Online Freelance Marketplaces: Boon to those in remote areas, bane to the Salaried worker

admin — Wed, 10 Mar 2010 01:42:20 +0000

Katherine Padilla came to Canada from the Philippines last April and soon found work — in the United States. And she doesn’t have to leave her Toronto-area home to go to work.

Padilla says she works 40 to 50 hours a week doing human resources, administrative and social media work for several U.S. clients while looking after her two children.

She works through oDesk, a web service that links employers and workers in a virtual work environment so people can work remotely. There are more than 400,000 contractors looking for work on oDesk and almost as many jobs have been posted.

Padilla says she likes the remote work arrangement. “I’m able to manage my schedule.”

ODesk is first a marketplace where those who need work done and those who can do it can advertise and connect. But oDesk does more than just facilitate first contact. Once an employer hires a contractor, oDesk provides tools to manage the engagement.

Workers log in through oDesk to work for clients. While online they can chat, and the client can see what the contractor is working on. For those who want to be sure they’re getting the time commitment they’re paying for, oDesk can capture screen shots from the worker’s PC at random intervals.

Gary Swart, chief executive officer of Menlo Park, Calif.-based oDesk, says his is the fastest growing online remote work marketplace, but it’s not the only one.

Elance, operated by Mountain View, Calif.-based Elance Inc., has around 65,000 employers and more than 100,000 active contractors, according to Brad Porteus, its chief marketing officer. Elance tends more toward fixed-price, relatively short-term jobs, while oDesk focuses more on longer-term projects where pay is open-ended and based on hours worked.

But like oDesk, Elance provides tools to help employer and employee work together. In both cases, a popular feature is the way the marketplace acts as a middleman for payment. Employers pay the agreed fees to oDesk or Elance, which then releases payment to the contractor when the work is completed.

ODesk guarantees contractors payment for the hours worked at the agreed rate. Elance allows clients to release funds to contractors when they reach milestones to the client’s satisfaction, and offers a dispute resolution system for cases where the client is dissatisfied.

There are other online job markets with narrower focuses, such as Rentacoder, which specializes in programming work, and YourEncore, where the contractors are retired scientists and engineers. Swart says employers with tight budgets who are facing limited supplies of some hard-to-find skills even in a weak economy are increasingly turning to remote workers. And in some cases that means very remote workers — on the other side of the world.

Canadians face growing competition

Amanda van der Gulik has built two websites from her home in Uxbridge, Ont., relying entirely on Elance contractors to supplement her own work.

“I use Elance for pretty much every part of my business,” she says. And the contactors she uses are physically located in different places around the world, from Canada to India.

So these markets bring offshore outsourcing within the reach of the smallest businesses. But does that mean Canadian workers face growing competition from low-wage contractors offshore?Frequently it does.

Jason Blacker, who runs BlackBird Copywriting in Calgary, gets about 25 per cent of his work through Elance, and he says online buyers are more price-sensitive. In general, Blacker says he loses 10 to 15 per cent of the jobs he bids on due to price.

On the other hand, he believes Elance brings him international work that he would otherwise have a hard time landing.

“The thing with oDesk is that providers come from all over the world,” Padilla says, “so there are some people that have a low hourly rate.”

She has seen bids of $2 per hour on some jobs, “which obviously can’t work if you’re in North America.” Roxanne Genier, a Montreal-based entrepreneur building a luxury goods and services web portal called luxeinacity.com, says using oDesk to hire overseas workers willing to do online research and data entry for less than the Canadian minimum wage is helping her build a more comprehensive site. Aside from cost, she says, the work is tedious and, “I just wouldn’t be able to find a Canadian who’d be willing to do that job.”

On oDesk’s website is a chart of average hourly rates for several job categories for the past two years. Rates in some categories have declined, and the average for data entry jobs is less than $5 per hour. Average pay for software developers has risen — to $15 per hour. That’s nowhere near what a salaried developer makes. An annual salary survey by the U.S. publication Computerworld says software developers employed full time in the U.S. earned an average salary of $85,684 in 2009.

If you’re doing work that many people can do, including people in developing countries, and you live where such work is available and well paid, online work marketplaces may be a threat. If you live where the work either isn’t available or doesn’t pay so well, you might benefit.

For people in high-unemployment areas, Swart argues, services like oDesk can be a boon, giving them access to work in more prosperous regions without requiring them to move.

“The internet can become a road into Flint, Mich.,” he says.

The more highly skilled you are, the less impact these marketplaces have on what you can charge. “If you’re a PHP programmer and you have pretty good skills,” Porteus argues, “you can pretty much charge whatever makes sense to you because there’s so much demand for you.”

Building a reputation for good work and reliability, through online recommendations, can also help. “I don’t actually base my choices so much on price,” van der Gulik says.

Like it or not, though, Porteus says more employers are seeing advantages in a flexible work force and tapping a global talent pool.

“We’re going to see a shift around how people and companies think about employment,” he says.

http://www.cbc.ca/technology/story/2010/02/02/f-freelance-outsourcing-internet.html

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Online Freelance Marketplaces: Boon to those in remote areas, bane to the Salaried worker

Canadians face growing competition