I Had Two Great Candidates. They Both Blew Up

In our latest 21 Hats Podcast, the owners discuss their latest adventures in hiring.

Good morning!

Here are today’s highlights:

  • Diana Lee went from her parents’ convenience store to the Inc. 500

  • Gene Marks on the best company password strategy.

  • Should the unvaccinated pay more for health insurance?

THE 21 HATS PODCAST

Episode 71: I Had Two Great Candidates. They Both Blew Up: This week, we delve into some specific hiring situations, including Jay Goltz telling Diana Lee and Dana White that he thought he had two terrific candidates to replace his retiring chief financial officer. And then, after conversations with each of them, Jay had no candidates, which led us to some interesting questions: Has there been a more challenging time to hire for cultural fit? How risky is it for a smaller business to hire a candidate accustomed to working at larger businesses? And what does hiring intentionally for diversity mean when your staff is almost entirely African American? Plus: Dana gives us an update on her potential deal with the military, and Diana explains how she markets her marketing agency.

PROFILE

Here’s how Diana Lee, the newest regular on the 21 Hats Podcast, went from her parents’ convenience store to Constellation Agency and the Inc. 500: “A tenuous grip on property, on the trappings of a life, was part of her inheritance, as her mother had fled North Korea to South Korea as a child, displaced by the Communist takeover. A sense of economic insecurity — and the drive to transcend it — had been passed down to Lee, first due to events on the other side of the Pacific, then by routine encounters with danger here in the U.S. ‘My parents had many convenience stores,’ Lee said. ‘I would witness them get robbed at gunpoint — many times. It wasn’t just one time.’”

  • “Her interest in local marketing dates back to her college years, when she took a job selling cars at a Worcester, Massachusetts, dealership. That decision — to enter an industry where she, an 18-year-old, South Korean-American woman, would be competing with men more than double her age — was driven by her childhood experience watching her parents toil  ...”

  • “And now, it is those family-owned, small businesses that Constellation wields the power to propel as direct-to-consumer, digital natives like Tesla leverage greater digital savvy, capital investment, and massive stores of data to outsell conventional franchises online. ‘I want to give them the advantage to stay alive,’ Lee said of the dealerships. ‘It’s not just a business. It’s not just a tech play. It’s a whole family unit that went through blood, sweat, and tears.’” READ MORE

HUMAN RESOURCES

The lack of foreign workers has seasonal businesses scrambling: “The complaint has been echoed not only by landscapers in Utah, but also by amusement parks in Wyoming, restaurants in Rhode Island, crab trappers in Maryland, camps in Colorado and thousands of other businesses around the country that depend on seasonal workers from abroad to work lower-wage non-farm jobs. The scramble for these temporary guest workers has been intense in recent years, as the jobless rate inched down and tensions over immigration policy ratcheted up. But this year, after the coronavirus pandemic first halted and then seriously constrained the stream of foreign workers into the United States, the competition has been particularly fierce.”

  • “[Tyler] Holt said he had raised his normal $14-an-hour wage — by $2, then $3, then $4 and then $5 — to attract local workers [to his Utah landscape business]. ‘I will give anybody a job that wants to work,’ he said.”

  • “Ken Doyle, the president of All States Landscaping in Draper, Utah, said the late arrival of 27 temporary foreign workers had cost him 15 to 20 percent of his business, about $1 million. ‘We’re so far behind,’ he said. ‘We’ve lost some very large accounts.’”

  • “Mr. Doyle spent nearly $30,000 advertising for workers as far away as Nevada and got no response, he said.” READ MORE

Venture capital dollars are flowing to HR tech companies looking to help companies recruit, hire, and retain workers: “Human resource technologies — which can run the gamut from background checks to benefits and everything in between — already has seen nearly $3.6 billion in venture funding for 260 deals this year, according to Crunchbase data. That dollar amount already surpasses all of last year, which witnessed not even $2.2 billion invested in 500 funding deals.”

