Are you looking for ways to strengthen your car wash business so that you can scale more effectively? Investing in HR is a great way to make your business stronger and more scalable. In today’s Scaling Car Washes podcast, your host JT Thomson talks with Linda Michaels of AZ HR Hub, and she shares lots of tips and tricks related to leveraging the role of HR in your car wash business.
Don’t miss these tips and tricks that Linda shares about how to ensure that the HR aspects of your business are strengthening your business instead of holding you back.
“I would say, think about culture! What is the culture you’re trying to create going forward as you’re acquiring car washes? And get them ingrained as quickly as possible in that culture. So they understand the expectations, they understand the business, they understand who the people are, and how important they are to the business! So I would say culture is huge.”
Don’t miss out on this episode where JT and Linda talk about how to leverage the role of RS when scaling your car wash business to ensure that you’ll continue to have success as you grow!
Want to get in touch with Linda? Visit the AZ HR Hub website, call her at 480-508-1627, or email her directly at Linda@azhrhub.com.
A Little More about Linda Michaels
From AZ HR Hub‘s website:
“Linda Michaels is the founder of AZ HR Hub and brings over 25 years of human resources experience. Linda has been an HR strategic partner to start up companies, small, mid-size and Fortune 500 companies. Linda has her bachelor’s degree in Human Resources and her PHR certification as well as her SHRM-CP certification through SHRM (Society of Human Resource Management).”
Interested in the episode but don’t have time to listen right now? See the full interview below!
Welcome to Scaling Car Washes. I’m your host, JT Thomson. I built my first car wash in 2002. And since then I’ve been involved at every level of the carwash ownership experience. I’ve built and sold my own car washes, and as a Sonny’s distributor, I’ve helped other owners build and operate their car washes. Along the way, I’ve been a multi-unit restaurant owner with 23 units in five states. We’ll talk to experts in the carwash industry and related industries that can share insight information that will help you build, scale, and ultimately exit your multi-unit carwash platform.
Well, welcome everybody to Scaling Car Washes podcast. I’m JT Thomson, your host and today I am with Linda Michaels. Linda is in HR professional, we have used her several times in standing up our companies we use her when we started to go carwash a few years ago. And then as we started love carwash, we have brought her in to help us with, you know, several aspects of HR. So I wanted to bring her into the show, and have her to share some different things that, you know, she sees in the HR world and share with us some of the things that you know, hopefully we can use in our business to avoid some pitfalls and to you know, as we scale our businesses to really, really just kind of make sure we’re not going down a path because you know, HR is definitely an area where if you don’t follow, especially in today’s day and age, the compliance guidelines and things like that you can get in real trouble. So Linda, welcome. Tell us a little bit how did you get into HR? And so
I was in corporate for many, many years. I won’t tell you how many, but I left corporate in like November of 2016, and I started my own consulting practice and haven’t looked back.
Great. Well, listen, this is an age where HR has been, you know, just really tested. And it’s a struggle for everybody. So tell me a little bit… How would you define HR? I hear that term. What is HR really?
So, it’s basically taking care of all the humans in your organization… partnering with, you know, leaders, owners, CEOs, to basically protect your human capital. I look at HR as being more of a strategic partner to the business owner versus in many years past, HR has always been just task driven. I view HR as more strategy in being in sync with business owners.
Absolutely. I hear the term people strategy, and I want to kind of probe on that in just a second… But when you look at HR in our business, so, in car washing, we have a lot of units, right? Or, you know, most of our listeners are men and women who own 2, 3, 4 car washes, and they’re really looking to grow. I think that’s really the thesis of our podcast is helping their business go from a Mom & Pop to a more of a scaled corporate environment, something that’s more of a professionally run entity, so that if you pulled the entrepreneur out, that business could keep running. So tell me, you know, what’s the difference between an entity that’s got 40, maybe 50 employees, to one this 400 to 500? What is it that… If I’m trying to get to that scale, right, which is, in our business, probably 10 to 12 employees per location when you include part time, so that’s probably 40 or 50 locations? What’s the difference? What do I need to be thinking about today in order to prepare for that kind of organization in the future?
Yes. So a lot depends on the number of employees. So if you’re small, you only have to comply with so many federal laws. And then once you get bigger, the minute you hit 50 or more employees…
Is 50 kind of the point of demarcation?
