Who is a historical figure you’d like to have coffee with?
Ben Thompson: Well, I’m about two-thirds of the way through a biography on James Cook. I would definitely like to have a coffee with that guy, interesting guy.
Heather Smith: On the boat?
Ben Thompson: No. They went through hell. It was crazy what they were doing, but modern day astronauts, those guys, and he just excelled and just did amazing things his whole career. I don’t think many people were aware of just how much he has done.
Heather Smith: Yeah, absolutely, very much pioneers like many people in the technology industry such as you today.
Ben Thompson: That is a real stretch, but I appreciate it.
Can you share with our listeners a bit about your background, Ben?
Ben Thompson: Yeah, sure. I’m qualified as a lawyer and an economist. I went to university and studied those subjects.
Heather Smith: Do you qualify as an economist?
Ben Thompson: Well, you have an economics degree. No one ever makes you prove you know anything. From a very young age, I was just into technology. I loved all sorts of technology starting with digital watches and VCRs and then I got my first computer and just was forever in love with every new thing. My career has been trying to find a way to weave those two things together, economics, a little background and a love of technology, and that’s been an evolving process starting in Sydney in finance, in the futures exchange, working in the Sydney futures exchange and then moving into M&A work then moving to the UK where we worked on startups and did an IPO for Interactive Investor International then a property portal, which became Rightmove, which is UK’s largest property portal like realestate.com here in Australia. Then, moved back to Australia with only one thing that was clear in my mind, which was I didn’t want to work for anybody else, and I wanted to run my own business.
Ben Thompson: I set up as a lawyer and have since been involved in Employment Innovations, my services company, which is an HR services firm. I won’t go too far into that. Power2Motivate, which started as my employee reward and recognition business, a software company. It’s now gone into loyalty and other programmes globally. KeyPay, the first investor in KeyPay and involved on the board of KeyPay as that’s developed into one of the world’s best payroll platforms. I would say the world’s best payroll platform. Most recently, Employment Hero, delivering services, making it easier to manage employment for SMEs. That’s my career.
Heather Smith: What I heard from that is a common thing that a lot of small business owners say in that they go, and not that you’re necessarily small, medium sized business owners, I don’t want to work for anyone so I’ll found a business and end up working for thousands of people in terms of clients and everyone that you deal with in the business. I think it’s a misnomer, isn’t it?
Ben Thompson: True. I think what I’ve discovered in the intervening nearly 20 years is that it’s not that I didn’t want to work for anyone in particular. It’s that I didn’t want to work in a large corporate environment. I didn’t ever enjoy getting in the lift and going up 20 floors and just being a cog in a big machine. I always liked to know that I’m capable of changing things and running things.
Heather Smith: I literally break out in hives when I have to go into a lift in one of the corporate buildings in Brisbane CBD, so I know exactly what you mean. You’ve been 18 years building employment-related businesses.
What fascinates you about combining technology with people management?
Ben Thompson: Well, I think it’s actually the ability to deliver a great service to tens of thousands of companies that really need it at an affordable price. That’s probably just economics that technology now means that we can provide really, really good products and services to SMEs. They’re getting the things that large corporates used to take for granted that were never provided then. Maybe if I can just explain some of the principles or the truth of what’s behind that. I’m sure you and your audience would be aware, but most people aren’t aware that 98% of all companies in the economy are SMEs, and 68% of all employees in the economy work for SMEs. In most people’s minds, if you ask them like, where do most people work, they just see large buildings with big logos on the top and they think that 70% of people must work for those big companies, but they don’t. It’s a small minority.
Ben Thompson: However, nobody started a business because they wanted to be an employer, and nobody has to be qualified to become an employer. Yet, it’s such a complex and difficult part of running a business. You end up with 98% of all companies struggling to manage employment in an effective way. It’s what keeps them awake at night. If that’s the truth then my question was how can we use technology to give small and medium sized businesses all of the tools and resources and expertise that they need to offer great employment to the nearly 70% of all Australians who work for them? That’s something that I think is really important. That’s what I find exciting about combining technology and employment.
Heather Smith: Yeah, it’s interesting because you would think employing someone is about doing the payroll and the numbers, but actually there is actually a real heavy weight or slant to actually having the legal side sorted out, which is where your background being a lawyer comes into it. That’s something that I find myself personally quite complex to navigate.
Ben Thompson: Yeah. Not just the legal side but the psychology, just dealing with people. There’s a lot more to it. The benefits. Also, the fact that small businesses typically don’t have the resources or buying power to provide their employees with benefits that again corporates can offer their employees and so why should it be that 68% of all Australians miss out on benefits that they should be getting? Technology can allow us to deliver that.
