, '08, that was like, I call it the first mass exodus. We had a lot of our baby boomers or early baby boomers that were already getting into retirement. They were starting to bail then. The generation before them was already pretty much on their way out, but they checked out. They said enough.

[00:04:39.07] - Dan Paulson

Now you fast forward to 2019, 2020, really, 2020, and 2021, when now we have this thing that happens that all of a sudden puts everybody at home. And they want to stay there. They want to work remotely. And I think in future episodes, we're going to about people who now companies are forcing people back in the office. But I think that also led to a number of people now, the later stage baby boomers who are ready for retirement, maybe they're five years. And now you've got your early Gen Xers who are maybe five or 10 years out. They're looking at the retirement funds going, we got enough. We're good. Stock market is still going up. We can get out now. And a lot of them took retirement at that point. So now you look at what's left in the workforce. You have some of your Gen Xers, you have a lot of your millennials, pretty much all your millennials are in that group. And then you have your Gen Xers and the next Gen after that coming up. I just don't think there's the degree of experience. So it's not that there isn't... Well, there's a lack of talent because those generations tend to be smaller, but there's also this lack of experience.

[00:05:55.23] - Dan Paulson

And that's when I approach you about this, I said, we're not going to be at least at the beginning stage, it's a job placement thing. We're really trying to bring some of that experience back in-house with companies that, as you pointed out, don't need a full-time person in there. And ultimately, they have people. They just don't have the people with the level of experience that they want. So can we bring somebody in to work remotely, work on a limited basis, provide that fractional approach to coach up the talent they have internally to eventually fill those roles we're talking about? And to me, that's where you're bringing in somebody for anywhere between, I would say a couple of months to a couple of years, really to build or strengthen that team. So that way you don't have to go out and search for it. You give the people internally an opportunity to accelerate their career in the company they're working for, move into some of those key leadership positions that you need to fill, and you're able to tap into experience of somebody who's been in the workforce for over 20 years to really utilize that knowledge to help you grow.

[00:07:06.15] - Rich Veltre

Yeah, the knowledge-based part of it is... I apologize that I didn't actually mention that because I wholeheartedly agree with that. I really do. I've been doing the fractional type work for a long time. I know you have as well. And it's worked for us. It's becoming a bigger deal. But it is an issue of a mismatch, where where the talent is definitely out there. There are people who are both younger and older that have the talent, but maybe don't know how to find the proper connection. They don't know how to connect to those people. And this is where we're trying to bridge that gap. Not just, again, not just the, you need people and we have people. Like you said, that would be just a regular recruiting place or a regular temp house. And we're not looking to do that all. We're looking to connect the proper talent with the need. And I think, just to add one thing, I think the other thing to focus on, at least the way I'm trying to push this a little bit is, forget the title. Forget the title. Look down deeper. What is it that you actually need to accomplish?

[00:08:24.23] - Rich Veltre

And then let's find the people that can help you accomplish that. If somebody really has the talent, but they haven't actually worked as, say, a CFO, but their experience is enormous in the task that you want, that's the person you want.

[00:08:39.05] - Dan Paulson

Exactly.

[00:08:39.26] - Rich Veltre

Don't turn down that person because you think somebody told you at the water-cooler that it's the CFO that you need. Not necessarily. I've been hired by other CFOs. I've had people turn around and say, I don't have the time to get certain project done. And so they look to me and I said, well, we can get it done. And here's what it will cost. And this is the advantage of you putting it through. And we did the project. Do I care that they didn't call me CFO of that company? No, of course not. Because the task got done. And it got done well. It got done exactly as he expected. And he'll come back to us at another point and say, here's another project. But if he's coming back solely because of a title, that's just the wrong way to look at Yeah.

[00:09:30.15] - Dan Paulson

And for companies that maybe they were told they need a CFO or a COO or CMO, so chief financial officer, chief operations officer, chief marketing officer, fill any one of those gaps that you're talking about, you're also paying a pretty hefty salary benefits and incentives on having that person full-time where you might not need them. So Rich, when you look at a CFO, I know you're out on the East Coast, so salary ranges might be a little bit different. But if you look across the board, what does the average CFO make for that title?