Yeah, so that’s when, you know, FMLA kicks in ADA kicks in, a lot of those types of federal laws kick in, where you have to comply… You know, they have to have job protection for 12 weeks, and all that kind of madness. And so then it just becomes more of an HR nightmare for business owners to really track compliance wise. And then when you’re up in the 400 or 500 range, then the employees are just a number at that point, right? So hopefully, you have a strategy as you’re growing to know how many people you’re going to need, and be able to hire ahead of, you know, the acquisition and the growth, so that way you can support the business and each location.
So, I’ve heard metrics over the years, and it seems to be shrinking, but it used to be that you’d hear like one HR professional for every 100 to 110 employees. And then I think when COVID hit, I was hearing people say like 80 or 90, because here’s so much work, right? Just things happen. And people were calling out, and just all sorts of conditions that we really never had to experience. And I’ve heard even lately, it’s like with recruiting and everything else, all the sudden it’s down to like 75 employees, right? Just as a kind of a rough guideline. Is that going to change? Tell me a little bit about how… So, at what point do I hire my first, right? Because I’m an entrepreneur. I’m doing all of it. I’ve got… Typically, I would have an office manager manage garnishments. And anything that would come up would typically go through my office manager, but they’re really not an HR person, right? They’re just kind of reacting to whatever happens. So, at what point do I go and hire somebody that’s got a real credential background in HR?
So I think that depends on the business, right? So, if you’re flipping a lot of employees, and you have a lot of employee issues, which in the carwash business, you tend to have more employee issues — absences, turnover, you know, all those sorts of things — so then I would lower that number to around one HR person for every 75 employees, and then scale from there. So, ideally, as you get into four and 500, people, you know, even larger, you’re probably going to need a dedicated benefits person. And that’s all they do as benefits, benefits and payroll, and then maybe you’ve got a director and then a separate recruiter, and then maybe you have even a generalist that can go do investigations. I mean, a lot depends on the volume in the business of HR activities.
You know, we do have… I wouldn’t say unique… We’re not super unique. I mean, restaurants and other businesses that are kind of retail line workers, right, these aren’t people who… They are on a ship; they can’t like work from home. So you we have, you know, call it 10 People at each location. So, it’s not a big number. And we have, in the Express world, we have 2, 3, 4 people working at any given time. On a busy day, you might have five or so. Full service washes and our business have a lot more. So, you know, the fact that we have a lot of… It’s replicated across a lot of units. And it’s not real complicated. So the type of person for an HR that you would bring in… You mentioned a PHR certification. Should I look for somebody with certain certifications? Is there something that I should be looking for when I hire my very first… I’ve got 40 employees. I’m about to open three new stores. So, that’s gonna push me at 70? What type of person should I hire? Like, what certification should I look for?
I would say, at minimum, a Bachelor’s degree in HR. So they have the book smart education, understanding the laws, that sort of thing. PHR also takes it to another level of experience.
What does PHR mean?
So it’s professional in human resources. There’s an SPHR, which is a senior professional in HR, or just a regular professional in HR. And you literally sit through a four hour test, 250 questions, and there’s more than one right answer. And so you have to guess the best answer. And it’s very challenging; it’s very difficult. Most people fail it first time around, because it is so challenging… But if they have a certification, that’s a bonus! But at minimum a Bachelor’s degree in HR.
Okay. And then, so if I had my first one, we’re growing, we’re at 100, 150. I’m looking at a second person. What does that second person look like?
I would say recruiter. Because your HR person can run the day to day operation, but your recruiter is going to help you grow the business.
Yeah, we have that now. So at LUV, we are… We’ve grown pretty rapidly, as you know! Really, October was our first full month; we’re in January of 2022 right now, so we’re four months in. We have 32 locations; we’re about to add another 17. So right now we have, you know, director of HR, we have somebody in payroll, we have a recruiter, and then I think we have a generalist, and we’ll probably add somebody here coming up. I think we have close to 400 employees right now. So we’re kind of that the 400 or 500 person mark. We’ve grown so quick! But tell me, you know, what are some traps? Like what are some of the things as I’m kind of growing? What are some of the things that you see that you can, you know, advise our listeners to be aware of as they’re growing? Like, you should think about this? Or you should think about that? What are some things that you’ve seen?
