Podcast Episode 2: A brand new framework to help you package up HR

Transcription below:

Hello James here, and welcome to this week's podcast.

In this week's main event, I'm going to be talking you through a new framework I've created to help you package up HR called the HR Service Pyramid.

And in this week's thought of the week, I'm going to ask you a question. What's stopping you from fulfilling your potential? And I share my own growth journey with you.

So let's jump straight in.

This week's main event:

As a HR consultant, the way you package up your support on services can make or break your consultancy. It is the most important thing you need to think about as a consultancy owner.

Why?

Because the way you deliver and charge for your services determines your business model, how you work with your clients, operational efficiencies, your revenue, profitability, personal income, and ultimately your happiness.

But we have a problem. HR is actually really difficult to package up, more so than any other professional service.

Why? Because it's fast, complex, and there are way too many variables flying about. HR, by its very nature, isn't black and white.

The support your clients need isn't black and white. And there are so many different levels of service that you provide, ranging from the simplest admin task to the most complex change management and investigations projects.

So it's no wonder that you find it really difficult to package up your services.

And that's why most consultants, including yourself, find it easier to just sell their time. But by doing this, you're capping your earning potential and you're missing out on a huge chunk of revenue.

You see that there are four different types of revenue that you can tap into. The first is passive revenue. The second is subscription based revenue. The third is time based revenue. And the fourth is one off revenue.

These are the different pricing models that you should be using to package up your services. And the goal is to use all four revenue types to create a balanced, hybrid business model. So if you think about your own consultancy for just a second and imagine your income as a pie chart, the biggest chunk of your pie chart right now is probably time based revenue.

And then your second chunk is project. You're probably completely missing a huge chunk of passive and subscription based revenue. And this revenue is really, really important because it provides you with stress free growth, scalable growth and most importantly, saleable growth.

So how have consultants tried to create subscription based revenue in their businesses before?

Well, they've tried to cram everything a client could possibly need from them into one package and it's never really worked. It doesn't work for you to do it in this way because it's literally impossible to manage.

I hear the same concerns, such as, I don't want to offer unlimited support. What if they asked this? What if they needed this? This could take an hour, this could take a day, this could take a week. How would I protect myself from being abused by clients? How would I make sure that I'm being profitable? And how do I move away from offering a certain amount of hours in each package when I've got all of these concerns flying about? And it also doesn't work for your clients because they don't see the perceived value in it and would much rather buy a block of hours from you and work that way.

So I was having this chat with one of my clients earlier on in the year. We were discussing her packages and we were going through all of the concerns and questions that she had, and I realized that what we were trying to do was impossible as an industry.

We've been trying to cram everything a client could possibly need into one package, and it just wasn't going to work, nor was it actually the right thing to do. So I said to my client that before we can even start to think about packaging up her services, we must first figure out a way to break HR as a service down.

First, we discussed lots of different ways to do this, and we decided that doing it via HR roles was the best. And that's when I created the HR service pyramid.

So think of a pyramid for just a second. At the bottom, we have HR admin. So this can include HR software starters and levers and all of the general admin stuff and payroll. On the next level, you have HR advisory, which is there to answer the low level questions that business owners have. This is your advisory helpline. You then have HR management, which is a little bit more involved and proactive and would include stuff like performance management, absence management and stuff like that. You then have HR director levels. This will include making strategic decisions on behalf or alongside the senior management team. You then have HR specialist level at the top. So this will include more specialist type of project work.

So there's lots of ways to use the HR service pyramid, but I want you to think about using it to organize your different services in the eyes of your clients, not how you might necessarily deliver the work. An example of this is an investigation. So in the eyes of your client, this sits at the top of the pyramid as specialist service. But how you deliver this internally may span all of the different levels. With that in mind, put yourself in the shoes of your clients and think about how your services might be organized first via the different levels of the HR service pyramid.

Now that you've arranged your services by the HR service pyramid, you now need to think about how to package them up. So let's think back to the four revenue types that you can tap into. Passive subscription, time based, and one off. Each revenue type belongs to a different level of the HR service pyramid.

So Admin, if you're focusing on HR software, is perfectly suited to passive income. But as soon as you add in any sort of management, then this will become subscription based. Advisory is definitely the level that is subscription based and this is what you should be focusing on. Management may be subscription based, but most likely time based and you might like to get a retainer in here. Director is time based, also retainer based, maybe one off work too, and specialist is also time based and one off work.

