For Web3 organisations and companies that manage a dispersed, multi-national workforce, crypto payments can make running payroll operations easier and more efficient. Sending money to locations around the world, to employees who may or may not have bank accounts, is a lot easier when you can use borderless, transparent, near-instant open money protocols like Bitcoin.
Better still, stablecoins like USDC, USDT and Dai allow businesses to give their staff the option of receiving dollar-backed tokens, avoiding the volatility for which cryptocurrencies are so well known – assuming they want to.
But in addition to these benefits, there may be other, extrinsic advantages to paying in crypto. Employees who are prepared to receive crypto – or who go out of their way to look for it – may well be more productive and helpful to your organisation than their fiat-loving counterparts.
The Selection Effect
Partly this is down to selection bias. Those who are interested in blockchain and Web3 to the point where they are comfortable managing crypto are, by definition, less conventional people. They are prepared to explore new technologies, they’re curious about the future of money and alternative asset classes, and they’re willing to challenge the status quo and try doing things a different way.
Moreover, Web3 is still in its infancy and tends to attract self-starters. There are few formal courses, so anyone who knows their way around the technology will probably be self-taught – with all that implies about their motivation, initiative, and inquisitiveness.
Isn’t that the kind of person you want working for you?
There’s also the Web3 culture of setting few rules and giving employees lots of autonomy, allowing a high degree of freedom to solve problems and build products. That tends to attract a certain kind of person. As Stephen Pair, co-founder and CEO of BitPay, writes, ‘Paying out in cryptocurrency can help attract top talent, particularly among young, tech-savvy, high-earning individuals.’
Even at the end of a bear market – or perhaps because people who believe in the future of this technology are keen to take advantage of lower prices – crypto payouts to employees have more than tripled over the past several months, according to internal BitPay data.
‘We’re seeing a growing number of people who want to earn crypto on our LaborX work platform, where over 100,000 freelancers have already registered,’ comments Sergei Sergienko, founder and CEO of Chrono.tech. ‘That broad trend is why we are focused on blockchain-based HR product development and cryptocurrency payments across our core offerings, LaborX, PaymentX, and TimeX.’
Aside from that selection effect, though, there are various other reasons why getting paid in crypto is good for employees – and why they might actively seek out gigs and opportunities that pay in digital assets.
1. Employee engagement
Stock options are an age-old way of including employees in the success of your company. If they work hard and help grow the business, they will directly share in the success they contribute to achieving. It’s the same with project tokens, a percentage of which are often reserved for employee bonuses. More broadly, Web3 is still at an early point, so workers will hopefully benefit from holding any major digital currency for the long term, especially BTC and ETH.
2. Independence
Receiving and holding bitcoin and other popular cryptocurrencies, including stablecoins, is the ultimate in independence. These tokens can be taken with you anywhere, and are freely convertible to different fiat currencies all around the world.
3. Earn more (in the long term)
With inflation at 40 year highs in some countries, everyone is feeling the pinch. Yet central banks are warning that raising wages may fuel even worse inflation – and many businesses can’t afford to increase pay anyway. Offering a percentage of salary in bitcoin can help to attract and retain workers.
‘People see this as a way to get a higher salary in the long term,’ according to Jonathan Chester, CEO and cofounder of BitWage. ‘Basically get paid today, and have a savings account that accrues as opposed to losing money if it were just sitting as dollars.’
4. Diversification
Similarly, receiving a portion of pay as crypto provides a way to diversify investments automatically. Additionally, getting paid directly in digital assets enables employees to bypass transaction fees and the hassle of dealing with exchanges. They can opt to have their crypto managed for them, or provide an address and self-custody it.
5. Security
In these days of high inflation, banking crises, potential US debt defaults, and other huge, national and international concerns, it’s easy to worry about what the future will bring – financially and otherwise. There’s just a little bit of extra peace of mind to be gained from owning an asset that you control entirely, and that will always function and be usable outside of the control of any financial organisation, commercial or central bank, or government. It’s the insurance policy against financial collapse you hope you’ll never need – but that you wouldn’t want to be without.
All of these factors mean that forward-looking employees are more likely to gravitate towards receiving crypto payments. It’s good for them, and that can only help them to feel more engaged with your business, more loyal, and more motivated to help you succeed. As well as securing top talent that will drive your business forwards, that also has second-order consequences such as a better work culture, an ethos that prizes hard work, and lower staff turnover, leading to greater employee satisfaction and reduced recruiting costs.
In short, offering to pay your employees in crypto could be a win/win.