EXCLUSIVE: Andela Dumps Salaried Employment As Full-Time Devs Become Gig Workers

From school to gig-like marketplace

The latest entry in the ‘Andela evolution’ journal spells out fresh information on the metamorphosis of the startup from talent school to talent marketplace.

After going fully remote and welcoming external engineers into the Andela fold as contractors, Andela has confirmed to WeeTracker that it would “no longer be supporting a paid bench.”

A well-placed source had earlier told WeeTracker that Andela has resolved to turn all the employed developers on its books to contractors – who will only be paid for work done and not a monthly salary as the company has been doing before now.

That has been partly confirmed as Andela has now revealed that existing developers brought on as full-time employees at Andela are now allowed to become contractors.

It is understood that the startup will now operate a ‘gig economy-esque’ model where engineers will only be paid when they are engaged in work, but not when they are not.

“As we started allowing engineers to apply to join the Andela network as contractors, one of the most common questions was whether existing engineers would be allowed to convert if they wanted to. We announced last week that we would be allowing engineers to choose whether they wanted to continue as full-time employees or convert to contractors,” the company explained.

“We will no longer be supporting a paid bench though, which means engineers will be paid when they are working, but not when they aren’t.”

They added, “We were offering the long-term contractor option to new recruits and recently extended this option to our existing engineers. At this time, Andela is not requiring any of our actively engaged engineers to transition to contractor status.”

In other words, Andela has completely abandoned its original play which involved cultivating and signing up some of the best IT talents in Africa as full-time paid employees (who are then outsourced to global tech companies).

The company has now morphed into a network or a marketplace housing both employed developers and freelance engineers wherein everyone in the network works as a contractor, or at least, gets paid on a contract basis.

By ditching its paid bench, Andela will no longer keep salaried engineers. Developers who stay on Andela’s books as full-time employees will only earn while they are engaged in a specific project — they are no longer guaranteed payment irrespective of whether they are working or not, as was the case previously.

Andelans who choose to convert to contractors will have the liberty to take on projects of their choosing. Andela did mention that “the engineers who work in contract relationships do earn higher compensation, and have more flexibility over who they work with.”

The company, however, maintains that its “engagements are typically long term in either capacity – often as long as the average full-time engagement, so the experience for a developer working with a company through Andela will feel similar.”

The Andela evolution may be complete

With the latest development, Andela, the resource pool for African engineering talent, has pretty much signaled that the 1,000+ developers on its books have a choice to make as the ball is now in their court.

The situation might even be interpreted as Andela being okay with letting some of its top talents walk because it now operates an expanded engineering network that houses a talent pool that is wider than ever.

This suggests that the shrewd evolution of Andela may be complete and “Andela 2.0” is now live; from training school to market pool, from exciting edtech to hardcore HR-tech. And it’s been a long time coming.

When Iyinoluwa Aboyeji, Nadayar Enegesi, Christina Sass, Ian Carnevale, Brice Nkengsa, and current CEO, Jeremy Johnson, co-founded Andela in 2014, the goal and model was to employ, train, and place developers.

Andela has raised nearly USD 200 Mn in venture capital since launching and it claims to have trained more than 100,000 people through programs like the Andela Learning Community.

Before now, the company’s business model involved training African software engineers at virtually no cost to the trainee, absorbing and employing trained engineers as full-time paid staff in Andela office locations, and eventually outsourcing them to “partners” which are usually companies overseas that pay top dollar for top engineering talents.

In May 2019, pushed by market demand, Andela opted to also sign up “ready-made” senior engineers and experienced mid-level developers. This may have been the sign of things to come as market forces soon caused the company to sever ties with more than 400 junior developers in September 2019.

After closing its junior developer (D0) program, Andela began to only seek senior talent, even going ahead to launch a senior talent-focused branch in Egypt in November 2019. But in February 2020, WeeTracker broke the story that Andela was, yet again, struggling to secure placements for some of its mid-level engineers who had been on the bench for months, though still getting paid.

Subsequently, WeeTracker exclusively reported that the company had kickstarted a voluntary exit scheme in which developers who can’t get placement can “choose to walk away with certain benefits,” or be declared redundant anyway. Apparently, the storm hadn’t passed.

But any more talk of such internal placement struggles may have been quelled somewhat during the most recent layoffs in May 2020 which cut 135 jobs but spared he developers on the company’s books.

After the layoffs in May, Andela closed all its campuses and offices in Africa and the United States, became a fully remote company, and welcomed external developers who could now secure placements from Andela on a contract basis, even though they are not full employees of Andela.

And this contract offer has now been extended to full-time employees. For Andela, this is the next step, and the evolution is perhaps summed by this statement from Andela to WeeTracker:

“In April, we shared that we were evolving towards a network/marketplace model focused on long term relationships between pre-vetted companies and pre-vetted talent. As a network, we will be better able to connect companies with the right talent at the right time, and as a result of that will also have more opportunities for engineers.”

Featured Image Courtesy: Forbes