So this is really, really important to keep in mind when trying to package up your services. There are some services that are perfectly suited to be packaged up as subscription based revenue and others that definitely shouldn't be packaged up as subscription based revenue.

And the HR service pyramid is an awesome framework that you can use to not only organize the different levels of service that you offer, but to organize them via the four different revenue types too.

The HR service pyramid can be used in lots of different ways too. So another way to use the HR service pyramid is by flipping it and it actually becomes your funnel. So when getting new clients, it's very difficult to try and sell them a piece of director work, for instance. But it would be much easier to get them on board with HR software first, or maybe your peace of mind advisory level service and then upsell additional services to them.

To that end, I want you to think about using the HR service pyramid to start value stacking your different levels of service. Now, the concept of value stacking is really, really important. So instead of trying to cram everything a business owner needs into one package and give them one big old hefty invoice, imagine that your services are layered on top of each other. At the bottom you have HR software.

Then they may have your subscription based peace of mind package layered on top. They then may have some management time added on. You may work with them one day a week at director level, and you may be working on a grievance. Now imagine your invoice at the end of the month.

All of these different levels are split onto different lines, allowing the business owner to understand the different levels of support that they're getting from you. The concept of value stacking not only helps the business owner to see what you're doing and the value of your work, but it also helps you to increase revenue from each client account too.

The next way to use the HR service pyramid is to see how profitable you are.

So for each level of the service pyramid. You can see what work you've been doing and who's been doing it. You can then work out what your average blended rate is and how much profit you're really making.

My clients who have done this have said it's been eye opening and it's really helped them to kind of have a strategic overview of their own consultancy and what they need to do. Similarly, you can figure out if you've got the right people doing the right type of work. So when reviewing your work in this way via the HR service pyramid, my clients have realized that overqualified people have been doing admin and advisory level work which has been impacting their blended rate and profitability.

So another way to use the HR service pyramid is to review and create your very own people plan. And by doing this you can see if you've got the right people in the right places and what their billable allocation looks like too.

As the consultancy owner, you should also figure out where you're sitting in the pyramid at a delivery level. And if you want to take a step back from delivery then you're going to have to chip resource in beneath you to do this. So in short, there are lots of different ways to use the HR service pyramid and in terms of frameworks to help you start, scale and sell your consultancy. I think that this is the first and most important one for you to take on board and start using.

So if you like the sound of this framework and would like to learn more, then you'll love the HR growth Academy. So I have two services, the HR marketing box and the HR Growth Academy.

The HR marketing box includes all of the marketing content you need to grow your consultancy and the HR growth Academy includes all of the guidance you need to grow your consultancy. And inside the growth academy you'll find the Recurring Revenue revolution video program so this is a video program to help you transform your consultancy by focusing on creating recurring revenue.

First, this video program includes the breakdown of the HR service pyramid, example, subscription based packages that you could use and a templated promotional deck to help you sell. So if you're interested, head on over to my website, the hrmarketingguy.com and check it out for yourself.

James thought of the week:

The fear of not fulfilling my potential is probably my biggest motivational driver. Or at least I've recognized it as the fear and have purposely used it to be my biggest motivational driver.

As grim as it sounds, I want to be on my deathbed and be like I had dreams, I gave them my very best shot and I achieved something. I lived life. The thought of laying on my deathbed and thinking I wish I had done this or tried this absolutely terrifies me. We've all been blessed with a life and we should use it to live a life.

And that's just my personal thoughts. And I'm always cautious of sounding a bit righteous when I say this stuff, but I think it is a really good mindset to have and I am thankful to the inspirational people that I've had in my life who have empowered me to think this way.

So thinking about fulfilling my potential, both personally and as a business owner, I sporadically check in with myself. Probably not as much as what I should do to see what's holding me back from fulfilling my potential.

And the biggest theme over the last few years has been my brain health. So since childhood or my earliest memories, really, I've always known and felt like I've just been a bit weird and different to other people.

Over the years, I've really struggled with anxiety. I dropped out of university because of it. I'd be really hyper and not be able to concentrate 1 minute and then crash hard and have to nap the next. Giving proper Labrador puppy energy, wild ideas, not being able to sleep and then not being able to think.

And the biggest issue that I've struggled with for years is brain fog and dizziness. Sometimes it can hit me for a week at a time and I literally feel like a vegetable, which, as you can imagine, is so, so frustrating and just really, really horrible.