[00:10:07.18] - Rich Veltre

Yeah, I think it varies.

[00:10:15.10] - Dan Paulson

And Rich froze up.

[00:10:16.25] - Rich Veltre

Okay, I saw an article yesterday that said, Average cost of- You're back.

[00:10:19.29] - Dan Paulson

Okay, you're moving again.

[00:10:21.12] - Rich Veltre

That was weird.

[00:10:23.15] - Dan Paulson

You said it varies, and then that was the end of it. So it varies. How so?

[00:10:27.29] - Rich Veltre

Okay, it varies because You have to look at what market are you trying to fill. Okay. Are you trying to put a CFO into a multimillion dollar company, or is it a startup? And so I saw yesterday, and it was a reputable article somewhere that said that the CFO average across the country is $450,000. I think that's high, because I think that they must be including some of these larger companies that are already headed towards IPO or very SEC-related structures, SEC-related reporting. Then, yeah, that's going to drive your price up. But if you're looking at just the normal CFO across the board, you're probably looking at the 250 to 350 range as opposed to a $450 range. But that's salary. You have a payroll tax burden and you have a benefit burden on top of that and any incentives that you're giving them on top of.

[00:11:28.12] - Dan Paulson

Which is usually anywhere from to yearly bonuses, often both in some cases. So even that $250 could quickly turn into $450 if it's the right company in the right situation. I'm seeing that on the operations side as well. Operations, probably a little bit smaller number. But what last time I did the research, the low end, even here in the Midwest, was probably right around 100,000. The sweet spot was somewhere between 160 and 180. And then, of course, much larger And then your company could go well up from there. But same situation, you're paying the tax penalty, you're also paying benefits. And then on top of that all, you're probably providing some equity incentive and bonus plan on top of all that. So it starts getting really expensive And then if you start ask yourself, well, do I need somebody 40 to 50 hours a week? In a lot of companies, it's no. If you got the talent, the internal talent that doesn't have the experience, you probably have people that could be trained up that could take a bulk of that work. And now you need somebody who's, I'd say, more coaching and advisory versus hands on doing, because I think that's something else that we both talked about this, too.

[00:12:39.09] - Dan Paulson

And I don't think either one of us wants to get in the situation where we're in the thick of it doing all the heavy lifting for a company. Maybe we've got a solution for that in the near future. But really, we see ourselves and the people that we're bringing on as providing more of that guidance, maybe doing some stuff, but not expected to be there 40 to 50 hours a week. Right.

[00:13:06.02] - Rich Veltre

I think it really does become a little bit of a defining matter that you have to say, you want somebody in a leadership role, to foster the rest of the people. I think this is a little bit of a new piece off of what you just said. But I think you I think you need the leadership top to be able to come in and grow and build the people underneath that you might already have or that you might need to find from somebody else. I don't think that's the market that we're trying to portray here. Am I saying that right?

[00:13:47.12] - Dan Paulson

Yes. Okay.

[00:13:49.06] - Rich Veltre

So I think I'm repeating what you said. And I do apologize for that. I was looking for a new thought there. But yeah, I think the key to a fractional or a gig economy is really not to look at this as, I'm just hiring part-time bodies. And too often I see that happen, where you're just looking to throw bodies at it. You're not thinking it through far enough. And I think that's where, Dan, you and I are going to really weed out on not only the staff side of it or the resource side of it, we are going to attack the fact that, is that what you really need?

[00:14:35.05] - Dan Paulson

Yes. And that's going to be a huge difference because we're going to come in and we're going to analyze what your priorities, what your challenges, what your issues are. Through that, we'll prepare a brief report sharing what we found and what we believe your needs are. After we get an agreement from you that that's the approach that you agree we should take, we then go out and we find somebody who is going to be the best match possible to fill that role. So it could be either one of us. It could be somebody else. We're going to talk a little bit later about how we want to build our bench. But the idea is a little bit more matchmaking than just throwing a body who has the credentialing in your lap and saying, okay, here you go, figure it out.

