VANNOY:

Hello everyone, and thanks for joining today. My name is Mike Vannoy. I’m the Vice President of Product and Marketing at Asure. And today we’re gonna unpack the September, 2021 jobs report. And my special guest today is Pat Goepel. Pat’s the chairman and c e o of Asure. And I’m excited for Pat to join us, not, not just because he’s an entrepreneur and, and kinda a student of the game for small business, but as a, as the CEO of a payroll company and 30 years in the, in the payroll and HR business. I, I think, has some access and some insight into the data that really underpins these job trends and can, and can really provide a, a unique perspective. So, welcome Pat.

GOEPEL:

Thanks, Mike. And I’m really excited to be here today.

VANNOY:

Okay, so let’s jump in. To, to me, there’s this, there’s this overhanging paradox where anybody who’s seen the news, the, the September jobs report there’s 194,000 jobs created that was about half of what was expected. So on one hand depending which media outlets you look at great disappointment in the jobs report. But when other folks look at the other side of the coin, the same coin, really, the, of the unemployment rate we’re, we’re approaching all time lows. I think pre pandemic, we were all time lows at like 3.8%. We’re at 4.8, 4.7 now. So it’s like this paradox. Is this a good story or is a bad story? What, what, what do you see from your, your

GOEPEL:

Perspective? Yeah, no, Mike, I think it is interesting times, and I think if you go back to Covid, and I think a lot of us saw the Covid impact somewhere around March of 2020. But what happened really is over time, there’s, we’ve lost about eight to 10 million people out of the workforce. And so when we talk about jobs created and we were disappointed, it, the jobs are there. It, it really is this dislocation of people leaving the workforce. So why are they leaving the workforce? Well, still, 5 million are either afraid for their safety or they’ve had to take care of family members, or they’ve had to homeschool kids or be involved with kids. That’s 5 million people that are aren’t available to work. And were prior to March of 2020 you think about immigration and immigration normally will create about a, you know, you’ll have a million people looking for jobs each year, immigration’s at an all time low, and forget the politics.

Not many people are migrating to the US during this covid period. That has in itself a work, a workforce shortage. Some people are afraid to work because of vaccination. Some people that used to work two jobs are only working one job. You see that in the home healthcare or some of the nursing home industry. As far as kind of, people have a little bit more money than they did. If you look at the savings rate, the savings rate among individuals in the United States is going up over 10%. Since Covid started, people weren’t going out. What that meant is that they have a little bit extra money, and there might not be quite the need to go to work, especially if you have some of the other safety concerns or other family obligations. So, what I look at, this is the job still are plentiful. You gotta meet the needs and find the people that are willing to work. And over time we’ll get there. But this dislocation based on covid is real, and it’s gonna take time to, to get back to normal.

VANNOY:

Pat, one of the things I think about anybody who follows ashore, you, you hop on our website, look at, read our blog. For several years we’ve been writing on the, the, the pending labor shortage, right? And so it was 1997, Mackenzie coined the phrase, war for talent. The unemployment rate in 97 at that time was 4.8%. It’s 4.8% now. And based simply on GDP and birth rates this thing, this labor shortage has been kind of baked in for a couple decades now, but I think you throw in some elections, a war, a recession, and a pandemic. I think the news cycle has kind of hidden the fact that from your perspective, how much of this is new normal that we just have to, you know, it’s finally hitting Main Street versus the narrow window of, of September job report, you know, coming out of a pandemic.