Anything compliance related! Because that is what you’re going to get sued over, right? Department of Labor, classifying people in the wrong classifications not having I-9s correct. All of the HR nightmare stuff that business owners don’t want to deal with. And even as simple as posters… Having the right posters in each work location that cover federal and state laws of wherever your carwashes are.
Right. Yeah, because one thing that is a little different is as you get bigger, you get a bigger bull’s eye for lawsuits, right? When you’re small, entrepreneurial, you know, nobody’s is going to bother… Like, you know, with your employees, it tends to be more of a family. But you know, as you start trying to move from the Mom & Pop to a really corporate environment, I do know that that is a big risk, right? So, for us, we… We really try to run by the book. We have an HR director. But we’ve acquired a number of sites that have very sloppy HR rules or policies that they follow. And so, it’s really tough. We’ve lost… We’ve acquired some companies, and we’ve had to lose employees because they would not pass e-verify, right? What do they do? So if I’m trying to build my business, right, that’s a risk. And I think as more private equity money gets into our business, they’re very acutely aware of the risks that go with that. Because there’s… there’s actually criminal law that owners have to be aware of, as well, for hiring, you know, illegals, and so forth. So, what should… You know, if I have a business, and I know I’ve got some people that maybe in the past, we just haven’t worried about? Is there a way to pivot? You just have to get rid of them? Is there… You know, how do you kind of clean up your…?
Yeah, that can be very challenging! So I think as soon as you’re aware that there’s a potential problem, then that’s when good faith kicks in, right? In good faith effort, we figured out we had a couple of illegals working for us or, you know, whatever the situation is. And we, as a company decided that, you know what, we had to terminate your employment because they don’t have proper documentation or whatever. I would say the minute you know, that there’s potential risk is the minute that you start addressing it as a company. And then that way, if you do get sued, and you look at like, we found this out, and in good faith, we acted on it immediately.
Yeah. Okay. That makes a lot of sense. Can you… So with E-Verify, can I go back to I’ve been operating and, you know, can I go and all of the sudden say I want to E-Verify everybody? Or is it like, once they’re hired for you, that cow has left the barn?
Yeah. So I would do once they’re hired going forward, never looking back. Because that, that creates a whole nother can of worms that you don’t… That sends alerts to the government: Why are you E-Verifying all these people all of a sudden? What else is going on in the business? You don’t want to send any red flags! So I would stick with your good faith and fixing it going forward.
Okay. So that’s… that’s something good to know. What else…? What are some other tips as I’m kind of growing my business? So you’ve talked about compliance. I think that’s super important. You know, obviously, states like California are extremely, you know, compliant.
California will kill you if you don’t follow.
Yeah, it’ll bring it to you.
So you definitely… Anyone listening in California needs to have an HR professional guiding them to make sure they’re navigating with all the crazy laws that pass every year with California.
Right. Yeah, because there’s a… As our HR director says, there’s a lawyer for every employee. So you know, you didn’t need to be careful. And we’ve acquired sites in California, so I know we are going to have somebody this is basically a California specialist. What other things… You’ve got compliance. Anything else that you can share with our listeners in terms of, you know, as you’re growing, think about this, right?
Yeah, I would say, think about culture! What is the culture you’re trying to create going forward as you’re acquiring car washes, and get them ingrained as quickly as possible. So they understand the expectations, they understand the business, they understand who the people are, and how important they are to the business? So I would say culture is huge.
Yeah, culture is, really everything, in my opinion! We’re a small business, so I tell everybody, “Listen, if we’ve got a terrible culture, we have nobody to blame but ourselves!” So you know, I think culture… I’d like to hear your definition of it. But you know, my mind, I think of culture as really kind of value driven. It’s like who we are, what we want to be, and what type of personality as an organization, we want to take on. How do you look at culture?
I look at it the exact same way. It’s like… You really have to value your people, especially in this tight labor market, of having a clear expectation set up. So that way, everybody’s on the same page always. And making the environment as fun as possible, as legal as possible. But yeah, getting the right people in that are going to fit that culture that you’re looking for.
