EP053 - Central Asia - an emerging market for distributed teams with Julia Collins and Farrukh Umarov from HireTruss
About the episode
This episode focuses on a new and upcoming region of the world regarding distributed teams and remote companies: Central Asia. Julia Collins and Farrukh Umarov are bringing talent in a unique model from the region and sharing their insights and learnings in our episode.
About the guests
Julia studied Computer Science and Mathematics at Columbia College. She spent a few years in Chicago working for an analytics consulting firm, eventually becoming a data engineer at a startup in New York City called WorkMarket. At WorkMarket, she grew professionally and loved the startup experience, which was filled with amazing camaraderie and ping pong. Her career pivoted into product management as WorkMarket was acquired by ADP in 2018.
Mid-pandemic, she was offered an opportunity to join Lincoln Labs, where she is the Managing Partner of Truss and Accomplice. Being back in the midwest, she feels truly at home and brought back some lessons learned out east to contribute to the growth and success of the labs she gets to work on.
Connect with Julia on LinkedIn.
Farrukh Umarov has traveled a long and storied journey to becoming a founder at Lincoln Labs. He was an offshore developer who answered an online ad for programming services. This started over a decade ago, and his family’s life changed forever. Over the years, he quickly became a leader and built an offshore development powerhouse of developers that delivered unprecedented value to the corporations they served.
Currently, he drives technical strategy and engineering development for Lincoln Labs. He is responsible for defining the engineering consultancy vision and overseeing the development of resources and strategies for his clients.
Connect with Farrukh on LinkedIn.
About the host
My name is Peter Benei, founder of Anywhere Consulting. My mission is to help and inspire a community of remote leaders who can bring more autonomy, transparency, and leverage to their businesses, ultimately empowering their colleagues to be happier, more independent, and more self-conscious.
Connect with me on LinkedIn.
Want to become a guest on the show? Contact me here.
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Welcome everyone. Welcome on the Leadership Anywhere podcast. Today's episode, we are going to discuss a region Central Asia and why this region should be on a more, front runner in terms of conversations when it comes to hiring people from there, working with people from there just a general understanding of that region. And I do have two guests here from the very same company, by the way. I do have Farrukh Umarov and Julia Collins from HireTruss. Thank you for joining. Thank you for taking the time for this podcast.
Yeah. Thank you so much for having us on. I'm really excited.
Tell me a little bit more about your journey. Both of your journeys, I guess it's a little bit different. How did you end up working together? How did you end up working remotely? And how did you end up working with this initiative of working with people from Central Asia?
Maybe I'll start and then Farouk you can follow up there but my journey I'll go back to university. So I studied computer science and math at Columbia College in Missouri, go Cougars. And while I was studying there. I was actually an intern at Farouk and his business partner Eric's first company. So I was a computer science intern at their company probably almost 15 years ago now. I had a great summer and that summer interning for their company I was introduced to their dev team in Central Asia. And then fast forward a little bit post graduation, I had big city dreams. I wanted to, I'm from a small town in Missouri, but I wanted to do the big city thing. So I said, Farouk and Eric, sorry, I don't want to Work at your company in Wisconsin right now, but let's stay in touch. And so I went to Chicago, worked at a consulting firm, went to New York, worked at a startup that was actually in the HR tech space. And I was part of a startup company in New York that had a successful acquisition to ADP, the huge HR conglomerate. So oddly I have found myself in the HR tech space. Not planning to be a co founder of a HR tech company. And yeah, so then, mid pandemic, I'm living in New York City working remotely and Eric and Farouk are like, hey, we started this tech collective called Lincoln Labs, and we have some sort of idea to bring in talent from Central Asia, are you interested in joining us? And I think I said no at least three times before I said yes but I'm glad I did and it's been two years already and yeah, so that's my journey and then Farouk I'll hand it over to you.