GOEPEL:

Yeah, I was referring to March and Covid hitting, and you know, and if you zoom out to the period you talked about Mike, with 1997 till today I I, I’d even zoom out further that when Social Security and 401K first came out, there was roughly 32 workers for, for every retiree. Now it’s two to one. And that speaks to the demographics you’re talking about. And then when some of those folks have a little bit extra money and they can retire, and the stock market’s done well you know, the savings rate during Covid was done. Well, people are just saying, Hey, I, I now have enough money to retire at a time where you have maybe two workers for every one retiree. So a couple million of those people decide not to go back to work. There’s nobody to take their spot. And so I, I do think it’s a war for talent. And, and then at the same point, if you don’t have people coming into the country at, at anywhere close to historic rates, now, where is the workers gonna come from? So employers have to really market themselves in a much more aggressive manner. They have to show themselves it’s a great place to work and, and get people working and thriving again. And that’s their challenge for the next foreseeable future.

VANNOY:

So I think the, the way you and I are both talking about this now, September is too narrow of a window to look at, but a as just an an indicator, you know, when I, when I was preparing for our conversation today and I won’t name the outlets, but it’s it’s name, it’s it’s print media that we all know, some lean left, some lean right, and, you know, pick and winners and losers of this report, something, it’s a terrible report because not enough jobs, some things it’s a silver lining report because participation rates being lower and unemployment being so low as a c e o of a publicly traded small business, do you think this is a good report?

GOEPEL:

You know, what I, what I think it does is speaks to the labor shortage. And you can’t, you can’t do the same things and get workers to come through your door. You know, you at, you’re at a time where you really have to get people invested in your company, get people vested in the opportunity, show them a future, and show them a way. It’s not just hanging out a shingle in a window saying, you know, we have a job now some of the folks in, in the September job report, the good news is we are creating jobs and we’re getting to be more stable. You can see it in the trends as we look all year, more people are working than the previous month. And, and that’s been a good healing process, but we have more ways to go. And, and what I think it really, this report speaks to companies gotta do a great job of selling their company and get people engaged and get people off the couch and, and working with working with them instead of maybe other pursuits, whether it’s taking care of the family or or, or or other, or other things in their life.

VANNOY:

Yeah, and you know what I, I, I think that is the important thing for us to focus on here is, you know, there is a pandemic. There still is a delta variant jobs are being created, and if you back out the, I wanna say I might be messing this up, it’s, it’s, it’s over a hundred thousand, might be 130, 170,000 negative jobs that are in government jobs. All of the non-farm jobs. You know, if you, if you back out the government jobs, you know, it is over a $300,000 net gain, a 300,000 job gain. So, all right, so let, let, let’s, let’s narrow this down to more of a post pandemic. You know, you’re, you sit in a very unique position that you know, there’s only a handful of CEOs in the country that are publicly traded payroll companies. And so you have have a vantage point to some data and some trends knowing what’s going on in your own business you know sharing what you can, you know, what, what, what help, help us to see around the corner here.

GOEPEL:

Yeah. When, when we look at the data and we look at just kind of talk to our clients and, and partners alike, what we’re seeing is an improving economy. And, and then, you know, so each month you’re adding a little bit more jobs maybe not at the pace everybody wants, but those positions are being open. And then from an employer perspective, they could hire more. And you see that in overtime hours. They’re at an all time high relative to the last couple years. And what that means is when they do have good people, they’re working ’em more and more because they, they can’t replace or get enough people in. So as far as jobs being created, it’s really now around supply and demand. It’s getting that supply of workers into i, into the small business and into working. And that’s where, you know, people can’t just hire a shingle.

They gotta really go out and talk to their neighbors and talk to, you know, somebody that’s cutting lawns and, and, and providing opportunities for people that you know, really want to work and are involved in, in the community and, and want to make something happen. But maybe they don’t know how to, or, or maybe they’ve gotten kind of stuck in a rut, but you, the days are gone where you can put a newspaper at and, and expect 50 people to walk through the door. You’re gonna have to kind of energize some people and working for you. But the leading indicators from where I sit with overtime, hours going up with some wages people, there are enough jobs, it’s now get the people in the door to working again. And some of it’ll help over time with the vaccinations and people being safe. Some of it’ll be just you know, kind of a new normal. And once that new normal gets predictable, which it is I think you’ll see the pace of change steadily increase over the next year.

