Understanding Exchange Rates to Pay International Employees | EP 125

Understanding Exchange Rates to Pay International Employees

1. Outsourcing can be a real game changer 01:06
   • David started outsourcing overseas about 3 years ago and it has had a huge impact on his business.
   • He didn’t have the business yet to afford US rates, so he started outsourcing to countries that had favorable exchange rates.
2. The US dollar is very strong 02:20
   • One of the first things that David learned is how strong the US dollar is compared to a lot of countries in the world.
   • A lot of countries have high quality high end developer talents, which will allow you to scale your company quicker.
   • It is important to understand the ratio of our country to their country. A living wage in the US is very different than say a living wage in India.
3. You can pay too much 03:43
   • What may not be a lot of money to us here in the US can be a significant amount of money in other parts of the world.
   • David learned a very valuable lesson about this early on. His company was giving out bonuses one year. One employee had been with the company for quite a while and David ended up giving what he thought was a pretty nice bonus. What he didn’t know was that he had put basically a year’s salary in the employee’s hand, who then decided to take the next year off and was never heard from again.
4. Do your research 04:52
   • Do your research ahead of time find out where they’re located.
   • Look for the average salary for a web designer or web developer in the area and figure out what the cost of living is.
   • This will help you also understand their country and their culture, which will help you communicate better.
   • You can understand what the dollar is worth in their country, so that you don’t overpay and you pay them fairly.
5. Scale your team quickly 05:38
   • Outsourcing overseas means that your money will go much farther and you will be able to scale your business faster.
   • However, this also presents some other challenges like keeping track of employees and such.