Work in the digital age

: Image via CrunchBase

Online services that match freelancers with piecework are growing in hard times

IT WAS not the Christmas present that Julie Babikan had been hoping for. In December 2008, soon after buying a house, she was abruptly fired from her job as a graphic designer at an accounting firm in Chicago. “I had no clue that my position was about to be eliminated,” she recalls. Desperate to find work as the economy tipped into chaos, Ms Babikan scoured job ads to no avail. Eventually she decided to advertise for work on a service called Elance, which allows freelancers to bid for corporate piecework. She has since built up a healthy stream of online projects and reckons she will soon be earning more than she did in her previous job.

Like Ms Babikan, millions of workers are embracing freelancing as an alternative to full-time employment or because they cannot find salaried jobs. According to IDC, a market-research firm, there were around 12m full-time, home-based freelancers and independent contractors in America alone at the end of last year and there will be 14m by 2015. Experts reckon this number will keep rising for several reasons, including a sluggish jobs market and workers’ growing desire for the flexibility to be able to look after parents or children.

Technology is also driving the trend. Over the past few years a host of fast-growing firms such as Elance, oDesk and LiveOps have begun to take advantage of “the cloud”—tech-speak for the combination of ubiquitous fast internet connections and cheap, plentiful web-based computing power—to deliver sophisticated software that makes it easier to monitor and manage remote workers. Maynard Webb, the boss of LiveOps, which runs virtual call centres with an army of over 20,000 home workers in America, says the company’s revenue exceeded $125m in 2009. He is confidently expecting a sixth year of double-digit growth this year.

Although numerous online exchanges still act primarily as brokers between employers in rich countries and workers in poorer ones, the number of rich-world freelancers is growing. Gary Swart, the boss of oDesk, says the number of freelancers registered with the firm in America has risen from 28,000 at the end of 2008 to 247,000 at the end of April.

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That may, in part, be a reflection of American bosses’ ruthless cuts in full-time jobs, forcing those laid off to scramble for whatever work they can find. But it is also a sign of another notable trend: the range of work available on “e-lancing” sites is growing to encompass more complex and better-paid tasks. “We’re starting to see legal and financial work coming online,” notes Mr Swart, who says he has recently been talking with a big American insurance company that is thinking of farming out claims adjustments via oDesk. Recent projects posted on Freelancer.com, a rival site, include the composition of a rap song to help teach English to Chinese students and a design for a luxury hotel in Barbados. Such work is more likely to be won by educated Western workers, especially if it requires local knowledge.