I never really knew what it was or what was causing it. And back in my early twenties, I didn't really have the mindset to do anything about it. I'm 32 now, and when I was like 25 or 26, my partner at the time said that I had ADHD. It hadn't really ever crossed my mind before. I just thought that ADHD was for naughty kids, a common misconception that many people had back in the day, I suppose.

And for the next few years, I didn't really take action. But I did start noticing things. I started to watch myself and I also started to kind of watch videos on YouTube on ADHD and kind of just pay more attention to it, really, and generally start to educate myself about it. Then Covid happened. This is when shit got real. I just started my business. I was working full time still. And then I actually had Covid.

All of the usual symptoms, sweat, sore throat, cough, etcetera. This affected me for weeks. And looking back now, maybe months, actually thinking about it, I was probably drinking like four to five coffees a day, trying to stay awake. But if anything, it was just making things even worse. My stomach was really bad. And the worst symptom that I had out of all of it was this brain fog. I completely lost the ability to think. I struggled to see and sometimes struggled even with simple conversations. It was horrible and actually really, really scary.

And I remember trying to write an email to my boss explaining that I just couldn't think. So imagine trying to write that email and I couldn't even write it. My brain was completely gone. And I remember picking up my laptop, slamming it on my desk, and I just sat there and cried my eyes out.

So I was in a really, really bad place.

And from that moment, I was determined to get this sorted. So I did lots of research and insights, told me that diet was probably a huge contributing factor and the first place that the doctors would start off with.

So I started off by doing an intolerance test. It came back that I was intolerant to pretty much everything. So instead of living off dust, I thought it would be a good start by going gluten and dairy free. So within three days of being gluten and dairy free, the transformation was crazy.

I always used to carry a lot of water weight and this completely dropped. I didn't have any stomach issues. My brain fog was much easier to manage and felt so much more alive. Things were better, but I still knew that I needed to get to the bottom of it. After doing lots of online ADHD tests, all of which told me that I was 100% ADHD, I decided to pay for private diagnosis because NHS waiting times were crazy long. I had my three assessments with three different psychiatrists and the results came back to confirmed that I did indeed have combined type ADHD.

And I scored the highest on both. I actually felt so relieved when I got my diagnosis, and this is when my education process started, really. And understanding more about ADHD and how ADHD affects me individually has been one of the most empowering things that I've done for my own self confidence and self worth.

I did six months worth of medication reviews, which was crazy. Some of the medication I tried made me feel wild, depressed. You name it, I felt it. But then when we found a medication that really worked for me, I was hoping that getting my diagnosis and starting ADHD medication would be my saving grace and that I would be a fully pledged normal person with normal cognitive function.

But in hindsight, this was just a hopeless dream. This is not how it works. Even though the edge was taken off, I still really struggled with focus and my brain fog still came back to haunt me on random days.

And I was in Tulum last Christmas and things got really bad. I didn't have my usual medication because the shortages. If you have ADHD or I suppose any other serious drug, the medication shortages are really, really bad at the moment. So you have my deepest sympathies if you're struggling with that.

And I was listening to Doctor Amon's podcasts while I was away. So he's a really famous kind of add doctor in the United States that I like to follow, and he was stressing the importance of diet. So when I got back to London, I decided to bite the bullet and find a specialist ADHD dietitian to work with.

After I found a perfectly suited bonkers dietitian. She is honestly wild. I love her. We started by doing loads of tests, blood hormones, cognitive function stuff. By the GP standards, I'm a healthy guy. But the results came back and told a very different story. I was pre diabetic and my hormones were all over the shop, amongst other things, and taking everything into consideration, my dietitian, Suzy, recommended a new protocol.

This is basically a supplement plan, and she advised that I tried the keto diethenne and I'm just about to go on a hardcore detox plan as well because she says, I have this toxic burden and we need to get rid of that and that will help settle everything down. So, honestly, since working with my dietitian, it has been life changing.

My diet is completely transformed and I've never felt better and I'm really excited to learn more about my brain and body and what it needs to thrive. So why have I told you a very quick summary of my brain health journey so far? And that was a super quick summary.

Well, as a human and business owner, you probably want to be as efficient and productive as you can be so that you can fulfill your own potential and create a life you love.

But maybe, like me, your health or something else is holding you back. And I hope that by sharing this story, it inspires you to check in with yourself to see what you need to do to fulfill your own potential.