Brexit. The shocking vote that has, and will, dramatically alter the European political and economic landscape. These consequences, whether positive or negative, will be felt by individuals, governments, and countries alike. They will have to work out a strategy that either capitalises on the benefits or shields from the fallout. Either way, everyone has to deal with the aftermath. But how is an eCommerce startup responding to Brexit?
At Shoprocket, our priority is to protect our employees from the immediate negative effects of Brexit. Due to the swift drop in the value of the pound relative to other currencies, we adjusted our salary payment for foreign workers accordingly. Right now that means converting wages from UK pounds to a fair US dollar equivalent. If the dollar were to become unstable, we would convert to another currency in order to most protect employees. We did this promptly: the plan comes into effect at the end of this month.
Founder Chris McCreadie addresses this in a letter sent to employees following the vote. Since Shoprocket values transparency we’ve included the letter here:
Wherever possible Shoprocket will pay the employees using PAYEE (or their local countries equivalent) and pay all the necessary tax contributions.
In the case where this is not possible which falls under the 2 main areas.
The country of origin has no tax treaty with the UK and we have to pay our employee in the country via invoice.
The country of origin requires us to have a legal company formed in their country and we do, which means again we have to pay our employees via invoice.
In the above scenarios, we will agree on a wage with the employee in $ (dollars) and then at the end of each calendar month we will convert this $ amount to their local currency and pay it.
At this moment in time, we pay a number of our employees using £ (pounds) which because of the Brexit has lost well over 20% of its value against most currencies, as a result, we will be converting the £ amount of current employees to a fair $ amount with this calculation factored in. This will come into effect from the end of this month (July 2016).
The $ is a far more stable of an international currency (arguably the most stable) but we will continue to monitor the situation and if we have to then we will switch to another currency that means our employees do not suffer.
As an aside to this, this is an example of how changes in one part of the world can and does have a global reach and as a result, I encourage to look at the alternative currency options out there such as bitcoin (https://xapo.com/) or gold (https://www.bitgold.com/) both of the services I have shown you allow you to hold your currency in a non-FIAT manner and insulates you from the peculiarities of the market as a whole. Personally, I have used both of these services above exclusively since December 2015 and it has been relatively pain-free.
I hope this makes sense and always, this is open for debate, comment or ridicule.
Whether or not you agree with Brexit, it’s important to consider how to best plan for and react to the outcomes of it. This is one example of a company’s strategy to do so.