VANNOY:

Yeah, I mean, if, if you just simply Google the two words goo covid cases, I mean, you, you, it, it, it’s obvious what’s happening, right? And, and whether there’s more variants and then more, you know, spikes down the road where obviously in, in, in a, in a recovery mode you, you mentioned new normal. What, what do you think’s, what do you think is gonna be the same and truly a return to normal versus, you know, I think about you know, an awful lot of these companies changed their business model fundamentally, right? Some have sought out technology and think about productivity per headcount in a different way. You know, how much of, how much of a return to normal truly is gonna be normal?

GOEPEL:

Yeah. Businesses and clients and employees and employers will all adjust. And you’ll see you know, variants, no pun intended. But what you’re gonna see is restaurants, for example, might go to more self-service, or you might order more, and then, and then you pick up your own food and then eat at a table. You’re gonna see a digitization of the workforce, and you’re already seeing that. So they’ll have many strategies. Businesses will have many strategies of finding different ways to get good people looking for different talent pools, enticing different hours in order for them to work, you’re gonna see digitate digitization of the workforce and of the, the business in order to cut out some labor. And you’re gonna see that, and then you’re gonna see people reach their customers and clients in a different way, and that’s all healthy.

And it’ll make us a better, kind of a better country as well as a more efficient, productive workforce to go with our businesses. And, you know, over the long term when you look at American business it goes up every decade. And it’s rare that a decade you know, will, will have a negative outcome around financial. So America business will thrive and, and, and survive and do really, really well. It’d just be a little different, and you’ll see a couple of small differences. I don’t think you’ll see one you know, one outcome. You’ll, you’ll see several outcomes, but ultimately, American business is in great shape.

VANNOY:

Yeah. You know what I, I think about one of the, one of the opportunities and probably challenges is probably not the number of jobs, but the types of jobs, right? So what is it the, the, the US car manufacturer in the last 50 years, it’s about the same number of employees that goes into the production of a car. But where it used to be, you know, single digits were in the electronics, now it’s like nearly half of all the jobs are involved in the electronic computer systems in a, in a car, right? And so overall jobs, the restaurant who starts to automate more as they change their business model, there’s gonna be new tech to facilitate that, but it’s not gonna be the person serving tables, perhaps is gonna be the person writing code. How, how should, how should, you know, big business thinks about this, right? Large enterprises, how should main street business and entrepreneurs think about the shift in skills that’s gonna be required for jobs that, candidly, some, a bunch of ’em don’t even exist yet.

GOEPEL:

No, I think that’s a great insight, Mike. And candidly, you know, I think the US government even is starting to, to think about it with community college and trade show and, or, or, or trade trade jobs, et cetera, so that it’s definitely on their radar. And then as far as bigger companies are questioning the value of a college degree and do they do a coding camp and, and teach their own skills. So small businesses tend not to be able to afford that training. Or, or it’s very personal training where actually maybe they don’t know. I have a formal training program, but they actually can train people and mentor people much more effectively than a big company. So every size company is gonna do it their way. But I, I do think having a clear kind of message on what it takes to be successful in working for an entrepreneur or a small business building kind of the culture you want becomes really, really important. And then word of mouth, if you’re a good person to work for, and, and people spread that word, ultimately you can attract and retain people at a pretty high level, but is there gonna be change? Absolutely.

VANNOY:

Yeah. You know what it’s, it’s a, it’s a good segue to our, to our next topic, to trying to give some advice, make this a, a practical use of time here for, for our listeners today. You know, I think about you know, I, I cite Elon Musk probably too much in our meetings, but you know, you talk about education changing he was pretty brutal in an interview I saw with him about two weeks ago saying, you don’t need college anymore. That everything, everything you need to know how to build a rocket, literally how to build a rocket is available for free on the internet, right? And so I think the message there isn’t tell your employees to go Google it, but more importantly, the resources are available to you as an entrepreneur to provide training and upskilling to your employees in ways that just never existed before.

