A westerner working on a startup in Thailand

[SbuxPlease]

I haven't posted to ThaiVisa much yet but thought I'd share an experience I've recently had with my 15 person startup in Thailand and look for any advice or recommendations.

 

Turned out that I'd inadvertently hired a bunch of people all in the same family who decided to make a giant mess of things.

 

It all started with an office manager - second one in the history of this company - who did a pretty good job during probation. But at the end of probation, she asked for a *huge* raise - 2 times current pay. It would have put her on the level of a specialist senior software developer in Thailand or even a western company director, well over 100k. I was generally happy with her performance but this was entirely unrealistic given her level and the needs for the company, but also felt like her departure at that time would be expensive and complicated to overcome. So we settled on a large raise (instead of huge) with an increased set of responsibilities, a promise from her to perform at an extremely high level, and a plan to revisit the situation in 90 days.

 

Abruptly, the performance begins to decline. My priorities seem to never quite seem get done. It's always someone else's fault. The status meetings are never kept, she's never ready. After a little while, my frustration is really showing through. She resents the scrutiny but always has some excuse. But now she's pissy around the office and we just can't have it any more.

Finally, 60 days of this, I'm done. I issue a clear HR Warning so that I can try and cover my bases, and begin advertising aggressively for her replacement. Fortunately, she gets the hint and resigns.

 

And then the surprise.

 

Multiple people in the company issue resignations within days. I soon find out they are directly related to her (I had no clue). Then I learn that she's been actively encouraging them to all perform at the lowest possible level - all kinds of jobs have not been getting done, all throughout the company there's huge problems in the brink of falling. She's convinced them that the company is about the fail; that the only reason they even get paid is because she's there to get it done. There's a discovery of apparent theft of petty cash, covered up by fake receipts generated with the help of others in her family. There's a discovery that confidential company data was getting emailed to her personal email address. She's been running a campaign with many outsourced contractors to keep them on the brink of not working with us. In the final weeks, she was hiding incoming mail and bills so they wouldn't get paid on time. She's telling any supplier or customer who will listen that we're about to go out of business or somehow breaking the laws. She's doing everything she can to damage the company.

 

The reason? She's angry that she didn't get her raise. She decided she didn't like me because I don't trust her, because I ask her to do hard tasks. So instead of finding a new job like any reasonable human would do, she decides to figuratively burn the place down.

 

What. The. Heck.

 

The lawyers seem completely apathetic about taking any action. Pursuing damages? Withholding even a fraction of the final pay? Not recommended, they say. Going to the police about the theft of petty cash and data theft? Not likely to result in any action at all. Cease and desist letters? An order to destroy company data/property? Meh, not worth the time they say.

 

It's enough to make you want to design you business model around needing the fewest in-country staff possible.

 

Before coming to Thailand, I had a fifteen year career as an entrepreneur with USA-based tech startups, have managed hundreds of people, bought and sold companies in the west before. I've been around the block a few times... But I guess we're not in Kansas anymore!

 

 

 

 

Edited May 4, 2018 by SbuxPlease

[janclaes47]

But soon Thailand will be the hub for start ups. I believe that you're not the only one in this situation.

 

 

[BEVUP]

would be advertising for all positions (taking your time ) as to be able to put them in their place that they are despansible 

or just move to another country 

[CLW]

Welcome to Thailand

[NiwPix]

I feel your pain. I understand your frustration and surprise. But as you've been around quite a bit, I am sure you've ran across your fair share of "trouble employees". Maybe not to the extend you experienced this time, but you shouldnt make ONE negative experience your summary of start up in thailand or employees in general. Give it a bit more time to gather more negative points....they will come ;).

I hope you are / were able to recover from the chaos she created.

[Time Traveller]

Sbux ,I'm sorry I had a chuckle at your experience. I didn't mean to, but when I read you're American, it explains a lot of your experiences. Thailand and American worker rights couldn't be more different. In fact, friends in USA are often amazed at the large number (is it 17  or 18?)public holidays Thailand get each year, as well as the generous severence packages mandated by law. Similiarly, Thai friends are often in disbelief that American companies have no legal requirement to provide their employees with holidays at all. And in many states, "right to work" laws mean employees can be fired at any time, with or without reason and with no severence pay.

