Business Talk with Baruch Swinkin Part 4: Route 38’s Unique Role in Israel

This is the fourth part in a series with Baruch Swinkin, the Co-Founder of Route 38 Professional Services LTD.  In the first part, we discussed how he established Route 38.  In the second part, we discussed an overview of the employer of record service. In the third part, we discussed the types of companies that use the service and its growth worldwide.  In this part, we discuss Route 38’s unique role among employers of records in Israel.

What makes Route 38 unique among Employers of Record?

There are many things.  First, we are currently operating only in the Israeli market.  We intend to, G-d willing, expand into many different countries one day and work in many other markets.

Second, to my knowledge, we are the only company in Israel that combines the elements of a smaller boutique firm that is accessible and responsive with the eminent responsibility to take care of all of our client’s needs.  We will, G-d willing, continue to do so no matter how large we become.

Third, we are easily accessible, completely transparent, and use a proprietary online system to allow employees and employers to know where they stand and know where every dollar/shekel/other currency is. This is combined with our proven track record for accuracy, dependability, and proficiency. 

Do you provide special assistance to new immigrants?

We provide the hand-holding that new immigrants sorely need. Most people who move to Israel are doing so for ideological reasons and purposes.  The language and cultural differences are vast between Israel and anywhere else in the world. To a certain extent, Europe is different but somewhat similar. The United States is exceptionally different than Israel.

We will be there to help you understand what you need to do, where every shekel goes and why it goes there. All this to ensure that your work is met with as much success as possible; we will put you in the best position to grow and to be able to focus on the other challenges that you face. 

Baruch Swinkin (Courtesy)

Does this hand-holding impact the companies that you work with?

On the company side, we are doing the same thing.  We ensure that companies are comfortable with our processes and understand the purpose behind our system.

Business owners come to us without understanding the market, terminology, or culture here in Israel. They rely on us to introduce all of these elements to them and help provide them with the data set that they need to make significant financial decisions.

Additionally, there may be an emotional aspect to this transition.  

Our end-user clients may have never met us.  They may have never met the individual they are hiring.  And sometimes they are letting a trusted company asset and friend live out their dream and move to a very far away land, and they want to make sure that person is taken care of. They want to make sure they are in good hands.

How is Route 38 unique?

To my knowledge, there is no other company that is combining all of this with the vast expertise we have in our company – the years of corporate finance and accounting experience, the years of bookkeeping experience.  And the payroll and HR experience that we have developed in the last seven years is outstanding.  We have an all-star staff which is second to none. 

How much transparency do you provide?

We offer complete transparency.  Every shekel is noted and accounted for.  And we have account managers who love the people they are working for and want to make sure they are taken care of at all times. So if at any time we do make a mistake, we will admit to it.  I don’t think another firm is out there with the care, hand-holding, and expertise that we have. 

What challenges have you overcome in building the business?

As mentioned previously, we have had to educate ourselves.  I am a CPA with a focus on corporate accounting and audit. I understand the Israeli accounting industry, although I have never been licensed here in Israel. 

We had to educate ourselves on what the requirements were to report earned income here in Israel.  And what are the legalities in terms of labor law? What can we invoice for?  What creates an employer-employee relationship in Israel and the US? We operate in an extremely regulated environment and need to stay well beyond the letter of the law in all aspects.

Did your team become experts in Israel’s employee and tax law?

We needed to become experts in employee tax law to ensure that we are on top of everything.  And that learning curve was pretty steep.  It took us a couple of years to even start feeling comfortable with it.  My first pitches given six years ago were somewhat awkward. So we have to continue staying ahead of the curve.  We intend to become very high profile in that regard.  We always need to act as they say in Hebrew, “lifnim meshurat hadin,” above the line – and make sure we are extremely conservative in our approach and do not cut any corners.  This ensures that we provide a service that everyone knows and trusts.

It seems like you had to put a lot of time and energy into learning the business requirements for Israel.  Someone could infer from this that you are at a disadvantage in the sector.  Why would a company want to work with you when they could work with a firm composed of primarily native Israelis who were educated and trained in Israel?

Because native Israelis have a tough time relating to Anglos – both vis a vis language limitations and culturally, and Anglos have the same issue relating to native Israelis. This is an extremely sensitive concern that we are dealing with – a family’s livelihood and often the final piece of their aliyah puzzle is on the line – and to feel comfortable, one needs to feel cared for, heard, and understood. We’ve been through the process, we know how hard it is, we can relate to the multi-level challenges you are going through. We are, therefore, uniquely qualified to walk you through the process confidently.   

In the next part, we will discuss the impact of COVID-19 on the business and Baruch’s vision for the future.