Yeah, my journey started about 16 years ago when I was a freelance worker doing like random projects online. And this is where I met Eric and we did a few projects together. And he had at that time had like small startup called Dealerfire. So we worked together for a few years. We built the office. We're building a team in Uzbekistan and we were like, we were pretty successful building websites for car dealers at the time. And in 2013, I moved to the United States, Wisconsin, Oshkosh. Very small town. So me leaving my warm city, Tashkent, Uzbekistan, which is very warm, 40, 45 degree in summer, in Celsius, and very busy, very big city, and a small town which is completely opposite, minus 30 degrees Celsius in the winter. It was quite a huge change. But I liked it. I liked the small town, small community. The company, the culture was great. And we had our development team was completely outsourced, so we had all our engineers in Uzbekistan and I was working from Wisconsin and in 2015, a company was acquired by a bigger company, Dealer Socket. We moved to enterprise environment, and we started building more teams overseas. Throughout my entire career, I was working with a team in Central Asia and we had pretty success working with remote teams. I was doing not just management work, but also, I was doing a lot of admin work because it requires a lot of effort to just keep the company running overseas because it has their own regulation, employment law. You need to know how to be compliant in those countries. And at that time, Eric led the company and I was working at dealer socket the bigger company and after a few years, we decided to reunite and open another company called Lincoln Labs. And Truss is a part of Linkin Labs. It's one of the business units.
Ah, okay.
And at Truss, we decided to help other companies be successful hiring people overseas and remove this barrier of entry because most of the companies they don't know how to work with how to hire people in Central Asia or other countries because there's a lot of regulations, employment law, bureaucracy. You need to go through, open the entity. You need to know, you have to have local entity. You have to know how to pay taxes. So what we do now, we help all the companies with all of this admin work and leave them just engineers let them manage those engineers and work with those engineers on a project, focus on projects, not focus on how to do all the admin work to keep the company running overseas.
So let me get it to properly also for the audience. It's almost a mixture of employer of records focused on a particular area or region plus the kind of outsourced project management as well. So you actually, those who are hired to those companies are still with you or they are with the company they are hiring.
So I think you have it 100 percent correct with the employer of record model, but there's huge companies right now that provide employer record services. I don't need to name them by names, but and that's originally what we just wanted to do was to provide an employer of record service in the region. But once we got going, we realized companies don't know how to find the talent in that market. So we are full end to end tech talent partner. We recruit candidates, screen them, and then provide the employer of record service. But what we don't do is manage the project at the company.
Oh, okay.
So you would the companies, we expect them to manage their new hire from central Asia, just like they would manage some of them have developers in India, South America, and the United States as well, manage them the same way you manage the rest of your employees, but we take all the global payroll and HR out of it for them and the recruiting. Yeah.
And okay. So what are the biggest challenges? Tell me is it more challenging to hire someone from Tashkent or even Samarkand. Or is it more challenging to hire from, I don't know, Jordan which is not close by, it's also like a region which is often under the radar. What's the difference? What is it, why is it or is it challenging to hire from Central Asia compared to others?
I think answer really depends on who you ask. I think the challenges with hiring in the region right now result because nobody has built the bridge between companies in North America and Thailand and Central Asia. I'm sure at one time it was very hard to hire people in India. They gained their independence in 1947 and their industry really took off later when companies made it super easy to hire there. Nobody has done that in Central Asia yet. We are the first to remove barriers to hiring in the region.
But even me, who's I wouldn't say that I'm 100 percent familiar with Central Asia, but still, I don't know the the needs and gritty details about those countries, for example, you mentioned India. I know that, for example, in India they do have a pretty solid they built up a pretty solid engineering university, engineering knowledge bases. They do have hubs in Pune and, these kinds of stuff. If you hire from India yes, you might have the challenges with the culture and the time zone and whatever, but you're 100 percent sure you won't have the challenge with the knowledge, for example, because they already have amazing universities there. I Don't know anything about Central Asia in this, in that sense. And I'm not saying that they don't have, sorry, I'm sure they have, I just don't know any kind of information around that market. Thank you.