I’m going to go back to a term we talked about at the very beginning, which is people strategy, right? You know, so you hear that, a lot of times at a bigger organization like a Starbucks or a Domino’s or some of these have a very kind of driven people strategy and we don’t think about it so much… I think owners in our business are very people aware, but as we grow, it becomes a little bit harder. And so you have to kind of change how you manage people. Because a lot of it’s been kind of family oriented, right? So in a Mom & Pop, that’s pretty typical. What are some things that you’ve seen people do… So if I’m an entrepreneur, and I’m trying to really kind of create my business to where it can run without me? Really that’s, in my mind, that’s almost kind of a hallmark of any non Mom & Pop… Like any standard business…. You pull the entrepreneur out, and the businesses just runs, right? You have management, you have all that stuff then. So, how do you go from that kind of family culture to a good culture but it’s really not, you know… It’s not not centered around the entrepreneur.
Yeah, I would hire the right leaders, right? So, the right leaders at your site, the right leaders at the division, district, whatever you call them, regional. Those are the people that it… the minute the entrepreneur steps out, that’s what runs the business. Right? They keep it running.
Right. And so that’s a great point, because they are the… And we look at… I mean, I refer to them as the tip of the spear, right? They’re the ones that are on the ground dealing with the… It starts… Not just the people loading cars, or the people out in the vacuum areas, or any of those people, but you know, it starts really there, and then it works its way all the way up through the the GM and the what we call the district manager or regional director of operations. You know, it’s kind of the way we refer to them. But yeah, I think, you know, creating that… Those set of values where they are ready to take ownership of it. I think ownership is a big part of culture. And so tell me just a little bit about some things that you’ve seen, or some activities, or… I’ll give an example. I visited Campbell Car Wash out in Nashville, Tennessee. These guys do a great job; they’re kind of growing from two to three units, and they’ll probably have 10 or 12. So they’re kind of just exactly what we’re looking at. But they have this Cares program where they’ve allowed their employees to kind of invest or put money out of their paycheck, $1 or $2, then it goes into a fund, and then it helps somebody. You know, if somebody got evicted, or their car broke down or whatever, there’s this fund that they can help each other. I think stuff like that creates culture. What are some… Anything else that you’ve seen, that’s, you know, kind of similar? Some good ideas for a business to try to generate or create and develop a culture?
Yeah! I mean, it’s hard, because it’s obviously going to cost the company money.
But that’s right! I mean, you can’t grow… And you know, that’s one of the things… It’s an investment. That’s a great point. I’m glad you brought that up because these things don’t just happen! So, if you’re going to grow your business from two or three, you can’t just put up buildings and put in equipment, you’ve got to invest in your people. That’s all part of the people strategy. So, keep going. I’m sorry I cut you off.
So maybe some sort of incentive, commission wise? So your $15 an hour guy can earn commission. That would keep them engaged. Maybe pay the people to volunteer at their favorite nonprofit,
Oh, that’s a good idea.
Give them a day off and here’s eight hours to go volunteer at the food bank or whatever, right? Things like that are what get the people engaged.
Yeah, it ties it back to the values, right? If you’re saying, “Hey, listen, we want to be a part of our community!” Well, put your money where your mouth is, right? So… And I think people see that! Employees definitely see that. You know, Tyler, and these guys out of Campbell Car Wash, I mean, I think they… You know, they put their own money in, but they’ve really just kind of created it, and it’s really employee driven. So they’ve got buy in, they’ve got ownership. That’s the type of thing that I see as really kind of driving a great culture.
You can even set up committees… So say, if you have six car washes in Utah, so somebody leads a committee of all the car washes and all the employees get together. So
Yeah! We’ve got a voice!
A representative from every one and say, How can we engage? How can we drive the culture? How can we have fun? How can we do this? How can we… Let them pick what works for that particular city or that market!
