This time, we’re speaking with Tom Nickalls, Founder & CEO of Castle HR. Tom caught the entrepreneur “bug” when he was employee #5 at his father’s industrial sales company. He then went on to co-found a consulting firm, lead a SaaS sales division, build and lead a sales team of 40, and has now founded his second firm, Castle HR.
Castle HR was launched in January 2019 and is based out of Toronto.
Tell us a bit more about Castle HR and how you serve small-to-medium enterprises.
Right now, the average company doesn’t bring in a full-time human resources until they hit around 40 employees. For most companies, it takes a couple of years to get to that stage. This creates a window where HR responsibilities fall on the company’s founders. HR is not typically their area of expertise so there are a lot of blind spots that can be very detrimental to a growing business.
That’s where Castle comes in. Our HR professionals help companies to define their culture by formalizing customized policies in an employee handbook and work on their mission and values. We also provide corporate and compliance training such as sexual harassment training and AODA (Accessibility for Ontarians with Disabilities Act) training. Companies looking to attract and retain talent are going to want to make sure their culture is the best it can be. If you’re not paying attention to culture, the company sometimes defines it for you.
We also provide advice to SMEs. Every company is going to have challenges with their employees and when you’re smaller you may wonder who you can turn to for advice. Traditionally, you would look to a lawyer or maybe to your colleagues or peers. But lawyers are going to be expensive and if you rely on colleagues and peers you might get bad advice. At Castle HR, we take the time to learn about your culture and your company so our HR professionals are perfectly suited to be that resource for SMEs. If you’re experiencing challenges with an employee, we will walk you through the process and handle it as though we were your own HR department including drafting any relevant documentation such as a termination letter or written warning.
Our entire offering is a paperless solution as everything we do is strictly digital. There are no printouts of handbooks, it’s all done electronically.
Is there a certain type of business you serve?
Tech companies are what I know best from working with them for the last decade. Tech companies are fast-growing, they’re very focused on culture and making sure they’re treating employees right. They understand that attracting the right talent is key for their growth. I saw a stat the other day—there are 15,000 job openings for senior developers in Canada and according to that study there are only 5000-6000 people that would actually fit that role. So it’s not a shock that companies are taking this seriously—you can see this reflected in the number of job postings related to company culture. Companies are making the shift toward prioritizing culture and we’re trying to be the early-to-mid-stage solution for that problem.
Why would companies choose to work with Castle vs. hiring in-house?
Hiring in-house is a straight economic decision. When you’re at 10 employees, you could hire an HR person at that point—there’s nothing stopping you—but usually at that stage, you’re more focused on growing revenue. We come in at a fraction of the price of an HR person and can give you what you need at that stage. If you’re hiring your first HR person, the calibre of experience and knowledge you get will be quite different. Our HR people are senior leaders that have been in the field for at least 10 years, working with a number of different companies, and gaining a wealth of hands-on experience.
You could hire a lawyer to draft your handbook and it will be done well, but it’s usually going to come with a price tag of between $5,000 and $10,000. Part of Castle HR’s service is that we will amend the handbook on an ongoing basis as needed. We typically do a three-year engagement with companies and will amend and update the employee handbook as new laws are passed or if you want to change a policy. Because we amortize that fee over the course of the three years as a subscription model, we are able to offer a more palatable price point to companies.
There are other services out there as well. You can go to Google and find templates for nearly everything, but if you do that you’re not personalizing the experience for your employees. Your handbook should really reflect and promote your culture.
You can go to Google and find templates for nearly everything, but if you do that you’re not personalizing the experience for your employees.
Can you talk about the different HR considerations a smaller company needs to make compared to an organization with 50+ people?
As a start-up it’s pretty straightforward, you want to make sure that your contracts are in place and are protecting the business. Once you reach 5 employees, you have a legal obligation as part of the Health and Safety Act to have a Sexual Harassment and Workplace Violence policy in place.
Typically, at around 10-15 employees is when you have an idea of who you are as a company and the kind of culture you want. At 20 employees, you begin to have other health and safety obligations so it’s really a case getting these processes in place as early as possible. As you ramp up to 50 employees you’re now responsible for AODA training. After that, depending on the company, you may start to experience day-to-day issues and recruiting and retention concerns. You may also want to look at performance reviews and evolving your culture.
There are a lot of really great solutions out there to help streamline processes like payroll and onboarding but when it comes to things like employee handbooks, HR advice, and compliance training that’s where Castle HR shines.
Are there any specific moments in a business lifecycle where HR support should be a priority?
Going back to the legal obligations, the main milestones I would talk about is five employees when you need to have a Sexual Harassment and Workplace Violence policy in place, 20 employees, when you form the joint health and safety committee, and 50 employees, which is when AODA kicks in.
Other than that, the milestones for implementing major HR initiatives depends on the company. For example, if you’re at 15 employees and get a round of funding and, all of a sudden, you need to double in size. Obviously that’s a catalyst for looking at your HR practices.
Are there any special HR considerations for the tech sector?
As a start-up, there is going to be a lot of turnover, especially at the beginning. People are very portable and they do shift around a lot, especially early on in their careers. That is the reality of the industry these days. I think for tech, the real consideration is finding good talent and keeping it. How do you create a culture in a company that people want to come and work for? There’s a reason why people go to work at Facebook and Google. It’s because they’ve created cultures that attract people. Obviously, we’re not going to be able to replicate that exactly with a five-person shop, but we can create an environment where people talk about what they do and talk about the company in a positive way.
