While this has been a challenge for some, an unexpected benefit of hiring remotely is greater access to a pool of talent that wasn’t accessible before. It means that companies who could only hire in their local area can now do so internationally. They can pick the very best, not just the very best available in the local area.
However, there is a problem. Hiring internationally is not an easy thing to do. There are numerous legal and financial hoops to jump through. That’s where a company called Deel comes in. Deel is a global payroll solution that takes away the stress and hassle of hiring internationally.
In this Disruption Talks live stream, we spoke with Dan Westgarth, Chief Operating Officer of Deel. He takes us through how Deel works, the key challenges of hiring in different countries, and what it could mean for the future of work.
Filip Sobiecki: What does an average day look like as the COO of Deel?
Dan Westgarth: We move incredibly quickly at Deel. It’s one of the things that we pride ourselves on. This means we practice a highly iterative work method, so the day always starts with me checking what problems are out there and picking the highest impact one. Then we’ll concentrate on around two to five different problems and solve them in order of priority.
Can you give us your elevator pitch for Deel?
We help businesses hire anyone, anywhere. If you want to hire someone in another country, it requires setting up a legal presence in that country. If I wanted to hire someone in Mexico, I would need to incorporate an entity, establish an office, establish organizational functions, and then start hiring people.
We deal with all of that for you. In under five minutes, you can use our platform to hire someone in Mexico.
Would you call Deel a fintech company or employment-tech?
I think that we marry both fintech and HR together effectively, which hasn’t really been done before.
We provide a suite of financial tools and invoice businesses in many different currencies and financial markets. We can also host and manage contracts in around 50 different currencies. That's the financial side.
On the people side, we ensure that people compliance is also met. We ensure that the relevant rules are followed, notices are served, authorizations and IDs are obtained, and are valid. Most importantly, we make sure the legal agreements that are used to bind work engagements are correct.
You previously worked for Revolut. What was it like transitioning into this role at Deel?
I was really successful in my Revolut career. I joined as an analyst with no tech skills. I left as a general manager and helped launch Revolut in the US. I was actually looking to take a break and focus on some angel investing and advisory work like many of my friends and colleagues do.
Then Deel came along, and I was introduced to the founders. When the pandemic happened, I think it was a catalyst that accelerated this shift to remote work. That was a huge lightbulb moment for me. It was an amazing company, an amazing product, and opportunity. I was offered the opportunity to join Deel, and I took them up on it.
How important do you think Deel will be in creating global change for the remote work market?
Many people think that companies use Deel to find workers with the skills they want for a lower cost. We find that’s not the case and that people are using Deel simply to find the best talent.
We’ve seen in this pandemic that companies are still hiring in major economic centers. I see companies in California hiring people in London or Berlin. I see companies in Tel Aviv hiring people in San Francisco and New York.
Economic arbitrage isn’t a driving force. I think the driving force is finding and securing the best talent without a geographical barrier.
The other thing to note is that there is a big economic shift, and we are accelerating that in some parts of the world that were not growing as quickly.
We’re seeing people being hired on Deel, using our financial products like the Deel card, Deel Advance, Deel crypto, and so on, while living in remote parts of third-world countries. Their paychecks are then powering the local economy and accelerating growth.
How is Deel different from the rest of the industry?
Employer of record businesses and umbrella companies have been around for decades, if not centuries. So we know that this model fundamentally works. We are just building a tech-first version of it to make sure it’s scalable across the market.
It’s similar to what neo-banks have done. They’ve taken the business model of banking and applied a modern solution to it.
In 2021, there are a number of service-based companies that are a few decades old. However, they’re not really tech-first businesses. They don’t see the same growth acceleration as we do. They will grow maybe 5% or 10% each year, but we grow about 30% each month.
What are the key challenges you’re facing?
It’s an operationally intensive business. If you look at the fintech space, managing payments, card issuing, lending, that’s all operationally intensive. When you couple that with payroll and people compliance, managing legal documents across more than 100 countries, it’s very difficult.
However, the way you manage that is through automation and technology, which is what we’re good at. That’s who we are. We design workflows that scale. The things we build work not just for one customer but also ten customers or even bigger companies.
