IT Crafts HR – Gerald Bot from Polyglot Group
Learn how to maintain a global presence on the example of the Polyglot Group, a company with employees who work in 9 different timezones. In this podcast episode, Gerald Bot, Chief Client Officer, explains how a business can benefit from PEO and what a company that plans to become remote-friendly needs to know before making the step towards telecommuting. Listen about why you should not trust Google in terms of searching for information, and how to solve problems with the logistics of hiring, which include local taxes and employee benefits.
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Maks Majer
Podcast Host
Maks Majer is a software engineer, co-founder, and CEO of ITCraftship, a company that helps both talented developers get a dream job at tech companies all over the world, and companies hire remote software developer superstars. He’s also a remote work advocate and helps startup businesses embrace the remote work culture. Maks is passionate about solving pains and removing obstacles by focusing on good software design and user experience practices. In his free time, he broadens his knowledge of business development as well as focuses on a healthy lifestyle that gives him the energy to get the most of a 24 hour day. You can catch him on LinkedIn.
Gerald Bot
Chief Client Officer at Polyglot Group
Gerald Bot, Chief Client Officer at Polyglot Group has over 25 years’ of versatile experience in Business Development, Human Resources and Project Management. As an International Trade & Management Expert, Gerald has worked on an array of different projects in various industries. From commodity trading to facilities management, he has managed a number of French, Australian, and American companies in Australia. Not willing to settle, Gerald always pushes the boundaries and makes a point of always putting himself in his clients’ shoes in order to better understand and anticipate their needs.
Something that you wish you have known earlier
Try and find yourself a local partner who understands where you come from, so the country that you come from, and the industry that you're in, and can actually talk to you in your language about the specifics that you are going to find in the place where you are going, and that is going to be the best investment you make.
Transcript
Maks
Hello, dear listeners. Today, I’m speaking with Gerald Bot, Chief Client Officer at the Polyglot Group, a global HR consultancy firm working with multinational firms, such as US companies like Salesforce or LinkedIn, French like Naval Group or Airbus, or again, Chinese like China Eastern Airlines or UnionPay.
Hi, Gerald, thank you for joining me.
Gerald
Thank you for having me.
Maks
It’s great to have you here. I want to start by asking you to tell me something about yourself and describe your position and your responsibilities to our listeners.
Gerald
Well, to make it really brief, as you can probably tell from my accent, I am French. I came to Australia 30 years ago and I’ve been working in various businesses, various industries before joining my family company, the Polyglot Group, and I am today the Chief Client Officer, which means I am really the clients’ voice inside the company.
Maks
Polyglot Group, as I already introduced it, works with a lot of companies, so I wanted to ask you, what is the common denominator of the companies that work with you?
Gerald
One thing that all our clients have in common is that they are all multinationals, they are all companies that go outside of their domestic markets and go and explore new markets, new geographies. Some are very, very big. Some are very, very small, but they all have that in common – they all go overseas, they all go to foreign markets.
Maks
I already mentioned some markets in which the Polyglot Group operates and I wanted to ask you which other markets do you work with and how can you maintain such a wide global presence?
Gerald
Okay, so today our headquarters are in Australia, in Sydney. Obviously, we’ve got offices throughout Australia. This is the country where we were born. We have a presence in New Zealand and from those two offices, we cover quite a wide range of the Oceania region, so Papua New Guinea, Fiji, Guam.
We also have an office in Cape Town, South Africa, one in Barcelona in Spain, an office in France, in the south of France, we’ve got one of our collaborators currently in Berlin, and another one in San Francisco, so with that, we cover about 9 time zones.
Maks
Yeah, that’s pretty impressive. How can you organize such a global presence? You have so many offices. Do you partner up with some local partners that help you set up? How do you go into these markets?
Gerald
Well, obviously in Australia and New Zealand, it’s our home ground, so we started everything ourselves. The company started really as a one-woman company 25 years ago and today, we’ve got 105 employees all in all. For some countries, we went ourselves and set up ourselves, like in Spain. For other countries like the US or in South Africa, we actually used local help to create the presence for us.