There’s a reason why people go to work at Facebook and Google. It’s because they’ve created cultures that attract people.
HR is one of those operational things that entrepreneurs tend to struggle with, due to a lack of knowledge, experience, or even time. What are some of the downsides of neglecting HR?
The worst-case scenario is a company being linked to the #MeToo movement. Having proper Sexual Harassment and Workplace Violence policies in place to protect your team is your responsibility. There are no more excuses these days as there are a bevvy of cautionary tales out there to learn from.
Employees exiting the company is obviously a huge exposure for companies. Exiting an employee can have a ripple effect if it’s not handled properly. When terminating an employee, it must be done with the proper paperwork and conversation considerations to avoid a lawsuit or having the Ministry of Labour get involved. Often people forget how to communicate that to the rest of the team. Whether an employee leaves for another job or whether they’ve been let go, you need to make sure that you’re communicating clearly with the rest of the company about the situation.
In terms of time and money, what’s involved in getting the right HR support?
If you’re working with Castle HR, it’s purposely designed to not be a big lift.
We start with a Kickoff Call, where the company’s leadership speaks with one of our HR professionals so they can begin drafting your handbook and understand who you are as a company, what your culture is, what your aspirations are, and what your mission and values are.
From there, it’s a matter of what each company wants to focus on. We can go straight to compliance training, or we can design customized performance reviews, or we can help companies to deal with sensitive issues such as properly exiting an employee. It really depends on what they need.
What should founders and business leaders be looking for when they’re choosing HR support?
If you’re looking for minimum support and you just want something in place to protect you, you can get that from templates. But if you’re looking to invest in your employees and to find someone to be a true partner, you have to look at someone that can invest time with you. Look for experience, talk to references, and get an understanding of whether your culture and what you’re looking to achieve fits well with the company that you’re having a conversation with.
What are some of the trends you’re seeing in human resources?
One of the trends that we’re seeing right now is employee engagement. It definitely goes hand-in-hand with culture. You can have overarching themes for employee engagement—great parties, great outings, great benefits, an open, ergonomic office, a beautiful space—all of the stuff that affects everybody and creates a positive environment. But you also need to consider how it works on a one-on-one basis. That goes back to understanding what drives your employees.
You can learn a lot about your company from your high-performing employees. What drives them, what makes them tick, what attracted them to your company, and why are they working there. You can get a lot of knowledge and build an ideal employee profile based off of that so you can understand who’s going to be successful in your environment.
You can learn a lot about your company from your high-performing employees.
How do mental health and wellness fit into HR?
We’re currently trying to figure out where mental health and wellness fits into our compliance training suite. We have a great benefits partner that focuses on wellness and we’re trying to bridge the gap and help companies understand the benefits of having mental health and wellness covered as part of their benefits package. I think there’s a bigger conversation to be had around that. We saw it in the way Sexual Harassment and Workplace Violence was carved out of Health and Safety into its own bill and I think mental wellness is going come out of that as well and be its own bill.
You look at companies like Bell with its “Let’s Talk” initiative and you can see that it is top of mind for people. Like most companies, we’re still trying to figure it all out but I think it starts with education— letting companies know what their legal responsibilities are and make sure employees know what they are entitled to.
You mentioned compliance training, what typically goes into that?
We modelled Castle HR’s compliance training off larger companies that have great reputations. The big takeaways were that they make training mandatory on an annual basis and have testing to ensure the knowledge is retained.
Annual compliance training typically takes 45 minutes for an employee to complete, but adds so much value to them and provides assurances that your company is a safe place to work and that you care about their well being.
What happens if companies aren’t in compliance?
I’ll give an example related to restaurants and bars. If you’re an office-based company, you can control your ecosystem pretty well as far as who’s coming and going, but in a restaurant or bar it’s obviously very different. You have people who are going to be drinking and a few who are going to take things too far. If someone crosses the line with an employee, you might have a situation where, even though the business owner may be treating their employees extremely fairly, if they haven’t provided the Sexual Harassment and Workplace Violence training they could actually be found liable for that incident because they’re not adequately protecting their employees.
You can even parallel that to an office situation where a salesperson is in an exchange over the phone and someone is bullying them, that is something that could be seen as the owner’s responsibility as well.
As an entrepreneur yourself, what are some of the tools and technologies you swear by?
For news, references and articles, Harvard Business Review and Medium are probably the two websites I’d visit first. My background is in sales so I have a plethora of books on sales and people that I like to follow online like Phil M Jones and David Priemer. As for books, I like The Challenger Sale.
On the technology and tools side, I’m a big fan of Todoist. We use HubSpot for marketing campaigns and use a New York-based company called Chanty for our team chat channel. However, we may end up migrating over to Slack because a lot of companies we work with are already using Slack and have added us as an HR function. Another tool I use frequently is Sales Navigator on LinkedIn. It’s a powerful tool and I really do like using it.
And for myself personally, I like to use Lumosity. I like chess puzzles and it’s pretty much the first thing I do when I get to my desk in the morning. It’s funny, sometimes when I get a whole bunch of stuff right and set a high score I think “today’s going to be a good day”.
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Learn more about Castle HR — https://www.castle-hr.com/
Connect with Castle HR on LinkedIn: https://www.linkedin.com/company/castle-hr/
And connect with Tom: https://www.linkedin.com/in/tomnickalls/
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