Remote's Job van der Voort on Global HR Solutions

Job van der Voort of Remote - Podcast Transcript

Scott:	Hey, it’s Scott Orn at Kruze Consulting and welcome to another episode of Founders and Friends. And before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely, but guess what? They did another thing. They integrate into your IT infrastructure. They make it really easy for when you hire someone to spin up all the web services and their computer, which sounds like not a huge deal, but actually we did the study at Kruze. We spend $420, on average, just getting a new employee’s computer up and running, and their web servers up and running. It’s actually a really big deal. It saves a lot of money and the dogs are eating the dogwood. We see a lot of startups coming in to Kruze now using Rippling. So please check out Rippling; great service. We love it. I think we have a podcast of Parker Conrad, you can hear it from his own words, but we’re seeing them take market share, so shout out to Rippling. And now to another awesome podcast at Kruze Consulting’s Founders and Friends. Thanks.
Singer:	So, when your troubles are mounting, in tax or accounting, you go it’s Kruze from Founders and Friends. It’s Kruze Consulting, Founders and Friends, with your host, Scotty Orn.
Scott:	Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting. And today my very special guest is Job van der Voort of Remote.com. Welcome, Job.
Job:	Thanks Scott. Thanks for having me.
Scott:	We were, before we turned the mics on, we were reminiscing about our childcare issues this morning. We were both in the same place in life here with young children. So thank you for making time. I know you’re a busy guy. Do you want to just tell the audience a little bit about Remote and retrace your career a little bit so that everyone knows how you had the idea to start the company?
Job:	Yeah. I have a background originally in neuroscience, but I ended up working at GitLab. I was there at the founding of the company and we grew that company from five to when I left, about 500 employees. And the way we did that is that in the beginning, we had people in a few different countries when we founded the company. So, we couldn’t find an office. So we figured, well, we’re just not going to have an office and we’re just going to hire the best person we could find independent of where they live. And so, we did that and we did that until we were 500 people and it worked extremely well. There were so many benefits to having a distributed team. It was very easy to find people. They were relatively inexpensive to hire relative to Silicon Valley levels, even though we paid everybody really, really well. And it was just overall great. There was one thing that wasn’t great, which is every time we would find someone that was living in a country where we’d never hired someone before, we had to figure out how to pay them and how to provide them benefits and how to be locally compliant. This was a huge, huge challenge. And the reality is that until the day that I left, we never found a great solution. And the solutions that we found, they were all very expensive, they were hard to work with, and just not the kind of thing you want to do when you’re building, in our case, a software company. We just wanted to build software. And now we were knees deep into bureaucracy. So, I left GitLab specifically to found Remote, and the idea behind it was that I wanted to give more organizations the power to build companies like GitLab that are fully distributed, where you have people all over the world, which has all those benefits that I mentioned. And so, I asked Marcelo to join me, he was my best friend, he’s the CTO at Remote, and we founded Remote about two years ago, in early 2019. And the goal was very simple. You should be able to come to Remote as a founder of a business and tell us, “Well, I want to hire Jane. She lives in Portugal. I don’t have an entity in Portugal. I know nothing about Portugal, but I want to hire her, and it should be as easy as signing up to Twitter.” And so, we spent about a year and a half building the infrastructure and the software to start to be able to do that. And luckily, since about a year, we are actually able to do that in tens of different countries around the world. So, it means that you can come to Remote, you can say, “I want to hire this person.” You just give us their email address, we will take in their information. It’s all in an app. It looks pretty, it’s easy. It’s very simple. And then we just invoice you every month. And what we do is we take care of payroll, we take care of benefits and any other compliance or tax related matters related to hiring someone in any country in the world really.
Scott:	It’s an amazing story and something that is so in demand now, especially like, at Kruze, we’ve been hiring remotely for three years, so we’re kind of used to it. And we hire people around the globe, too. But most startups we work with have started thinking about this as soon as COVID hit. I think a lot of companies maybe had a couple of contractors somewhere, but then when COVID hit, it really turbocharged the trend you’re on. Have you seen that? Has it been just this crazy hockey stick of growth?
Job:	It’s interesting, because we only started doing sales in April last year, so COVID there was already happening and people were already working from home, but I think that, it’s objectively, our company is doing extremely well. And the growth is really fast. I think a year ago we had maybe 15 employees internally and today where at about 130.
Scott:	Oh my gosh. That’s crazy. [inaudible] still good at onboarding employees? GitLab is legendary for their handbook, for the working remote and things like that, but I think, just so people can really understand the alternative, something like Remote, which sometimes founders get bad advice and they’ll set up a legal entity themselves in another country, and you start doing that a couple of times and it gets really expensive. It’s super detracting and people don’t know this, but when you have a subsidiary in another country, you have to file extra forms on your tax return, the 5471’s, which is an informational return for a foreign subsidiary. The IRS wants to know that. And so, your taxes get way more complicated. Whereas if they just would have known about Remote, they could have just worked with you immediately, hired people very quickly, not had to worry about the tax consequences in these situations. It’s pretty nice, right?
