Join Safeguard Global’s Carol Mello and the CITC’s Kuntal Warwick as they discuss expanding the latest trends in HR and payments management to grow your small to mid-sized ecommerce business globally.

Webinar Transcription

Kuntal: I see, okay. There we go. So, we are broadcasting right now. And I think we’re just… Hi, everyone, who is here and trying to sign on. Sorry, we’re a few minutes behind in broadcasting but just waiting a few minutes for everyone who’s registered to be able to sign on, and we’ll get started in just a few minutes. I see quite a few folks getting on, which is wonderful. Carol, I think I’m seeing a few more folks come on. We’ll start at about 10:05. I just want to make sure that everybody can hear us. Carol, if you want to just say a quick hello.

Carol: Hello. Hi, everybody, who’s joining.

Kuntal: So, if you cannot hear us, please use the chat button down at the bottom of your screen, and let us know. All right, just got confirmation that we are being heard. All right. Well, as more people sign on, we’ve got quite a few folks registered, but I think in the interest of time, we will get started. So, thank you all for joining the California International Trade Center’s first webinar on industry innovations. This is our attempt at connecting what’s happening in the global landscape with larger companies and corporations and trying to connect that with smaller businesses in the State of California.

If you all have not had a chance to visit the CITC website, I would encourage you to do so at californiainternationaltrade.org. That’s C-A-internationaltrade.org, and you will see all kinds of interesting resources and tools. As some of you may already know, the CITC is a new initiative that is looking to connect small and medium-sized businesses to digital trade resources, free tools, services, and support. My name is Kuntal Warwick. I’m part of the CITC team. And today, we have Carol Mello, who is the West Coast Regional Alliance Manager with Safeguard Global. And before I hand the screen over to Carol, I think, you know, Carol, you and I talked about this a little bit earlier, we had the perfect tee off for this conversation.

As many of you might know, Jeff Bezos was in India last week announcing a new initiative with Amazon, where they’re going to be investing a billion dollars into SMEs in India to support their digital capabilities and capacity. And so, in describing that and describing Amazon and the growth of Amazon, he rightly pointed out that as small businesses, we’re often having to take care of the what, the how, and the who of business. But what was so critical to Amazon’s growth was actually the who, and who you hire, the talent, the capabilities, the capacity, and also which partners you choose to connect with, particularly overseas. So with that, Carol, I want to hand it over to you, and we’re looking forward to hearing about Safeguard Global and how they can help small and medium-sized businesses in California in their “who” needs.

Carol: Thank you for the introduction, Kuntal. I am very happy to be part of the webinar. As Kuntal said, my name is Carol Mello, and I work for Safeguard Global. I’m based out of San Francisco, but I cover all of California and then throughout the United States. And today, I am here to talk about how to navigate through international workforce and HR for ecommerce, and then how we have helped small to medium-sized companies do so.

So I’m going to go ahead and start this presentation. We’re also going to have an interactive video, I think you will enjoy it, and then we’ll do some Q&A. So, yeah, getting ready to start. And I’m just going to make sure that everybody can see. And Kuntal, if you please can confirm that, as we are getting ready to go into the presentation.

Kuntal: Yeah. It looks perfect, Carol.

Carol: Okay. Great. So I want to start talking with all of you about some 2020 Global HR trends. We try to provide that to our clients just as a, you know, obviously stepping stone to what the year is going to look like and some of the trends we’ve seen in the industry, and a lot of those obviously apply to ecommerce and just everybody that needs to understand a little bit of what’s going on in the HR world.

2020 Global HR Trends

So, we have evolving role of HR. As you’re probably familiar with, HR started to take, you know, moving away from being an only support role to becoming a strategic partner and helping achieve those organization objectives. So, there’s this evolving role of HR that we’re seeing in the industry, and it’s great given all of that has to go through HR right now, and how much is needed, and a vital part of the arm of the organization, so to say.

So then we’re talking about, you know, number two is changing employee expectations. You have, you know, five generations working together for the first time in history. You have to accommodate those demands. You have aging workforce, hypercompetitive job market as you probably know, and HR just can’t afford to ignore those. You want to attract the talent. You want to retain the talent across all these generations. Some of the things we’re looking at is work-life balance, you know, meaningful impact. People want to believe in what they work for and believe that they’re making an impact. Also, experiences versus achievements. They want to put those experiences in there. They’re a lot more worried about that. So, you have to cater to all these generations, and HR is really, you know, the core of making that happen within your organization.