 

So, given that Thai Labor laws are weighted in favor of employees, my tips to you are these;

1. Check all references before hiring anyone. You probably did, but many companies don't.

2. Do NOT hire family members. Ever. And I dare say do not even hire your own family members.Other workers will look for any favoritism and whether it exists or not, it will just feed resentment. If you're unsure, in Thailand things like family names, Province they come from and schools attended are good clues.

3. If you have any doubts about a person's honesty, do not hire them.

4. Pay only market salaries. Remember, Thailand is not (yet) the center of the global economy, so unless you're in the Rice/Tapioca/Rubber industries,  the only reason to base here is to benefit from it being a low cost country. 

5. If you must pay someone above market to keep them, make sure that it is linked to performance.  (because the Thai labor laws require severence calculated on monthly salary x no. months based upon length of employment )

6. If someone resigns, let them go immediately. Is it really worth risking them sabotaging your business just to get another 2 or 4 weeks out of them?

7. Lawyers are good at protecting you beforehand, but even they can't go up against the Labor Law. It's correct what they said, trying to withhold payment of the full entitlement on termination effectivelly means guaranteeing  you losing in a Thai Labor court.  Even cases of workers who after fired for theft from the company still win in a Thai court.

 

And final question, what is an Office Manager anyway? I thought the middle management jobs disappeared a decade or 2 ago. Is it just a glorified receptionist/secretary? Because I've found that in Thailand many many inexeperienced receptionists / assistants get put in positions that they don't have a clue about what they are doing. Things like accounts / legal filings / permits etc. should all be done with specialized staff, otherwise there is a risk they will attempt something like she did upon giving notice for leaving the company.

 

Anyway, good luck. As an entreprenour, you'll know it's all live and learn

Edited May 5, 2018 by Time Traveller

[NiwPix]

In all fairness....Point number 2. I am sure he is aware of that. Especially because he mentioned that he had no clue they were all related until after the fact.

[stevenl]

15 minutes ago, Time Traveller said:

Sbux ,I'm sorry I had a chuckle at your experience. I didn't mean to, but when I read you're American, it explains a lot of your experiences. <snip>

Agree with you, just surprised it took you a while, it was obvious from the start of his post already he is used to USA style. And to prevent comments, this is a neutral, so positive nor negative, remark here.

[yellowboat]

You should be commended for giving it a shot, but it is Thailand.  Pay as you go: project then contracts.  Project ends contract ends.  The office environment here is not great. 

 

Saigon is better for programming IMO.   Thailand is better for tedious work that requires supreme patience and an artistic flare. 

 

I hope you survive. 

[Brunolem]

You say Thailand, but where?

I assume you are in Bangkok...

I used to manage a company of similar size in Bangkok, a decade ago, and went through some similar problems.

 

When you say that your employees are all from the same family, that would be possible in a remote province, but much less likely in Bangkok.

Do you have proof of these family links, or do the employee use the terms "my sister" or "my brother" which do not necessary imply a real blood link...as I have discovered many times when questioning the concerned persons?

 

Are you talking about Thai or Thai-Chinese employees, especially the one that put you into trouble?

 

I mention that because it makes a big difference.

Whereas Thais are unlikely to engage in smear campaigns such as you describe, Thai-Chinese are very different.

As a matter of fact, I experienced trouble with the Thai-Chinese employees, who stuck together against me, while the Thai employees never joined them.

In the end, I had to get rid of most of the pack of hyenas.

 

After this experience, my conclusion was that if, as a Westerner, you want to run a small business in Thailand, you'd better be ready to spend of lot of time recruiting, just to replace those who are leaving, which happens constantly!

[grkt]

Maybe you show too much money...

I always pay the minimum because anyway, paying more or less, they will always cause troubles.

[Cranky]

You say - "It's enough to make you want to design you business model around needing the fewest in-country staff possible"  100% correct.

