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Hey Sifted Reader, 

This week Anisah’s in Mexico, Amy’s (still) in Berlin, and we’re thinking about the incredibly complicated world of distributed teams. A small — but growing — number of startups are hiring a head of remote to help them navigate the comms and operational challenges that come with having people all over the world. Others are grappling with how to offer a “fair” pay package to team members in different geographies. 

So, let’s get into the gritty details! And, as always, if you find this a useful read, please share with others.
 Amy and Anisah 🧡

\How to

Compensate remote workers ‘fairly’

Employing people all over the world is super, super complex — as Dee Coakley, cofounder and chief executive of Dublin-based Boundless, knows well. Her startup helps companies “employ anyone, anywhere” and comply with local HR standards and manage payroll. This week, she shares some guidance for startups beginning to hire people all over the world. 

The most important thing is to have a philosophy. Then write it down — and stick to it. Some companies pay the local market rate; that’s historically most common. There’s a real logic to that — if I have a person in California who I were to pay the same as somebody in rural Croatia, the person in California would not have a roof over their head, and the person in Croatia would be living like a king — but they’d be doing the same job. You also have to take into account competitiveness; that person in California could access other jobs at the California rate. But then again, that person in Croatia can now maybe also access the California rate at another company, now that the global workforce is more mobile. 

Other companies use a formula. They use that to adjust pay based on, for example, the country the individual is living in, whether they’re in a city or more rural and what their cost of living is. I haven’t heard of people factoring in tax — tax rates vary hugely worldwide so you as an employer pay 1.25% on top of the salary in Denmark, whereas in France it’s almost 50% — but I can imagine that’s coming down the track. 

Don’t forget about the cost. It is quite astonishing how many people make hiring plans and assume the cost of employing somebody to the employer is the same everywhere. It’s wildly different. Factor that into calculations. 

Every company should strive to be fair… although “fairness” is an incredibly challenging thing to deliver on. Sometimes when we’re hiring for a role, the market rate is higher than we thought it would be. We then go to the other team members in a similar role and bring them up. We review everyone’s salaries once or twice per year, and bring them all in line. You will just lose people otherwise; members of your team will have a chat at some point, and you will have to be able to defend why this person earns this and that person earns that.

When it comes to benefits, you need to be competitive. You need to provide what people would expect if they were to go to an alternative employer. Find out what’s the norm in the territories individuals live in: what seems like a great benefits package to you might not be well received locally. Be aware that statutory entitlements vary hugely from country to country. Paid time off varies massively: in most states in the US, there’s no entitlement to time off; in France, it’s 41 days. If you’re an employer in the US, health insurance is a big heavy line in your financial plan — but if you have team members in the UK, they wouldn’t expect it. In France, people expect to get money towards lunch every day — and that’s held very dearly. In the UK and Ireland, people really want a bike to work scheme. At Boundless, we produce an infographic for each country setting out the statutory minimum, what the norm is for a good employer in that country — and what the norm is for a really great employer in that country.

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\On The Subject Of...

Salaries for remote workers

💸 Approaching pay (a bit) like pricing. “Compensation is pricing with higher stakes. You want to pay as close to what makes the folks you want to employ happy without bankrupting yourself,” writes Jessica Hayes from Whereby in this smart piece.

🛠️ How to build a consistent compensation calculator. Another piece from Jessica Hayes, explaining the steps to take to figure out your startup’s pay framework.

🧮 How to calculate compensation for remote employees. There are three key ways that salaries for remote workers are being set: Buffer’s way, Basecamp’s way or GitLab’s way. 

💻 The remote pay gap. If companies are saving money on offices, why are staff being paid less for not being in one? A great read from the Sifted archives.

🌎 That pay gap is going to have consequences. Hiring top talent locally is fiercely competitive. Now in a global market, talent will jump ship even quicker if they’re unhappy. 

\Feature

Do you need a head of remote?

A small — but growing — number of startups, including Cargo One and Doist, are hiring a head of remote to help them cope with the complications of a distributed workforce. 

But… what does a head of remote actually do? And will the role always be needed?

Miriam Partington finds out.

\People Moves

Virtual kitchen startup Taster has hired a chief commercial office. Rober Taracido Ruiz is joining the startup, which now operates 100 digital kitchens across Europe. He’s previously worked in top sales roles at Just Eat, WeWork and Groupon.

Got any people intel you'd like to share with us? We'd love to hear it... 😉 

\Smart Reads

1) The challenges of community-led growth. It seems like everyone is building a community at the moment. Here Femstreet’s Sarah Nöckel shares five misconceptions about community building.

2) Get the word out. You've built a great product — now help people find it. Here's your starter guide to content marketing. 

3) What's it like running a cooperative? Media company Defector is using its first annual report to share insights on this increasingly popular business model. 

4) How productive are your developers? Stack Overflow takes a punt at figuring out how to measure productivity (while asking if it's necessary).

5) Brunch with Sifted. The mastermind behind Backed VC's scout programme and COO at Diversity VC Daisy Onubogu discusses community, capitalism and lack of depth in company missions.

Read something you think everyone else should too? Send it on over to Anisah.

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\Book of the Week

Blockchain Chicken Farm by Xiaowei Wang

Blockchain Chicken Farm: And Other Stories of Tech in China's Countryside is a brilliant book by author Xiaowei Wang. It connects the dots to show us how a digitised rural China — with pork farmers using AI to produce the perfect pig and ecommerce villages — reveal new truths about globalisation and the power dynamics behind innovation. Here are my key takeaways:

  • We need new tales of innovation and barometers of success. Recent innovations help us manage everything from people to groceries — but what we really need are innovations that tackle structural social change to help address some of the pressing social and environmental problems of our lifetime and find ways to measure that impact. 
  • Scaling social trust in tech is hard. Pervasive notions of rapid growth at all costs permeates innovation culture but it begs the question: how do you scale social trust when trust is broken from building fast and breaking things? Wang looks at how rapid tech adoption has dissected our collective understanding of scale, privacy and surveillance.
  • We need to deeply rethink our vision of work. How can we shift our focus about the future of work from optimisation and automation of tasks (devoid of meaning) to more creativity-infused and purpose-driven work?

Wang presents us with a rich landscape of tech adoption in China’s countryside but you’ll find many parallels with the Western world. I highly recommend this as a read. In fact, it’s so brilliant, I even started a virtual book club to discuss this book with other folks. Join the next one. 

— Dama Sathianathan, partner at Bethnal Green Ventures

Amy Lewin
Deputy Editor

Get in touch with her at amy@sifted.eu.
She loves a bit of reader feedback.
Anisah Osman Britton
Founder at 23 Code Street

Get in touch with her at anisah@sifted.eu.
She loves to hear about the latest in startupland.
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