So, then we’re talking about improved employee experience. They want vibrant workplaces. They want flexibility, autonomous work options, fair treatment, resources and opportunities, you know, having coaches and mentors versus just a managing relationship. So, you’re seeing that play a huge role for one of the 2020 trends as well. And then we have employee growth and development, really honing in on the education, the personalized learning platforms. So many companies are doing this internal platform where you can go get trainings in a plethora of different subjects, and that you really see that come forward in 2020 a lot more. Also, mentorship programs. Unternally, inside the organization or if you work with another organization that you might be sharing with or be part of your own, having those mentorship programs across your organization is really important.

Also, HR data and analytics. Everybody goes to HR to get data, correct? And it’s very driven, heavy data information for decision making. But we’re talking about more predictive analytics as opposed to simple reporting. So, you know, really getting into what that means for the business and how you’ll be able to utilize that information better going forward. Also, wearable technology and employee wellness. That’s been on the rise for a couple of years now. Hitachi is actually now one of the first organizations to use wearable devices in the workplace. So, they’re really trying to focus on wellness goals and monitoring, you know, are you standing up enough, should you be doing some breathing at this time. So, they believe it’s going to cause more productivity out of the workforce and make them really feel good about being able to have that on their job environment.

And then also portable benefits. With the big gig economy, they want to carry between jobs and benefits, and also it’s very important when you’re looking at countries without universalized health care. So, that is a huge trend, especially because, as we’ve been seeing, the gig economy, it’s not going down, in fact, it’s trending. And then, with that as well, we need to talk about increased regulations on contract work. So, as temporary employment grows, which makes sense, and it’s very helpful as a small to mid-sized organization, especially on ecommerce, you also need to be aware there are scrutinies growing in the area of, you know, temporary employment. In fact, California had the Assembly Bill 5, called the AB5, that is putting some pretty revolutionary steps in making sure that contractors are treated in a way that they have all their benefits and they’re not neglected within the system, and they don’t want any more misclassified independent contractors in the state. So that is the huge thing to be looking for. I’m not gonna go into depth in, you know, all the specifics of this bill, but I’ll definitely encourage you to look at it, especially as you’re operating in California, so very important to be aware.

Some statistics, you know, 58% of small to mid-sized businesses have an international presence. So, I want to stop for a minute in this slide, and a lot of you might be thinking, “You know, I am not an international business yet because my product or service is only being offered in the U.S.” So, I invite you to think outside the box when you think about this. Because if you’re hiring contractors internationally to do any sort of development work or assist you and you’re paying them, wiring money or any of those things, you should really be considering yourself an international company because you are, in fact, an international company because you’re hiring people internationally. You don’t need to be present in market with a product or service in order to be categorized as an international company. That person is already a fundamental part of your operations, and they constitute your company, and they are offshore. So if you have those contractors or those people sitting in another country, you should think of yourself as really an international company and start understanding more what that landscape looks like for you.

Ecommerce Challenges

So, ecommerce challenges. I think it’s across all industries. But you can relate with that from an HR perspective, which is attracting and hiring people that can make it all happen. We understand that a lot of mid to small-sized companies are…you know, you might be bootstrapped, or you might have to invest your money and you can’t necessarily go out and just hire all the skill set you market. A lot of times, you’re left with trying to split, as best as you can, your funds in order to create the right output for your milestones. And hiring people is key. As you all know, especially in California and all over the country, it’s a very competitive labor market for those skills because we have, you know…I think it’s between the fourth and sixth biggest economy in the world in California. It keeps going up and down.

So, there’s a lot of companies looking for the same skill set as you’re looking at. And it’s really important to be able to attract and retain that talent to achieve your goals. So, you want to maximize your dollar. So, when you’re thinking about hiring in California, a lot of times you might say, “I found this incredible resource, but they have four other offers, and I don’t think I can afford them.” So what we’re inviting you to do is think outside the box, and we’re going to show you, you know, the steps to do that.

In-Demand Ecommerce Tech Skills

 So, some of the in-demand ecommerce tech skills, and we don’t have all of them, but I think it’s a good look is software development, data analytics, UX, AI, and SEO. So, those are the things that, you know, especially for ecommerce, you’re looking to obtain. And like I was saying, it is a competitive market.

Ecommerce Human Capital Global Costs

So, what we’re talking about is know your ecommerce human capital global costs ahead of time. So what we’re offering is an option that you’re looking at an international workforce that is ready to be action. In some countries, in fact, in a lot of countries, there’s a huge amount of unemployment, and people are desperately searching for jobs. And with all the technology hubs that are emerging all over the world, they are on those hubs. Now, since you’re thinking about this as a small to mid-sized company lenses, you may think, “But I’m too small. I would have to set up an entity. I will have to, you know, do the contracting,” which you might be doing currently, but, as you know, there’s some liability and risk that comes involved into that.