Job:	Yeah. And I think the thing that you mentioned is the least of what I would mention as one of the concerns. I think the greatest concerns are you have to be locally compliant, so you have to run local payroll, you have to understand local labor laws, you have to file taxes locally as well. If you have an entity somewhere, you have to act, and the entity has to operate independently in a particular way, so you have to do something with like, how does the money get into that country? Do you have the right currency? Do you have a local bank account, which is almost always required? And so you quickly get into a situation where, just for one subsidiary in a particular country, you have to do a lot of really complicated things. It’s really far away from just running your business. It’s often very bureaucratic. I have a notary visiting my house every single week just to sign documents because otherwise we wouldn’t be able to get stuff done. And of course, we made it our business to solve these kinds of things that would happen if you just set up a few different entities. It’s really complex.
Scott:	Yeah. Because you can’t, just to reiterate what you said, you can’t be a startup and pay people through payroll in another country, unless you have an entity. And of course, because the government wants their payroll tax. A lot of times people think about the government’s revenues being the end of the year taxes on profits, but payroll taxes are a huge revenue source for every government across the world. And so they want that, and they’re not going to let you set up a bank account, pretty much in every country. You need to have… The banks are required to ask for an entity before they let you start a bank account. And so what you’re doing just really speaks to me because you’ve made it super simple, you made it virtual. And there’s something, which I was talking to another team member of yours a couple of weeks ago, and they were telling me about how the fact that you guys own every entity in every country is actually a pretty big competitive vantage. Do you want to explain the compliance aspect of that?
Job:	As I was describing, we need to have those entities ourselves. And what typically is happening in this market is that there’s someone that owns an entity. Let’s say John has an entity in Portugal, and then we, as Remote, could go and say, “John, can we use your entity to employ people through us?” And that model, which is most commonly used, we decided to not do. And the reason for that is one, transparency; we want that if our customers employ someone through Remote, it’s as Remote and not something else, and two, we wanted to be fully vertically integrated. So, meaning we could control every aspect of employment, of payroll, of taxes, and of compliance, and the only way to truly guarantee that is if you own everything yourself. And so, when we started Remote, we went on a mission to do this for every country in the world. Today we’re in about 30 countries. By the end of the year, we expect to be in about 80. And to do that, it has cost an immense amount of money and an immense amount of blood, sweat, and tears. It’s a really, really, really hard thing to do and really hard thing to maintain as well. But for us, it means that we can really, truly vertically integrate. And it means that we can onboard someone really, really quickly. It means that we have experts in-house for every country, because this is one of the hardest things. You say, “Well, I want to hire Jane. She lives in Portugal, just do it for me. And these are the health benefits that we have.” But the reality is that Portugal has particular statutory requirements and particular compliance rules and particular labor laws. You have to comply with all of those, otherwise you, as the employer, get a fine, by the government. So Remote is set up to protect you from all of that. We are actually liable employer and we build the business in a way that we actually know what those risks are and so that we not only can protect you, but also Jane and ourselves.
Scott:	Hey, it’s Scott Orn at Kruze Consulting. And before we get back to the podcast, quick shout out to ChartHop. ChartHop is one of my favorite new SAS tools on the market. And basically, what ChartHop does is it puts your org chart in the cloud. And I always like to say, it brings transparency to your organization. And so, everyone in your organization can see who they report to. They can see the full organization chart of the company and how their group relates to other groups. It also has a lot of information on the individuals in the company. And so, you can click on the Chart Out profile and just get where people live, their experience, slack handles, all this kind of stuff. And it’s just a really great tool. The other thing is ChartHop has started doing some cool stuff around compensation and budgeting planning. And so, you can actually start seeing what the cost structure of the company looks like certain scenarios. So, I’m loving ChartHop. Check it out, charthop.com. We use it at Kruze, really like it. And I can’t recommend it enough. All right. Back to the podcast. Just for folks that don’t know, there’s other… I’ll get emails or other firms that call themselves a Global PEO will pitch me, and they’ll say like, “Oh, we’ve got work in every country across the United States or [inaudible] every country across the world.” But when I drill into it, what they’re really doing is white-labeling another outsourcer’s entity. Sometimes it’s an outsourcer of an outsourcer. And so, you’re three degrees of separation away from actually knowing exactly what’s happening, knowing you’re compliant. Because they’re not really thinking about… What I like about your model is that the fact that you own that entity, you’re very focused on actually doing the compliance well and not creating risk for yourself. So, there’s a benefit that both parties are very aligned, versus the outsourcer of an outsourcer. They don’t really care. They’re just trying to get the contract signed and boom, boom, boom, let’s move fast. So, I think I really like the way you guys are doing it because you’re thoughtful about it. You’re taking the long-term approach. And I think also like the… Forget the compliance and doing that correctly, all the other aspects of the service are going to be so much better long-term because you are vertically integrated. Are you seeing that? Little things that you can… You have that playbook that you’re going across all the other countries across the world, are you seeing little synergies or little benefits that you’ve learned from other countries?
