PowerToFly: How It Works and Makes Money

Technology veterans Katharine Zaleski and Milena Berry founded PowerToFly in August 2014. It matches companies around the world with women in the high-tech sector who want or need to work from home. Similar to the founders, many of the women are mothers. They are also digital nomads who work from a variety of locations.

Labor force participation rates overall rose from just under 59% in the mid-1960s to a high of 67.3% overall in 2000 before declining to 66% in 2015. One of the major reasons for the 35-year increase was the movement of women into the workforce.

In 1972, the workforce participation rate for all women was 43.2%. This rose steadily through the 1980s and 1990s, reaching a high of 59.9% in 2000. By 2014, in the aftermath of the great recession, it had declined to 57.0%.

High-tech companies are known for demanding extremely long hours and for being dominated by males. While some Silicon Valley companies have family-friendly policies such as paid maternity and paternity leave, most are not known for welcoming women in general and mothers in particular.

HowToFly founders Berry and Zaleski realized that plenty of women have the right skills and degrees for success in high tech, but the workplace is not meeting their needs for flexible hours and locations. Many women in their 30s exit the workforce - and have trouble returning to it later - when they have children and need to balance competing demands on their time.

Berry and Zaleski founded the company to match employers looking for highly skilled individuals with women, mostly mothers, who can fill those jobs but can't or don't want to work in the quasi college-campus environment that characterizes many high-tech companies. They have built a client base that includes The Washington Post, Time Inc., BuzzFeed, RebelMouse, and Hearst.

Individuals seeking employment, whether full or part-time, are referred to as candidates. They are based all over the world, including parts of the Middle East, where it can be difficult for any woman to work outside the home.

PowerToFly raised its initial $1 million of seed money in July 2014 from New York-based Lerer Hippeau Ventures. This was followed by Series A Financing in June 2015 for an additional $6.5 million total. Lerer Hippeau participated again, along with other investors such as Hearst Ventures and Crosslink Capital. The company launched its website, PowerToFly.com, in July 2015.

PowerToFly's hiring process includes a series of three interviews to vet candidates before matching them to potential employers. New candidates and employers are assigned a talent manager to work with them for the first two weeks to help create a positive and successful remote work environment.

PowerToFly charges a fee to a company that hires someone from its website and also charges an ongoing percentage of the salary that is paid to the employee. All fees are paid by the hiring company; there are no fees or charges to candidates. The terms of PowerToFly payments are set forth in the Terms section of its website.

Companies can hire a U.S.-based candidate either as an employee, in which case ADP Inc. serves as the employer of record, or as an independent contractor. Candidates outside the United States can only be hired as independent contractors.

If a company hires a candidate that it finds on the PowerToFly website, this is referred to as a "covered offer." The company must pay PowerToFly an upfront fee equal to 20% of the candidate's first-year annualized salary, or 20% of what the candidate is actually paid if employment is less than a year. The fee can be paid in an upfront lump sum or as a monthly fee of 2% of that month's salary, for a total of 24% over a 12-month period.

In addition, a company that hires a U.S.-based candidate as an employee or an independent contractor must pay PowerToFly an ongoing monthly fee equal to 3.25% of the candidate's wages. The monthly fee for candidates outside the United States is 2%.

PowerToFly has the potential to change the way headhunters do business because its website-based approach provides far more transparency on who is looking for work and which companies are hiring. It may also impact the extent to which high-tech businesses are male-dominated, not simply because of the women it places in jobs, but because it demonstrates that high-quality female candidates are abound. It has the potential to impact the ability of women to obtain meaningful, paid work in areas of the world where educational opportunities have outpaced job opportunities, such as Africa, the Middle East, and Latin America.