GOEPEL:

No, absolutely. And people need to take advantage of it. And, you know, being curious is always perhaps the number one important, but, you know, important quality in, in, in just doing anything in life and, and being successful. But what I would say is small businesses with the labor shortage, be open to your next employee in every meeting you meet, whether it’s at church, or whether it’s at a restaurant, or whether it’s you know, going for a walk in the neighborhood. Make a list of all the people that you want to be either friends with or, or you think would be available to work for you or, or, or be open to those connections. Because a lot of times people are looking for just that personal connection in order to, to, to, to work somewhere where they’re gonna spend a third of their life.

 Also, I think be flexible, you know, if you hired one full-time employee, but maybe you hire two in the future, and then you open up your talent pool to either kids that are part-time in school or, or, or mothers or, or fathers that have small kids and, and might look for four hours out of the house as opposed to eight hours at a house. So being flexible, being open to those connections and then also understand that it’s a short term issue. There’s a dislocation of skills and jobs and, and people will return to normal over time. Answers do come over time and know, you know, that you can build bridges in order to get to the other side.

VANNOY:

One of the things that, that I think about, so we talk a lot about like employee engagement, right? And, and offering flexibility and, you know, two part-time versus one full-time part-time at your brick and mortar business, part-time virtually. And that flexibility helps to drive employee engagement. That’s pretty well documented. But you, you, you touched on it, I’d like to go deeper is the talent pool. If, if you are currently recruiting, you’re a brick and mortar business, but you have some ability to have flexible workers, if you’re recruiting from a, a 60 minute commute, call it 10 miles, depending, you know, if how urban you are if all of a sudden you expose, expand your search to the state or the tri street region, or the US or anybody who speaks the language around the globe, your, your, your talent pool just grows exponentially. Yeah. Speak just some creative ways that entrepreneurs can tap into that.

GOEPEL:

No, it’s, it’s a very good point, Mike. You know, I think just tapping into the global workforce wasn’t a thought many people had and as little as before the pandemic and, and now they’re recognized that they can hire talent anywhere, and it, it’s, it’s talent that you know, there are people in different countries right now that would die to work for somebody in America and, and be successful with a living wage. And, and that living wage was perhaps a fraction of what we were paying somebody in America today. So that’s available. As far as the war for talent, you know, the, the war for talent in the United States, or within 60 miles if you’re 60 miles is within San Jose, but now you can have a coder, and that coder doesn’t even need to speak the language anywhere in the world.

Now there’s 160 countries you can recruit from at a cost structure that’s in most cases cheaper than San Jose. So I, I think the smart companies are trying to figure that out. They’re getting connected. I know as a payroll company, we’re starting to get pushed globally as well. And you know, because that’s where the talent pool is. And, and in some cases you have some pretty sharp willing people. And when you have a situation where you literally have more jobs than applicants, certainly people are gonna go outside their normal boundaries. But it comes down to making, recruiting a focus every day and being open to talent in different spots. And if you do that, you’ll be very successful as an entrepreneur.

VANNOY:

Yeah. You know, it’s interesting, the global piece, cuz you think about anybody in the, in the human capital management space in the last 20 years, you think this is an enterprise play, right? They’re gonna, you’re gonna, you’re gonna outsource and offshore a component of your business to, to, to maybe India, maybe Costa Rica, wherever. But increasingly in this gig economy, you might be a small business with 10 employees. You might have one or two employees that are freelance on the other side of the globe, right? I don’t want turn this into an infomercial for us, but you know, one of the things that we’re exploring, right, and we’re getting preparing to launch is a concept around daily pay. Can, can you just talk about not just thinking differently about geography, but like how you actually engage in pay employees, like, you know, our babysitter, you know, pay with Venmo, right? I mean, I came from the airport today in an Uber, right? I mean, how we pay for things. These, these lines are kind of blurring between the old days of either cash or check. And I, I think just the way in which we pay people, whether it’s a 10 99 or a w2 is, is a game changer for entrepreneurs as well.

