When to Hire Your First HR Manager (And Who to Hire First)

Sean Weisbrot: Welcome back to another episode of the We Live to Build podcast. Starting a company is hard, and recruiting and retaining talent is probably one of the most important things you're going to have to do.

Sean Weisbrot: Our guest today is Michael Podolsky, the founder and CEO of Weiser Brand, which helps brands with their marketing efforts. His company has over 80 employees, and today we learn how he has built his team to last. Specifically, we talk about what was the most important first hires, the importance of hiring in-house when you should hire an HR manager, and how your company changes after hiring an HR manager. How having an HR manager helps with the recruitment process. How often you should communicate with your department heads? What can you do to retain your employees, and how has he changed over the entire process of running companies for the last 15 years?

Sean Weisbrot: Thank you for taking the time to talk with me today, Mike, I appreciate it. I'm really excited to learn more about your companies and how you were able to grow to over 100 people. So, thank you for your energy and your time.

Michael Podolsky: Thank you, Sean.

Sean Weisbrot: Why don't you tell everyone what it is you do right now, and then we'll move backwards and start with, you know, what gave you the idea to do it and things like that.

Michael Podolsky: Sure. My name is Michael Podolsky. I've been in business for the past 15 years, grew my companies to 120 employees today, and continue building it.

Sean Weisbrot: What exactly is it that your companies do?

Michael Podolsky: My major company is Wiser brand. Wiser brand is a mixture of internet consulting for e-commerce company. We do digital marketing, we do software development, we do customer service. And our typical client is mid-sized client that may be requiring extra digital marketing help or extra development on this or that project.

Sean Weisbrot: I remember you said something like you were born in Ukraine, but then moved to the US like around the age of 18.

Michael Podolsky: Yes, I grew up in Ukraine well, former Soviet Union at that time. And then just when Ukraine became independent, I moved to the United States. I got my education in the States. I have a computer science degree and MBA in finance from NYU Stern. I spent a number of years, uh, more than a dozen years on Wall Street working as a software developer for major trading floors, trading houses on the street before launching my own businesses.

Sean Weisbrot: You also said that even though you've been in America for decades, you have an American company. Most of your team is actually still in Ukraine.

Michael Podolsky: It just happened that way. Yes, I tried Philippines, I tried India, uh, and then I went back to Ukraine. I have built a successful team in Ukraine.

Sean Weisbrot: What made you decide to work with people in Ukraine? And do you think that working with people in Ukraine was the reason for your success, and being able to scale to so many employees?

Michael Podolsky: It certainly played a role. Employees, uh, abroad are more competitively priced than US-based employees. We've managed to build a remote company where everything is being done remotely. Plus, there is no employees besides two partners in the United States. Everything else is being done out of Ukraine. We have full infrastructure that we need to operate there.

Sean Weisbrot: So, when you say remote, do you mean that everyone is working in their own houses, or do you have actual offices that they go to in Ukraine?

Michael Podolsky: Right now, everyone is working remotely, of course, because of the current pandemic. But usually, we do have offices in Ukraine where people are able to meet and work together.

Sean Weisbrot: What were the first two years of developing this company like for you?

Michael Podolsky: It was a lot of fun. The hardest part is to find the right first employees. What we'vedone is we hired five people to do one task, and that was content building task copywriters, so to speak. We went to Ukraine. We've hired, uh, an auditorium at the local university. We spent 2 or 3 weeks training that was rigorous eight-hour training days, speaking to people, training them what they're going to be doing, having tests every week. I believe the first collection of people we've had like 7 or 10 people, and by the end of three weeks we were left with five of them. Those were absolutely right people that stayed with us for a very long time. One of them is currently running one of my companies in Ukraine. So, the selection of first people is crucial in order to make the right choice and move forward.

Michael Podolsky: Now, I perform this function for other clients of mine that are willing to build their base in Ukraine. I have it as a function of my office for visor brand. What I do is I pick the right person that will run the team, and that person comes on board first, and then it's like a skeleton that you use to bring other employees on board. Don't start by hiring an HR person. No. Hire first, technical person. Hire first, person that you can incentivize and make them interested in your project. That's the key. Once you find the person who really the person may be lacking some knowledge, you can. That's fine. You can train them, but their heart must be with you. And that's extremely important for the first people you get.

Sean Weisbrot: Yeah, I definitely agree. I'm lucky that I have a background in psychology, so I've done my own HR work. I'm trying really hard not to hire an HR manager, but I think probably by like 30 or 50 employees will have no choice.

