You're a digital startup with remote employees across the globe. That's awesome. But how do you go about paying all of your amazing people without paying a ton of fees and without wasting a ton of your time with Bank transfers and invoices and such? That's a really good question.
We're going to find out today in this episode of The Startup Corner!
I'm Biro, a founder at Jexo, a fast growing SaaS startup with project management tools and thousands of customers. And in this video series, I'm going to talk about my experience with growing teams, implementing tools and processes and much more. So strap on and Let's get into it.
So along with the Pandemic, There've been more companies that have enabled their employees to work remotely, some of them, like Atlassian, completely transitioning to a remote. First type of culture. But when it comes to managing your remote team, be it as a startup or enterprise company, how do you go about making sure that you comply with every country legislation as well as being as effective as possible with the payments with the contract and not spending a ton of money? Well, that's a good question. And the things that I want to talk about today is one, transfers and Bank transfers and how you pay your team internationally. And second, how do you do that automatically and complying with local laws around employment?
Our discussion is going to revolve around two specific tools that I'm using with our team internally, and I found them extremely, extremely useful.
But a bit of history. In early 2020 kind of in the same time with the Pandemic, we decided to go full time with our business with checks. And at that point it was me and Nicky pretty simple for us to do transfer payments and things like that. We fast realized that we were actually a USD currency type of business.
What do I mean by that? Well, we are getting paid in USD by Atlassian as well as the majority of the tooling and services and hosting that we were paying for online is in USD. The company is based in the UK. So I had a bit of a dilemma because we had a UK pound account and we were doing all of the payments from there and receiving money in that account. So we were basically losing conversion fees and transfer fees for non same currency for when Atlassian was sending us the money, as well as when we had to pay our contractor as well as all of the tooling and expenses that we have. I already knew at that point about transfer wise, so I decided to look into it. And as it shows on my screen, it says TransferWise is now Wise. So it's now called Wise, but what Wise is a easy, affordable way for you to transfer money wherever you want in the world. So there are a lot of countries and currencies that are accepted on transfer wise.
You basically have a very low cost fee for these transfers. And the exchange rate that you get to use is very close to what you see on Google. When you do the conversion, when you go to their website, you have here directly.
I can show you like for example, if you want to transfer, Let's say $4000 and it automatically shows you exactly how much GBP you'll need to spend for this. And it shows you the transfer fee is around 10 GBP and then the conversion rate is as low as possible is almost the same, probably the same as the Google one.
And this was brilliant for us because it meant no matter what type of currencies we were working with, we are able to open currencies, Brazilian Real or whatever other currency. You can actually do it through Wise and have an account, a virtual account there and transfer basically those transfers that you do our local transfers in a lot of cases. Those transfers also take minutes.
So for example, your contractor or your employee can have the money in the Bank account in minutes rather than days. But it also meant that now we were able to just receive the money from Atlassian.
We could receive the money through Wise now direct directly in USD and not lose a penny on the amount.
Now, a couple of other things to mention about Wise. One, it works with QuickBooks and other accounting software, so all of the transactions that you have here will automatically appear in your accounting software worth mentioning.
They're not a Bank, so they're not officially a band, but they are regulated as a Bank. And also you have the exact same guarantee in your account that usually get these other banks.
So they guarantee something like I think 80 here in UK up to 80,000 GBP and they're Guarantor. I think it's Barclays Bank. If anything happens to them, you'll get your money back up to 80,000 K from their Guarantor Bank.
They also have a lot of integration. So there are a lot of other tools that use and integrate with Wise nowadays because it's one of the most popular platforms.
Alright, so we have this in place. We've been using this for years now.
The next thing that we started realizing was we were spending quite a bit of time with manual payments invoices and things like that, as well as creating contracts.
As we started getting a bit bigger in terms of them size, we moved away from 1 2 people. We started hiring throughout 2020. We hired quite a few people and this year and we realized, well every single month I need to remember I have kind of like a reminder in my calendar to pay everyone to sit down one day and just make all of the transfers, make all of the invoices is or get all of the invoices and transfer to money to everyone in our team.
The same with the contract you have to write up the contract, you have to send it. You have to sign it, send it for signage and all of that stuff. And there are these Hello sign and DocuSign systems that can help you unload some of that manual labor and such. Through a pure conversation, my good friend Lucas from Meetical showed me this! And I looked through it, and it was extremely exciting service for me, for multiple reasons.