Heather Smith: Yeah, absolutely. That was one of the key features that jumped out to my thrifty mind or thrifty eye that you’re actually enabling small businesses to offer what large corporations are currently offering.
Ben Thompson: Yeah. Compliance again, just weaving that technology piece into it. The reason that we built the modern awards rule sets into the payroll solution was because I had spent years in court defending employers who had got it wrong. I’ve worked in the US. I’ve worked in the UK. I’ve seen many different employment law regimes, but nothing compares to the complexity of paying people in Australia. When we realise that it was possible to take them on an award, all of the penalties, loadings, allowances, shift work and everything else that comes with it and build complex rule sets into a payroll system that would keep people largely compliant. This is important. This is what we have to be delivering. They can focus on the other aspects of employment, the people and culture aspects and the benefits and that type of thing.
Heather Smith: I think you’ve answered my next question already, which being based … We’re both here, based here in Australia. How complex is our employment system compared to our own relation to other westernised countries? You’re saying it’s by far more complex.
Ben Thompson: Yeah. The modern awards is by far most complex. Most other economies have a national minimum wage. The US has 50 states obviously and minimum wages … national minimum wages or state minimum wages. If you’re across many states, then it becomes very complex. For an individual business in one place, it’s a lot easier. The UK has a minimum wage. Again, I focus on helping SMEs up to about 500 employees. For those businesses, it’s not uncommon for them to be working … Even for a small business with 10 employees to be working and bound by three or four industrial instruments, all of which have completely different pay sets. If you’ve ever sat and opened up a modern award and read it from start to finish and put yourself to sleep, but they’re not a simple document.
Ben Thompson: Literally just yesterday I was reviewing clauses in a modern award for a client. There’s a thousand ways to interpret it. That’s just one clause in one award. A small business person with a florist, they’re never going to sit down and get their head around that. How do we solve for that with technology?
Heather Smith: Excellent. I’m glad that is a solution out there because it honestly does my head in that I can’t as an intelligent person go and set up a payroll for 10 people because everything just is so complex, and I know that if I get something wrong, we’re then potentially in court over it, which we all want to pay everyone the correct … The people I’m working with all want to pay people the correct amount of money. Moving on from that, can you share with our listeners what your business, Employment Hero, does?
Ben Thompson: Yeah, sure. Employment Hero, our strapline is to build a better world at work, create a better world at work, and it’s to give small to medium sized employers between about their first employee and 500 employees a complete … We don’t call it HR. Sorry. I’m just going to go off on a tangent here, but we don’t call it an HR or an HR platform because what I’ve realised over the last 18 years is that small businesses don’t like HR. They don’t want HR. HR is again a very corporate thing. We call it a people management platform, and it’s designed to give those businesses everything they need to recruit, onboard, manage, pay and provide benefits for their entire workforce, timekeeping. It’s a complete end to end solution.
Ben Thompson: We’ve also packaged into it things like employment contracts, all of the policies you might need in this country, Q&A, your frequently asked questions around what happens in this situation, how can I manage with a termination or a redundancy and what are the steps to take? Taking that legal skills and the content that lawyers would normally provide and just building that in for everybody. It’s a complete employment management solution for every business that’s in that price bracket or that size bracket.
Ben Thompson: I might just go on a little beyond that and what we’re doing is recognising that one individual small business just won’t have, as I said before, won’t have the buying power or the resources, time, skills to put together a benefits package for their employees and so they typically miss out. When you have 150,000 employees as we do on one platform and you have that $9 billion worth of buying power running through the system, you can go out and negotiate phenomenally good employment benefit package for everybody. It’s almost like a union that we can bring so many SMEs together and they can become so powerful together that we can make working for a small business far better than working for the largest corporate because you get the benefits of the fun of working in small business. We would just go … not having to work in a big corporate but none of the downside. You get paid well. You get great benefits. That’s what we can do through Employment Hero.
Heather Smith: Employees can obviously use it as an employment incentive, what your solution is offering.
Ben Thompson: Yeah, absolutely. It’s an incentive. It makes them more attractive. We’re also doing things like reward and recognition, having operated Power2Motivate, which is a reward and recognition platform for over a decade. We’re recognising that again though … We only used to work with … Power2Motivate typically doesn’t support people under a thousand employees, but we’re taking the best bits of that and making it available to the smallest business. The psychology of employment, we’re basically solving that with technology as well.