Michael Podolsky: Look, absolutely yes, you have to hire an HR manager at a certain point. We've hired HR at 20.

Sean Weisbrot: So how long after you started the company did you start to see revenue?

Michael Podolsky: Our first company that we've started, we've invested $100 each. It was profitable months three.

Sean Weisbrot: And then so then how long was it until you were able to hire your first round of employees? You said you hired five people at once.

Michael Podolsky: Our companies are completely bootstrapped. We never go out and ask for money from investors or banks. We run our companies very lean and we only invest our own money. That's how we've built to the size. We are just organically growing. After about a year and a half. We went to Philippines and that was for a year and we were not successful. So, we were wasting money for about a period of a year.

Michael Podolsky: My own experience with Philippines was not a good one. I've heard a lot of companies that had successful track record with Philippines. I guess it also depends on the vendor selection. Maybe we've done wrong vendor selection. At the time when we were building it, we didn't go to Philippines to hire people. Uh, we remotely hired a team. That could have been a mistake right now. Looking back, uh, we maybe the approach was wrong.

Sean Weisbrot: I mean, I have eight people from the Philippines that I've hired. I've never met a single one of them, and they're all great. So, I'm sorry that you didn't have a good experience, but, you know, it's okay. It worked out because you have success in Ukraine. That's all that matters. So, what was the reason why if you had money coming in and month three, that you waited another year or more to start looking for people?

Michael Podolsky: This project started as a weekend project for us. Something to do. Uh, fun. We really enjoyed it. Me and my partner, we started hiring only when we felt a need to expand and do more besides our own survey activity. That's why we didn't rush to hire right away.

Sean Weisbrot: So, the first year and a half, you didn't have any employees. Then you went to the Philippines and you spent a year trying to hire, and then you went to Ukraine.

Michael Podolsky: We hired, uh, people quite fast and start with that team grew from one person to a group of eight people in about a year. Right. So, we've hired one person, then that person hired additional seven people at the end of the year. We've had eight people in Philippines, but it didn't work.

Sean Weisbrot: So, you fired them all and then you went to Ukraine?

Michael Podolsky: Yes.

Sean Weisbrot: And so then how long did it take in Ukraine to find the first batch of people?

Michael Podolsky: As we were finishing work, uh, in the Philippines, and we've made a decision that we're going to try something else. We've hired a consultant, someone who was, uh, work started working part-time for us in Ukraine, helping us look for talent of a certain type. That person. His name was Alex, if I remember correctly. He started looking for people and started to arrange for us to come, uh, secure the hiring of the first batch and organizing that audience in the college where we would be training people. It was a different approach that we've taken on establishing a base in Ukraine. We were more proactive. We actually went there to do it.

Sean Weisbrot: You said that the first batch of people you hired in Ukraine were specifically content writers, right? Yes. So how long after them did you hire the next group of people and. Where they also content writers, or were they tech people? Or because you said air was around 20.

Michael Podolsky: So, uh, once a content-writers were established, we started to have a need for more developers. Right? Me and my partner are developers, but now we were generating more and more ideas around the business that required additional development. And what we've done is we've hired a vendor in the same city in Ukraine, we've hired a person, and that person had entrepreneurial desire to build his own business. We've hired him as a vendor, right, as a contractor, as we needed more and more work to be done, he brought on additional people that worked for him, for us but through him, Two years or three years later, we understand that we want to bring together our assets and place them in an office so that they work together. Right. At that point, people, uh, we didn't have an office.

Michael Podolsky: People were working remotely, but we felt that, uh, it would be best if people work in one physical location. So, I asked my copywriters, uh, my employees, they, uh, chosen that they, uh, want to come to the office, but my development vendor said that he is not interested to join me in Mayo. So that was an interesting dilemma for me because all of my developers were like for developers at that time, how do I get development knowledge back in-house? We've had an interesting conversation with that vendor, and I told him, look, I want my developers in-house. He understood. He agreed. So, I started hiring internal developers that were working side by side with that vendor already in my office. And over a period of a year, uh, we were bringing on more and more developers in-house while reducing our staff with, uh, development vendor. And at some point, we said, thank you. That was it. Now I have my development in-house.

