Below are some of the key differences and pain points we know from Deel or have heard from customers/prospects: 1) Cost/Fees, 2) Compliance + Operations, 3) Platform / offering
Cost/Fees
Originally Deel had a very low / cheap offering, that they were only able to offer due to VC funding covering their losses, as they focused on Growth at all costs Old fee: Their price was to be $299 per employee per month, and from 2020-2021 often ran a “first 12 months no fee” In 2022 interest rates increased, and like many Tech Startups reliant on VC investment, Deel increased their fees to try to get revenue to justify their crazy valuation Fee increases Their fees went up to $699 per month but Jan 2024 (but they advertise it as $599 monthly - if you pay up front for the year) Extra fees: We also know they’ve been including extra charges - e.g. the 30% rule in Netherlands requires a form to be filled out by the employer. Boundless does not charge for this if the employee is eligible, but we had a prospect tell us that Deel were charging a flat fee of $1,000 to complete this FRX: How Deel handles FRX is much more complicated and expensive than Boundless’s Reuter’s mid market rate on the date of invoice + 1.75% - see screenshots from July 2024 at the bottom of this page... Deposits: Unlike Boundless’s account balance, most EORs will ask for a deposit. The difference is that a “deposits” can be kept if certain EOR terms aren’t met - e.g. termination notice, previous late payments, minim term of employment not reached. These deposits can vary and aren’t necessarily based off payrol value. Hidden Fee disguised as payroll: In June 2024, we received from a prospect a quote from Deel on a salary in Czech. You can see the slack thread where Deel added in things like
1. “Accident insurance” as a stand alone cost, even though it was already factored into the “Social Insurance cost”.
2. Equipment allowance - which is not mandatory
3. Severance Accrual - which is not a thing, and likely a way for Deel to accrue extra funds in the event of paying off an employee being terminated
This meant that even though our “fee” was higher, the prospect was shown that the monthly invoice of everything was higher with Deel, due to these non transparent or incorrect payroll breakdowns
Deels Quote vs Boundless for same salary in Czech 2024 Deel - Czech Salary Quote - 2024.pdf
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Monthly Salary: 136,091.67 KC Deel “platform fee”: 13,885.81 KC Deel monthly total cost: 208,079.55 KC Additional annual + once off fees listed on page 2 Boundless - Czech Salary Quote - 2024.pdf
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Monthly Salary: 136,091.67 KC Boundless fee: 15,295.61 KC Boundless monthly total cost: 197,386.27 Additional annual + once off fees listed on page 2
2) Compliance + Operations
Deel’s success has been around VC funding, marketing and offering an all in one “compliant” solution in every country in the world. But we’re well aware now that their focus is on tech/platform tools rather than operations and understanding how employment really works
Licenses: Some countries like Germany, Italy and other countries require licenses to operate any sort of EOR services there. We know in the past Deel has not always had these in place Employment Contracts: Deel employment contracts have always been suspect to non compliance. Even their contractor agreements in 2020 stated any issues would need to be taken to US labour courts, even if contractor based based in another country (which in reality is not an enforceable term as misclassification lawsuits take place in the country the contractor is working from and that is the law followed).
But often in EAs, Deel will mention only Deel + the employee with little to no mention of client. This makes it easier to ignore regulations on co-employment, and set up. But will inevitably cause issue if employees report this to local authorities in the future. It’s also why Deel can’t allow for C-level hires, otherwise Deel would have 100s of CMOs, COOs etc whose EA says they are Deel’s C-level. These sort of EAs can cause IP concerns and other issues. Encouraging Contractor: Deel from day 1 offered support in every country, but then upon inquiring for EOR support there, they would only have contractor payments set up and would encourage customers to use this, even at risk of misclassification. This was mentioned in their California investigation around misclassification (as well as an a sales call with a prospect who had 20 people in Mexico) that Deel employees were accused of encouraging customers to take the cheaper option of contracting rather than employing people Operating in Spain: Deel offers EOR in Spain, which we know is not compliant No wet ink in Germany: At a Deel webinar Q&A in 2023, numerous people asked when Deel would be offering wet ink signature in Germany. Deel ignored these questions, and is likely not following this in Germany or other countries Nike story: for misclassifying workers. Deel has removed their logo from their website, but there are still plenty of quotes from their founders ok Nike being a client Other coverage: of clients and of their own employees/team who are often employed as Full Time contractors - more can be found on Google
3) Platform / offering
Jack of all trade - master of none: Deel have needed to rapidly expand their product offering, to try to grow revenue and meet their crazy valuation. So they’ve started to acquire companies that complement EOR services (Visa services, payroll, ESOPs, Hofy for equipment etc). All of this + integrations means a lot on their platform and nice to haves they can offer for cheap/free - but the quality of the services and support are still very low. Customers need to choose between quality or quantity Use partners: In some countries, Deel are known to use local EOR partners False EOR: Deel historically would advertise countries for EOR but in reality don’t offer EOR there, just contractor. Whether this is still the case in some countries is TBC Poor Customer Service: There’s been a growing list of issues from delays, ignoring key questions, over promising under-delivering. Basically, if everything goes ok, it’s fine. If there’s any issues of missing/incorrect/delayed payments or termination processes, they’re useless. Good to reference our % payroll success rate and ask prospects to compare that with what Deel claim
Deel