GOEPEL:

Yeah. And I wanna be paid in Bitcoin, so <laugh> especially at going up at 60,000 a coin. So I do think you’re gonna see a lot of changes in this area. And if you think about, you know, whether it’s ESPN or, or the internet people want to highlight right now they want to see it as it happens. And if you think about the traditional payment plan, you know, you, you work for maybe two weeks maybe there’s a lag and then you get paid for those two weeks. But boy, what if you could get credit immediately, you know, when your babysitter gets paid you, you know right at the end of the shift you know, same thing. The worker would love to be paid right away as well. So if they can get credit for the hours they worked and, and, and get paid right at that time, instead of waiting two weeks, when you think about all the labor shortage and, and when you think about people that, that wanna wanna work but then want to get immediate reward, they have that opportunity, I think you’re gonna see more of that in the future.

You’re gonna see those demands. I also think, you know, technology’s changing so much. So in some cases the US banking system is perhaps a little bit behind the NACHA or ACH rules that require three days of settlement or two days of settlement you know, are breaking down. And, and, and now people are looking at it, how do we move faster? Europe and some other countries are, are getting to that kind of same day or next day banking kind of process and debit cards and cash Cash’s, you know, coins could be obsolete at some point in time here. So that’s a much different world and the changing scape, changing landscape of pay, I, I think you’re gonna expect more ultimately of that Venmo experience. Now that being said, cybersecurity and all these kind of things have made banking on the phone and banking on the web kind of a, a new frontier.

And, and people want to do it the proper way where, you know, their, their money is safe but yet they can pay people and attract people effectively. And, and then employers are gonna want to make sure it’s safe. Employees are gonna continue to want that pay immediate or as soon as possible to the work they are. And then at Assure, you know, we’re looking at more and more at these daily pay opportunities and, you know, I have looked at some Bitcoin opportunities in the future. Maybe we’re a little early there, but you know, if we can get it safe, repeatable, and satisfactory for both the employer and the employees sign me up to that model because that’s the model of the future.

VANNOY:

Yeah, I think what I would encourage entrepreneurs to, the way to think about this is not necessarily employee demand. You might not have any of your employees currently asking, Hey, I wanna get my pay earlier. But if you are competing for the same employees, if you’re a restaurant, you’re competing for the same staff that the restaurant across the street is, right? And so if all things are equal and you can pay daily and they get the immediate gratification of working for you and the guy across the street doesn’t, it’s a competitive advantage for you, right? So as we talk to folks, there’s a whole bunch of people that, you know, see this as, yeah, I, I, I don’t think that’s necessarily for us. I think that’s the wrong lens to look through it. So, so whether you do or don’t choose to use it, it’s not whether it’s for you, it’s whether it helps you attract talent and differentiate against your competitors. So,

GOEPEL:

No, I think that makes sense, Mike. And just, you know, the simple question is, do you wanna wait two and a half weeks to get paid or do you want to get paid immediately? You know, I, I think 99 of a hundred would say, Hey, sign me up for that immediate pick. Yeah,

VANNOY:

Right. Alright, let’s wrap it up. Last topic that I wanna talk to through is just the, the great resignation. We don’t have to go deep on this. You know, two weeks ago we did a webinar on this topic. It was got, got tons of traction tens of thousands of, of views on this thing so far. So encourage you to go check that out if you haven’t already. We did produce an ebook called The New Normal where we share a bunch of best practices for employers to, to try to get ahead of this. And, and what are some of the things that you can do to, to retain and engage your employees? Also looking for talent lots of best practices. So, so please hop on the website, assure software.com/guide to the new normal during great resignation in, in, in follow some of the best practices. I guess, pat, where I’d be curious for your, your perspective is maybe what are some of the risks, but more importantly, what are some of the opportunities? Because greater resignation, man, this is, this is tough if, if half your workforce, two thirds of your workforce, depending on the stats you believe are are considering a job change that’s super scary, but there’s, there’s opportunity lies there as