Maks
I already interviewed a few HR professionals working in remote companies and I’ve learned that they have problems with logistics of hiring, which includes local taxes, retirement plan contributions, healthcare, and other benefits. Do you have solutions at Polyglot Group that could help with these issues?
Gerald
Well, the essential work that Polyglot Group does wherever it is based, is to assist its clients with exactly those questions, so we help clients with basically deciphering what are going to be the local taxes, the local retirements, the local leaves, the local healthcare in the countries that they are going to. We have a number of activities that we offer our clients.
The first one is talent acquisition and recruitment. The second is about HR support, HR solutions, and that includes quite a wide range of solutions and support, including immigration support, including PEO, then we’ve got payroll activity. Our payroll service runs now in 7 countries and we pay about 43,000 people a month, so we are not a giant but we are sizable enough that we’ve got the right infrastructure for this, and of course, not to forget it, we also have group which helps clients set up their business or register their business in the countries where we are located.
Maks
Setting up the business is one choice but you also mentioned PEO which is Permanent Employment Outsourcing Solutions, right?
Gerald
Mm-hmm, absolutely.
Maks
For companies that don’t want to set up a local subsidiary. Can you please explain what it is and how this can help remote companies?
Gerald
Well, PEO is an easy way to set up in a foreign country with your own staff but without having the need to create a local entity. Essentially, how it works is that you go through a PEO firm like Polyglot Group and we become the local employer for your team members, so in effect, we have a contract with you, the multinational.
Basically, we are the local employer, so we are fully in charge of all the administrative payroll HR side for your employees and we charge you for the service. Essentially, total employment cost plus a margin.
Maks
Okay, that’s making it quite clear. I would like to get a bit of an example. Let’s say that a US company wants to start hiring in Australia. What kind of problems can they expect and how do you help solve them?
Gerald
That’s an interesting one because we do this every day. We have probably about a third of our clients who are American companies these days, so a couple of things that we address every time we have a US client coming to us.
The first one, the concept of compensation and benefits is very, very big in the US. Now, in Australia, benefits are the worst possible way to give remuneration to an employee and I’ll explain to you why. There is a very punitive taxation system applied to benefits in Australia, so essentially, if you want to give an employee $100 worth of benefits, you’re going to have to give another $100 to the tax office, so you double your cost. Now, we help our clients to go around that, but the first time we sit down with them, we really have to explain to them why it is so different here from back home where they are, so that’s the first one.
The second one runs around leaves. Now, as you know, different countries have different types of leaves or we call them vacation, holidays. In Australia, one of the very specific things about holidays, vacation, we call them annual leaves, is that they accrue every year but they never disappear unless they are taken or paid which means that over the years, we’ve had a number of clients who ended up having a lot of liability because they didn’t keep a close eye on the leaves taken or not taken by their employees, so it’s very quick to end up having millions of dollars of liability in your balance sheet.
Those are the two main aspects that we talk about. The other one which is the 401k in the US is a little bit similar in Australia. It’s called Superannuation. It’s currently 9.5% of the gross income and that is an employer contribution only. Now, the employees can contribute if they want but it’s optional for them.
Maks
Okay, so that is with Australia. I expect that with other countries, companies are facing similar problems and with your local subsidiaries, you’re able to deal with those and help them educate on how to approach these problems and help them solve them. Is that right?
Gerald
Exactly. If you look at Australia, it has a very, very specific system. If you just go a little bit further east to New Zealand, it’s very close but the rules, payroll, for example, all of that is very different. The holiday calculation when you do payslip is very, very different in New Zealand than they are in Australia and they are very close countries. They’re like cousins, but still, the rules are very different.
Maks
Yeah, absolutely, and just a question from a perspective of our market in Poland where I’m from, here, a lot of us, especially software engineers, work on a contract basis where they set up a sole proprietorship business or a limited company and they are hired through these companies by the employers. Is that a common practice in other countries that you’ve been operating in or you haven’t heard about that?
Gerald
It is, it exists in some countries. In a number of the countries that we work in, it is not always authorized. What I mean by that is I’ll take Australia as an example. For a software engineer to be a true freelancer, he cannot have just one single client. He has to have a number of clients to whom he sells a number of services or to whom he sells his time and expertise, but if he’s got just one client, then that client is really considered as an employer.
