The Andela conversion-fee trap

Here is a scenario every founder who has used a staffing marketplace knows. You bring on a contract engineer. They are good. Six months in, they know your codebase better than anyone. You want to hire them full-time. That is the system working, right?

Then you read the MSA, and there is a conversion fee. Sometimes 30,000 dollars. Sometimes 50,000. Sometimes a percentage of first-year salary. To hire the person who already works for you.

What the fee is actually for

The conversion fee is sold as compensation for recruiting cost. That is not what it does. What it does is make the marketplace the only place the relationship can live. The engineer cannot leave to join you without a five-figure check changing hands. So they stay billable through the platform, at the platform’s margin, indefinitely.

A conversion fee is a wall built between you and the person who already does your work. You paid to put them on the other side of it.

What it costs you that is not the fee

The fee is the visible cost. The invisible cost is worse. Every month you keep that engineer on the platform instead of on staff, you pay the platform margin on top of their rate. Over a two-year relationship that margin dwarfs the conversion fee. The fee just stops you from ever escaping it.

What we do instead

Holdfast charges no conversion fee. None. If you work with one of our engineers and you want to hire them, hire them. We will make the introduction and help with the transition. We are not built to trap a relationship. We are built to ship a thing and, if you want more, ship the next thing.

If you have ever signed an Andela-style MSA, you already understand why Holdfast exists. We read the same contract you did. We just decided not to write one.