 

Here's a cautionary tale.  I had a secretary transferred to me that was on a way too high salary due to her previous boss.  Performance slowly deteriorated, coming in late, pissing off the other Thais by boasting about her higher salary and being generally disruptive.  So I asked our lawyer what to do about the disciplinary procedure - pretty normal, verbal warning, written warning, second written warning then the sack.  To be fair we gave her opportunities at each event to improve but nothing did.  6 months later we fired her, she sued and won. So she got another 6 months salary whereas I could have just fired her on the spot, paid six months and be done with it. Instead it cost 6 months of grief and another 6 months salary.  Thai courts will rarely back the farang.

[luk AJ]

I have a company in Thailand with 70 Thai employees and I recognize most of the stories above. My advice would be to stop ASAP with a difficult employee and pay whatever necessary to get him/her out. Always pay at least the legal requirements. Don’t discuss one month more pay-out because the damage they can do is always much higher. I have a lot of good people but some rotten apples as well and if they leave full of frustration they will try to hit back. Very different from European behavior.
I even had a very well paid employee with management position who left because he was frustrated and although he left himself he became a nightmare. He contacted my customers and told really bad things about me and he created multiple other problems. They are also very well protected by Thai labour law. Mostly workers and mid level admin staff are ok, it is everything above that is potentially risky. Don’t let them “own” part of the company and always include a back-up plan and regular checks and controls. You know such problems will come so be prepared.


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[GLewis]

So that  treaty of amity,  and the accompanying bravado did not work out so well.? 

[CLW]

Reading all the comments the behavior of some bosses is borderline to racism and slavery. I wouldn't work for one of you

[Brunolem]

10 minutes ago, CLW said:

Reading all the comments the behavior of some bosses is borderline to racism and slavery. I wouldn't work for one of you

You should see how the Thais, and especially the Thai Chinese treat their workers!

With them at the helm, there is no way that an employee, or a former employee, is going to bring trouble to the company...unless said employee has a death wish...

[BEVUP]

18 minutes ago, Brunolem said:

You should see how the Thais, and especially the Thai Chinese treat their workers!

With them at the helm, there is no way that an employee, or a former employee, is going to bring trouble to the company...unless said employee has a death wish...

+1

I would like to know where CLW has worked

I would work here for a Falang firm not a problem - But we are restricted on the type of role ( not like the west who will let any type of worker in, leaving their own to beg )

Racist/Slavery - We're actually talking about Thailand so I can't see it being racist, & where is the Slavery if terms & wages have been negotiated

Try working in the west

* Immediate start = You will have to wait 2 weeks before we decide 

* Descrimination = As most workers know if you claim workers comp for a particular injury (even if minute ) your days are as good as over

* Employment application = 10 + forms / double that if going through a labour hire mob - Medical (just waiting for the day when they pull out the Microscope to shove it where the sun don't shine ) - Assesments on your qualifications ( one wonders why we studied for further quals - only to be told we don't think you know how to do it anymore ) - Quals & tickets, in just reading some of the adds they are a complete joke as I would of had to spend 4mths trying to obtain all just to be a Labourer & then you can't get the job because you aren't site inducted

THE LIST GOES ON

* I would also beleive you would be able to think for yourself here as opposed to the west

 

All this whether it's 1 day or 1 year 

[luk AJ]

I guess you need to have a company first to understand, I was an employee for longtime to and I can assure things look very different depending on the angle.


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[ericthai]

OP sorry, but it sounds like you let this girl handle everything!

 

Once she demanded more money that should've been a big red flag.

However, you agreed because she had all the control. 

 

You need to take control.  You need interview workers and decide to hire. You need to approve all purchase. If you cant speak thai, hire an assistant, use the assistant only for translation and teaching you Thai.

If you want to own a company in Thailand you really need to learn to speak and understand at least some Thai.  

 

 

 

[Autonuaq]

Welcome to Thailand.

In your story you did do a few things wrong and will keep on doing wrong as other told you already.

 

Thai know the value and more and more are companies pay 100k or to 300k for developers.

 

I do not know you and based on the story you made the same mistake many do with the angle of approach is not adjusted to where you are working.

 

Startup hub well there are so many other countries that have the same facilities or even bet

 

Hope your survive.

[SbuxPlease]

Thanks all, there's some really helpful comments here. I've learned some tough and expensive lessons in this saga, and plan to redesign a lot of my business model and HR strategy to cope with what I've learned.