Yeah, that kind of empowers them, and gives them a voice. And I feel like what I’m hearing there, in my mind… My mind goes to buy in, right? When people feel like they have a voice, they really become bought into something. So that’s a great point. Yeah, I’m going to pivot a little bit here. But you know, in our business, I kind of laugh because we have just a bunch of dudes, right? You know, they’re usually younger guys. And, you know, historically, this has been a job. And we’re going through a lot of changes in our business; we have a lot of money coming in. A lot of people are seeing the car wash industry as really a legitimate growth industry. And so there’s, I mean, literally billions of dollars being poured in, and I can tell you just from what our guys spent, it’s a lot of money. And so, you know, I think as we are starting to move through that, I think we’re going to start seeing a lot more sophistication come in. And I think, one of the things that I think is important is that we’re not just dudes, right? So increasing underrepresented populations in our carwash is important. Like women in car washing. Brenda Johnson runs a group called Women in Car Washing, which I think is fantastic. We’re a big supporter of that; she’s got a conference going on. So we’re sending four women down to that, down in south Florida. So I think it’s important for us to, you know, look for multi ethnic, multiracial groups and not just be a bunch of guys, right? Because I think this is really moving to more of a career path, and we want to give career opportunities to a lot of different people. So what are some strategies that an owner can take in order to try to create a little bit more diversity, create an opportunity for people off the beaten path?
So that would be… I view that as falling under the recruiter’s responsibility of targeting certain minority groups, and certain ethnic groups, and women, and going after those markets and making the recruiting strategy purposeful. Like if you give them a goal of I want at least 20% of our workforce to be diverse…
Yeah. So set a target! Okay, that makes perfect sense. Yeah. Because if you don’t, you know… One of the mantras that I’ve lived by in my career and that I’ve really tried to instill in our managers is, you know, what’s not measured isn’t managed. Because if you don’t measure it, you don’t you talk about it, nobody pays any attention. So it could just be… “Hey, we’re going to hire more women! And we’re going to hire more diverse population to our car washes!” But if you don’t have a goal, you won’t get there! So I think that’s good. I think, you know, as we are… The world is changing, right? And car washing is changing in a lot of ways, so I think this is an area that we have an opportunity to change with it! So, there are a number of companies that I see out there that are really kind of leading the charge on this… The guys over True Blue is actually here in Phoenix with Stu Crum, and I know, Mr. Car Wash has got some people that are doing it. So I’m really encouraged. I know, the guys that GO are doing it. So, we’re trying to follow, and I think we’re going to start seeing more of that, and as private equity comes into this business, I think we’ll see more of it! How do you… So in terms of getting the culture driven to more of a career oriented focus, that young people are really staying for longevity and trying to do… Any tips or anything that me, as an owner, that I might be able to do to try to, you know, instill that kind of career, that long term mentality?
So I think that comes from your branding, right? So it starts with your branding. And then your recruiter takes your branding and makes your brand spread of… “We’re not here for a carwash, we’re here for a career!” Or you know, whatever tagline you want to use… And your recruiter works with folks and only brings on the folks that fit the culture who are willing to grow and learn. And then you put them through your own internal training programs and processes to groom them to maybe be a GM or district manager. And that gets sold at the beginning of the employment process.
That’s a great point. Because I think grooming really, I think the thing about training… And so, we’ve hired a senior trainer; we’ll have a whole training department, I think that’s… You’re seeing a lot more that. Creating a career path is really not just by chance; it’s a very deliberate act, I think. And so what we’re trying to do in our company is really kind of create a training, and then you build skill sets in people.
I would also purposely design a career plan for individuals that are high potential, and I have a template that I can send you… But you literally, when they start with a company, and they want to aspire to be a general manager… How are you going to get them in to that position in a year? What are the steps? What do they need? What skills what training, you know, all of that? Oh, okay. And actually, it’s in a written document, and then you follow it.
And is that a template? If somebody emailed you, would you share that with any of our listeners?
Okay. So at the end, I’ll make sure we get your contact information. So somebody… If they wanted to reach out, they could email you, and and they could pick that up. I want to kind of take one last pivot here to technology, right? I think technology is… There’s some exciting stuff out there. I’m really curious to hear what you see as really cool. Some things that our listeners, you know, again, coming from a smaller organization, trying to grow it and scale it, by scaling your business… What are some technology apps that maybe you have seen in the HR people strategy world that might be useful for folks?
I think having a great payroll platform that you can grow with is essential! Instead of people doing maybe their books by hand or even QuickBooks, and you’re very limited, by having a platform that can scale anything from performance to the whole recruiting process, and everything’s electronic, and then even their learning is through that platform.
