Businesses are using the work-from-home movement to accelerate their spread across national borders.
Companies looking for staff or overseas sales are applying the same communications technology that is making pandemic-accelerated work from home possible for their international hiring and needs. They hope to use the technology to circumvent the familiar challenges of global commerce, such as setting up national subsidiaries, waiting for immigration visas, or opening expensive offices in distant cities.
This has accelerated the growth of People2.0, a 20-year-old company recently relocated to King of Prussia from Exton, which has found new interest from customers and investors in its role as employer, agent or administrator – everything you need to hire people and keep them useful – for cross-border remote workers, contractors and global staffing companies looking for new recruits for large employers.
Acting as a middleman, People2.0 saves businesses the hassle associated with hiring remotely for often short-term or fast-moving assignments.
Business doubled after People2.0 attracted expansion capital from a private equity investor in 2018 and has doubled again since private equity giant TPG (Texas Pacific Group) bought a majority stake in 2021.
The company is now the employer or official agent of 50,000 workers in 50 countries on average per day, chief executive Erik Vonk said. That’s more people than work for Vanguard Group or Wawa Inc., for example.
Founded by recruiting industry veterans Charles B. Miller and David Van Soest in 2002, the company is still partly owned by Miller and Vonk, who joined as chief executives in 2015. TPG – whose investors include state and Pennsylvania school pension funds — kept Vonk in charge with a warrant and a stack of cash to buy more companies. Because it’s a private company, he won’t say how much.
Vonk spoke to The Inquirer about the company’s growth and mission following its latest acquisition last week of Denver-based TalentWave, which provides similar services to tech companies in Silicon Valley. It was the fifth acquisition since TPG backed the company, but Vonk said People2.0 is also growing “organically” at more than 20% annually by bringing in new customers.
This interview has been edited for length and clarity.
You are an American company expanding overseas and you want to deploy new people. How do you become an employer, for example in Dubai? It takes a lot of arrangements. It often makes sense to leave that to a third party, and that’s what we do.
It’s for anyone a business may need. We have blue collar workers in the system, as well as highly qualified specialists, as well as executives.
We are facing a very big opportunity. It’s the ability to make remote work work for individuals, as well as workplaces.
Workplaces see the workforce, their workers, as something that can now adapt more easily to the pace of business. There were continuing trends towards specialization, gig work [whether as contractors or regular employees shifting among projects]and remote work arrangements, all of which have been accelerated by the pandemic.
But especially when you cross national borders, it has become very complicated. The regulatory environment in most countries [such as payroll taxes] does not help to set them up [flexible, remote] job accommodations. It can take a long time to set them up unless you have a tool like People2.0.
And yet, there is such a need. Workplaces are expanding and contracting much faster than in the past. We are a facilitator of these on-demand and remote work arrangements. We find ways to make it work and so today we find ourselves surrounded by green pastures.
Our services add an average of 3% to 7% above the worker’s salary.
Traditional recruiting companies prided themselves on having physical offices all over the world to speak to candidates in person. But this makes their infrastructure cost very high. And we’re not a traditional recruitment company. We are much leaner. The superior development of technology allows us to be highly profitable at lower costs.
The old-world endowment model arguably still has a role. Very successful global companies – places like Amazon, Abbott Labs, Meta – all have client recruiting firms they work with, as do the big four consulting firms when they [recommend] people with their customers. These companies are still finding the right international candidates for many of these workplaces. And then they come to us, for the flexibility to structure their overseas work arrangements smoothly.
We see a lot of “me, too” and wannabes, and we bought into specialty companies that were building a practice. But no one saw this opportunity so early or developed it so quickly; we are an employer of record and [contract-employee] official agent in more than 50 countries. We have an advantage, and it will take many years for anyone to catch up to us.
The King of Prussia is important to us. We have functional organizations here – technology, sales, marketing, our own human resources. It houses some of our senior executives, such as our Director of Legal Affairs, Kathleen McCarthy.
Growing up. My partner Chuck [Miller] and I had started making acquisitions from our portfolio. We hit the bottom of that barrel, and then we had to decide whether to slow growth or access more capital.
In 2018, we recruited a first private equity investor, CIP, from New York. The goal was to see if we could double the business in five years. They were a good partner; a year later, we had doubled in size.
So now CIP was scraping the bottom of their barrel. We very quickly developed a new thirst for more capital. We therefore turned to TPG, a very high quality investor. And now we focus on profitable growth of the business. We will continue to do whatever it takes to get there, with the right capital, from investors or lenders.
We are building this business to be a fast growing global business. If access to public capital through an IPO guarantees business continuity, we will. But always with the aim of growing the business, not just creating an asset that we can sell. It is a living organism. And it’s way too important for us to think about it that way.