So what we’re proposing is look at global costs ahead of time. If you’re bootstrapping or, like I said, if you’re going to invest your money, just think about it in a broader sense, like, “Okay, this is what I have to spend, you know, and this is the service that I can use to action those people. I can now look into the international market to gain the type of workforce that I need to create my business and my output.” So, you can identify where the talent is, know the employment costs and regulations ahead of time so you can build your international strategy, your talent pool. You know what’s coming down the pipeline and you’re able to look ahead. You can access total employment costs.

So, right now, you might have a contractor and you might be wondering to yourself, “Oh, I’m 1099-ing them,” except 1099 is not legal internationally. It is in the United States, but it’s not something that exists internationally. Every single country have regulation for contractors. So, you really need to be aware of those in order to build your international strategy and make sure that you’re dealing with compliance ahead of time and you’re making an informed decision.

So employment capabilities in development hubs. You’ve been seeing a lot of, you know, development hub surface all over the place. You know, some of the mentioned ones are Ukraine, India, Canada, Poland, Philippines, Romania, Brazil, Taiwan, but there are many more. An interesting fact that I’d just like to point out to you, you might already know this, but I think it’s important to tap into, is that more than 92% of Filipinos speak English, which makes Philippines one of the largest English-speaking populations in the globe. They’re actually, the government, is implementing and doing all this specialization work about same high school system. So, they can join an educational reform because they know the skill sets that are needed. And then now, you can ensure the Philippines and action that workforce there. So this is just an example, one out of many countries that are doing things to diminish the unemployment rates internally, attract foreign investments, and then really get their workforce to be looked at from a global perspective.

eCommerce – Questions you should ask yourself

So, you know, when you think about your ecommerce business and what you’re trying to accomplish, there are some questions you should be asking yourself. And I think those are really broad, but also very important ones because you can always drill down and get more specific. But one of them is, “Am I currently using international contractors?” If that is a yes, how many hours a week are they working? And the reason why I’m asking you those is to bring to light that in some countries, as little as 25 hours a week constitute a full-time employment, which means that they should be getting benefits, they should have a contract in place, you should be paying them legally and compliantly in country in order for you to not be exposed to international liability.

Mind you that some of the international regulations that are now in place like GDPR, there are cross-border agreements. What that means is that it will hit you, your compliance bill will come to the United States, and you will have to pay them. But if you’re thinking about, “Oh, I’m a small business or a mid-sized business, I can fly under the radar,” that might be the case, but that might not be the case because also when you’re thinking about the big players, you know, when you think about Amazon ecommerce or some of the huge companies that are out there, they actually can be riskier because they have the funds to pay those compliance bills. But when you’re talking to small to mid-sized, yeah, let’s hope you fly under the radar. But if that’s not the case, then what happens is, you are faced with those bills, which can sometimes, for example, just to give you an example, it’s not to scare you, but I think education is important.

GDPR compliance bills can reach a million Euros or more depending on what kind of information was leaked from a non-secure platform. So, that can really break your business. That can break what you’ve been looking for and building upon for your company. So, it’s not to scare, it’s just to bring you information so you’re well-informed. Whatever you sit in your company, if you’re an HR, if you’re a CEO, if you’re the CFO, it’s just important to know that it’s out there, and then put all the, you know, planning in place to make sure that you are considering these things as you’re thinking about your strategy.

Another thing is, “Are they legally registered in their country as an independent contractor?” Can you actually verify that? Independent contractors can be a great solution if it’s utilized correctly. So, you just need to make sure that you’re doing it right. “Do I understand the local employment regulations and requirements?” That’s another thing to ask yourself, “Are you under a certain amount of hours it takes?” It takes some research, you know. It’s something that works, but you have to make sure that you’re addressing these ahead of time, you know. And, “How can I action a global workforce to meet my output milestones as I grow my business?” and that is really what you should be asking yourself and should be part of that plan as you develop, you know, how you’re gonna create output, or if you’re actually thinking about going full-on in an international market, how to penetrate that market and really finding your niche and what is going to work for you and how to do that, minimizing your liability and trying to eliminate the issues of compliance as much as you can.

So I’m going to play you a little video. I think it’s a great video. It’s not long. It’s two minutes, so bear with me.

Innovation

Technological evolution and the gig economy is changing the nature of the way we work for a growing global workforce, one which promises great opportunity for those companies that choose to participate and expand. Rapid global expansion is a near-impossible task you say? Where do we start? You could create an entity, yet that requires all sorts of local labor market knowledge and expertise. You could hire contractors, exposing your organization to a whole host of challenges, or you could be up and running in less than two weeks. How? Via Global Employment Outsourcing, the fastest, most flexible, most financially viable asset to achieve strategic growth in over 179 countries.