Maks
Okay, that sounds like a similar regulatory limitation that other countries have as well, so thanks for bringing that up. Please tell me more about the service your company offers and where else you help your multinational clients.
Gerald
Essentially, the company starts with a company set up. We start with setting you up either as a legal entity or what we call a representative office which is a very light version of the setup because you don’t have a legal entity. You just register locally to be an employer, and then we take care of all the registrations that are required by our clients to be compliant, so it can be employment registrations or it can be business registrations.
We are just making sure that they are fully compliant. From there, we go to the recruitment itself, so we’ve got a specialty to recruit, on the ground where we are based, people that have the technical abilities, but also very often, speak the language of the home country of our clients, and understand the culture of the home country of our client. Obviously, if our clients are American or English, it’s not such a big deal because English is a common language. If we’ve got Chinese, French clients, German clients, it is sometimes very useful for them to find, let’s say in New Zealand, somebody who speaks French or German to be their CEO or CFO or to be a local engineer. It sort of helps the dialogue and helps achieve more.
From the recruitment, we then take care of all of the typical HR requirements as in setting up the remuneration, setting up the employment contracts, doing the onboarding, but in every country, you’ve got specific forms to fill in and to file with the tax office, sort of Social Security, so we take care of that, and then we take care of payroll for our clients. Sometimes, we might even do light bookkeeping for them if they are a very small presence and need somebody to take care of all of the administrative sides of the business, whilst they are focusing on their business development.
That’s what we do and today, as I said, we are doing this in Guam, Fiji, Papua New Guinea, New Zealand, and Australia in Oceania. We are very soon opening the likes of the Solomon Islands, Dongala, Vanuatu because we find that our clients like to have a one-stop-shop for their region. Obviously, in South Africa, we do all of that and we also recruit for all of Africa, particularly for places in Africa where English is not the main language. We also, from Barcelona, from France and from Germany, recruit and set up our clients for the entire community, including the UK today. In America, we specifically focus on talent acquisition, so it’s mostly recruitment.
Maks
Okay, so that sounds like a wide range of services and as you said, like a one-stop-shop to all of the different HR operations where you can help with.
Gerald
Yes, it is a range of services, but what we found is this range of services, we didn’t decide one day that we were going to do all of that. What happened is that over 25 years, our clients pushed us to do a little bit more, a little bit more, a little bit more and eventually, we had a complete solution for any multinational company that wants to come and set up in one of our countries. It’s our clients really who pushed us to develop our scope of service.
Maks
Absolutely, and that sounds very interesting because I already heard from other interviewees that these issues are present when they want to become multinational or when they want to work remotely and hire people from outside of their country, and that leads me to my next question. What do you think a company that plans to become remote-friendly needs to know before making that step of becoming remote?
Gerald
I think the first thing they need to embrace is that they will not know what they don’t know, so what I mean by that is that they need to understand that they are used to operating in a particular regulatory and cultural environment, and going anywhere else, and it doesn’t matter if the language is the same, but going anywhere else will throw surprises at them.
They need to be convinced that they will not be able to ask the right questions because they don’t know they should ask those questions. It’s actually something that we use internally amongst the Polyglot Group team when we talk. We say, our clients don’t know what they don’t know, so they can’t ask the right questions, and where we fit in is that we come in, we sit down with them or on the phone, we tell them which questions they should be asking for particular countries, for particular market.
For me, that is the biggest thing that a company that wants to go multinational and remote-friendly. They really need to embrace that, they really need to realize that they need expert advice because they just don’t know what they don’t know.
Maks
Yeah, that makes sense, especially where it’s the first time that you’re making such a move, you won’t be aware of the things that are required in a different location, and although remote work is increasingly present in company management. Do you think companies still prefer to invest in opening satellite offices rather than opting to be a remote company?
Gerald
Not really, not always. I’ll give you an example because I think examples speak more. We had, years and years ago, a German company involved in electrical products. They had a few distributors in Australia and they were selling their products through those distributors and the business was okay but nothing special. They came to us saying that they wanted to hire their own local employee to go and push the distributors more and help the distributors sell more.
