On today’s episode of the RecruitingDaily Podcast, William Tincup talks to Lachlan de Crespigny from Revelo about solving the tech skills gap with remote staffing technology.
Some Conversation Highlights:
Listening time: 28 minutes
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Music: 00:00 This is RecruitingDaily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week, we take one overcomplicated topic and break it down so that your three year-old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.
William Tincup: 00:34 Ladies and gentlemen, this William Tincup. And you are listening to the recruiting daily podcast. Today. We have Lachlan on from Revelo, and our subject, our topic today, is solving the tech skills gap with remote staffing technology. So a bunch to unpack there. And I can’t wait to talk to Lachlan about it. Lachlan, would you do us a favor and introduce both yourself and Revelo?
Lachlan: 00:59 Sure. Thanks so much for having me today.
William Tincup: 01:01 Sure.
Lachlan: 01:03 So as you said, my name’s Lachlan. I’m one of the co-founders at Revelo. You can probably tell from the accent I grew up in Australia, and now my time between North America and South America. Revelo is a talent platform that helps US companies hire top quality, full-time, remote software engineers across Latin America. So most of our clients are people who have fully remote workforces, looking to expand their talent funnel, and they come to us to try and hire all across Latin America, just as easily as they would hire across different states in the US.
William Tincup: 01:43 I love this. I’ve traveled all of Central and South America, so I’ve been to every country. And so I don’t speak Spanish or Portuguese. So, I’m at a bit of a disadvantage, but I’ve been to all those countries, and wonderful communities of talent. But again, not necessarily … I guess what’s interesting about the way that you’re going about it, is there’s pockets of really talented people, in, let’s say, Buenos Aires, or Santiago, that are wonderful, but they’re not tapped. They might be tapped regionally, but they’re not tapped from the rest of the world. So I love-
Lachlan: 02:30 Absolutely.
William Tincup: 02:30 … first of all, how did you settle on this? How did you pick Latin America as opposed to Eastern Europe?
Lachlan: 02:39 Yeah. Well, so me and, I lived in Latin America beforehand. I actually, I was working at Boston Consulting Group and I spent about a year and a half in Latin America before I did my MBA up in the states. And while I was up there, I started spending more time with my co-founder who’s Brazilian, born and bred. And we could see at the time, it was about 2014, ’15, and it was just when this wave of tech companies was starting to overtake the states. Airbnb had 200 employees. And I remember we visited their office, and they were managing more rooms than the Hilton with 200 employees. And the Hilton had 10,000 employees or something.
And so it was right at the start of the wave, we knew that there was … You can see that, and you could think, “Okay, every company in the world is going to invest in software developers heavily over the next 10 years.” But then we looked at Latin America and there was no technology. And I mean, really super basic stuff, that would help people find software developers across the region. So we knew that would be big eventually. And that was the start of the journey that led us to where we are today.
William Tincup: 04:00 And what are the, probably pre-COVID, what were the historical barriers for, let’s say, someone in France working with software developers in Peru?
Lachlan: 04:11 Yeah. So it’s very hard. All the barriers are the same now as they were pre-COVID. The difference is that now almost all companies have remote software engineering teams, whereas pre-COVID, there was many less. But the barriers, there’s barriers on multiple levels. I think the first and the biggest one, is you just don’t know how to recruit across these markets. So occasionally somebody says to me, “Oh, are there any good quality software developers in Latin America?”
William Tincup: 04:47 100%
Lachlan: 04:49 My my response is, “Yeah, there’s multiple of the most successful tech companies in the world, have been born from this region, but it’s very hard to find talent.” If we said, you mentioned that you live in Dallas. I bet you could build a better team in Dallas than I could, because I haven’t lived there. I don’t know where people hang out. I don’t know the right signals on the CV, et cetera. So it’s just very tough to know how to recruit across different regions. And then when you do, there’s obviously, unfortunately, a lot of tax complications, if you’re going to pay benefits, there’s a lot of benefits complications. Very tough to know how to do it legally, but not cost-prohibitively in all fronts. And so we take all of that, and we give a turnkey solution, so that it’s easy to recruit. It’s easy to pay. It’s easy to provide benefits, et cetera.
William Tincup: 05:43 And is there a perceived language barrier? Or is that just mythical?