Global Employment Outsourcing

Let’s say you’ve engaged four independent contractors in South Korea or now a compliance risk, or you’ve acquired a company and workforce in Senegal but not the business entity, or you need to hire a worker for an upcoming project in Sweden. Your challenges? Entity registration can take six months or longer. Hiring contractors risk non-compliance, and failing to comply can be costly. With GEO, your employees are up and running live in country, fully compliant with all local laws in under two weeks. GEO owes its speed and efficiency to Safeguard Global’s established and expansive network of entities around the globe, with intimate knowledge of local laws and culture, contracts, and local languages, making payments in local currencies and same time zone availability, ready to take responsibility for quickly getting your workers up and running, fully compliant and doing what they do best so you get back to doing what you do best, supporting the strategic growth of your business. Nimble, low-risk deployment of your global workforce in under two weeks. That’s GEO. That’s Safeguard Global.

[00:24:01]

So, I just want to make sure that, Kuntal, you can hear me, and I’ll go back to the presentation to make sure everybody can hear me as well.

Kuntal: Yes, Carol. I can hear you.

Carol: Okay. Great. And, I know we’ve been talking about, you know, how to do this, you know, and now I’m going to bring you home to explain exactly what Global Employment Outsourcing is. So, traditionally, you had two options to take your business global. You can do your standard entity set-up and engage your workers through that organization. The business risk is medium if you know the local laws and you have local advice, legal advice in how to operate your entity. The upfront investment is usually quite high. We estimate that it is between $60,000 to $100,000 to open a foreign subsidiary, and then you need to make that operational, which is really adding the headcount to be able to manage the office in a different location.

And then the speed to engagement. It can be as little as, you know…some countries like the UK, I heard three months but also can take up to six. And then a lot of countries where some of these resources that we talked about developing slowly, they’re usually a little harder to set up entity at, so you might be looking into six months to a year or a year and a half. And it takes a lot of time to set those up and come up with all the paperwork that you need. But it is an option. It is a great option depending on what cycle of your business you are in.

The second option will be the independent contractor route, which we mentioned. It’s a high business risk because, again, you need to make sure they’re not misclassified. You need to understand the local income tax and social security risks involved. It can work as a solution, but if you’re not doing your due diligence, it can go south really fast. The upfront investment is fairly low. You know, you don’t really need to do much in order to engage independent contractors so that is a low risk. And the speed to engagement is fairly fast. So you can get a contractor up and running in a fairly, you know, fast timeline. The thing is 60% of international contractors are non-compliant, so something to think about as you go to your strategy.

Then, you have an employer of record. So, what employer of record is, before I explain the GEO, is that think about these two options, what Safeguard offers and other employer records because like us, there are others in the market, too. We do have competitors like everybody else. We go into these countries, in our case 179 countries that we’re operational, and we’re able to employ under our company umbrella in those 179 countries. What means that, for example, our U.S. clients might action as just in India, or they might go to 70 different countries with us. What that allows them to do is that they don’t need to set up a local entity because they’re using us in country. For all purposes, that local government sees Safeguard as the employer of record, rendering services to the end client, which will be your company in the U.S. So what that does is we employ compliant locally, we have local employment contracts, and we run all the HR compliance, taxes, payroll benefits. A lot of times, we’re mirroring or trying to mirror in U.S. benefits for those international workers. And we do that under our umbrella so our clients don’t have to do that themselves and take the time in the workforce to establish in every single country.

And as you’re probably aware, once you establish, you have to source all the vendors locally yourself and make sure that you are operational. So we take the headache out of the equation, providing the Global Employment Outsourcing, which allows you to tap into the global pool of resources that are available to you. So the business risk is low because we’re assuming the responsibility for all the local laws and regulations. The upfront investment is also low because you do a one-time setup charge and then after that, it’s based on management fee on salary. And then the speed to engagement is fairly fast. It’s two to four weeks. It’s not as fast as a contractor, let’s say, that they can start maybe the next day, but it is fast because we’re going through all the process of enrolling them in payroll, providing benefits, a local employment contract. You know, if you want to change your local employment contract to try to fit your company as much as possible, that is something that we help clients go through in country to make sure that it is as close as possible, keeping in mind that, you know, international law is international law. So, we can change certain things, but we try to mirror that and provide, you know, a seamless workforce across the globe. So you have that there. And it’s an 88% cost reduction in their international establishment by utilizing an employer of record solution, also known as EOR. So employment of record solution is what we do, and Global Employment Outsourcing is the acronym that we use to sourcing that international workforce.