It handles all of the payments for you automatically every single month. It kind of acts like a purse. You put the money there and the platform distributes the money in your contractors or employees accounts, Deel accounts, and then they have to transfer it into to their Bank account.
Everything is automatically generated. I don't need to issue or any invoices. I don't need to receive any invoices contractors, and I don't need to manually pay them.
Keep track of Bank accounts and details. When you have a tiny bit of 10, 20 people from time to time, they change their contact details, their address, or even their band details and things like that.
So you have to keep up registry of all of that and change all of that. So that's a bit of a manual work. So with Deel, you make one payment into the account, the amount that Deel knows that it needs to distribute to the contractors based on the automatically generated invoices. You generate contracts for each of your employees or contractors in Deel with specifying the amount of money that the contract is value either.
And you can do like a fixed amount per month or hourly rate or based on milestone. So it's very flexible in that sense. The contracts can also be generated in other currencies, so you don't have to have one single currency. You can generate as many currencies as you please. And then every single month based on that information, Deal pays out your employees, which is awesome. The other reason why I started using Deel, the contracts and due diligence side of things. So with this platform, when you generate the contract, you specify what country the remote worker is in and what Deel will do is one generate a contract with sections and information that complies to local laws because you know the contract in, Let's say Germany might not be the same as the one in Mexico. Right?
So as in the laws in those countries. So like this, you make sure that you're contract your contractor agreement are compliant to the local labor laws. That's 1, and 2 you can choose to request the necessary documents based on local laws that the contractor needs to provide you with.
So what that means is Deal knows that in Brazil, for example, the contractor needs to provide their document of establishment of the company Sole Trader or whatnot, as well as their passport or their local ID.
And you see all of this information available in their account. So for example, you can see as an example here for documents missing to document spending. So all of that is taken care of. So you don't have to then both you and the person that you employ have peace of mind that you're legally compliant with the local labor law.
The other thing that kind of triggered a bit of an improvement from me and Nikki's side from a mentality point of view, everyone that works with us are contractors, and some of them have chosen to self employed to have health insurance.
And such some of them might not yet have as they might have moved from being full time employee to contractors. Deel also has this agreement with Safety Wing, which is this international health insurance company. They offer health insurance, and it's kind of like a global health insurance for remote employees. It covers, I think, over 175 countries or something like 175 plus countries. It doesn't really matter where you are. You have coverage with these in those countries, and you can basically request it from the Deel platform. We've decided that we're going to cover, if not all, at least part of everyone's health insurance.
I think we kind of decided if it's through through these guys who are probably going to cover for their entire health insurance, this is kind of just a minor thing to take a bit of a financial stress away from them. If we can do it, then why not? Again, I found that really great. They're also some other perks in there.
The other aspect of Deel that kind of excited me for the future is this full time employment. You can hire in any country or a lot of countries through something called EOR, or which is Employer of Record Services.
And these are basically entities that reside locally in the countries, in the specific countries that employ someone on your behalf, and in the employment contract is going to be speculated that financial load is taken by your company and the employer provides work for your company. So through that employment contract, all of that is speculated.
So it's all legal.
But the benefit of this is that if you have employees that would rather not have to be contractors and deal with all of that, basically, they can be full time employed in the country that they need to be.
We actually had in the past and we had to kind of say no to people that wanted to work locally and be employed locally. Now we know that if we really want someone to join our team and they have those requirements, then this is an option that we can really take in consideration. And it's also not expensive, to be honest, for what it does. I think it's 500 dollars per month per employee, which, again, is not a lot of money thinking of that person is employed locally, and they don't have to worry about anything in terms of health insurance and other benefits that they might get a pension and other benefits that they might get from them being employed locally and not as a contractor or self employed or or company.
So I wanted to share this because I'm sure that this combo of Wise, Deel and Safety Wing for international health can really help. One can really help founders that are considering hiring remote, but they're concerned about the whole headache.
The due diligence and such can really kickstart and motivate you to just take the step and start hiring anywhere in the world because there are tools that exist out there in the wilderness that do what you're concern of having to spend time on for you, but also for employees.
Right? So you're more likely to become a digital Nomad, knowing that you have ways of getting paid through Wise, because Wise works not just for companies, for individuals as well. That can be your digital wallet where you get paid, and you can basically generate any currency and paying any country. You can travel as much as you want as well as things like global health insurance. Kind of like enabling you to take advantage of health insurance no matter where you are in the world, whether this month you're in Spain or next month you're in I don't know China.
I think this is really valuable. I'm really excited for this transition to remote, because I think it's going to create a shift in attitude towards work in general.