Lachlan: 05:52 Yeah, so there’s two barriers that people overestimate. The first one’s the language barrier. And I mean, the reality is many software engineers today, they speak English. All of them read and write. And through that, most of them end up speaking and listening professional English as well. It’s a surprisingly high percentage. You mentioned you’ve traveled the region. The general population in Latin America doesn’t speak very good English, but in software engineers, they all do. The language of software engineering is English.
William Tincup: 06:28 Well, and the irony of software is also ones and zeros, it’s code.
Lachlan: 06:34 Yeah.
William Tincup: 06:36 Yeah, so how much Portuguese or Spanish does one need to know, or English, does one need to know to code?
Lachlan: 06:43 Yeah, there’s a lot of similarities with maths and logic, et cetera. And the commands are all in English. And you know the other interesting thing is people always overestimate the cultural differences as well. I joke with people that there is much more similarity between, a Latin American software engineer and an American software engineer, than there is between an American software engineer and the sales team. Communities live online now. The communities are based online. They look the same, they speak the same language. They have the same jokes, compared to say your sales team, which I think anyone who’s seen them both, they know they’re very different cultures.
William Tincup: 07:24 Right. So working with, so getting started, let’s just say, as people listen to this, they’ll be like, “Okay, here’s this massive talent market, talent pool, or talent community,” which is typically what recruiters, talent acquisition people would say, is like, “There’s this wonderful talent pool. Okay, how do I access it? Now that you’ve told me that there’s gold in Alaska. Okay, then now what?” What’s the pathway forward?
Lachlan: 07:54 Yeah, you’ve really only got two options. One of them, which of course I would recommend, is you go through a platform like Revelo that facilitates, it makes it faster for you, and easier for you. And a lot of, there are other solutions like us, but we’re tailored for this particular market. You get in contact, and we’ll walk you through the whole process. Other companies have chosen to do it themselves. Either by setting up a local entity, or trying to find a way to navigate the local laws themselves. I generally think that’s too expensive and too labor-intensive. It’s a little bit like Spotify, I think. You could go out and find the music yourself, and own the music yourself, and for every song you wanted to hear, go and do it all yourself. It’s possible. It ends up just being easier to pay Spotify a monthly fee. It’s quick, it’s easy. They take it all off your hands, and you get access to all your music.
William Tincup: 08:56 Right, and let’s go, because I want to talk about Revelo, but let’s do the path that they think they can do it themselves first. So creating an entity in the, let’s start again, when you used Peru as an example, you’re creating a Peruvian entity, which is no easy feat if you’ve never done that. And then you’re finding local talent. So you’re probably hiring a recruiter locally to then find that talent. What are some of the other, I’ll call it pitfalls, but what are the other failure points?
Lachlan: 09:33 Yeah. So I unfortunately, in a very sad and frustrating period of my life, had to do this. So I can walk you through exactly the steps, and the pitfalls are really surprising. The first one is establishing a company in a country. You can, it’s not too bad, takes about a month in most Latin American countries, some a little more, some a little less. The surprisingly difficult step, is normally opening a bank account. Almost every country in the world has, because of KYC requirements, and just because of bank rules, they’re not set up to open a bank account for a foreign entity.
So most countries in the world, and this actually, you get similar problems in the States, they’ll say, “You need a track record of revenue for us to be able to open a bank account for you.” You say, “Well, I need the bank account in order to receive the revenue.” And it just breaks their system. And so they really struggle to get through. So often an approach that you need to do, is buy a small inactive company with an active bank account.
William Tincup: 10:45 Right?
Lachlan: 10:47 From that point, as you pointed out, the first two steps actually have to be an accountant, and someone who can advise you on HR laws. In a lot of countries, there’re rules around how you’re allowed to pay benefits that you have to provide, depending on certain types of employment. Once you’ve got the accountant, the HR rules set up, the bank account and the company entity, then you can go ahead and start hiring employees.
William Tincup: 11:12 So what’s interesting there, is it’s compliance, payroll. It’s basically basic HR, right? So how do you do compliance? But I didn’t know the thing about bank accounts. That’s actually really cool. And again, and yet another pitfall that probably an unforeseen. People probably think it’s pretty easy. You just walk in Bank of America’s, lay out some documents and done. Yeah, next.