So a quick, you know, graph for you to take a look at. We’re calculating 3 to 12 months from an entity establishment as opposed to 2 weeks for being able to action the workforce with Global Employment Outsourcing. You know, around $75,000. Like I said, it can range from $60,000 to $100,000 very easily as opposed to $8,000 to $15,000 a year for capital expenditure, and you’re talking about maybe 4 or 5 people to do that compliance offshore and be part of your subsidiary as opposed to one point of contact that does all countries for you.

Technology for the Success of Your Ecommerce

With that said, another thing that I think is very important from planning … and just having an idea of where your company is with the global workforce is technology, and as your own ecommerce, you know, how important that is. And we find that it’s a matter of…we’ve seen of our clients, it creates such success for them when we’re able to action that information right away. And you will have that at your fingertips, the technology that we’re launching. So, the technology for GEO is a single workforce management platform that is GDPR compliant. GDPR compliance is the data privacy that I mentioned before in Europe. Also, as a business owner or a small to mid-sized company, you definitely want to look into that and do your due diligence on GDPR to understand what that means for your company.

But, to change focus to the technology, it manages profiles, it stores all the documents securely, and it tracks time and attendance. So if you have, you know, hourly employees or people clocking in and out, it tracks that as well. You can approve expenses on a portal without having to use a separate technology. You can do mobile access in your phone. You improve the employee experience because it’s very intuitive and it’s very easy for them to use. You simplify your global management because now you have access to all your global workforce, where they are sitting and all the analytics behind that. You save time. You can approve time off, you know, reimburse expenses request all through the system. You increase the security for those professionals and for your company. And the response time becomes a lot faster because it works again on all time zones. The platform is online so they can access it at any time.

 

And that’s what it looks like. We have a whole demo in it. If you’re interested, we can always arrange that on an individual basis. But you can access from your computer and as well as your phone. Again, you can access all these things in 179-plus countries in one platform. And what I really love about this is, I was an HR professional, I dealt with operations so I saw a lot of that. I help a lot of clients in many countries, and it is amazing what analytics does for business planning and understanding where your organization is going. And really, with some of the heat maps that we’re using in this technology, if you’re familiar with Domo, that’s what we use for our analytics. It’s essentially we are licensing with them to be able to pull all that information and show you how much you’re spending in employment costs in each country, salaries, where are those people sitting, you know, where is your biggest workforces working from, and you can really see that from an analytics perspective. That means a lot to anybody, you know, sitting at the board, or being the owner, or the founder. You can really access that really fast without just looking at numbers there in front of you. So it gives you a very, very good perspective.

Again, you know, we are servicing currently 389 clients, and we’re supporting them in 179 countries. And we truly believe that we have been able to really make a change in our ecommerce clients because it provides them a nimble workforce, and they can access with people all over the world.

And I would like to just point out some of the big names that we work with, a lot of on ecommerce as you know, eBay, Lululemon, Crocs, Klim, Warby Parker, but also all across the industry. We are with GitLab now in 70 countries. We work with easyJet, with Impossible Foods and the Impossible Burger on the food side of things, you know, Hootsuite. So this is a very exciting solution, and I think it will create such a huge difference for businesses going into this new decade, where you really need to think globally in order to maximize your dollar. So, I spoke a lot. I’m gonna stand back now, Kuntal, and just let you go through Q&A.

Q&A

Kuntal: Thank you, Carol. Thanks. That was really informative. And I think, you know, just again, this is an opportunity to showcase what companies are doing, how they’re servicing, you know, small and medium-sized businesses, especially ecommerce businesses. And I know you and I talked a lot about, you know, what Safeguard has to offer or any other type of employment solutions company, how they can help a small ecommerce business get into global markets a little bit more effectively. So with that, you know, I do see that we have a question. And so, Ryan is asking, “Tell us a little bit more about the predictive analytics and how can it be used to enhance ecommerce sales?” So, yes, and I have a follow-up question as well, but, you know, if you can speak a little bit on predictive analytics and enhancing ecommerce sales.

