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Banking on KC – Erica Brune of Lever1

 

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Kelly Scanlon:

Welcome to Banking on KC. I'm your host Kelly Scanlon. Thank you for joining us.

Kelly Scanlon:

With us on this episode is Erica Brune, the owner and CEO of Lever1, a professional employer organization here in Kansas City that continues to make national lists of fastest growing companies. Lever1 was ranked as the fastest growing company in Missouri in 2017 and was ranked number 44 in the nation by Inc. Magazine that same year. Erica was also an Ernst & Young Entrepreneur of the Year finalist in 2017 and 2018. And she and her company have won a host of other awards too. Most recently, Lever1 landed in the seventh spot on a list of the nation's fastest growing companies owned or led by women. Welcome Erica.

Erica Brune:

Good afternoon. Thank you.

Kelly Scanlon:

What is driving all that growth, Erica? I mean, seriously, it seems like year after year now you're ranking on those lists, and it's not just way down at the bottom of say, the Inc. 5,000, you're up in the top of those lists. What's going on with your growth?

Erica Brune:

Well, thank you. We are thrilled to be growing at the pace and rate that we are and we really attribute that to our clients' success. The way our business model is shaped is if our clients grow and they succeed, so does our business in supporting them with our services. So first and foremost, having successful clients has been the key. I mean, doing a great job for them has led to referrals from our existing client base. So many of our clients have started second and third businesses and brought us with them. So again, just helping them be successful has, in turn, led to our direct success.

Kelly Scanlon:

Yeah, so a lot of organic growth, it sounds like.

Erica Brune:

That's right. We do have a business development team that's very successful at going out and obtaining new business, but I would say our biggest opportunity has been with our current clients.

Kelly Scanlon:

You talked about your business and making the client successful. Let's talk about what your business does. You're a professional employer organization, or sometimes people might refer to that as a PEO. What does a PEO do?

Erica Brune:

PEO provides outsourced HR solutions. Everything under the HR umbrella from payroll, employee benefits, HR compliance and employee relations, recruitment, risk management, Workers' Compensation, you name it, under the HR umbrella, we have a staff that is able to provide those services to our clients. Yet we have the flexibility to offer them a la carte and allowing our clients to pick and choose which of those services will best benefit their business.

Kelly Scanlon:

What attracted you to the HR business?

Erica Brune:

I fell into the HR world, like a lot of us do, by getting your first office job out of college. HR is typically something that the accounting or operations team needs to pick up. Many businesses don't need that full time, but certainly is needed to get payroll and new hire paperwork processed. So I started by learning on the job and picking up those tasks at a law firm where I worked for about 10 years and really enjoyed it. Really enjoyed seeing how the back office of a business operated and supporting that business by doing the HR functions.

Kelly Scanlon:

I believe you spent about 10 years in New York when you got out of school, and then you were actually doing some plays there in New York, and then you came back to Kansas City where you were born and raised, I believe.

Erica Brune:

That's right. I took a stab at New York City for 10 years and absolutely loved it, but decided I was ready to come back home to Kansas City and start a family, and had a great opportunity to join the team at Gragg Advertising and picked up their director of operations role, which oversaw HR, finance, and operations for that business. I'm still with that group today. Greg Gragg was kind enough to extend ownership to me, and over the years we have created or acquired over 10 businesses, including starting Lever1 about 10 years ago.

Kelly Scanlon:

You took a path that some companies might not think of doing, but other companies have done very successfully just like Lever1 has, and that is, it starts as a division or a function of an existing business, and then you realize, you know what, we could spin this off and actually offer these services to other clients and create a completely different company out of it, which is what Gragg did and Lever1 was born. Talk to us about that kind of a business model. What are some of the things that you need to be aware of if you're considering that?

Erica Brune:

You're exactly right. We wanted a separate entity as just really part of our business structure, where we could house all of our administrative functions. I think at that point we had eight businesses operating, and it just made sense to have an independent entity performing the administrative functions, and that's how Lever1 was born. But very quickly, we were processing invoices, sending different types of billing out to all these vendors. And they said, "Well, who is this Lever1? Do you provide these services to other businesses? Can we use you?" And it truly was the follow the signs, and if customers are wanting to buy what you're already doing, well, you may as well start selling it. And that's exactly what we did. It really was a demand from the other businesses we were servicing, and that's how Lever1 got started.

Erica Brune:

I would say things to be thoughtful of is common ownership. You own multiple entities. And sometimes people think they can do different things, operate them separately, and of course you can, but there are nexus rules and common ownership rules. For example, on benefits, where if you offer benefits to one of your entities, they really need to be equal and similar to all of the employees. You're going to look at them as an aggregated group. Same thing with a 401k match, for example. Offering a match to one group but not to another, there's a lot of rules around that.

Erica Brune:

So I would say operationally setting up multiple entities is a great strategy. Just be mindful that doing so doesn't necessarily get you out of some of those HR pitfalls, like offering benefits once you have 50 employees. They are going to look at your aggregated group by common ownership.