GOEPEL:

Well. Yeah, there sure is opportunity, and we’re fortunate as Sure Software where, you know, we reside in Westlake, Texas, or a suburb of Austin, Texas, which is one of the most exciting, vibrant cities in America today. And, and we’re opportunity abounds. You know, you, you pick up a tablet and, and look and Tesla’s moving here, or SpaceX or Oracle or what have you, and there, there’s a company a day that’s moving to Austin, or so it seems, and when you think about it, yes, there is at risk where you could lose your employees to other opportunities, but if you think about it if two thirds are looking for different positions, you want to be meeting with those two thirds. And now if you see it as an opportunity, I would tell you to skill sets in Texas with the the University of Texas grad graduates with just a skill set of the Texas workforce or people moving to Austin for the first time and they’re looking for work. Boy, we we’re sitting on a really neat a neat time where you could take advantage of that great resignation in a way where it, it’s a great welcoming of your workforce of the future, and that workforce of the future can be highly productive and highly skilled, and, and we’re embracing that opportunity as opposed to running from it.

VANNOY:

Yeah. You know, I just think about microcosm of like my own direct reports. You know, there’s nobody I wanna lose, but I I almost view this as a great reset, not necessarily just great resignation, right? People have gone through it a lot in their personal and professional lives in the last 18 months. And if, if the new world for, for their personal lives means that they need to make a change, then I wanna do everything I possibly can to retain the talent that I can, but then they have an opportunity to get to work for someone that does align with them, right? But more importantly, there is more talent out there that we know what does align with us as well, right? So, I, I I, I, I think in some ways this is a new normal, we called the ebook the new normal, but I, I think there’s a resetting period here where employees are gonna get aligned with the companies that work for them and vice versa, right?

And, and, and new relationships will be established. And, you know, luckily we’re all going through this mucky water together at the same time. But I, to to me, the, the message to entrepreneurs, small business owners, managers of midsize companies, is don’t only play defense here in you. Of course you should retain your talent and should do everything you possibly can to retain your talent, but don’t only play defense because the two thirds of the comp employees that are looking for other jobs are at your competitors also, or other companies would have the skillsets that you need and you need them too.

GOEPEL:

Yeah, no, I think it’s a great point, Mike. And, and, you know, we talked and, and set the conversation up 20 minutes ago with you know, change is happening and change is fast, and employees sometimes have fear of change. By the same token, new employees coming on board don’t know much different. And so if your business has changing dynamics, sometimes you don’t wanna lose those employees. You want to bring them along, but by the same token, you have 3, 4, 5 right outside your front door waiting to embrace a new opportunity. And sometimes that opportunity is a really good fit going forward for your business. So if you’re open to that sometimes those are the best opportunities. And right now, if I think about the last four or five big changes or big recessions, great opportunity came out of it. And when I look at COVID and the opportunities that are gonna come out of Covid, whether we’re gonna get bit better as a business, our small businesses are gonna look at different models, whether we’re gonna recruit better people, I think there’s no time like the present to to be very, very successful with a little focus and imagination.

VANNOY:

Yeah. Pat, I really appreciate the conversation today. Hopefully this added some insight to, to, to folks listening in today. Guys, we’re in the business of helping small and mid-sized companies grow. We do that by helping ’em first stay compliant and paying their employees. But, but ultimately it’s by attracting the talent, developing that talent in, in developing the human capital that can get you to the next level. So anything we can do to help in that endeavor, we’d love to be part of it. And until next time, pat, thanks for joining me today.

GOEPEL:

Yeah, thanks Mike. And thanks all of you for stopping by and, and listening,

VANNOY:

And until next time, everyone, have a great day.