Carol: So on the first, like…on the trends for 2020, I talked about just, like, overall trends in the industry. So people are using predictive analytics a lot across all areas of your business. Well, we focus in…I know the question was regarding sales, we focus in human resources. So, the predictive analytics that we can give you is essentially how much you’re spending in each country at that point in time with that contractor…it wouldn’t be a contract, it’d be a full-time employment workforce, and really giving you the tools to look at that and see, “Are you actually creating the output in that country, you know, that you need? Are you actually…the way you’re spending your money there, it doesn’t make sense for you.” So our analytics are a little bit different than what I mentioned on the 2020 because this is industry-wide. We focus on HR. So we will give you all the analytics that you can to predict, you know, “Should I go into this country in South America or this country? I’ve been considering five. I’m really not sure because I don’t want to get in six months from now and discover that because of this union increases across the board, I now have to pay somebody an additional $5,000 after just giving them a raise.”

So what we do is give you those numbers ahead of time so you can really hone in your business and what you need in order to operate in a certain country. Unfortunately, from a sales perspective, that’s not our focus. I’m sure there are people in the industry doing the same. Our analytics really help predict your workforce, and how much you’re going to spend, and how much you can view that workforce internationally, where they’re sitting and all of that. So, I’m not sure if that answers the question, but from us it’s more of an HR perspective.

Kuntal: So, let’s maybe change the perspective on that question a little bit. And I know I’m putting you on the spot here and you may or may not have…

Carol: If I don’t … I don’t have.

Kuntal: That’s perfect. But, you know, I think maybe another way to ask that is…and if you can give us some examples of, you know, some of the companies that you’ve worked with maybe when they started out at a smaller stage, and then what were you able to do for them, and in which country to make their operations more effective and really help them to grow and accelerate their growth. So, I don’t know if you’re able to share any of that with us because I know there were some privacy issues with sharing specific examples around clients, but if you can, whatever you can share with us that would be helpful. And question and answer is open to the rest of the group, so I encourage those that might have questions to go ahead and type your question into the Q&A section at the bottom. So, we invite you all to join the conversation, but, yeah, maybe that might be helpful.

Carol: Yeah, absolutely. So, there was a specific example with a founder. Again, it’s hard for us to disclose a lot of names, but he is a one-person operation in the U.S. But he has a lot of workers that he was previously contracting because he’s a bootstrap founder. He was doing that, and he had all these people sitting internationally. He was going to compete with some gig economy platforms, and he’s not launching actually until March. So we sat together in San Francisco, it just so happened that he was in San Francisco, and we’re able to look into, you know, five different markets that he was thinking about sourcing from his workforce internationally.

So his question was really like, “Oh, I really want to predict what I’m looking at because I kind of know where they’re sitting, but having this information about benefits, pay grades, you know, and all the regulations, how is it to hire and fire somebody, and how can I use that to my advantage as a company, you know, how can I get those numbers and spread out and say, ‘Although the, let’s say, exchange rate in this country is very, very, you know, advantageous for us doing business from the U.S., the regulations around employment are not very good for me.’ This is what I have to spend on benefits.” It might be, you know, 20%. It might be 100%, depending on what country you’re looking at. It might be double the cost because you have so much to do internally.

So what we do is really get on those conversations and provide data. So, we pull data. For example, these five markets that he wanted to go to, we were able to provide all the numbers, the costs, and say, “This is what it looks like from an employment perspective. If you were to pick those five markets from a simply, you know, HR perspective, like, what are my costs gonna look like, what are my payrolls going to look like, what do I need to be thinking about, then that is how we’re able to help ahead of time in making those informed decisions other than tapping into that global workforce that might be sitting, that you might think, “I can’t touch those people. I can’t employ them because I am not present,” or, “I don’t even know where to start if I do employ them to make sure that it’s compliant.”

So, that’s the information that really comes into play for small to mid-sized companies because the big companies that we might be working, where they come in and they’re like, “Okay. We’re ready. We don’t want to establish there. You know, we do have these people. We can’t afford to not hire them compliantly because we have investors.” They might be, you know, publicly-traded or whatnot, so they don’t get to go through the process of ignoring those facts. A lot of them is like, “No, I need to be compliant.” So they’re looking at that ahead of time. But we work with a lot of small to mid-sized companies that they’re not sure. So they come to us for information. And a lot of times, I’m sitting with people and just navigating to what that looks like for them. But across the company, we always provide our clients with all this information so they can make informed decisions about their business.

Kuntal: Great. So, I would then ask, again, as another follow-up question, are there specific regions around the world that you’ve seen, particularly for ecommerce companies, where, I mean, obviously, you know, it depends on the industry, it depends on your product, it depends on so many factors, but are there particular regions around the world where you’ve seen the entry of an ecommerce company be much more effective from an HR perspective and, yeah, from a growth perspective with employees?