[00:15:26.26] - Rich Veltre

Right. Yeah, I think, And we have been doing this for a long time. So I'm not trying to jump the gun and get to your bench part of the conversation you just mentioned. But I think that's the other thing. We are working towards both sides. We are working towards making sure that you're not just picking a body to throw at it and say, well, I have a body, and they're sitting there, and they should be able to do this. Well, we're being a little bit more careful than that. And the part of this is, we will be screening people beforehand. We will have a list of people that we're already working with or that we've already gone through. And we'll be going to them and saying, this is the project that's available. But I think it goes back to what I said before. I think on the company side or on the hiring side, you want to get down to the point of, what do I really need? And that way, you're not wasting your money. It's worth the time up front for the company to spend. It's It's worth the time for us to make sure that we vet the people.

[00:16:34.22] - Rich Veltre

It makes total sense for us to know who we've tagged as being available to do that a project. And then this becomes really a good match making exercise.

[00:16:46.17] - Dan Paulson

That is exactly right. The other thing is in most fractional C-suite service, I'll call it, it's usually isolated to one discipline. So as As you pointed out, fractional CFOs, there's a lot of companies out there that offer fractional CFO services. We're starting to see more fractional CEO, fractional COO, some fractional marketing, that type of thing. The idea here is it's not targeted at one specific area of expertise. We are looking across the board at, again, bringing in the experience senior level leaders, executives, executives, executives, managers that have the talents and skill sets to fill any one of those needs. So the idea is this becomes a place to stop first to find out if you say, well, we need somebody with marketing, great. We can come in. We can look at, say, is that really what you need? If it is, we'll have somebody on our bench to step in and help fill that role. If it's in IT, for example, we'll have somebody there. Operations, finance, yeah, we've got those areas covered. We'll definitely have more people to fill in. So it really does become a broader brush we can paint with than just saying, well, we can help you on the CFO side and you're on your own for the rest of it.

[00:18:14.02] - Dan Paulson

We can also mix and match. So if you need in different areas, we can split up that time how it's needed to help fill those gaps. Maybe you do need marketing, but maybe there's also some operational issues, some costing issues that need to be addressed. We can definitely then help step in and take care of those gaps as well. And I think that's where really what's going to make this the difference between the matchmaking side of it and being able to answer your needs across the board in your organization. It's going to be a lot different than what you're going to experience somewhere else.

[00:18:47.24] - Rich Veltre

Yeah. Yeah, I think it's going to be 100 % different. I'll pause there. I apologize But I think there's an enormous differentiator here. I've been doing this, and basically what's been happening is I get hired and I get hired off of the title.

[00:19:18.16] - Dan Paulson

Right.

[00:19:19.19] - Rich Veltre

And I know I said this before, but this is such a key, important topic that somebody keeps hiring me off the title, but then you you realize that person doesn't understand the title. So if you needed an accountant, we can get you an accountant, or we'll refer you to one. If it's not on our route, if it's not in our wheelhouse, we'll refer you to one and say, Hey, go talk to these guys. But the key here is we would know that you don't need the CFO, you need the accountant. How many times have I been hired as a CFO? And the first thing I want to talk about is taxes?

[00:19:57.15] - Dan Paulson

Well, I believe we were having a discussion last week where you were investing your time with a client upwards of 50, 40, 50 hours a week. So even beyond what you were being reimbursed for to basically do accounts payable, accounts receivable stuff.

[00:20:10.08] - Rich Veltre

Yeah, it was- That's not what the CFO does. It's not CFO. Cfo might oversee those, but who do you have actually doing those tasks?

[00:20:18.19] - Dan Paulson

Right.

[00:20:19.04] - Rich Veltre

That was the big problem. That's the big problem I'm still running into because that job is still going on, and I'm pushing back and saying, This is not what you hired me for. This is not what you need. So why are you paying for it? Because the rate doesn't match what you need. So the question becomes, who's the trusted advisor? I'm trying to be the trusted advisor, even though they're trying to treat me like an employee. And the question And the question is, at the end of the day, they just want it done. Well, if that's the case, XCX is not for you.