Yeah, I think that's a really good layup. So yeah, Uzbekistan, for example, their population is about 36 million with a majority of their population the average age is 29 years old. So a very young population that is eager for job opportunities. So what has the country of Uzbekistan done? They've opened the IT park of Uzbekistan to help foster tech growth in the region. And they now have 65 IT universities that graduate an average of 30, 000 tech employees per year. So just like India is building, their tech pipeline with universities, government partnerships, Uzbekistan is doing the exact same thing and actually probably really looking at models that have been successful, like in India and replicating them in their country. And did I miss anything Farouk?
I would say also to add to this is with IT Park, so this government program, Uzbekistan has lowest tax percentage in the region, maybe even it's only seven and a half percent, I haven't seen anything lower anywhere in any countries.
Personal income.
Yes. The only taxes you pay seven and a half percent plus 1 percent to it park to be in a program. That's all. Yeah. And this is impressive on top of that I T park provides if you hire people in regions, not in Tashkent, they provide free office space. They can pay up to 15 percent of salary of your employee. They cover HR services. So if you have HR expenses, they can cover that. They also pay for educational courses. If you want your employee to take some courses, they can. So it's very impressive how much they're doing now to support IT sector in Uzbekistan.
This is really amazing. And these, so there, let me get it correctly. So there is a lot of people who are graduating and participating in the program, but because of the country's given economic stage and whatever, don't have the ability to suck all of those people up locally, right? And they have the option to work, I don't know, remotely, from a geopolitical standpoint, from China, Russia, or Europe. And obviously, I don't know, but probably everyone is preferring Europe and US because of the money. And because of the projects but none of the European or U. S. companies actually built a bridge, as you said there to, to use that. Nice. I think I get the model. There's a lot of complex. It always takes a minute. Yeah. Nice. And I understand why it is a benefit for that region to do that. And I understand that the country itself and the country is there, not sure about the neighboring countries but we are now talking about Uzbekistan, which is like the largest and the best one there, we understand the supply part. How is the demand? So why, as an US company or European company, shall we say, why should I employ or work with the talents from Central Asia? And why not prefer I guess why not prefer local because of the financial reasons, but why not prefer talent from India, Philippines, or I don't know middle East, maybe. What's the deal for me?
Yeah, I don't want to over speak, but always wanted to give Farouk the opportunity if he's interested, but the opportunity in the region is a majority of the schooling system in the country provides English from a young age. English language is very common. So that's not a challenge. And then it's not an oversaturated market like India or even Latin America. So think of if I'm a tech employee, just like probably how I felt in New York city. If I quit my job in New York city as a data engineer, the next day I could have had a job easily. So I think attrition is much higher in regions where there's more opportunities. So in central Asia, it's not like that right now. When we help remote talent in central Asia find opportunities Not only are they eager for these opportunities, they're loyal to their clients. Their job satisfaction is probably higher than other markets. And so not only is the cost arbitration there, we can hire, A developer for about one third of the cost you can in the United States, but the attrition is much lower and we are not experiencing the challenges that companies have, for example, right now when hiring an India. There's all of these stories that I'm sure you've heard just because the market in India has grown so, so huge but it's just not like that in Central Asia. So it's a huge untapped talent market and opportunity for companies right now to hire in the region.
That's totally great. I understand. And even with the calculating in your margins, even with that they bring really valuable cash to home and they are. Yeah. Yeah. And they are very loyal because of that.
Yeah. And you're able to even, paying about one third of the cost that you would in the United States, you're still providing middle to high, upper class salary for these people in their country.
Yes. And our.
Yeah, sorry. Plus, they don't need to spend the time in Tashkent as well. If they don't want to they probably they went there to do their university, but they are from a smaller town or village and they want, they just want to move back. Why not? They are working remotely. Yeah.
Yeah, exactly. And then, our whole take on this model, our mission and our passion is really growing the amount of opportunities in the region for these people that we love working with ourselves, that we have built a previous company with but we are completely transparent in the cost to employ someone there. We're not hiring someone, putting a 35 percent margin on it and telling the company that's what it costs to hire someone there. We have a platform where all of our clients can log in, see who they've hired, where they're located, exactly what their take home pay is each month. And then our fee is very transparent on top of that. Yeah, so really taking that employer of record approach in terms of the cost model.
