Problem: Odesk, Elance, and Guru: Platforms That Facilitate the Forming of Partnerships with Freelancers a freelancer is an independent contractor that has skills in a certain area, such as website design, search engine optimization (SEo), or marketing. Start-ups hire freelancers for two reasons. first, they fill gaps that companies have in their expertise. for example, a business may need to develop a social media strategy, but lack capabilities in that area. There are freelancers who are social media specialists, who can quickly and effectively help a business design a social media strategy. Second, freelancers can be hired on an "as needed" basis, so they are typically cheaper than hiring a part-time employee. In addition, if a business hires a freelancer for a project and it doesn't work out, a decision can be made to not hire the same person again. It is more difficult to separate from a part-time or full-time employee. There are a growing number of Web-based platforms that make it easy to identify and hire experienced freelancers. odesk (www.odesk.com), Elance (www.elance. com), and guru (www.guru.com) are popular examples. The platforms are services that allow freelancers to identify themselves and allow anyone needing a freelancer to browse through the listings to find a good fit. for example, guru lists freelancers by category, which includes IT & Programming, Design & Multimedia, Writing and Translation, Sales & Marketing, and several others.
The freelancers post their photo, an explanation of their expertise, an overview of their experience and job history, their hourly rate, and a portfolio of their work. Elance posts statistics that reflect the freelancers' ratings from previous jobs, the number of jobs that have been obtained through Elance, and comments from previous clients. for example, at the time this feature was written a freelancer named Chris S. had completed five jobs through Elance with a perfect five-star rating from clients. one of his clients wrote, "Chris did again a great job on a PHP/WordPress type project. great communication and turn around as usual." This type of feedback provides future clients assurance that Chris might be worth a try for a similar project. Chris charges $46 per hour. While that number may seem high, if Chris is a proficient programmer and designer, and turns around work on time, he may be well worth it. He'll also only charge for the number of hours it takes him to complete a job. over time, companies often become comfortable with individual freelancers, and the relationship becomes more of a partnership than an arms-length arrangement. The platforms make money by taking a percentage of the money that the freelancers are paid. The amounts vary-odesk takes 10 percent, while Elance charges 8.75 percent. There are protections built into the services to prevent freelancers from taking money and not completing a job. Sites such as Elance and guru, which initially focused on IT freelancers, have expanded their offerings. Companies can now find qualified freelancers to reliably plug almost any skill gap that they have.
Questions for Critical Thinking
1. Imagine that you are the founder of a company and need help setting up QuickBooks for your company. QuickBooks is an accounting and bookkeeping platform for small businesses. Search guru, Elance, and odesk for QuickBooks freelancers. Select the one that you think represents the best combination of expertise, experience, and cost. Summarize the key attributes of the person you selected.
2. To what degree is it appropriate or inappropriate to hire freelancers to fulfill some of the core competencies of a business?
3. Make a bullet-point list of the advantages of hiring freelancers to do short-term projects for a start-up.
4. In what ways do you believe that a freelancer could become a partner of a company rather than an arms-length independent contractor?