So a lot of people use ADP or Paylocity. Is it part of a service? Are you talking about an app or service? I think we use Kronos UKG in our business. Is that kind of what you’re talking about?
Yes. So I get special discounts through some of my payroll providers, and we use them with our clients because they are very robust and they help grow with the company. You can basically flip on modules as the company gets to a certain growth, and it does everything that you need it to do, and even for the folks who don’t have a computer at home, can get on their phone and do everything that they need to do. Everybody has a phone. So a very robust platform would really make life easier!
Can you name two or three that somebody should go and bake off of there? You know,
So my top two are iSolved and Paylocity.
iSolved and Paylocity. Okay. We used Zenefits a number of years ago, I don’t know… I don’t know if they do… exactly how they fit into all this. But I know from just like an onboarding and… technology capturing all that information, holding it, and compliance and everything else. These platforms are really, really important! In terms of any other apps that you’ve seen out there that are interesting, or something that somebody who is growing their business should be looking at?
You know, I like some of the Zoho products.
We use Zoho for our CRM. Interesting. Okay.
They’re they have so many different products. And they’re very intuitive… To speak with their representatives, you often can’t understand them. And so they’re intuitive enough that you just go in and click and figure it out. And you don’t really need guidance from anyone. So I personally use that for my business. I use multiple platforms, and ZoHos.
Interesting. Okay, yeah! So we use the CRM. And listen, if you’re not comfortable doing it, I went on to Upwork. So Upwork is a… Ypwork.com is a place where you can go and find freelance, you know, for hire people on small projects, or whatever. And we wanted to customize our CRM. And I just hired a consultant. It cost us probably 600 bucks, 700 bucks. And he kind of did all the configuration and helped us build it out. And, you know, I didn’t have time to do it. We’re so busy that, you know, the last thing I wanted to do is spend a few days trying to figure out how to configure Zoho, but yeah, so it’s interesting!
I think you just said a key thing, which is, you don’t have time to do that as a owner! Right? And so that’s where you… you have to decide, let’s pay people to do some of that stuff for you, so you’re not in the weeds day to day! You can’t be in the weeds!
Yeah. And Upwork? You know, I don’t know… For people who have not used it, Upwork is fantastic, right? I’ve used it for marketing and branding type stuff. I’ve used it for, you know, spreadsheets, like if you need somebody who’s just an Excel guru, building models, we’ve done that. So Upwork is a really great place to throw up project and typically get somebody very reasonable. And I think in this day and age, a lot of people… That’s why they’re… why you’re not seeing people out in the workforce, as we were talking about earlier, is there’s a lot more alternatives to traditional work. So Upwork is one area that you can find people to do some interesting things. So, technology is great. I think even on time… timecard management, right? So we’re about to start using Deputy, and I know there’s several of these very sophisticated time management system that look at GPS, and facial recognition, and all these ways that really protect both the employee and the employer in terms of time management. So there’s some interesting things out there.
Yeah, one of my main traction clients uses fingerprint scanning, to clock in and out, and that way, you’re avoiding timecard fraud and all that other stuff.
Yeah. So, I think we’ll see a lot more of those types of things. Anything else on the technology front that you’d share?
I would say Fiverr is another one of my favorites. Because if there’s a Mom & Pop out there that maybe is on a budget, and they need a logo done or something, you could get a logo for 10 bucks, or marketing materials or whatever. Very inexpensive! That’s another one my favorite sites.
Fiverr. I’ve used them as well. Actually, I think the logo for Scaling Car Washes podcast came from somebody off of Fiverr.
I knew it had a funky spelling! So anyway… Well, listen, Linda, this has been great. I know, our world is changing at a rapid rate… How we manage people is so different than it was even just a couple years ago. I think, you know, if people have questions or just looking for any information, how would they get ahold of you?
So email or phone is the best way.
Okay. Can you share that?
Sure. Email is Linda @AZhrhub.com or phone is 480-508-1627.
Well, Linda Michaels, thank you so much. I’m JT Thomson. I am your host of Scaling Car Washes podcast. Thank you so much.
Thanks for listening to today’s episode of the Scaling Car Washes podcast. Please subscribe to stay current with all of our episodes coming up. Thanks, and I’m JT Thomson, your host.