Totally. And I guess this is a question for Farouk, tell me why other countries on the neighboring countries don't do such programs. I understand that, for example, I don't know, in Tajikistan, Kyrgyzstan, and other stuff, some of them, they have the natural resources to support their own country in a very well mannered stage right? They have oil and stuff. But others also on the same, side as Uzbekistan, but they, but we don't hear too much about their IT programs, for example.
Yeah they do. They're trying to do something like Uzbekistan, but Uzbekistan is very aggressive and very proactive on providing benefits for IT companies. Just an example, we also have an entity and we hire in Kazakhstan. And Kazakhstan also big market for IT talent but taxes are very high. We'll pay about 40 percent income tax.
That's German tax.
Yeah. And they have a special program for IT companies. It's called Astana Hub. But requirements are very strict and if you get into that program as a company, you will pay, you still pay 20 percent tax. This is I know and still high. And Georgia they also have similar program and we're trying to get into this. We're almost, we're on the final stage of approval. In Georgia, we're paying 20 percent taxes. And once we get to that program, we should be paying only 5 percent total, which is impressive. This is Georgia is one of the countries and region also investing a lot into IT companies in the country, so to help the economy and they're doing all they can do. Simplifying regulations and making it easy for companies to open their local branch or office and start hiring people.
I know. And Georgia is very generous about opening companies, just in general, by the way, I wouldn't say it's a tax haven, but I've heard that that companies are actually setting up branches there. And also their banking system is okay, and secure as well. Let's discuss a little bit more about the remote work. Because I don't know, it's like Tashkent is what, it's two to three hours from myself. So it's like what is eight hours for you?
Six.
Six? Yeah, usually. So you actually need to like work quite a while with the time zone difference. How do you handle that? How do you manage these people? And any tips that you can share with the audience that are best practices?
Yeah. I think one of the biggest things we've all learned in the past two years by most of us working remotely, like if you manage remote employees, you need to have the mindset of trusting someone and evaluating based on deliverables, not time in the office. So remote work works if there's trust between the employee and the employer. So number one, that's true with anywhere you hire for remote employees. But secondly for ourselves and for our clients, when we are talking to talent in the region. We're very up front in the first screening of the required overlap time and what that would require the Employee to do in order to adjust their schedule to accommodate. And a lot are happy to do it. So a lot of the talent that we have employed. So say if they work with a company on the West coast, which is worst case scenario, time zone wise they adjust their schedule so that they work until midnight. So they've completely adjusted, have the first part of the day free. And then work up until the evening. So it's just really being clear with expectations, screening candidates to make sure this is something they're willing to commit to and it's, really hasn't been a problem. Any other thoughts Farouk?
Yeah, I would say it's pretty common to have those time schedule, so most of the engineers, they, they used to work, start work late, and work from 8 to 5, and in Tashkent or Uzbekistan, they have to stay late up to start work late, about like at noon, at 1 p. m., and finish like 10, 11 p. m. With that, it gives us three or four hours overlap every day, and I like it the way it works. For the last decade we work with remote teams team on Uzbekistan and for engineering project, it's actually better than have like full day overlap, because the reason is You do releases at night. You do all the deployment at night. And this is where it comes handy. They start work at night US time. They do all the deployment in the morning when you come to work. Everything is deployed, tested before actually your customers see that.
Yes. Yeah.
This is one of the advantages. And also, what we noticed is, once your team grows, you have multiple teams. You start seeing challenges with a lot of meetings, a lot of distractions. And we had those problems, and when we have overlap, every time I come to work, my managers come to work. They want to talk to engineers, ask about status, ask about projects, distract them. And this is when overlap time we had, this is for distraction. But in the morning, our time, when they start work, they have three, four hours focus time.
Yes.