[00:20:51.17] - Dan Paulson

Well, I think there's also going to be a learning curve with this. We have to do, and what I believe we are going to do is a better job educating people of what you're investing in, what you're getting for that investment. This is why we've both been in situations where we've worked with clients, we've worked with business owners, and they say, well, this is all great, but I can't do it. I don't have enough time to do it. Well, do you have the people that can actually do a lot of the heavy lifting? In most cases, they'll say yes. I mean, there are situations where the business is just too small and doesn't have the payroll to even have the people to do the support, which case that's another problem. We got to figure out you and I can work on that individually. But when it comes to, I've got the people, but I feel like I need to babysit them all the time, or they don't understand my vision for this or how to get it done, or they just plain don't have the experience, that's really something where CXCXO can step in and say, okay, well, let's learn what it is you want.

[00:21:52.02] - Dan Paulson

And now we have an expert, a leader that can step in and help produce that outcome for you. So you can still focus It's focused on the 99,000 other things you got to do. But now you have this person who can essentially take that project and run with it, get it to a point where it's running on its own, and then we can come back to you and say, okay, does that solve the problem or not? Is there more to do? If there's more to do, then what's next for that individual or whoever else we need to bring in? Or maybe that solves the issue, freeze up enough time for the owner that they can get back to focusing on the visionary side their business, not the day to day tactical side. So let's take a look at the website a little bit, shall we? It's a damn nice looking website, if I do say so myself, and I do say so myself. It is the best thing that GoDaddy could produce for me in such short notice. Free plug for GoDaddy. So we've got some information here. We've got a little bit more about what we're talking about here.

[00:22:58.26] - Dan Paulson

So that should clarify some of the discussion we're having today. We do explain about how we're different. So we get into a little bit more of what makes us unique here, which I truly believe it's the hands on services. I We're going to talk today. Not just plugging a live body into a spot and then expecting that person to do something for you. We are going to make sure that person is the right fit. We are going to do enough research and work with the owners, the executives, to make sure we know who we're putting in there, why we need to put them in there, how they align with the culture, what they're expected to do. So there's no surprises. I think some of the more important stuff we should look at on here. We have a page, Join Our Bench. By the way, go to xcxo.net. It's not. Com, it's. Net. So xcxo.net and click on Join Our Bench. So let's say you're somebody who is retired or semi-retired, but If you haven't been out of the game too long and you really don't want to play golf every day or fish every day or sit and watch TV every day, you believe there's still more you can give, but you don't want to work full-time.

[00:24:12.16] - Dan Paulson

Maybe you only want to put in 10 hours a week, maybe 20 hours a week. Come here, fill this out, basic information, attach your resume. So give us something to give your background. We will contact you and set up a meeting to learn a little bit more about your background and your experience, your successes, and And how we might be able to utilize you. The challenge here is we're trying to do two things simultaneously. We're trying to build a bench of people, of experts, and we're also trying to find new clients. So having the expertise always helps, and we would love to talk to you about that. The areas that we're looking for are not limited to, but include finance, banking, IT, marketing and operations. So anyone, I think the key here, though, is 20 years plus of real world experience. That is the void I believe we are really trying to fill. Rich, do you agree with that?

[00:25:06.02] - Rich Veltre

I do agree with that.

[00:25:07.02] - Dan Paulson

Yes. So if you've been out of college for five years, bless you. Definitely keep us in mind, but we're going to look for somebody with more experience. There's so much that comes with time that just can't be replaced by sheer talent alone. So that said, there might be a few, very few prodigy examples that we could bring in, but I think for the most part, we're going to stick with the 20 years or more of experience here. We explain a little bit more about our process. So this is really where we spell it out. So the needs assessment. First thing we do right out of the gate is we make sure that what we're working on is what's going to be most important and produce the greatest results for you. Once we figure that out there, then that goes to the matchmaking part. So now we got to align the experts we have with the issue you have and figure out who's going to be the right fit for that. Follow that up with the interview. So it's not just going to be us saying, hey, here's Bob Smith. Bob Smith is now going to be your fractional COO guy who's going to help you out.

