For employers, it reduces the risk of hiring a recruiter and makes it more affordable. For recruiters, it creates a differentiator and spreads out payments to reduce the highs-and-lows so commonplace to the business.
Or at least that’s how co-founder and CEO Ken Winters hopes prospects and customers see his Silicon Valley start-up, JobEscrow.
Here’s the explainer video:
“The idea for the company came in 2009 when an employer had invested upwards of $60,000 to bring on a new worker,” said Winters. “After 90 days, the employee left and the company was out all those recruiting fees. I thought there had to be a better way.”
On the JobEscrow system, a recruiter can approach an employer and guarantee his candidate for a period of up to 4 years. The two parties agree on a fee and payment schedule, then, similarly to buying a home, money goes into escrow.
Once a hire is made, payments are then typically made on a monthly basis for an extended period of time, as opposed to a lump sum after 90 days of a candidate’s employment. The company believes this model takes out significant risk to the employer and gives any recruiter using the service a leg-up on traditional recruiters.
“It’s recruiting insurance,” said Winters. “Recruiters will make more money in our system, because we’ll help them shift development time to recruiting time. Recruiters will get business they normally wouldn’t get.”
To generate revenue, JobEscrow doesn’t take a percentage. Instead, they have a credit system, priced at $410 per open job escrow. The service also matches the employer with a recruiter of JobEscrow’s choice based on need and culture.
Further down the road, JobEscrow hopes to add reviews and feedback for buyer and seller alike, something akin to eBay’s grading system of comments and 5-star ratings.
Come December, the company will also introduce outplacement services. Here, employers laying off employees will be able to add cash rewards to escrow for recruiters who place their former employees in jobs. Vets can look to benefit from this offering as well.
The company has taken no investment and currently employs eight people, most of whom are in tech. Two soon-to-be-announced hires include a CTO from Google and a director of engineering from PayPal. Marketing the company is done primarily through PR and direct sales. Patents are pending.
The company also counts industry veteran Kevin Grossman as an advisor. When asked about why he joined the company, Grossman said:
It was exciting to see a recruiting technology company focused on recruiting process change management and fiscal responsibility as much as the tech itself. Plus, offering rewards to place laid off employees within the same escrow model was a double win for me.
“We don’t have competition,” said Winters. “Why? You’d have to be a little bit crazy to do this.” He meant crazy like a fox, I’m sure.