  • “This month alone has seen 17 funding rounds in the HR tech space announced in the first two-plus weeks, including New York-based Remote — which helps companies hire anywhere in the world by handling payroll, benefits and compliance issues — raising a $150 million Series B at a valuation of more than $1 billion.”

  • “‘Companies always looked at HR as a cost center,’ he said. ‘It didn’t drive sales, therefore they didn’t want to spend there. But more people are realizing people are their advantage.’” READ MORE

STARTUPS

Latin America is producing a lot more unicorns: “Digital banks and payment tools aren’t the only ones landing really big rounds. E-commerce, consumer apps and proptech are the standout runner-up sectors when it comes to big investment recipients, per LAVCA. And while Brazil is still the leading unicorn producer in Latin America, other countries are also scaling up their herds. That was the case in 2020, and appears to be holding steady this year as well.”

  • “One of the biggest 2021 funding recipients is Mexico City-based Kavak, an online platform for buying and selling used cars that raised $485 million this year.”

  • “Others include São Paulo-based home rental marketplace QuitoAndar, which landed $300 million, and Santiago-based alternative protein producer NotCo, which pulled in $235 million.” READ MORE

CYBERSECURITY

Does your business have a password strategy?

LOGISTICS

Asia is emerging as a weak link in the global recovery as the Delta variant further scrambles manufacturing and supply chains: “Countries in Southeast Asia have been among the hardest hit, prompting new social-distancing restrictions and lockdowns in countries that had largely avoided those measures earlier in the pandemic. As factory production contracts across Southeast Asia, Indonesia and Malaysia, which have recently faced surging caseloads and Covid-19 deaths, have been among the worst affected, according to IHS Markit.”

  • “Malaysia has required factories in nonessential sectors such as apparel to close since early June after a series of Covid-19 outbreaks linked to workplaces.”

  • “The Delta variant has been detected in more than 26 cities in China so far, threatening to further damp already-sluggish consumer sentiment as authorities imposed mass-scale lockdowns.”

  • “South Korea’s exports sector, which rose 29.6 percent in July from a year ago compared with 39.8 percent growth in June, will face similar headwinds, including supply-chain uncertainties, in coming months.” READ MORE

THE COVID ECONOMY

Masks are back at McDonald’s, Home Depot, Starbucks, and Target: “Some municipalities and local officials also said Monday they would start to impose new indoor mask mandates on residents in response to new federal health guidelines and rising U.S. Covid-19 cases. The moves are the clearest signs yet that the coronavirus pandemic continues to be a challenge for U.S. business, and that employers are contending with ramifications of the fast-spreading Delta variant for employees and customers alike.”

  • “Many businesses are changing their policies just as they were preparing to return to normal operations after the Labor Day weekend and the restart of the school year. Most retail and restaurant chains are requiring employees to wear masks, while suggesting customers do the same but not requiring them to do so.” READ MORE

Tyson Foods is mandating vaccines: “The mandate will extend to employees in its offices and in the field. The poultry supplier is requiring its leadership team to be vaccinated by Sept. 24 and the rest of its office workers by Oct. 1. Frontline employees have until Nov. 1 to be fully inoculated, extra time the company is providing because there are ‘significantly more frontline team members than office workers who still need to be vaccinated,’ a Tyson spokesman said. Tyson is offering $200 to frontline workers who verify that they are fully vaccinated.” READ MORE

Should the unvaccinated pay more for health insurance? “The Affordable Care Act allows insurers to charge smokers up to 50 percent more than what nonsmokers pay for some types of health plans. Four-fifths of states in the U.S. follow that protocol, though most employer-based plans do not do so. In 49 states, people who are caught driving without auto insurance face fines, confiscation of their car, loss of their license and even jail. And reckless drivers pay more for insurance. The logic behind the policies is that the offenders’ behavior can hurt others and costs society a lot of money.”

  • “If a person decides not to get vaccinated and contracts a bad case of Covid, they are not only exposing others in their workplace or neighborhoods.”

  • “The tens or hundreds of thousands spent on their care could mean higher premiums for others as well in their insurance plans next year.” READ MORE

If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren