Eynat Guez founded Papaya Global in 2016, when the concept of remote working was relatively in its infancy, seeing the need of companies to automate their global payroll. The COVID-19 pandemic brought growth on a whole new scale, with companies rushing to shift to a remote work footing but with little idea as to how to efficiently manage such a payroll.
Q3 2021 hedge fund letters, conferences and more
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy Read More
We spoke to Guez to learn about how she and all the Papaya Global team stepped up to the plate and took advantage of the opportunity in the pandemic crisis.
How did COVID-19 affect your company? What were the biggest struggles you experienced during the pandemic?
My company, Papaya Global, had entered a state of rapid growth just as the pandemic arrived. We had to hire, onboard, and train many new employees in different countries and different time zones, all remotely. The challenge there isn’t so much on a process level. We worked out all the details quickly. What’s hard is building a company culture when people have virtually no interaction with most of their new colleagues. After three years when everyone knew just about everyone at the company, we suddenly found ourselves in a situation where a third to half of the workforce never met at all.
What made it possible to bring people together was the fact that we had put a set of values into practice at an early stage. People knew what we stood for when they joined, and we were adamant about applying our values equally for everyone, regardless of location, seniority, or gender. That transparency gave people something to grasp onto as a link to the company and the rest of the workforce.
One of the most important things we did in this period was to take the whole company and their families to the Maldives for a 5 day off-site. People had been stuck inside for various lockdowns at that point and really needed to get away. So, the off site lets people decompress in a beautiful, low stress environment while spending some casual time together. We saw a massive improvement in collaboration when we got back.
For me, the lesson is clear: there are lots of good things about remote work, but the magic happens face-to-face.
The pandemic saw a huge shift to remote work. How did Papaya Global play a part in that shift?
The trend towards remote work and distributed workplaces was already gaining momentum before the pandemic arrived. We started Papaya Global in 2016 to help companies hire and pay people in different countries in full compliance. Companies with different degrees of remote work were among our first clients.
Of course, the practice jumped tremendously with the pandemic because companies that never considered remote work as an option suddenly found themselves with no other option if they wanted to continue operations. Those companies – the ones pushed into remote work rather than having chosen it – weren’t really prepared for all the complexity. The Papaya Platform was just what these companies needed to make sure their entire workforce was paid compliantly no matter where they were.
One of the biggest lessons of the pandemic was the importance of technology, especially automation. We saw it first-hand at Papaya Global. Companies were calling us in a panic because they didn’t know how they would meet their payroll, especially in the beginning when the disruption was most intense. An automated payroll will function under any disruption, but manual processes are dependent on people being available to do their jobs.
We keep hearing about the “great resignation.” As a people management platform, how is Papaya Global experiencing that trend, and how do you help companies deal with it?
I’ve heard all about ‘The Great Resignation’ but I haven’t seen it at all at Papaya. Our retention rate is 94%, and for a startup in the volatile hi-tech industry, that’s a very high number. We’re still hiring at a high rate, and the people who are coming in are extremely motivated. We haven’t seen it with our clients either, and since we charge by the payroll, a large resignation would impact us directly.
I think there are many causes for this dissatisfaction. People might love their work but feel disconnected from their companies. Remote work can potentially cause this kind of disconnection, if they have no inner sense of the company.
Companies need to be aware of their culture now more than ever. It’s what I call the company DNA. Companies need to honor and cultivate their DNA, which is generally set by the founders and top leadership as an extension of who they are as people and as managers. There are no “best practices” for developing an organization’s DNA but it’s crucial for long-term health. When you have people who work at the company but aren’t part of the company, that’s one of the worst things that can happen, especially for a startup.
As a workforce management platform, we place tremendous importance on the employee experience. It can be as simple as making a global org chart accessible to people to build a sense of unity. A lot of it comes from the benefits package a company offers. We advocate a set of global benefits – benefits packages that are the same for people no matter where they work. It gives a sense of fairness and equality. We also advise clients not to give allowances for benefits, but to give the benefit itself. Don’t give an employee $100 for health care and make them go out and sign up themselves. Sign them up to the company plan. It’s a small thing but it tells people you are looking after them.
Companies also need to think about things like global equity – giving equity to people abroad just as they would people hired locally. It’s a massive headache with all the legal issues involved, but it has all the advantages that local equity has on the people who get it.
What do you think the workforce of the future will look like? Will companies continue to outsource to consultants and gig workers, or do you envisage a backlash beginning at some point?
There is a trend in government to protect worker rights, and I think it’s pointing the world of work in the right direction. There will always be a role for independents and consultants, but it will be limited. Companies that want to grow can’t rely on temporary contractors. They need a permanent workforce they can rely on. A company that has zero or nearly zero employees and lots of contractors needs to be very careful about misclassification. It’s also a company culture that might not attract the top talent.
There are so many options for companies to hire people with or without a legal entity today, that there is no reason not to give their employees full rights and benefits. Any company can hire through an Employer of Record. It’s not a long-term solution in most cases, but it allows companies to hire with an eye towards the future.
What about the employees’ side of things? Do you think the workers of the late 2020s will prefer to be freelancers and small agencies, with more freedom but fewer benefits, or will people want to go back to classic salaried employment models?
There is really no reason why employees can’t have the freedom they want and still get all the benefits and labor protection they deserve. We are seeing it today with remote work. People are demanding freedom and flexibility within the context of their jobs and the technology tools are all in place to give it to them. More tools haven’t been invented yet.
Employers have to be willing to show flexibility as well, but the rewards can be enormous. You get a loyal workforce that knows you are willing to meet them halfway on what they want. The more of a sense of partnership that can be built between the company and employees, the more both sides have to gain from it.
The office-free business: in your opinion, is that an efficient way to keep down costs, or a recipe for chaos?
There are companies that have done it and have been very successful, but they put a great deal of thought into how to make it work and planned tremendously. They have hundreds of employees across the world, and each one is paid in compliance with all tax codes and labor laws. I think it’s possible to do it well, but it takes a lot of work.
In our experience with Papaya, whenever we have a cluster of employees in one area, they ask us to open an office. The combination of having an office for part of the week and working remotely for part of the week – the hybrid model – seems to be the best of all worlds. People get both flexibility and structure. And they spend some time together.
I personally feel that it's important that people have personal interactions. We used to be able to take that for granted, that we would meet with people directly. It’s really about connecting people and creating a cohesive group. It’s not the same over screens. Just on a practical level, it’s challenging because people are in many different time zones.
As a woman and a mother working in tech, do you see the compensation and benefits models becoming more supportive towards parents with careers? What changes are taking place right now which give you hope — or perhaps, make you feel despair?
In 2021, I became the first woman to lead a unicorn in Israel – one of the biggest ecosystems for hi-tech innovation in the world. On one hand, that shows progress in that I broke through what was previously a glass ceiling. On the other, I saw first-hand how far the industry has to go. I negotiated the funding round that gave Papaya Global the billion-dollar valuation while I was pregnant with my third child, and we closed the deal two weeks after I gave birth. The negotiations took place over Zoom because of the pandemic. I don’t think our partners even knew I was pregnant. About a year earlier, I was pregnant with my second child and we were talking to investors about a B round of funding. Those negotiations took place in person, and I could just feel the air leave the room when I walked in, visibly pregnant.
So, speaking from my own experience, I can tell you that women can do anything, and no one can tell me or any other woman that we shouldn’t be leaders or CEOs or anything else. It’s our choice, and it’s time that we took what belongs to us. But there are numerous biases and obstacles women face every day that still hold many women back. I know it, I felt it, and I’m proud to say that I was able to succeed anyway.
One of the most pervasive myths that many women face is the ideal of Wonder Woman, the woman who has it all – a career, a family, a life where every minute is accounted for AND an abundance of leisure time to devote to interests, hobbies, and causes. I found that it’s not so important to be a wonder woman. I am who I am, and that’s been enough for everyone.