Lachlan: 11:36 You would think so. It’ll never, I will never forget what she said. I was sitting in front of a bank manager, and I said, “I don’t understand, I have,” at the time it was about a $100,000. I said, “I have a $100,000. I’m trying to give it to you.” What do you want me to do?
William Tincup: 11:53 I want hand this bag of money to you right now.
Lachlan: 11:57 And her answer was fantastic. She said, “You need to send this form via fax to this telephone number.” I didn’t know how to respond, yeah/
William Tincup: 12:11 No, thanks for your time. Appreciate you. But no one would, you wouldn’t know that? I mean, if you’re you’re again, if you’re in Silicon Valley, and you’re trying to do this bit in Peru, especially if you’re trying to do it remotely.
Lachlan: 12:26 Yeah.
William Tincup: 12:26 You don’t know this. I mean [inaudible 00:12:29]-
Lachlan: 12:28 It’s just not with the time to find out how to get it done. It’s … Yeah.
William Tincup: 12:34 Well, let’s move on, because so we’ll probably bounce back and forth with some of the pitfalls that are there for, if you try to go this alone. Great, have fun. But with Revelo in particular, I mean now that the audience understands the positioning, and the talent pool, what does it look like right now? What’s the state of the talent pool that you have right now, and how are you growing it? And also how are you deploying it?
Lachlan: 13:04 Sure. So we actually own the largest sources of software engineers for both local and international companies in Mexico, Brazil. And then we’re well on our way to being the biggest in multiple other Latin American companies. So it’s one of the differences of our model, versus some of the competitors you’ll see out there, is that, at any one time, we have not just our US clients accessing the talent pool, but there are thousands of local companies as well, that are accessing the talent pool, and making job offers, and interviews on our platform as well.
So because of that, we’ve become the go-to places for all of these software engineers, to find a job. Even well before COVID, and well before remote makes sense. And it means that we do have a US company, which often have the most attractive job offers, the most attractive work to do, and salaries, et cetera. When they enter the platform, they get access to many more times candidates than they would normally get, because they get access to all the candidates that have come to interview at all the Latin American companies, as well as the ones that have come to interview for American companies.
William Tincup: 14:27 So tell me a little bit about the, I want to say vetting, or certification, or how you understand the skills of what … Jose [inaudible 00:14:39] is a good friend of mine in Santiago, Chile. So Jose’s on the platform. How do we know the breadth and depth of Jose’s experience?
Lachlan: 14:47 Yeah, I think of it as, as three levels. There’s a first level, where you just need to take out a lot of the people that are looking, are trying their hand at getting a job in software engineering, but they really don’t have the skills. Or they’re very junior, haven’t had any experience, or they have worked in IT, in a support capacity, but have never written code, or developed good products. So the machine and the technology we’ve built can clean out a lot of that quite easily.
The second step, is what I call a matching step, which is every company has a little, they want different requirements for them. Some focus more on teamwork, some focus more on deep technical skills, and a lot of experience in one particular programming language. That’s more of a mapping step, that a lot of it is input from the candidate, that we map out, to make sure that their expectations and their experience, and what they want from their career, matches up with what the company wants.
And then the third step is a little bit more of a hands-on vetting process, where they respond to some technical interviews. The technical interviews are very standardized, in order for us to validate that the areas they believe they’re strong on, they’re actually strong on. And we can do that in a standardized way, across technologies, across knowledge of different types of technologies. That requires a little bit of our in-house engineers, and marketplace of freelancer engineers we have evaluating their responses.
William Tincup: 16:35 So let’s go backwards to the model, because some people listening might think, rightfully so, might think of this as a staffing play, where the talent community that you’ve built, they access it, and then you deploy that. And then basically you act as the employer of record, as a staffing firm would. And maybe if that’s true, if there’s a conversion, sometimes staffing firms have a baked-in conversion, “If you want to hire this person full time,” et cetera. So let’s go backwards. I should have asked you this a couple minutes ago, but what’s the business model for Revelo?
Lachlan: 17:17 Yeah, and you’re not too far off in that we do get a lot of clients that are evaluating traditional staffing players. So the way our business model is, we take a monthly fee from the total payment to the candidate for as long as the candidate’s employed at that client company.
William Tincup: 17:44 Oh cool.