Carol: Yeah. I mean, in the end, as you say, Kuntal, it all comes from strategy. So, like, we might have some of our clients that are really focusing on Asia, either because they need the development work that sits there, or they might want to actually launch. Like, some people want to launch early on, and they want to go into this known market. Some people want to wait. So it’s really dependent upon strategy. But out of the development hubs, you know, the technology hubs, those that I mentioned during the presentation, like, are some that we’re seeing emerging and growing every day, you know. So you can think about, like, if there’s, you know, as close as Canada, and then you can go all over the world. So it really depends, like, do you need people that speak fluent in English? Do you need people that, you know, are just doing X, Y, and Z, so that’s maybe not in your strategy? Like, it doesn’t really matter if they, like, can dominate the language 100%. So, it really comes from company strategy.

But, you have, you know, Canada, you have Ukraine, you have Philippines. I mean, there’s ones popping every day. I mean, I sit in San Francisco and every day is a new emerging development market that people are talking about. But I definitely see some of these, being known, are the ones that I mentioned during the presentation. So that’s what we’re seeing people going to source, but as other countries are seeing that opportunity, you know, they’re developing programs that really further their education on those disciplines, as well as people that had those skills that previously weren’t putting themselves out into the job market. They were like, “No, there’s a huge need internationally so maybe I shouldn’t advertise myself to global companies.”

Kuntal: So, to that end, I think, you know, what we know a lot about here in Southern California is the nearshoring option and capability of Mexico, you know, especially even in the tech services area, and not just in manufacturing and, you know, some of the areas that we often tend to talk about with nearshoring. But, so, yeah. We do have two other questions. Michael is asking, “Does Safeguard get involved in protecting IP, particularly with hiring in developing countries with weaker legal systems, or is that a separate concern from, you know, the HR functions that you typically engage in?”

Carol: Yeah, so that question is a great question. We get that a lot with my clients because we work with a lot of, obviously, all kinds of text, so they’re always asking about IP. The answer is it depends on the country. I’m more than happy to look at, you know, specific questions. I have my contact information through you, Kuntal, but it really depends on the country because, in some countries, the contract is so tight, we can’t make any changes. And in some countries, there’s a huge amount of changes we can make to contracts. And we really need to make the contracts compliant, but we guide you and say, if in this country, we cannot do absolutely anything about this, we tell you, “Okay, this is a side agreement that you can put in place. You know, a lot of our clients have done it with their lawyers and put it in place as they send the employment contract and have that backed up,” you know, and that is the way we do it. It’s a very case by case, you know, and we’re guiding the client through all those hoops.

So, as we go through the process of giving them an understanding, for example, if you’re going to as close as Canada, there’s provinces, so things work differently in every province. So we’ll provide you, “Okay, on this province, this is what you can do. This is what it looks like.” And if you have…you know, the question of IP comes very often to us, and we’ll say, “If we’re working within this, we can absolutely do X, Y, and Z, but if not, this is what our other clients have done, and this is where we found success in the industry by doing a side agreement or talking to lawyers and having that kind of overlap and be delivered together and things like that.” So, we’re always coaching our clients into being able to get what they need for their specific business needs in country, specifically when it comes to the development work.

Kuntal: So, another question we have, “Are large entity HR departments open to GEO? Do they see it as a threat?” And relatedly, what I would ask is, is GEO designed primarily for smaller entities, or, you know, what types of companies can really take advantage of GEO?

Carol: Yeah. That’s a great question. So, we get this question a lot, and this is why it’s such a nimble solution. We do work with, as I was mentioning, one founder that is bootstrap. We also work with companies like FedEx, eBay, you know, GitLab, everything under the sun. So, it comes back down to strategy. For example, I’m sure a lot of you probably know that GitLab is almost 100% remote. They employ everybody remote. If they were to open an office in every country that they employ, they cannot do business. They will spend most of their time figuring out how to operate entities in however many countries they’re in. So it’s not sustainable for them. And in some countries, they might have entities. In some countries, they might do contractors. It’s really knowing how to utilize all three solutions and how you need to fit them. It’s not a threat because, I mean, it’s just a matter of where you are in your business and also you need to think about.

If you start closing contracts in that country, if you actually…one thing is sourcing skill set to provide output to fulfill U.S. contracts. That’s one thing. Another thing is if you actually want to enter that country and really start collecting revenue in that country, then we can start talking about, you know, do you trigger a permanent establishment. We have a revenue nexus in that country that you need to address. So that is something else as well. So, for some of our clients, they’re never going to go into that country, they don’t want to sell in that country, but they just need, for example, development work to fulfill U.S. contracts. So, in that case, they may never need to set up an entity. They’re checking their accounts and they’re like, “It doesn’t make sense for us,” even if they might have 50 people on their GEO. Their company strategy just might be different, and they might not want to set up. So, we could have, for 1 company, 50 people under GEO. But also to another client, let’s say they decided to source skill set in the country and they decided to go have a country manager, they were doing some business development six months or a year later, they’re like, “This is a good market so we’ve decided to add another person,” they’re not closing yet, or they might be closing a very, you know, small rate, in which it doesn’t trigger that permanent establishment, so then they have to look at when is that going to happen for me, and then a lot of them will eventually transition out of GEO if it is better for the company to go ahead and establish because now they have, you know, 20, 30, 40 people, 100, sitting in that country.