Kelly Scanlon:

You must have a front-row seat to what we're all talking about right now, which is every time you read a business newsletter, you see something about the labor shortage and you see things about the economy. Do you think we're going to be dealing with this labor shortage long term? Are there some industries that are being hit more than others? Give us your bird's-eye view essentially of what's going on here.

Erica Brune:

Sure. I sure hope we aren't, but we kind of thought we'd be out of it by now. All the tax incentives and the unemployment incentives had worn out, and we thought people would return to work, and the reality is a lot of people are still choosing not to.

Erica Brune:

What I'm finding is that some families that had double income, now are going with single income and they're just learning to deal with less. And for a variety of reasons, they are enjoying that. They were tired of the stress that was causing their family life. We're just seeing people get by with less and be okay with it. They don't really feel like it's a sacrifice because they're choosing quality of life over making a higher income. We are still seeing that as a big challenge.

Erica Brune:

As businesses are thriving and creating new jobs, there isn't the same amount of workforce available to fill those jobs. And it is incredibly frustrating for employers across all industries right now. The ones that we're seeing are hardest hit are education, medical, and then the hospitality. Those restaurant jobs, a lot of people left. All ,three of those industries through the pandemic, they got burnt out. They wanted to do something different, and they're really struggling finding people.

Erica Brune:

I would say for the women who are willing to work, there is no better time to enter the job market than today. The amount of mid and high-level positions within companies is phenomenal right now for the job seeker. All women who are applying are tending to find higher rates of pay and higher-level positions than they were prior to the pandemic. And that's a factor of the economy and the job growth that's been created. So there's no better time for women to get ahead than today. I don't know the exact numbers in terms of if women are making headway, but I am seeing women get accelerated positions from what they had two years ago.

Kelly Scanlon:

So in a tight market like we're experiencing right now, what insights would you offer to employers who are trying to attract employees?

Erica Brune:

First, they can start with the job posting and the interview process. Back in the day, when you were trying to find candidates, as an employer, you were really able to scrutinize and quiz and give tests and all these things, and now it's the complete opposite. Employers really need to market their business to the applicant pool. Employees entering the job market now are really interested in your social positions on climate change. And are you charitable? What organizations do you contribute to? They're making their employment choices based on some of those social positions, more so than the job title and the rate of pay, which is so interesting.

Erica Brune:

So we talk to our clients a lot about really marketing that job posting. Not just about what the job is, but how is your company different, and how do you stand out as a business, your core values, the ways you give back to the community? Those are really drawing applicants in. Same thing with once you get them on site for the interview, no longer is it the hard press, tough question interviews. It's a lot more shepherding them around the office and letting them meet with mentors and really selling your company to help you stand out from your competition.

Erica Brune:

And then I would say the biggest tip that we give our clients that our recruiters are really struggling with is to move quickly. If you are needing to hire people, you need to move day of. It is not uncommon now to make a job offer to a candidate in the interview process if you're comfortable making that hire. But asking them to wait a week for feedback, they're going to have other offers at this point. And so you have got to move very quickly in this job market.

Kelly Scanlon:

In terms of benefits, are you seeing different benefits taking priority than you did a few years ago prior to the pandemic? Is there any focus on new ones?

Erica Brune:

When an employee is making a job decision, we're seeing more applicants ask to review the benefits package than we have in the past. So they're smarter consumers, right, shopping around for their jobs. So they want to really review and understand what the costs are. They've clued in that just offering benefits can be very different from job to job, the cost of that. So they're wanting to see what those benefits are.

Erica Brune:

We have also seen many employers move up their 401k match. What some used to wait a year before they started offering that match, are now doing it very early on; 60 days of employment. That's been the one that we've seen people ask the most about.

Kelly Scanlon:

From a human resource's perspective, are there any enduring lessons we've learned from the pandemic?

Erica Brune:

I would say one, again, that more human relationship directly with the employees. These are all lessons that we've learned year over year, but they've never been more true; again, is that over communication. So many employees were disappointed with their employer through the pandemic and did not feel communicated enough. Telling people three, four and five times when you think it's so obvious. Just keep those lines of communication open with your employees. Constant communication. No employee says, "Oh, they told me too much what our policies were," or "what our position was." So that over communication, I think became just so top of mind for us in HR, and I would encourage all business owners to remember that.

Erica Brune:

The other piece of it is is that any way to automate those entry-level tasks, where we are seeing the biggest shortage of workers. People are just not wanting that entry-level manual work like they used to. Those used to be the easiest jobs to fill because you had the largest pool of applicants. Any way within your business to automate those tasks, those types of employers are just thriving. And we've tried to do that within our own business; streamlining, building out the system so that we can hire a higher-level of applicant who is interested in working and not be backlogged with all the more entry-level manual data type tasks that nobody's applying for those jobs.

