2123 - How Data Analytics is Revolutionizing HR Management with Flex HR's Jim Cichanski

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1:05With us right now, it's Jim Satansky. Jim, you are the founder and CEO of FlexHR. You're found on the web at flexhr.com. Jim, it's great to have you. Yes, how are you today? Excellent, excellent. Well, Jim, tell us about FlexHR. Oh, FlexHR. The company is 25 years old. We have started as a HR fractional VP of HR to companies. And just about three years into the company, we had our clients just asking me, hey, Jim, just take all of HR out of here. Could you do that? So we actually developed an HR outsourcing function. and we turned it into the largest Southeast HR consulting and outsourcing firm.

2:01We do everything for a client in our HR solutions, especially on the HR outsourcing. We do all their HR work. We onboard the employee. We actually send them their offer letter and get them to sign it. And then we get all the onboarding paperwork in. We help them select their benefits. And sometimes you have the spouse on the phone with them because the spouse works for a company. They have benefits. And how will they interact with their benefits? So that's how personally we get with an employee of our client. And then we make sure we get everything done for them. That gets deducted out of their payroll systems.

2:49the 401k money gets moved to the 401k company that kind of stuff and then we do the payroll and we do payroll where we actually do all the keying the client does not touch a key on their computer do payroll we pull all the time we do all the payroll we send it to the client say it's ready you want to approve it and it gets done and we make sure everything happens direct deposit and everybody's checking account and all that good stuff. Yeah. Well, Jim, would you mind maybe sharing a little bit about a typical evolution of HR when you think about a new business startup and, you know, they kind of begin, you know, likely the founders doing quite a bit.

3:36And do you mind kind of maybe telling us the story of what kind of this normal life cycle up to the point where they start realizing, oh boy, it's time to call Jim. Well, true. See, give you a little story about how I founded FlexHR. Actually, I was in corporate America, in the HR, head of HR, some large companies, even billion-dollar companies. And one day I was flying back from California, and I just took the value of a acquisition down by 50 % because of the HR actual embarrassment of what was going on in that company. And we did not want to take all that liability because it was a stock purchase.

4:25And on a napkin, I drew up saying, hey, these companies need a fractional HR person to watch over how they're doing stuff to make sure they're in compliance with all the laws. And I took that fractional concept 25 years ago from my other experience. And I spent 27 years in the military National Guard. And my last four years, I ran a state HR department with 13 ,000 troops, almost 4 ,000 civil service employees. And I did it part-time. And I'm like, wait a minute, Let me transfer that concept to the civilian world and actually start a FlexHR with the fractional concept of HR to take care of the compliance, watch over the compliance, making sure the value of a company was there when we sold it.

5:22And I can't tell you how many CEOs that then sold their company with us doing the work saying, hey, we got a great thumbs up on all HR activities when they did their due diligence. And they sold them to some pretty good sized companies, too. So very, very proud and happy when we hear those comments. I bet. I bet. And by the way, thank you so much for your service. Always great to have a fellow vet. I was in the Navy for five years. And I want to ask you, of course, it's like any time we have someone that, again, had that opportunity. What from an HR and leadership perspective, what are a couple of things or a thing or two that from your time in uniform that you gained experience that you got?

6:15You kind of alluded to one thing, obviously, but what did you learn and what are you bringing to corporate America? You know, in my 27 years, 41 % of my time was being a commander and I commanded combat artillery. and one of the things that you learn really quick when you're the CEO or a commander, same slot basically, is that you have to build trust in your employees. You build trust in your employees. You tell them the truth all the time. You're transparent with them. They will work harder than ever for you. If they're uncomfortable with what's going on in your company, and especially the ownership, they're not going to work as hard.

7:09They might jump ship. The turnover will be larger. All of that good stuff. So one thing that I felt I learned in literally, I think I figured out one day, 31 years as a CEO equivalent is getting and building that trust with employees and even clients. Yeah. Can you share a little bit more about those principles of trust? Like what is it, you know, from the mindset of someone who's on the team, you know, employee or whatever, what are some things that leaders might think are trust evoking, but may actually backfire or have the opposite effect? And what things really matter for evoking a culture of trust?

7:57Yeah, I mean, probably, and I probably had to do this several times, too, and I saw other CEOs have to do it. when you sit there and put out, let's say, maybe a compensation plan, a commission plan, something that's worth value or dollars, and then you don't see that the program is working. And you sit there and be truthful with the employee saying, okay, we have to change this. And this is why we have to change this and show them and be transparent about it. when you do that you gain the trust of that employee saying yeah I actually didn't see it working either so and you said you made a mistake and now you corrected your mistake and you were transparent with us in fixing that problem I mean that's kind of like an example that I know I had to have one time where I had to change plans I had to do things and just had to be frank with my employees and they accepted it.

9:07But I think it's the way in the communications and the process of going about it and totally being transparent about why and how Yeah. And, you know, here we are, Jim, in 2025. What are the evolutions or what technology or what's kind of on the horizon that gets you excited about the future of HR? Yeah, the future of HR is definitely technology. It's been moving there for a long time. I bring down the concept of technology. You know, years and years ago, we did very rough payroll. And payroll was the only thing that was somewhat automated. But you had to do a lot of manual things to payroll to make it work.

10:04And then we had a revolution of the 401k that came into being. And when we sat there and said, well, we have to have that money being taken out of paychecks, moved over to vendors and into individuals account. Now, that was probably a very huge error in the technology boom of one portion of HR that started the revolution of saying, well, wait a minute, the payroll system now could become an HRIS system. And now today, we could have that HRIS system literally onboard an employee without human intervention. where you could just send a link to that employee saying, welcome to the company here, fill out all your paperwork.