Heather Smith: Fantastic. You have described it, but maybe is there anything else to add to who is the ideal customer for your solution? You’ve said someone from one to 500 employees. Is it anything else in that or is it just every small business it would be suitable for?
Ben Thompson: It’s probably easy to exclude some. There are some businesses that are very reliant on a very sophisticated job management system, and that becomes such a central point for managing time and billing. Construction and that type of thing, they would probably fewer … There’s fewer … We do have clients in those industries but it’s not the majority. Other than that though, we’ve designed the platform to work across white collar, hospitality, some blue collar industries. We’ve got a lot of not for profits. We’ve got a lot of charities on there. It’s really designed to work for almost everybody.
Heather Smith: You’ve been in the industry for some time now. What would you describe as an optimal employment cloud business stack for an SME?
Ben Thompson: I would probably divide it up below 100 employees and above 100 employees. From an employment perspective, I’m a bit biassed, but I’d say Employment Hero for finding and onboarding and managing your employees. For payroll, if you’ve got less than a hundred employees and you do not have a particularly sophisticated or complex payroll, don’t have complex payroll needs in Xero or Intuit, which is also using KeyPay, both of them will work very well. Over a hundred employees, KeyPay, HeroPay are better solutions. They’re just more most sophisticated. Beyond that, I don’t want to even pretend I know enough about the accounting stack and Receipt Bank and how everything all fits together to manage expenses and billing.
Heather Smith: Absolutely. I was interested in hearing what you had about the employment area.
Ben Thompson: Yeah. I do think that if you’re bound by awards, if you want to be compliant and you have to pay your employees according to award sets, rule sets, then Employment Hero has all of that built in. I would encourage you to have a look at something that takes care of compliance.
Heather Smith: It sounds like you’re gathering enough data in there in terms of, you said, oh, we can help you find employees. The likelihood is those employees could actually be at another business and you could almost do job and skill matching experiences in people in other businesses. I don’t know whether that would be … other businesses would be happy about that, but it sounds like when you’re running in small business, it’s hard to find people.
Ben Thompson: What you just mentioned as an idea, as a concept, it’s not something we … The net benefit to our client or the employer, the business has to be a little higher. If we’re poaching, if we were ever involved in pulling people out of one of our client’s businesses to put them in another, I’m sure we would quickly become disliked. That’s not on the cards, but we have received an investment from SEEK, and we are integrating into the SEEK jobs platform. When you find an employee, it’s very easy to onboard them through Employment Hero. About 80% of all jobs that are advertised in Australia are filled through SEEK. Employment Hero can be right at that point of finding an employee and onboarding that employee. We’re very excited to be working closely with SEEK.
Heather Smith: Yeah, absolutely. Well, for me, that’s the number one issue I hear across practises, is finding people. Anything that you can do to assist in that. Where does Employment Hero fit into the modern practise, the modern accounting or bookkeeping practise? Further to that, can you describe the Employment Hero business portal?
Ben Thompson: Yeah. I think accountants and bookkeepers are now in a difficult position when it comes to managing employment. Accessorial liability cases mean that you don’t want to be giving too much advice or advice that you’re not 100% confident with around employment. Between award interpretation and pay rates, sham contracting, genuine independent contractors or even vulnerable workers act, there are so many ways to get involved and drawn into a potential dispute or penalty around employment. Employment Hero I think is solving those things. It’s not potentially core business for the accountant, but we can partner with an accounting firm to provide their clients with the solution to all of those issues.
Ben Thompson: We’ve built to do that. We’ve built a business partner portal on top of Employment Hero, which allows one of our business partners, be they accountants or HR consultants, bookkeepers to manage hundreds of clients, dozens, hopefully thousands of clients through one portal, so you can look in. You can see where every client is at in terms of how many active employees they have, who hasn’t completed onboarding, who hasn’t signed a contract, whose certifications may have expired when a performance review is due to kick off and how far through that review you are, as well as managing all the contracts, employment contracts, policies, etc. and keeping those up to date and sharing them with your clients.
Ben Thompson: We’ve really tried to approach how can a consultant manage employment or help small businesses manage employment in the same way that the accounting platforms are helping accountants to manage many clients at the same time. I think it’s definitely possible for HR people who are involved in helping manage employment to do the same thing through our business partner portal.
Heather Smith: Excellent. Thank you for sharing that. What are the outcomes you’d love to see from people using your solution?
Ben Thompson: I want a small business person … I think that small business people too frequently are petrified of being employers and petrified of being caught out.