Yeah, so they come to work, they focus three, four hours and leave the afternoon for meetings. This is how we used to work and was successful and I really liked it.
It works for me as well, by the way. So I can back that up. Most of my clients are from the U S and I prefer East coast because of the time difference but yeah, but still it means that during the morning or before 12, I can do all my focus work, all the actual work. And later on I can do all the meetings and, it's all up to you. On engineers, I guess it's a little bit different because they are client facing what they are doing. So obviously the client is the one who decides when the meeting is happening. But yeah, personally, I usually schedule most of my meetings as this recording on your mornings. And it's totally working for everyone, I think. What else? Tell me a little bit more about those companies who are open to work with you or through with you with your services. Why they are preferring this aside from the financial benefit, everyone gets it, but still why don't they hire someone locally or near shore, because this is what you are doing. This is almost like totally offshore. So even though you have people in the States.
First and foremost, I think our clients are so cool. And I say that because there's so many companies with this conservative mindset that they aren't willing to try something new or be the first person, first company to really hire tech talent in Uzbekistan. Like they really, we'll probably wait 10, 15 years when it's not as much as an advantage, but our clients right now, they're like cutting edge in a way. And I think I love working with them because they are open minded people so I just get to work with really cool people with that mindset. Other than that, our clients are companies that have been hiring in other regions of the world before, so I'm not having to sell them on remote work or hiring outside of the U. S. They're already doing it. What I have to try to convince them on is Hey, this is a new market and you should give it a try and we make it completely risk free, we have actually built into the country's employment laws is a probationary period. I'm not sure how common that is in Europe, to be honest, but...
Everywhere in Europe, I think it's totally normal to have a three months of a probation. And in most cases the layoff happens with a one month of notice. Obviously if you are a more senior, you have more.
More. Yeah. And so central Asian countries have that same thing. So when a client comes to us and they're like okay, I'll try it. The risk really isn't that large. They only have to pay us if we find talent for them that they actually want to hire. Easy there. And then they get to employ this person for the first three months and try it out. And if, of course they have to cover their employment costs and our Pretty low fees, but they, if it doesn't work out, they can let the person go, without severance and just be like, Oh, I tried it and it didn't work, but that has not been our experience. Our clients, we, so far, everyone has grown. They start out with one and then before you know it, they've hired 15 people in the region coming back to us each week with, we're a small company, they have direct access to me. They can say, Julia, I need another C sharp developer. And with in one text, our team is sending him resumes. So yeah, I don't know that I buttoned that all up clearly, but.
Actually, of course, but it's interesting to see that I also have a rule, by the way, again, personally I just trying to relate to what you said is that, I don't work with with companies who are not working already remotely. But so I don't need to explain why having distributed operations is worth it. I don't need to teach from the very ground up. And I guess any company who hired talent outside of the U S for full time positions or like that. They do understand challenges, benefits, every They do understand the whole picture. The only, selling that you need to do is that, hey, wanna try out Central Asia as well?
Of course. Yeah. And that feeds into diversity and where you provide opportunities. As both you and I know, I graduated college and I thought the place I would be able to get the best opportunity as a software engineer, I'd either have to move to New York or San Francisco. And now we all have this opportunity to be a part of a global revolution, provide, you can employ someone somewhere that somebody, maybe they wouldn't get as many opportunities because they live in Samarkand, but they're a very talented developer. And you've been able to spread opportunities outside of New York, San Francisco, London, Berlin. And that's just a cool thing to be a part of.
Totally. That's by the way, that's the best ending sentence for the whole show. I totally, 100 percent get it. Tell me if someone wants to hire Central Asian talent, where people can find you.
They can find us at hiretruss.Com and feel free to email me directly at julia at hiretruss.com. So thank you so much for the time and the opportunity to share we as a small, but growing company are so grateful.
Thank you very much for your time, for taking the time for this call and appreciate of coming here and it was good chat. It was good meeting with you.
Yeah, absolutely. It was so fun.
Thank you very much.
Thank you.
Thank you.