We talked to them about how they wanted to do that and they said, “Oh, we don’t want to set up a local entity because there is a lot of admin and there’s a lot of legal things to follow, and we want something light and simple,” so we said we can offer PEO. It’s something that we had started years before for Airbus. Actually, Airbus was our first PEO client, and the client looked at the offer and said, “Yup, that’s exactly what I want. You recruit my specialist on the ground, my country manager, and then he’s going to be your employee and we will just pay you once a month and we’ll have nothing else to do, like no other tax obligation or whatever, just one invoice payment per month, that’s it.”
This worked for about 4 years, from memory, and the local person, and we had found somebody who could speak German quite well which was very helpful for the headquarters. That person grew the business so much that he then actually became the VP for Asia-Pacific, and then after 4 years, our client said, “Well, we’ve got a lot of business now. We want to open a satellite office. We want to open a subsidiary,” and so we helped them open this subsidiary.
Of course, the person we had on PEO then became their local employee. He was the managing director here, and we helped them set up with their employment contracts. The managing director here came to us and said, “Can you please take care of my payroll?” and so today, the client who started with one person on PEO has about 20 employees in their own satellite office, within their own subsidiary, and we do the payroll for that company. Everything goes around, you know.
Maks
Yeah, so it sounds like a good first step, actually, to setting up a presence in a country and start with a PEO, and then as it grows, transitioning into a satellite office and your company can help with both of these.
Gerald
Yes, and I would say it is a very good solution for countries that are either very complicated from a regulatory environment perspective, complicated from a cultural perspective, and countries that are a bit far away and in different time zones. It’s a bit difficult to organize all of the admin support, so that’s where it is best to have a partner on the ground to take care of all your back office, in a sense.
Maks
Absolutely, and now that it comes to my final question that I always like to ask since it is extremely interesting how much progress we have made in retrospect. What do you wish to have known earlier and what kind of tips do you have for HR departments from different companies that could improve their work, especially considering setting up multinational presences?
Gerald
A few tips there, the first one is whenever you go to a new country and you want to hire a local team or let’s say your first couple of local employees, I think it’s worth trying to find people who understand your culture, that is, the culture of the country you are from. It’s sometimes complicated for people in one country to work with their headquarters in another country. I’ll give you an example of that.
We had one client, a mining company that was acquired by a big, French corporation. I think within 6 months, the entire accounting team from the Australian company wanted to resign because they just couldn’t put up with their French colleagues, with the demands from the headquarters, but the demands were actually very normal for a French person. They were nothing special, so that’s where having people who are multicultural, bicultural, bilingual, all of that is very helpful, so that’s one.
Another tip, do not trust Google. The biggest problem that we find today is with clients who come to us saying, “Hey, I’ve done all my research on Google and I know this and this and this, and this, and this is how it works,” and then we have to say, “Well, did you check the date on the thing that you found on Google?” because the problem is, the Internet is full of very old information. Things in the area of employment, in particular, all the regulations on employment, they change all the time.
One aspect is like in Australia, the rules for immigration change all the time, like a couple of times a year, the rules change, so go and do your research, but take it with a grain of salt. Nothing that you read is systematically true and sometimes, the way to read the information. You need this cultural advantage because sometimes, even if it’s written in English, it’s actually not what it seems to mean, so that’s another tip that I would say.
Talk to your colleagues, friends around you, and see, share with people who have had experience in going to a particular country. If you want to go to Brazil, for example, you might want to check with colleagues and people in your network who have gone there before because payroll and employment, in general, are very complex and you need to be prepared.
So, the last tip, try and find yourself a local partner who understands where you come from, so the country that you come from, and the industry that you’re in, and can actually talk to you in your language about the specifics that you are going to find in the place where you are going, and that is going to be the best investment you make.
Maks
Awesome. Well, that’s a handful of tips and I think they will be very useful for companies who are trying to go global or trying to go also remote in other countries, and that was my last question, Gerald. I want to thank you a lot for taking the time and answering all my questions.
Gerald
Thank you, Maks, thank you for having me.
Maks
Yeah, it was a pleasure, and I look forward to connecting with you in the future.
Want to listen more? Check out the IT Crafts HR podcast episode with Adrian Martinez, CMO & Co-founder of HR Embassy who will tell you about the importance of employer branding at different scales of business.