Heather Smith: I completely agree with that.
Ben Thompson: Yeah. I want that to stop. I want them to feel proud. I want them to feel proud of what they deliver to the economy and to the people that they employ. Why is it that so many small business owners literally fear the day that they are going to be asked about their employment arrangements? Rather than feel proud that they’re delivering jobs for dozens of people and helping their families and helping their kids through employment. Then, they feel like, wow, if I feel that good about being an employer, I can go from 12 to 25. I want to grow this. I want to do more of the good stuff by offering more employment opportunities.
Ben Thompson: The system is just stacked to make employers feel paranoid about getting bigger. The more articles there are … I know that people do things wrong. I know that people get things wrong. I know that the Fair Work Ombudsman has a duty to publish all of that, but it’s got to be well balanced. I just don’t hear people talking up what small businesses and SMEs are doing for their employees. I think Employment Hero can get to a point where when you’re using it, you feel far more secure as an employer. You feel like you’re doing everything right and you feel proud and capable of growing your business without that monkey on your shoulder. That’s exactly where I’d like it to be, and I don’t think it’s far from it.
Heather Smith: Yeah, absolutely. I completely agree. It is scary. All of the litigation, etc. here in Australia that seems to surround employing people. As I mentioned before, I think most people want to do the right thing and they find that they’re doing something wrong, and it’s retrospective, and there’s a lot of punishment, and then it all hits the media.
Ben Thompson: Look. They do get it wrong, and I get that, and that should hit the media. There’s a principle in the psychology of employment in reward and recognition that to get people … to create a positive workplace culture, everybody should read say four times more positive feedback than negative feedback. When we go to work, we just are automatically giving constructive criticism to people that we don’t feel that we’re doing it wrongly. We’re not trying to make people feel bad. It’s just constructive criticism. If you start to acknowledge every time you give constructive criticism and then try and provide four times as much positive feedback, you realise it’s really, really hard.
Ben Thompson: There are ways to improve it and that’s where reward and recognition systems come in, but the same should go for acknowledging and thanking and respecting employers, small to medium sized employers for the job that they do within our economy. Every time there’s a bad article published about a bad egg, make sure that there’s four articles saying this is amazing. This small business in Brisbane, this florist, I don’t know why I’m talking about florists today, but she’s just taken her one store to three stores, and now she’s employing all these extra people. These are people that are feeling better about their lives and isn’t that wonderful? You never hear those stories.
Heather Smith: No. I agree. You rarely do hear those stories, but maybe that’s … We need to get more of them out there. What’s your favourite feature of Employment Hero that everyone should know about?
Ben Thompson: There are so many. It’s usually the next one that’s coming. I get very excited about the next feature. We’re actually running internally our OKRs module. I’m not sure if you’ve heard of OKR management. It stands for objectives and key results. It’s a process of setting the company objectives but then running it all the way through and aligning objectives and key results all the way through to every individual in the business. We use it here internally and love it, but we couldn’t find a system that did it really well. We’ve designed and built that system and we’re rolling it out. I know that many, many people in the startup community, particularly fast growing tech companies use OKRs. I’m really excited to launch our OKRs module, particularly amongst a lot of the customers that we know are using them. That’s pretty exciting.
Heather Smith: Yeah, fantastic.
Ben Thompson: I could go on for a long time, but I won’t.
Heather Smith: Sounds like … I’ve been sent warnings not to ask you about various things, not to mention Bezos and Elon and Steve Jobs or you will go on for a long time.
Ben Thompson: Yeah. Don’t mention any of them.
Heather Smith: I’m not mentioning things. What tips do you have for an accounting or a bookkeeping practise who isn’t using your solution, wants to start using your solution? How do they adopt it and roll it out?
Ben Thompson: In terms of just getting it set up, just contact Employment Hero through our website, and we’ll run you through a complete demo, put you through one of our onboarding programmes. We have self implementation or fully managed implementation. Then, I would start to become really familiar with the content and the processes in there such as OKR and performance management things and reward and recognition. Once you decide that the product works for you, then it’s a matter of contacting our partnerships manager, and she will be able to help set you up with a business partner portal and a reseller arrangement so that you can roll out Employment Hero across all of your clients.
Heather Smith: Thank you. Excellent. Sounds like it’d be quite an easy process to adopt.
Ben Thompson: Yeah, sorry. On that, some of your clients might know Jacqui Graham, who’s joined us recently from MYOB. She’s leading up our partnerships programme, so she certainly knows the accounting industry back to front and is great to work with.
