Regtech start-up Gecko Governance continues to share tales from New York, this time navigating employment infrastructure when hiring and expanding in the US.
New York is a great city for expanding and March is a particularly good month for fast-growing Irish start-ups. Numerous St Patrick’s Day events provide Irish businesses with a great platform to showcase their technology and products. It is a huge opportunity to increase your profile and gain industry awareness within the local market.
Gecko Governance participated in multiple leading industry events, including the New York Stock Exchange Ireland Day, the Irish Funds showcase seminar (where founder Shane Brett spoke on the blockchain panel) and the well-known annual BNY Mellon Irish Breakfast.
‘St Patrick’s Day events provide Irish businesses with a great platform to showcase their technology and products’
These events were attended by prominent Irish and American business leaders, industry experts and even US congressmen.
One of the key themes of the events was Brexit; how it may affect the US and EU economies, and how Irish companies can continue to expand successfully in the US in these volatile and uncertain times.
The cost of employment in New York
The employment environment in the US is very different to Ireland. The cost of employing good local salespeople can seem astronomical in comparison.
For example, a basic salary might range between $125,000 and $150,000 per annum. However, companies must also take into consideration additional local requirements:
- Employers’ payroll tax of 12pc
- Healthcare (between $300 and $500 a month, half of which is normally paid by the employer)
- Substantial bonuses and commission on sales (20pc and up)
The total cost of an experienced salesperson in NYC can easily amount to $250,000. In fact, local companies view the cost of a four-person team as circa $1m a year.
‘Local companies view the cost of a four-person team as circa $1m a year’
In the US market, holidays are far more limited than in Europe. Many businesses open on public holidays and employees routinely expect in the region of two to three weeks’ holidays annually.
In addition, New York is considered an ‘employment at will’ state, which means that a private sector employer can hire and fire as they please and a discharged employee will usually have no legal recourse – incredibly, even when their dismissal is unfair or unreasonable.
— GECKO Governance (@GECKOgovernance) March 15, 2017
Relocating staff from Ireland
Alternatively, if companies go down the road of relocating staff, it is also a sizeable investment.
A well-appointed and centrally located one-bedroom apartment 20 minutes from midtown Manhattan will set you back in the region of $2,500-plus a month. Rental agents will expect a commission of at least one month’s rent and employees relocating with no credit history may also have to pay up to three months for the deposit. (We were charged a $400 deposit on a $29 internet hotspot device, all because we had no credit history in the US!)
In other words, the initial outlay on renting an apartment can easily reach five figures – a hard pill to swallow for any start-up.
Tea, Tayto and St Patrick’s Day networking
Despite these challenges, New York is still an incredible place to do business.
Attending just one event can lead to a dozen follow-on meetings. New York’s high flyers are not only generous with their time – they will gladly put you in touch with the industry experts in your field.
Everyone knows someone here. Offers of introductions are everywhere, and anyone will meet you for 20 minutes to give you advice and feedback.
‘Your start-up status is not a barrier to partnership with large US businesses’
Unlike in Europe, established companies will happily engage with you if your product adds value. Your start-up status is not a barrier to partnership with large US businesses. In our short time here, we have already managed to meet many of the leading financial companies, technology giants and even self-made billionaires.
A real coup for us was being invited to march in the 2017 St Patrick’s Day parade, which all came about after we attended one of the Irish Business Organization of New York’s excellent ‘tea and Tayto’ networking events.
Networking is everything in New York.
Shane Brett is CEO and Andris Macs is a senior business development analyst at Gecko Governance, a new multi-award-winning regtech blockchain solution to easily allow fund managers to monitor and manage their regulation and compliance requirements.
Over this series of articles, Gecko Governance will share their war stories on the practical side of opening an office in New York. Next up, they will cover some more major logistical challenges of moving into the New York market, including visas and red tape, leasing office space and even running their own industry event.