Ultimately, everything we're building is very scalable. You can think of us as the Amazon in our space. Amazon took the bookshop, which has been around for centuries and deployed technology to build something that really scales.
How does Deel protect itself from other competitors?
We’re not doing anything new. We’re wrapping things together that have been around for years. As the process of hiring internationally is so complex, what Deel has done is partnered with the different stakeholders that would be involved in the process. We do that in over 100 countries.
What would usually take months and thousands of dollars, we’ve turned into a five-minute process that costs $50 or $500 a month instead.
The ROI for using our service is so high that it makes us very competitive.
The user experience for both workers and business is also highly valuable because it’s such a unifying experience, using one simple system.
What’s next in line? Are you looking at new features or market expansion?
I think that payroll is the perfect entry point for fintech. The big successful fintech companies in America did a good job of capturing that payroll/direct deposit system into their banking ecosystem.
At Deel, we are that same kind of direct deposit, first touchpoint, which is a great platform to launch fintech products on. We launched our Visa card and have seen some great conversions, more than we expected. We also have a Deel Advance product which helps people access their paycheck as soon as they earn it. We are also looking into the investing space, retirement space, and cryptocurrency.
Ultimately, we want to serve our customers' financial needs, and many are in markets where these products don’t yet exist.
Is there a type of company that’s too small for Deel? If you only need to hire two people, is Deel suitable?
Yes, we have lots of smaller customers. We have stealth start-ups and then companies on the New York Stock Exchange.
Can you use Deel for general hiring and HR management, even if you’re not hiring remotely?
Yes, a lot of companies are using Deel as a domestic use case. We’re not just for hiring. We can manage vacation days, employment agreements, and even GDPR agreements. It’s a good solution for those companies, even if they’re not looking to hire abroad.
Do you think there are any losers in this business model? For example, is there a taxi driver vs. Uber case where others could miss out if Deel rises in popularity?
I think the loser is going to be the talent. I think the bar for talent is going to get higher. If I have a business, I’m no longer restricted to hiring people in a 50-mile radius of London or Warsaw, or New York. I can hire globally. Those who would have been hired locally may now lose opportunities to others from other countries.
I think the flip side is that companies will have to get more competitive. We saw this in Silicon Valley in San Francisco. Companies were offering outrageous benefits, breakfast, lunch, dinner, free Uber rides, and so on to attract the best talent. I think we will see that Silicon Valley ecosystem rolled out internationally.
If COVID hadn’t happened, what else would have pushed your clients towards remote working?
I plot businesses on a spectrum in terms of decision-making. At one end of the spectrum, you have small founders who have raised seed money from family or friends. They make decisions almost instantaneously because they can. On the other end of the spectrum are the big institutions that have more robust risk management systems but therefore make decisions much slower.
What COVID did was accelerate that decision-making process, which has led the bigger companies to catch up to the new start-ups.
We’ve seen a lot more publicly-traded clients come to us who are just making the decision to go remote. COVID was the catalyst, but I think it was inevitable.
Are there any other benefits to Deel beyond time-saving and a more diverse pool of talent to choose from?
I think the time-zoning and language support we offer is also very beneficial. We operate 24/7 in terms of operations and support. We have multilingual teams and multi-time zone teams that help us deal with customer issues whenever they come up.
Are there are any industries in particular that have adapted well to remote working?
I don’t really think of remote work in that way. I don’t think the office is dead. We’re not trying to remove people from the office. We’re just here to connect talent and make that easy.
Remote work is a buzzword right now.
A lot of people identify with it, but I think the phrase “remote work” will eventually morph into just “work.” Companies will naturally have people working remotely, in different countries.
I think the days where we restricted hiring people to that 50-mile radius of London or Berlin are gone. It's all about flexibility now.
What is your decision-making framework at Deel?
The first thing we ask ourselves is “what is the problem?” We take a step back and look at the problem and who we’re solving it for. Then we look at problems and potential decisions as a whole and pick the highest impact one.
If you had a magic wand and helped a generation of 12-year-olds learn a new skill, what would it be?
I think communication is most important. We need to ensure that the next generation knows how to communicate well and share knowledge. I think that’s really important for the future.
This discussion is part of our Disruption Talks recordings, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products. To get unlimited access to this interview and many more, sign up here: www.netguru.com/disruption/talks