Job:	Yeah. Sometimes we go into a country and local legislator tells us, “Well, you cannot do that here. That model doesn’t exist.” And we say, “Well, but we have all your neighboring countries and this is how do it there.” And actually, this competitive dynamic between countries tends to work in our favor. And then beyond that, it’s little things, but they make, as you said, they have this great cascading effect, like onboarding someone, it tends to take many weeks of time in this market and we tend to be able to do it within a few hours because we just centralized everything. We have all the information, we have all the people on our side. And so, but then, the one thing that tends to hold up these processes is something that we can’t control. It’s like, you have to file something in a particular government and it just waits. And that’s the only thing. But on our side, we can optimize extremely well. And we have a clear side, like what is happening? Why is something happening and when is something happening?
Scott:	Yeah. But I love that you have that experience and you can actually walk, I’m sure there’s some competitive pressure with the governance, but also probably just the aspect of being able to nicely, kindly walk them through how some of the other countries in their region were able to do this. Because I think every government across the world wants especially high paying technology, software development, hardware development, designer types of jobs. So, some of them just probably don’t know exactly how this can be done, haven’t thought about it enough. And so, you’re bringing actually this expertise around the globe, which is opening up their economies. And I’ve grown up in Silicon Valley, I’ve worked in Silicon Valley forever. You’re starting these little network effects all over the world. And 10 years from now, it’s going to be really impressive. You guys are like the ignition for all these different markets.
Job:	Yeah. It’s interesting. We actually employ a lot of executives as well. When we started Remote, we thought well soon there’s going to be software engineers, but it’s all over the board. And more and more we hear from governments directly reach out to us like, “Hey, we want to talk to you.” Which is very exciting. I’m curious to see where it will go. I think it will be in every country in the world within the next five years or so. So yeah, it’s going to be [crosstalk].
Scott:	All right, well, I’ll look forward to working from Fiji for Kruze Consulting. Do you guys have a heat map of all the countries across the world? You can see the most popular places that people are choosing to work for, especially in COVID. And I’m sure there’s people in Fiji and people in all the exotic locations.
Job:	We see people over. It’s not very surprising. Unfortunately, no map. It’s English speaking countries are still very, very high and the countries where you think there’s going to be a lot of people that is exactly where you see them, but we see more and more people moving to the middle of nowhere somewhere, which has been very interesting to see. Some people living in the middle of Scotland somewhere, close to nothing. That’s been very nice to see. Or like myself, I live far away from the city center. There’s nothing around our house. There’re a few other houses, but there’s nothing interesting here.
Scott:	We’ve seen that in the United States with our employee base and our client employee base, people moving to Wyoming, Montana, all over the United States. It’s been really cool. I know you got to go here in a second, but what’s one thing you learned from your GitLab journey that you’ve been able to apply at Remote as you guys are growing so fast?
Job:	How to build a remote company. It’s a pretty broad thing, but I think that’s the main thing we took away. At GitLab we experimented a lot, we learned a lot, we reiterated a lot on how to build this kind of organization, how to scale it up and do so really quickly. At this point, Remote is growing faster than GitLab did when it was this size. And it’s been very good to have had that experience because I think there’s a lot of early investments that I made, particularly in people and creating trust and creating a particular company culture that at GitLab we wished we had done earlier and by now of course, things are fine, but yeah, so that has been very, very valuable. Over-investing in people is not really a thing, and so we invested very much in people and making sure they’re happy and healthy.
Scott:	I love it. I’m always saying, especially in a remote company, communication becomes so important and fostering Slack, Zoom, any type of communication is just so, so important. Job, thank you so much for your time. Can you tell everyone how to… Just reiterate how, if they’re looking for Global PEO services, where they can reach out to you and how to find Remote?
Job:	Yeah. It’s very easy, Remote.com. And if you want to reach out to me directly, it’s job, as in a job, @remote.com. It’s very easy.
Scott:	Job, thank you so much. God speed with your children. Hang in there. You’re almost there. And thank you so much for the time. Really appreciate it.
Job:	Thanks so much.
Scott:	All right, man.
Singer:	So, when your troubles are mounting, in tax or accounting, you go it’s Kruze from Founders and Friends. It’s Kruze Consulting, Founders and Friends, with your host, Scotty Orn.

Job van der Voort on Remote - global HR solutions for the future of work

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