10:58And it automatically says, OK, you said you want these benefits. We're going to subtract this amount of money out of your paycheck. It all automatically happens. The hard part with moving so much to automation is you start losing the value of that communication with the employee. So interesting how some clients have said, I don't want to go that far with automation. I want to have human intervention with that new employee. Make them talk through the benefits, push through the concepts of these are value to you and why you have these benefits. So what this really costs the company and what the company portion is going to pay versus what you have to pay.

11:54But that human intervention still has to be there and a human element. So we're seeing that. The other automation we're seeing is AI. Well, do you mind if I just ask you this question right now? Because I've been hearing some statistics or some predictions that AI might offset or replace as much as 30 % of all... This might be a little hyperbolic, so I'll take this with a grain of salt. but I've seen some numbers that have shown that as much as 30 % of all labor by the year 2030 may be replaced by AI. And, you know, obviously in people leadership and in HR, this has to be something that's kind of buzzing around in your world.

12:48It may not be 30%, but it's going to be significant. I think we can all agree. Well, remember, we heard that story when laptops and computers started, too, that it's going to take over all the people and people won't have anything to do. And quite the opposite. Yes, we might be able to do things with less people. However, when you think about it, look at how many people are being hired now into the AI field to produce this data, keep the data warehoused, separate the data, and actually make it more pure every day. um so yes when i wanted to write a letter in fact i'm a president of an hoa and i had to write a nasty letter to one of the homeowners i asked ai to do it and they produced 95 of that letter perfectly i just had to adjust a few things so there is ways to use ai especially when you have to start with a blank piece of paper and do something.

13:59You can at least ask AI to write it, and you at least have a draft that you can now modify. And I think we're seeing that starting to happen in the HR world, in the finance world, even in the legal world. So yes. However, when you take a look at the employment and employees available to work in a curve down the next 20 years, we need something like AI to fill the void of people. Yeah, truly. And, you know, I'm just thinking of, you know, organizations being able to build their own LLMs so that they can, you know, for some of those difficult problems, I really look at, you know, this enables all employees and all team members to just produce better outcomes much faster and hopefully our output increases.

14:55And I think, you know, most companies want to grow. I recognize there are seasons of certainly of belt and tightening and so forth, but generally companies want profitability. They want growth. And so, you know, for me, it's like, you know, if an employee comes and they'd like, listen, this used to take me eight hours and now it takes me one hour. I'm going to be like, wow, That's fantastic. Let's do that. Let's do that seven more times. Yeah. We have those seven hours to do something else. That employee becomes so much more valuable to me.

15:30So, again, just a great lesson to all of us is evolve and look at just how much more of a greater, better job, fewer mistakes. mistakes. You know, I'm thinking about, you know, legal and, you know, some HR issues, which might be tricky, you know, handling difficult communication, for example. Boy, I mean, this really gives us the potential to just avoid a lot of mistakes, I think, by just having access to better tools to enable us to be more effective at our jobs and so forth. Absolutely. Yep. Well, Jim, I'm sorry, I kind of pontificated there. I feel badly. Seven hours that the employee now saved, they could use that seven hours to be more productive in other areas.

16:17Yeah, yeah, exactly. So Jim, your website, flexhr.com, who listening to us should probably be reaching out? Yeah, I mean, if you go to Flex HR, you could reach out using the contact me page and ask questions away or just say, hey, can we have a conversation? And we'll link up with them and have a discussion.

16:48In terms of companies that you work with, what's kind of the scale or scope that you typically operate in and where do you go to? In the outsourcing world, our typical client is usually around 50 employees to that 500 employee range. Now, that being said, we carve out some of our services to literally Fortune 500 companies, like just managing their leaves for employees. Because when you get to a company that has 100 ,000 employees in it, mastering managing all of the leaves, the pregnancy leaves, the family leave, My son is going to the military and I'm a caregiver when my soldier comes back and I got a care gift for them.

17:44All of those rules in the state's paid leaves, the state family leaves now, besides the federal laws, it needs a specialist. And companies just don't have that expertise and or the turnover is so great that they want continuity. So they ask us to carve out that piece for them in an outsourcing mode. So we do that. And of course, our consultants, we have about 50 consultants all over the country. And we consult in literally every area of concept from compensation to leadership development, coaching, mentoring an HR person. A lot of times I'm going to promote you to be my head of HR in this company.

18:32but yet you don't know anything about HR. So I'm going to hire FlexHR consultant to mentor you and be able to be there for call friend needs. And that works out very good. We have many, many clients that do that. Yeah. Your website, flexhr.com. I want to point out a couple of resources too. You seem to have a good roster of virtual events for someone that has been listening to our podcast, maybe because they're kind of interested in the topic and they may or may not be ready to outsource just yet, but it looks as though you have some pretty great resources on your site. We do. And we have a lot of webinars and we're SHRM certified.

19:13So they get CE credits for those training sessions, which is good. And literally we have a consultant that has, you know, 30 plus years of experience giving these webinars. So a lot of brain transfer during those webinars. I love it. I love it. Website, flexhr.com, obviously, to someone doing their research right now. Jim, when someone then are, you know, they're interested in seeing if they should outsource, what typically happens? Yeah, we then set up a call with them. We do a demo for them. Sometimes they want to say, OK, here's a list of exactly what we do for you. This is how the interface is with your company.

19:59and then they might be interested in us doing their payroll and they want to see the payroll system and what it could do. So we could show them all those type of aspects of, gee, show me a typical site if I'm an employee and I want to see how much PTO I have, what does that look like? You know, those type of questions that usually a client will have. Jim Sachansky, again, founder and CHRO of FlexHR. You're on the web at flexhr.com. Jim, it's been a great conversation. Thank you for joining us. Thank you. Appreciate it. Have a great day.

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