A few days ago, we launched a new model for working with Joppy (Hiring as a Service – HaaS) that we would now like to introduce to you. But to explain the model, it’s more important to detail why we created it.
We’ve spent 7 years in Tech Recruiting, and several aspects of the industry haven’t sat well with us. However, two particular points compelled us to propose something different:
- Firstly, the high recruitment fees prevalent in the industry, typically ranging from 15-22% of the annual gross salary in Spain (and up to 25-30% in Central/Northern Europe). While we respect those who charge these fees, the invoice is significant and often does not align with the budget realities of companies.
- Secondly, the economic “risk” a company assumes when hiring a candidate. Despite a thorough interview process, there’s always a chance the candidate may leave after a few months or turn out not to fit the team well. In either scenario, you’ve already paid the recruitment fee upfront, which is non-refundable, resulting in high associated costs.
For these reasons, we decided to create HaaS (Hiring as a Service), a model where we share the economic risk involved in hiring.
How does it work? Instead of charging the entire fee upfront, we offer a monthly fee of 1.25% spread over 12 months, sharing the hiring risk. You will only pay the monthly fee if the candidate remains with the company, thereby spreading the cost of the recruitment service.
Here’s an example: you pay 1.25% of the candidate’s annual salary each month for a maximum period of 12 months. If the candidate leaves the company (or you decide to part ways) after 4 months, you pay only for their tenure: 1.25% x 4 months = 5%, with no additional cost.
To be fully transparent, at the end of this payment period, you will have paid a total of 15% (1.25% x 12 months). However, two key points must be noted:
- The hired candidate will have spent one full year in your company, completing their onboarding and training, and will already have brought value to your organization. For us, the best indicator of successful recruitment is retention. Paying for proven performance is highly positive.
- From a cash-flow perspective, you will have paid a small monthly amount (1.25% of the annual salary), significantly easing your company’s financial management. Protecting cash flow is crucial for businesses, and this model clearly supports that.
At Joppy, we strongly believe in talent and the quality of our matches (only 3% of our companies utilize our guarantee, and our candidates typically stay around 2.5 years). Yet, there is always some risk, and this model aims to help and share that financial risk with you.
Additionally, to make the offer even more attractive, this model includes a 12-month guarantee—the highest in the industry. If anything happens with the candidate within this period, you can search again for a new candidate through Joppy without additional costs.
When should you choose between this new HaaS model and Joppy’s traditional single-fee model at 9.5% per hire? Each time you hire a candidate through Joppy, you have the flexibility to select either the new model or the traditional one. The choice is yours.
Apologies for the lengthy explanation, but it’s important to clarify why we’ve created this model and how it benefits you. If you have questions, we also have detailed FAQs available.
If you’d prefer to discuss any aspect, we’d be delighted to schedule a quick video call.
Leave a Reply