Lachlan: 17:45 So if you were a client, the dynamic that we try and create, is the candidate would say, “Oh well, William’s my boss. William decides what my salary is, what I work on. Revelo helped me get the job. They helped me get benefits, and they helped me get paid.” And so that’s the relationship of the business model, and how we make money is just on a monthly fee as long as you’re employed. We do that because we want, what most of our clients are looking for, is effectively a long-term employee. They want someone that will come to their company, and build their career at the company. They’re not looking for freelancers, or project work, or anything like that. And so I want our interest to be aligned. We want to find a candidate that’s good for that company, that will stay for a long time. It’s better for Revelo, it’s better for the client, it’s better for the candidate.
William Tincup: 18:39 And so the company pays that, just for the audience edification, the company’s paying that to you? Not not the employee?
Lachlan: 18:50 Correct. Yes.
William Tincup: 18:51 Right, makes sense. And so that goes on as long as they’re employed by said company?
Lachlan: 19:01 That’s right, yeah. It decreases over time, [inaudible 00:19:04]-
William Tincup: 19:04 Yeah, I was about to ask you that. How do you, so I mean, without getting in too far into the weeds, how long, how does that look? And also how do you keep track to make sure people are, not to say, “Being honest,” it’s not the right way of thinking of it. But just that they’re still working there, and that the client is still paying you for them still working there.
Lachlan: 19:26 Yeah. Look, that second point, that second question is probably the most common question I’ve got since starting Revelo, is, “How do you keep people honest?” And-
William Tincup: 19:39 Well, you hope that they’re honest already, right? It’s the [inaudible 00:19:42]-
Lachlan: 19:42 Well, that’s the good news, is they really are.
William Tincup: 19:46 Fantastic.
Lachlan: 19:46 I could fantastic on one hand, the amount of companies that have tried to do something outside. It’s very few. Basically no company wants to approach an employee in the, and say, “Hey, let’s see if we can cut someone out?”
William Tincup: 20:03 Let’s try and [inaudible 00:20:05]?
Lachlan: 20:06 Yeah, that’s not how you communicate to your team, “I’m trustworthy and we’re together for long-term.” And on the employee’s side, the employee wants a health plan. The employee wants a guarantee that he’ll be paid, because he knows that US company could just stop paying him, there’s nothing he can do about it. There’s a lot of things that the candidate wants security around as well, that he knows he can’t get, if Revelo gets cut out of the equation. And so they like to stick with us for the things like the health plan, things like the salary security, things like the ability to get another job if look at recent events. If the start-up that they’re working for goes bust, they want to be able to quickly find another job in the US. So for all those reasons, they prefer to work through the platform as well.
William Tincup: 20:57 I love those. So one thing I wanted to ask you, is there a community element to what you’re building on the back-end with this talent pool? Are they, I’m thinking of Stack Overflow and GitHub, and the way they’ve built technology communities. You’re building a Latin-based talent community as well. Do they get to interact with each other?
Lachlan: 21:26 Yeah, absolutely. And it’s been a very cool thing to see. It’s a fun thing to see. We’re very careful to making sure that they still feel like their boss is the client. They work at the client. They’re not, there are some companies in our industry that treat them as, say, Revelo employees. That’s not our model. They see themselves as the clients’ employees. But it has been cool to see they form this community around things like, there’s a lot of conversations going on in the early days about, “Okay, how do I bring US dollars into Latin American country X, in the cheapest way? Who’s got the best exchange rates? Who gives visibility on fees, et cetera?” And so then we could build into the platform that feature, guaranteed lowest cost exchange rate across any providers. Things like that were great to see what they care about, help them engage with the community, and help us all build value together.
William Tincup: 22:27 So, one question is not necessarily about price, but the perception of price.. As I traveled, there are some things in Central and South America that are cheaper. Check.
Lachlan: 22:41 Yeah.
William Tincup: 22:42 Got it, yep. But not everything. And so, just speaking from an American perspective, I think sometimes especially people that haven’t traveled, they think of, “Okay, it’s Latin America, pick a country, Columbia? Okay, everything’s cheap.” And that’s not true. So, how do, I mean, you’re doing a lot of education of course, as you go through this process. But how do you educate people as in terms of the pricing for these particular skills?