Heather Smith: Excellent. Thank you. What apps, software or tools can’t you live without, Ben?
Ben Thompson: Oh, it’s so boring, but G Suite. I was such an early adopter of G Suite. I had so many battles internally 10 years ago when we first started using it, I think maybe going back that far, and now I won’t accept anything in a spreadsheet. Everything has to be in Google Docs. I’m sure accountants and bookkeepers are much more Excel than G Suite.
Heather Smith: I’m G Suite as well. I love G Suite.
Ben Thompson: Yeah, it’s awesome. What other ones? There’s Evernote. I’ve been using that for a decade. I just got a renewal subscription, and I’ve got so much stuff in Evernote now that I couldn’t live without it. They’re probably the two big ones for the time being. Employment Hero is super important to me as well.
Heather Smith: Do you have any hardware gadgets that you love?
Ben Thompson: Well, I have one particular one. I have a Tesla. I’m not a car person but it is just the ultimate gadget. My commute to and from work is some of the best time in my day because I get to spend one on one time with my favourite gadget.
Heather Smith: Fantastic. Excellent. Thank you for that. What does the next five years look like for you, Ben?
Ben Thompson: Really exciting. We are expanding Employment Hero internationally. We’re just about to launch our international product. We are deepening our relationship with our distribution partners. SEEK is one of them. There’s a few others that are coming. We are yet to … We will crack the benefits programme or what we call work life for the employee side of the market and get to the point where I believe employees will ask their employers to use Employment Hero because they just are so in love with the benefits that they get from Employment Hero and the way that employment is a better experience for them. I’d love to tick over a million people, a million active users on our platform. We can see that happening well within the next five years. We’re on a growth path to a million users. Yeah, lots of good things.
Heather Smith: Excellent. Sounding very exciting for you. What are some of your favourite business books our listeners should check out?
Ben Thompson: I think The Hard Thing About Hard Things is nice by Ben Horowitz. We’ve all been through really tough times in business and often frequently, it’s never easy. It was nice to pick up that book. I listen to books so I didn’t really pick it up. I went for a ride, just a mountain bike ride a couple of years ago and put it on and came back to the house about an hour later and said to my wife, “I’ve just had the best hour. I just heard about somebody who is going through so much … who’s been through so much worse than me, and I feel better about myself because if they can get through that, then I can get through the things that I’m dealing with day to day.”
Ben Thompson: Jim Collins’ books, he’s got so many great books, Good to Great. They’re all very similar themes, but he constantly improves on those themes, and there’s a lot to take away from him, particularly his most recent one. I can’t remember the title, but if you look up Jim Collins, you’ll find it. He talks about Sorenson’s expedition to the South Pole and the concept of a 20-mile march that Sorenson got there because he had one rule, which was you wake up in the morning, you walk 20 miles, put up your tent, and then we rest. Some days it took them 12 hours to get there. Others, it took them three hours to get there, but that was the rule. We have our own 20-mile march, which is probably confidential, but every month we have to achieve a certain objective, and that’s our thing. That’s worked really well in the business.
Ben Thompson: Scaling Up, probably not as well known, by Verne Harnish, but I’m a huge advocate of Verne Harnish. I’ve been attending his events for close to 15 years. We have implemented his Rockefeller habits and his quarterly themes. Every 90 days … You probably don’t want a little synopsis on every book, but every 90 days, we ask across all of the businesses, we ask the same question, which is what is the one thing, the most important thing that we can achieve in the next 90 days to take us as far as possible from where we are today to where we would like to be in a year from now. We obsess on that one thing.
Ben Thompson: Once we decide what it is, we create a theme and we obsess on that one thing. We could create a metric to track it. That’s our obsession for 90 days. If we get there, then we celebrate hard. We’ve done that consistently for over 15 years, which is 64 … I think this is our 65th quarter without ever failing to do that process.
Heather Smith: Wow. That is a lot of commitment there.
Ben Thompson: Yeah. Keep it simple and just repeat it.
Heather Smith: Yeah, absolutely. That’s very impressive. I’m sure a lot of people will get a lot out of those books and from listening to you and hearing you today, Ben, so thank you very much for being on the show. How can people get in contact with you?
Ben Thompson: They can find me on Twitter, @bnthompson. They can also learn more just via employmenthero.com.
Heather Smith: Thank you so much for your time today, Ben. Really appreciate it.
Ben Thompson: Heather, thank you very much for your time. It’s been a pleasure.