Sean Weisbrot: I think that was a good decision. I had no experience with tech before I started my company. Beyond personal experience, like learning about hardware and software, never coding or anything like that. And I had so many people trying to convince me to just hire outside, and I was like, no way I'm gonna learn how to find these people, how to train them, how to manage them. I'm going to do it all myself, you know, why would I outsource tech when I'm a tech company? Like that looks horrible. I think to any investor it'd be like, wait a minute, you want me to invest in something you have no control over? No, that doesn't sound good at all. So, I assume that the process was smooth, right? You said he understood that you were basically getting rid of him over time.

Michael Podolsky: It's human relationships. Uh, of course, he was upset, but it was a fair conversation. I am very straightforward person. I made three offers to him to relocate to my office, but he felt the- I understand look, he had other consulting jobs that he was doing on the side. And, uh, he made his decision that, uh, he wants to stay in. Dependent. It was his business decision. It was fair.

Michael Podolsky: And look, we communicate today for different reasons from time to time. Right now, one of my businesses is competing with him. But if we get an interesting project we can share with you talk. So, it was totally friendly and totally business relationship. And he knew what I was doing. I was not doing it behind his back.

Sean Weisbrot: Yeah, I think that's really important to have that open and honest communication. Was the HR manager next to then? Did you hire 15 developers or?

Michael Podolsky: No. At that point, one of those copywriters was already managing the group of people. So, and she was managing the group and we've had trust in her. She was running very well. She would consult and she would make hiring decisions together with us bringing on additional people. We pretty much started hiring HR when the top person couldn't handle any more HR, and we needed just more people that she could handle.

Sean Weisbrot: So, at that point, how did the company change when you hired the HR manager? Besides giving the person, the ability to stop focusing on hiring, right? Having this dedicated person, how did the company change from then on?

Michael Podolsky: HR has two parts recruitment, and retention. Those are the two big R's. You must always focus on retention and not forget about recruitment. Actually, there should be a good balance today. Looking back, if your company is excellent at retention, you're not getting new blood into the company. If you're not growing at some point, company can get stale. It loses new ideas. If I look back today, there are certain moments in the company life when I would have chosen maybe to let go some people and hire fresh blood in. If they hear this part, they may just scream at me.

Michael Podolsky: But now, as I'm looking back at 15 years story, those could be good moments which I have not done. So how? How it changes things. They start worrying about retention. If you haven't done it in the past, we've always been pretty good with retention. Well, I like to keep people too. And one important thing that I do for retention is besides recruitment of fresh blood, sometimes what's important is asking people internally what they want to do in their life. Sometimes when you have a young company it wants, a young person may not have decided what they want to do in their lives completely. All of a sudden you get a developer that wants to be a project manager. Um, I've had an accountant who wants to be a UX designer. It happens.

Michael Podolsky: At that point, you need to give them a shot. You need to give them a try to do that. That keeps good employees in and they are more reliable. So, and they do more what they like. And that's important. That increases their productivity. So, I promote intercompany transfers from when one person can move from one company from one department to another. I actually as I grow my businesses, I've. Known to poach good people from old company to build a new company. It is helpful, uh, for me, and is also helpful for employees because it gives them an opportunity to grow, and everyone else sees that there is an opportunity for them to grow as well. If they show aptitude to a particular task or have a certain ability.

Sean Weisbrot: Yeah, I definitely see that, uh, within my own company. Like I had one guy on the back end who I just one of the most incredible communicators, you know, with documentation, you ask him to document something, and it's like, so beautiful and clean. And he was with us for a year and a half. But when he left, we hired someone else to come in. And within two hours of their first day, they were already contributing code because of just how easy it was for them to walk in and understand how everything worked because of this documentation. He wanted to have more experience managing people, but we just didn't have a need for a second back-end developer, so we couldn't give him the opportunity. Uh, so he left and worked with someone else. And so yeah, it definitely happens.

Sean Weisbrot: And whenever I talk with someone, like I asked them, what is it that you're looking for? How can I help you get there? I have one guy who I hired recently, uh, who has many years of experience managing teams, but we didn't we weren't sure that we needed him to do it. Not because of his personality or anything like that. We just weren't sure. But then we brought two other people on, and we realized that he had the most experience of the threes. So, we thought, hey, we'll let you manage them without like having a title of being a lead because like, he's not he's not allowed to merge code, but he can do code reviews and he can work with them to figure out in what order they should develop and who should take on what tasks. So, and that's been really helpful. So, did the pace of hiring increase because of the HR manager and how did you handle it? Did you say like, hey, we need to hire a new developer now? Go find one. Like what was that process? How do you communicate with HR to know that there's a new person to hire?