Lachlan: 23:16 Yeah. This is a key question in our industry, and in this massive shift to remote, and I think one of the most interesting. Before COVID almost every company in the world set salaries based on where you live.
William Tincup: 23:33 Right, location-based pay?
Lachlan: 23:34 That is … Absolutely, yeah. And most people have been doing that for 20 years, and it’s a very hard mind frame to shift out of.
William Tincup: 23:42 Yep.
Lachlan: 23:42 The companies that are building the best remote teams, that we see through our platform, they’re ignoring that way of thinking. And the way they’re thinking is, “Look, I need the best 20 software developers that I can get for this price. And I don’t care where they live, because we’re all working remote. They’ve got to show up at work on time. They’ve got to be technically excellent. They’ve got to work with the rest of the team really well. And here’s the salary I’m willing to pay.”
And that’s all they think about. That’s all that matters to them. So they don’t actually, if you take that way of thinking, you don’t adjust your salaries depending on where the candidate lives. And companies that are doing that are just building up these incredible engineering teams, because they get the absolute best candidates from all over the world. And I’m including America in that as well. It really has broken the mold. What says that you should pay someone in San Francisco more than someone who lives in Utah? How is that better for the company?
William Tincup: 24:50 So I’m familiar with this, intimately familiar with this topic, because I got myself into a bit of hot water with Indeed. They asked me to write an article about this, and then I wrote it. And I said that we should eliminate location-based pay, because it hides inequities, pay inequities.
Lachlan: 25:08 Yep.
William Tincup: 25:10 Billy, I’ll just use a simple, Billy and Sandra do the exact same job-
Lachlan: 25:16 Yep.
William Tincup: 25:16 … to the T. Sandra lives in Topeka. Billy lives in San Francisco, Billy gets paid 22% more. They do the exact same job. So it’s, what you’re talking about, not only is, I think, the future of comp, but it’s also one way that we can get rid of pay inequity.
Lachlan: 25:38 Yeah, absolutely.
William Tincup: 25:38 Because I think we’ve hidden behind this concept of location-based pay to pay men more than women.
Lachlan: 25:46 Yep.
William Tincup: 25:47 So-
Lachlan: 25:47 And I think, I 100% agree, and I think what, if many companies say, “What we care about is the quality of your work-
William Tincup: 25:57 100%.
Lachlan: 25:58 And so then-
William Tincup: 25:59 That’s all you should care about.
Lachlan: 26:01 That’s all you should. And so back that up, it should, so then pay the same for the same quality.
William Tincup: 26:07 It’s skills-based. What is your skill?
Lachlan: 26:09 Yeah, absolutely.
William Tincup: 26:10 I’m paying for the skills. Where you live or are, doesn’t matter. It’s the skills. So let’s talk a little bit about skills. What are the most, the in-demand skills that you’re seeing right now from the platform?
Lachlan: 26:25 Yeah. There’s always a massive amount of demand for the standard programming languages that are in vogue at any one time. And so right now the bulk of the demand is for Python engineers, and React engineers. What we’ve seen as well, that I’ve found really interesting, is you also get demand from companies that use technologies that are a little bit different, but they know that they’re more common in other parts of the world.
So we actually get quite a lot of requests from companies that are looking for Ruby On Rails engineers. Because they know there’s strong communities of that down through Latin America. And a lot of the FinTechs come to us as well, because they, a lot of the most successful FinTechs in the world come from Latin America. Turns out a lot of the skills, and a lot of the technologies that they use across that region, are similar to what you use in the states. And so they’re getting, having a lot of success looking abroad.
William Tincup: 27:25 Lachlan, this has been fantastic. I love what you and your other co-founders, I love what you built with Revelo. This is just simply amazing. And it’s wonderful-
Lachlan: 27:35 Thank you so much.
William Tincup: 27:36 … for the audience, to know that there’s yet another way to crack this nut. So thank you so much for coming on the podcast.
Lachlan: 27:45 Thanks so much for the time. Really enjoyed it.
William Tincup: 27:45 Absolutely. And thanks for everyone listening to the RecruitingDaily Podcast. Until next time.
Music: 27:50 You’ve been listening to the Recruiting Live Podcast by RecruitingDaily. Check out the latest industry podcasts, webinars, articles, and news at …
William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.