So it really depends, but it’s really nimble because you can action and you can also…it’s a solution that allows you to play more because once you establish, you’re established. Every year, you need to do taxes for the entity. You need to figure out everything. You need to operate compliantly. So there’s no in and out. So this is a good either short-term or long-term solution depending on who the person is. We have clients that have been with us for years and they’re not gonna switch. We have clients that have established an entity, move all their people to their entity, six months later decided that it couldn’t keep up with compliance. So they kept the entity just to recognize their taxes and operate, but they move people back to us because they’re like, “We cannot possibly manage these workers. Like, it’s just we don’t have the HR capacity in the U.S. to manage that foreign entity.” So it depends. Sorry to say that, but it depends on where you’re coming from.

Kuntal: So thanks. That’s helpful. I think, because we have a few minutes left here, I wanted to ask just one last question, and we may have time for one other question from the group. But you explained this a little bit in your presentation of the types of skill sets that are needed, particularly if you’re an ecommerce company that’s growing overseas, but what are you seeing, you know, in reality with your ecommerce companies that are setting up shop or that are growing in other regions, what types of skill sets are you seeing being asked for the most? Are they purely on the technical side, or are there other types of skill sets that are being requested as well? And if you can just very quickly give us an example of how you all have worked with…I know, you know, this is a multinational, very large company, but, you know, just to give us an insight in how you’ve worked with somebody like an eBay, and if you have an example of a small ecommerce company that you’ve worked with that you can talk about, would love to sort of know, you know, your experiences with those types of companies.

Carol: Yeah. Absolutely. So without saying names, you know, some of the small ones, I would say, is heavily on the skill sets that we talked about, you know, development because you need to create all of that. It’s very much, you know, everything that is happening behind the scenes and everything essentially is about work, it’s user experiences, it’s AI. You know, people are really using AI now these days. So you really hone in on those skill sets. Search engine optimization, like those are the things that you’re finding the talent that is, you know, there. For some of our bigger clients, it will be all of that. And in addition to, they might be entering that new country. So then, they’re looking for country managers, they’re looking for boots on the ground, you know, they’re looking for some of the skill sets that they might be on their way to establish, or they might just like, “No, I just really need people to make sure,” or if you think about stores, a lot of our companies are in ecommerce, they might have stores as well.

So then, you’re thinking somebody to go and make sure that at that store in that country where you decide to open the store in addition to your ecommerce, that somebody is making sure that everything is par description and, you know, it looks a certain way, it feels a certain way. So they might be, you know, hiring somebody to go around and do that, in addition to the country manager. So then, it becomes a very broad thing once you go to those bigger companies because they might have, you know, some of the stores are operating, or even now Amazon is opening, like, you know, even though they’re not our client, just to give you an idea, you know, some of those stores they open, how they operate, and how much corporate intervention is on the way in which they’re setting everything up in that country.

So, I mean, it really changes, but what we see on ecommerce is pretty standard development work, that kind of skill set when you’re smaller, and as you grow, you still do all of that and you’re just adding on some of these specific countries, you know, people managing your business in that country. So, I hope that answers your question, Kuntal, but as you grow, you just add upon layers. Like, we’re not seeing you get out of one inch or the other, you really just have different needs as you go along.

Kuntal: Okay. Well, I think this was very, very helpful, Carol, very insightful. And thank you for sharing what Safeguard Global is doing around the world for companies of all sizes really. But we’ll look forward to having future conversations with you, maybe about some specific companies that you’ve worked with, looking at, you know, specific functions. I’m sure there’s a lot more to talk about. But thank you all for joining us, and we will be happy to share with the group Carol’s information, and looking forward to having you join us also for future “Industry Innovation” series webinars. We’ll be having one coming up on February 20th, where, you know, we’ll be talking with another great company on website optimization, and taxes, and duties calculators. We have another session coming up on marketing and global marketing platforms, as well as cybersecurity as well. So we’ll hope that you’ll join us in future months, and have a great day. Thank you so much.

Carol: Thank you.

Kuntal: Take care.