[00:26:15.04] - Dan Paulson

It's going to be, hey, we want to introduce you to Bob. We want you to meet them, them to meet you, and then work together and say, is this the right fit or not? So in the end, really, it's the business owner who has the final deciding factor on who we in. In some cases, maybe we can't find a right fit, in which case then they might be too picky, and maybe we don't want to work with them. But that's another story for another day. The next step is setting the expectations. So you're making this investment in whoever you're bringing in. It should be clear on what we expect them to accomplish in how much time we expect it to accomplish and how much time it's going to take that individual to be working with you each week to make sure that that outcome works. And typically, again, we're looking at anywhere between 5 hours a week to approximately 20 hours a week, but typically no more than that. So this is not a full-time position that we're talking about. Step five is the monitoring. So we will come back each week. We will talk with the person we've put in place.

[00:27:16.06] - Dan Paulson

We will talk with you, and we will make sure we're making progress along the way and measuring that progress and performance to make sure we're getting the results. The last step here is once we've reached that milestone, we're going to do a debrief. We're going to celebrate because we don't celebrate enough. So we're going to spend some time celebrating our success on that and then again, determining what next steps might be after that. Anything I missed there, Rich? I think we got it.

[00:27:43.14] - Rich Veltre

It's a beautiful thing.

[00:27:46.06] - Dan Paulson

It's beautiful. It's just beautiful. Just beautiful. If you all learn a little bit more about us, assuming at this point you know a little about us, but you can definitely visit our Founder's page. And we hope to be adding more people below this in the near future. We're talking with about half dozen different people right now, and try to finalize things there. And then, of course, if you want to contact us directly, we have a spot where you can schedule a Zoom meeting directly with us. So if you click on this Ta-da. I apologize, Rich. I tried to get your picture up there, too, but this is on my calendar. So you can go ahead and you can schedule some time with us. We'll spend about a half hour chatting with you via Zoom to learn what you need or what you're looking for. So in a nutshell, that's the site. Rich, you got anything you want to add to it?

[00:28:38.10] - Rich Veltre

No. Very cool. I was very happy with it when it's set up. I think it's going to work great. I think this is a tremendous opportunity to put the right people with the right projects and solve some problems for people who have projects that they need to have done.

[00:28:55.11] - Dan Paulson

I agreed. So for the first time ever on Books in the Biz, we can now share one place to go and one email, or actually two emails, contact, but they both go the same spot. So if you want, visit us at xcxo.net. You can reach me at dan rich@xcxo.net. Rich, they can reach you at rich@xcxo.net. And that's the easiest way to get a hold of us. So now you don't have to go looking all over the interwebs to find us, we're going to be in one spot. And thank you all that we have already talked about this and said, hey, this sounds really good. This is something cool and different, and we would like to be part of it. So we would like to include you in on that list, too. Please contact us at xcxo. Net. And Rich, have a great Halloween. You got some candy you're going to be handing out?

[00:29:53.28] - Rich Veltre

Oh, we have so much candy. I don't think we have enough kids in the block. We probably don't have enough kids in in the whole city.

[00:30:01.09] - Dan Paulson

In that case, you're going to have a lot of leftovers for yourself. Yeah, I'm going to send them to my kids school tomorrow. Your dentist is going to be so happy.

[00:30:09.15] - Rich Veltre

I'm going to send them to my kids school tomorrow and just say, look, hand it out. I don't want it here because if I eat it, I'll just put all the pounds back on.

[00:30:19.21] - Dan Paulson

Well, we didn't get as much candy, but we got the full size candy bars. Yeah, we did the same. So if it's in the neighborhood, you're going to look out. You're going to get the big bars to go in your... None of the little snacks stuff. They keep getting smaller and smaller.

[00:30:32.12] - Rich Veltre

No, we did the big stuff, too.

[00:30:35.21] - Dan Paulson

Well, good. Hey, Rich, we're going to talk again next week. Actually, I've already been talking with a few extra guests coming up, so we'll announce those in the near future. But until next week, we will see you at that time.

[00:30:47.22] - Rich Veltre

All right. Sounds good. I'll talk to you later.

[00:30:49.20] - Dan Paulson

All right. Take care.

[00:30:51.10] - Rich Veltre

See you.