 

The company will definitely survive another round, but one of the steepest learning curves has been about how far away from (what I now know to be) western values many people appear to be - things like holding integrity and honesty at the highest level, reputation, continuous self-improvement, desire to achieve something hard, etc. These are values a start-up culture needs to get right with the first few dozen hires, and it's amazing how difficult it's been to find those people.

 

Perhaps the first lesson a westerner needs to learn is that the labor law "tools" (like at-will employment/termination on the spot for poor performance, etc) are largely unavailable in Thailand. Part of the lesson is learning where I do have some power in the employer/employee relationship and can enforce rules effectively. Things like having a time punch clock. A white collar western work force would rebel at the mere thought of one, but now I know it's not only common but probably a requirement to keep your staff from slowly drifting off course.

 

I agree now that when things are going downhill just pay the severance and eliminate the poor performers because there is literally no other way to shed yourself of the headache. This idea feels offensive as a whole, because the poor performer is ultimately "rewarded" with a 4-5 week-long (or more!) paid holiday followed by another short job search at which point they are back to their old tactics with some new employer. That's if they even need a job in the first place, because it seems like mom/dad are always there to step in since many seem to live at home anyways.

 

Many lessons learned, hopefully not to be repeated. No amount of reading about the culture and business environment ahead of time will really prepare you for on the ground experience like this!

 

[blackcab]

Someone once said to me that you're not a real manager until you've managed in Thailand.

 

They were right. This country gives you so many more skills than what you learn from a Western country.

 

OP - I'm in the fire them instantly and pay them severance camp. Of course the Thai way would be to humiliate them in front of everyone else and wait for them to quit.

 

Of course if you have a fingerprint time clock and CCTV as proof then if they don't turn up for work for 3 consecutive work days without a reason (medical certificate, etc.) then you can fire them without any severence pay...

[theguyfromanotherforum]

It's your own fault for opening a startup in a third world country. What did you expect?

 

Lessons learned? Obviously not, since you insist on doing business in a third world country. 

 

However, I really do appreciate your honest post. This will be a lesson to many smart people reading in the future. I learned a lot of things before from Thai Visa before moving to Thailand by reading about other people getting burned, so fortunately I did not.

 

 

[VocalNeal]

Nobody has mentioned that when the problem employee leaves she or he relatives will start up a company in direct competition using existing customer/suppliers/contractor database. 

 

#2 above even if the employees are not directly related there is usually one employee who starts an adhoc company union. One-out-all-out scenario. 

 

Time clocks? We have a simple book they sign and the time they arrived.

 

Always call bluffs even if it hurts. 

 

 

Edited May 11, 2018 by VocalNeal

[SbuxPlease]

2 hours ago, theguyfromanotherforum said:

It's your own fault for opening a startup in a third world country. What did you expect?

 

Lessons learned? Obviously not, since you insist on doing business in a third world country.

 

I'm not sure it's in good faith to suggest that other people's actions are my fault or that I haven't learned a lesson in all of this. I'm taking ownership by trying to prevent it to happen to me again and hopefully as a warning to future entrepreneurs to be aware of this kind of thing. Obviously we're all learning as we go through life and despite lots of previous experience I didn't expect to need a counter plan for humans behaving quite like this when I came to Thailand. Now I know and will react accordingly. It's a shame that it needs to be done, I see it as a real dampening on the economy and if it's widespread, likely slows a lot business development down and in turn probably keeps many good jobs away from the country.

 

I'm also not "insisting" on doing  business in a third world country. I gave it a try, some successes and some failures. It's been interesting. I'm not sure I'd recommend it. I have learned to hire more people from a culture I understand to work as contractors rather than in-country staff.

[theguyfromanotherforum]

13 minutes ago, SbuxPlease said:

 

I'm not sure it's in good faith to suggest that other people's actions are my fault or that I haven't learned a lesson in all of this. I'm taking ownership by trying to prevent it to happen to me again and hopefully as a warning to future entrepreneurs to be aware of this kind of thing. Obviously we're all learning as we go through life and despite lots of previous experience I didn't expect to need a counter plan for humans behaving quite like this when I came to Thailand. Now I know and will react accordingly. It's a shame that it needs to be done, I see it as a real dampening on the economy and if it's widespread, likely slows a lot business development down and in turn probably keeps many good jobs away from the country.

