What is outsourcing?
“Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal stuff and resources” Dave Griffiths
“Online outsourcing or freelancing platforms match employers (firms and individuals) and workers to perform work online. The process of finding a job, performing the job and being paid for the job all take place online.” SAORI IMAIZUMI
In 2013, at least 145 online outsourcing marketplaces or platforms were identified globally, although the true number is likely to be higher. Some of these platforms are very large: 17 million registered users at Freelancer and 9.7 million at Upwork. About 10 percent of registered workers are active.
The United States, the United Kingdom, France, Germany, and Israel are the top five hiring countries on oDesk (now part of Upwork)—the largest online freelancing platform. the United States, the United Kingdom, France, Germany, and Israel are the top five hiring countries on oDesk (now part of Upwork)—the largest online freelancing platform.the United States, the United Kingdom, France, Germany, and Israel are the top five hiring countries on oDesk (now part of Upwork)—the largest online freelancing platform.
The benefits of online outsourcing for workers:
1- They can access jobs with higher wags than many can access in their home countries.
2- They can work flexibly from home.
3- It enables workers to earn extra money besides regular jobs.
4- Workers can always select only the work they love to do.
5- Most online freelance platforms doesn’t require education certificates, unlike traditional hiring process for internal workers.
Figure 1: Main advantages and disadvantages of online work: Results from survey on Microworkers.com
Source: Survey of online workers on microworkers.com, where the majority of workers are from developing countries, especially South Asia. The survey was done as part of the background work for the World Development Report 2016.
The benefits of online outsourcing for employers:
1- Outsourcing reduce costs.
When internal stuff performs the work, the company will have to afford the costs of the facilities in which internal stuff will work. The rent of the office, electricity bills, … etc. Where as the costs to outsource the activities can be relatively way cheaper.
2- No long term commitments required with workers.
3- The ability of finding a high talented workers from any where in the world.
4- Fastest work turn over.
Many freelancers work even in holidays and any time of the day. This actually makes hiring a freelancer for a task is better than giving it to an internal worker. The internal worker will only work during the work time of the day and will not work in holidays absolutely.
5- Faster hiring process.
Employers can get an online worker hired, and start working on the job in literally a few minutes. While hiring a new internal worker to do the job might requires a few days in the best scenario.
Challenges of online outsourcing.
There is many challenges affects the success of the hiring process. There are also many challenges affects the quality of work they get. For example:
- Well, lets face the fact that most freelancers in the world are from developing countries. Actually a study done by Payoneer shows that 40% of freelance jobs offered worldwide is taken by Indian freelancers only.
- Although freelance platforms adopt different ways to verify the freelancers skills. It is too difficult to make sure online workers have the enough skills to have jobs done with good quality. In fact it is a big challenge for employers to test and verify the freelancers skills before using them.
- Also the work turn over is a challenge it self because outsourcing work online can’t be directly supervised.
For online workers
there is challenges too, for example:
- Inexperienced freelancers might be a victim to fraud because they are not aware of how to guarantee that employer is willing to pay.
- Time control is not easy at all. So it is a big challenge for any freelancer to control his working hours especially for those who work from home.
- Distraction elimination is another challenge. When you work from any where you are your supervisor so you probably wouldn’t be able to avoid distraction.
- Marketing your work. When you work for others as an internal worker you never care about marketing. But working for your own, you have to market for your services in order to sell them, and this is a great challenge.
The workforce in the biggest economies are rapidly heading to online outsourcing because its great benefits. So there lies a very promising opportunity for freelancers from all the countries to hunt.
Although we listed a long list of challenges or disadvantages of online freelance, it doesn’t make full time local work any better. Actually all the challenges discussed earlier can be easily beaten. For example employer can always ask the freelancer to do a sample work to make sure he got the required skills to do the job. Also freelancer can always manage their time and learn how to promote their services.
Finally, there is a lot of tips written by experienced freelancers and clients to help others overcome these challenges, we are listing some bellow:
- Freelancer time management
- Critical mistakes to avoid as a freelancer and Critical mistakes for Fiverr platform
- Some platforms are applying more restrictions on new freelancers to make their platform more saver for Clients.