Kelly Scanlon:

You're an avid volunteer, well known in the community for your service, and much of that service focuses on organizations that are dedicated to bettering or empowering women. For example, you took on the awesome, really huge task of being a co-chair for the Go Red for Women event in 2017. You've served as the Kansas City Chapter President for the National Association of Women Business Owners. You've served on City Union Mission's Women's Committee, and you've also been the Board President for the Single Mom KC. And there may be others that I don't know about, but those I was familiar with.

Kelly Scanlon:

What drives you, first of all, to serve? And second, why do you choose to spend your time and talent in the service of women's organizations in particular?

Erica Brune:

Great question. When I got back to Kansas City, I was launching this business and out in the community, and I had the opportunity or was invited by other women to join in some of those organizations. It really opened my eyes to how strong of a community the women business owners in Kansas City are, and I was really drawn in. I saw some women that I admired and idolized and I felt where I wanted to be in my career. That's what they were doing. That's where they were spending their time. And so I got involved and engaged. I was just really blown away by the amount of support and resources and community that those organizations had created for the women business community, specifically NAWBO, the National Association of Women Business Owners, and so I never left. I stay involved. We have a large majority of clients that are led by women due to those relationships.

Erica Brune:

In all of those that you mentioned, I did have a personal tie. So I was maybe invited or encouraged to participate and then felt very moved by the mission of those groups. And just raised my hand and said, "I can help. I can contribute in the ways that I have skills." And it's paid off tenfold, not only, like I said, in the mentorship and the resources, but the fulfillment of being able to give back and sharing the resources that I have. And then even further on, those same relationships then created business opportunities as well, which was a great unexpected result as well.

Kelly Scanlon:

Sure. And I think a lot of people who volunteer find that, that you always get back more than you receive. You might feel like you're working really hard on behalf of an organization, but when you stop and reflect back on the time you spent there, you realize the benefits that you accrued, whether it was relationships, new business, whatever it might be, was much more than you ever gave.

Erica Brune:

That's right.

Kelly Scanlon:

Erica, from a workforce development standpoint, where do you see the opportunities for Kansas City as we try to build a better future?

Erica Brune:

Well, that's a great question, Kelly. Starting in the high schools and middle schools, and we have a lot of great programs in Kansas City that are already reaching those individuals, but the job readiness has never been more important than it is today. The jobs are available and we need workers. So certainly finding and identifying the students that may not need or want a four-year degree, and helping them understand the jobs that are available right out of high school, and that they can really make a very, very good living in some of those trades and other professions. As well as our local community colleges and local colleges, having the programs and focus for the jobs that we see coming available in Kansas City. And they're already doing a fantastic job identifying those opportunities.

Erica Brune:

I've had the good fortune of traveling with the Kansas City Chamber on the Leadership Exchange Trip, where we go to other cities and ask them about workforce development opportunities and where have they found success. And it's the same answer; it's the future generations, helping them really have job readiness skills. We need people who can enter the workforce and make direct impact because we're so short staffed. And so helping them focus with internships and through their higher education so that they really have the job readiness, not just the philosophy and the ideas that are certainly important, but they're able to really be job ready by the time they graduate.

Kelly Scanlon:

So a curriculum then that allows for practical experience. Is that what you're saying?

Erica Brune:

That's exactly right. The CAPS program, I believe in Northland is doing that really, really effectively. We get a lot of people... I mean, look at my business. There's no degree for payroll. There's classes for payroll. There is a degree for HR. But the reality is people coming out of college don't know how to do the practical HR that's needed for most small businesses. They have the theory and these organizational development classes and things that really only apply to super large business. And the majority of businesses, as you know, is small business and they need practical hands on. What can I put in a job posting? What new hire papers do I need to file? How do I get payroll processed? What happens if somebody has COVID, or how do I draft a policy? Just very hands on skill readiness is needed in the curriculum.

Kelly Scanlon:

Erica, thank you so much for being here today, for sharing your insights into some really big questions that we're facing as businesses today when it comes to the workforce, when it comes to attracting talent. Really appreciate your time and delivering that information to us.

Erica Brune:

Thank you for having me, Kelly.

Joe Close:

This is Joe Close, President of Country Club Bank. Thank you to Erica Brune for being our guest on this episode of Banking on KC. Congratulations to Erica and the team at Lever1 on your continued growth.

Joe Close:

As any successful business owner will tell you, driving growth and adding value to your business year after year is not easy. It requires the ability to recognize and overcome ongoing challenges. One of those challenges is building a team, finding and retaining talented employees who can work together to carry the business forward. In today's tight labor market, that challenge is even more pronounced, but those same market conditions have created opportunities for job seekers. As Erica noted, there is no better time, particularly for women, to enter the job market than today.

Joe Close:

If you have left the workforce and are looking to return, please visit the careers page on our website at www.countryclubbank.com. We'd love the opportunity to talk with you. Thanks for tuning in today. We're banking on you, Kansas City. Country Club Bank, member FDIC.

 

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