 

I'm also not "insisting" on doing  business in a third world country. I gave it a try, some successes and some failures. It's been interesting. I'm not sure I'd recommend it. I have learned to hire more people from a culture I understand to work as contractors rather than in-country staff.

 

You sound very optimistic and upbeat. This is a very nice quality in a country where laws are in place and people (mostly) play by the rules. Even if the rules are unfair, at least they are there.

 

For the life of me, I don't understand how you didn't figure out the employees were related? Do you speak Thai? Did someone else do the hiring for you? Do you have a significant other here that would have helped you screen your employees?

 

If not a secret, how much did you end up paying this girl? My wife works for Siemens and as you know this is a big international company that will employ in Thailand for the next decade. I don't know if it is comparable, but they pay their Thai engineers 70k baht. They do, however, offer various benefits and pension.

 

Why wouldn't you do a startup back in the USA? Is it because it's more costly?

 

 

 

[blackcab]

1 hour ago, SbuxPlease said:

I see it as a real dampening on the economy and if it's widespread, likely slows a lot business development down and in turn probably keeps many good jobs away from the country.

 

To be fair, for the most part Thailand is a country that replicates, not innovates.

 

Which is exactly what @VocalNeal said.

[NiwPix]

There’s absolutely nothing to criticize Sbux for what he has done / not done. It seems like he has a good grasp of things and just stumbled over something he hasn’t experienced before and shared his story for some input. Nothing wrong with that.
Doing a startup in Thailand can be viewed in two ways...an opportunity with some risk or a challenge with little hope.
Let’s face it, most “start ups” here basically copy something that’s been done in the West before, especially America. However, the startup here thinks they can do it better and / or adjust it to the southeast Asian market.
No need to compete with a big player in the West if you can be the first here and possibly do it better. It does come with a price: the headache of doing business here.

[VeriThai Investigations]

On 5/11/2018 at 8:58 AM, VocalNeal said:

Nobody has mentioned that when the problem employee leaves she or he relatives will start up a company in direct competition using existing customer/suppliers/contractor database. 

 

This is a significant on-going problem, and one that we help to actively combat when working with our direct-hirer clients as well as our recruitment agency clients. And while you can't predict what someone will do in the future, you can take some positive steps to mitigate risks that the standard EE&C (employment, education, and credit) checks won't catch. 

 

Our enhanced screening involves looking to see if a candidate has a current or prior principal role in a firm in a related field, or if he/she has a VAT registration as a sole trader or has a history of personal tax filings (PND.90 wages) as a contractor as a side hustle. This can be extended to include immediate family members as well as co-resident individuals by searching the individual's residential address, their tabien baan address if different, or both. 

 

It's also important to keep mission-critical data as compartmentalized as possible, then re-screen your employees before giving a grant of enhanced access along with a promotion or other change of duties. And this is especially important in this era where so many of a company's crown jewels are digital, i.e. client lists, vendor lists, proprietary processes and source code, and so on. 

 

We're sponsoring the SME Business in Thailand forum for the next little while so we look forward to both sharing our expertise as well as fielding any other questions people may have regarding commercial investigations, due diligence, and the like. Just start up a new topic and we'll try to answer promptly, or send us an email. 

[jimster]

On 5/11/2018 at 8:13 AM, blackcab said:

Someone once said to me that you're not a real manager until you've managed in Thailand.

 

They were right. This country gives you so many more skills than what you learn from a Western country. 

 

OP - I'm in the fire them instantly and pay them severance camp. Of course the Thai way would be to humiliate them in front of everyone else and wait for them to quit. 

 

Of course if you have a fingerprint time clock and CCTV as proof then if they don't turn up for work for 3 consecutive work days without a reason (medical certificate, etc.) then you can fire them without any severence pay... 

You can also use LINE to punch in/punch out. The time the message was sent being the times the worker arrives/leaves work. 4 years ago I was working for a Thai employer who used that system.