Michael Podolsky: When the HR manager came in, we already had departments and department heads in each department. I wouldn't make a decision to hire or not to hire. I relieved myself of that ability so I can step in and say, hey, we need to hire in that department now if I can foresee something. But in reality, I let department heads manage their workload, their expectation of workload, and they need to hire additional people. So, if a department head feels that they need another person to be added to the team, I let that department head to come to COO or me and present the case why they need an additional person.

Michael Podolsky: As I was growing more and more, I was relieving myself of responsibilities as much as I could simultaneously by assigning that responsibility to other people. It is good and bad at the same time. Good is you give more responsibility to other people. But I am the one with a vision. It has to coincide. So, uh, I need to communicate with department heads regularly. To know where we are going so that I can expect growth or decline in particular departments.

Sean Weisbrot: So how often would you communicate with your department heads in general, and then how often do you communicate about how the vision is changing and therefore like who they should be hiring or not hiring things like that?

Michael Podolsky: It depends between different companies, different structures in one company every day, 30 minutes, every morning, US time. Um, there are six of us. So that's five minutes each. And we talk only about very important stuff, what's on the table today. And that has been very efficient. Very efficient. Uh, that's for the Weiser brand for consulting company head of sales speaks about new prospects. Head of HR speaks about hiring new people. A marketing talks about their progress. Operations manager speaks about seats, computers, and stuff like that. Right. So, we are all on the same call. Head of sales start. They show us the pipeline.

Michael Podolsky: We know what kind of recruitment we need to bring on board, how to make the brand in another company. I speak to department heads, uh, once a week, roughly, uh, on random in random fashion. No particular schedule. There is one meeting that, uh, once every two weeks for all department heads and me. You need to have a human conversation with your first report. That's how you communicate culture in your organization. Think about growing your company after those seven people that you have right now. Those seven people would need to manage people underneath you most likely will be in the position to promote people that work for you right now, so that they manage other people. They need to understand your culture, and they need to take it in so that they can pass it on to others. If you don't speak to them, they will not know your culture.

Sean Weisbrot: For sure. So, how have you changed over the entire process of starting your company? Growing it for 15 years?

Michael Podolsky: I lost some hair. How have I changed? I've changed. I became more calm. As strange as it may sound, I was much more jumpy. In the first years of building the company. I started concentrating on processes much more than I was before. I did realize some mistakes that I've done, uh, with hiring, with firing mistakes. Uh, I realized that I regret most things that I have not done. I do not regret things that I have done and failed it. I regret most the things that I could have done and I haven't done. Those are my biggest regrets.

Sean Weisbrot: Okay. What's something I haven't asked you that you wished I would have asked?

Michael Podolsky: I spoke about building a team that is flexible. Your team should have a feeling that they can move around and they have prospects with the company. Even if they don't like something that they're doing today, they have an option of growing. There is one interesting trick that I played with my guys two years ago I. I was not an inventor of this trick. I was. I've learned it on some conference in Vegas. So, I have a company. At that time, two years ago, 80 people, and they have ten top managers. I've taken ten pieces of paper and they wrote a thank you letter to their parents. So, I have ten heads of department. It was a Christmas party. And for that Christmas party, I wrote ten letters, thank you letters to the parents of my first lieutenants. It made a great impact on the parents and on those employees. It made a human impact. That is just huge. Uh, it came from my heart. I was really interested to do that. And I told the parents of those people how lucky I am that their parents shared their kids with me for the time that they're spending with me. And I was really grateful.

Sean Weisbrot: And how old were they?

Michael Podolsky: Uh, late 20s, early 30s. So, it's like a letter that a parent would receive from a teacher, right? It's similar to that, but it is different.

Sean Weisbrot: So, what's something that you have learned recently that you're trying to implement?

Michael Podolsky: Taking the pause in negotiations when you're negotiating a deal, sometimes taking the pause is very beneficial at the right time. I am usually very fast person, fast decision person. I give answers straight away. But in negotiations, taking a walk to the balcony and taking the pause sometimes plays a much bigger role.

Sean Weisbrot: Yeah. You know, in Asia, when you're in a market, right, and someone wants to sell you a piece of cloth or whatever it is if you walk up to them and you go, how much is it? And they're like, oh, it's, it's $20. And you go, ah, they're not going to change the price. But the minute you turn your back and you start to walk away, okay, 18, 18, 18 and you keep walking. Uh, 1616 then you keep walking. 12, okay. All right. 12 done.

Michael Podolsky: Yes. But the talks not only in Asia but in big deals as well.