Here's a note on the future of work, from Upwork CEO Stepane Kasriel.
Yesterday, avid followers of internet-driven disruption dove into the annual insights feast that is Mary Meeker’s Internet Trends report. 2015 marks the report’s 20th anniversary. When the report first launched in 1995, Internet usage was minimal -- only 0.6% of the global population (vs. 39% in 2014) and 9% of the U.S. population (vs. 84% in 2014) had access. E-commerce was in its infancy. Airbnb wouldn’t exist for another 12 years.
Since then, everything from software and media to lodging and crafts has moved online. What market is next? How about work... So many of us continue to slog through daily commutes. We sit for hours in offices. We feel as if we’re waiting for the school bell to ring at the end of the day to escape. Why are we behaving this way? Our habits are born of the Industrial Age, when people had to be in one place to work factory lines. But there is almost no need for that today. Meeker’s report proclaims that the “big 20-year change” is people have become connected to the Internet through their devices 24/7. We can all log on to “go to work” rather than drive to an office. Furthermore, manufacturing jobs are going away and innovation-driven jobs are on the rise. This innovation-driven work is much more easily performed online.
Price is such an obscure aspect when it comes to development services. The answer to the question “how much does it cost to develop an app or a website?” is as relative as Einstein's theory, even if we limit its scope to the European market.
Presumably, development services in Switzerland are more expensive than in Romania, while in Denmark and in Norway the costs are thought to be pretty similar. The post-soviet world, is considered, among other things, to be the perfect destination for software development outsourcing, since prices are reasonable and quality of services is better than in many other outsourcing destinations.
Instead of dwelling on assumptions, though, let’s try to test these hypotheses with real data. The following research was done with the purpose of helping those looking for development services in Europe come to well-grounded conclusions.
Our research is premised on the tacit assumption that the cost of service is directly related to its quality.
We based our observations on the following suggestions:
· A low-priced service is unlikely to result in high quality deliverables.
· The average price in a given market corresponds to a level of quality deemed sufficient by purchasers. In the case of software development, though, a product owner may be left with the feeling that ‘it could have been done better’.
· A price “above average” is what a product owner should be looking for, since higher rates generally indicate higher quality.
· Very high prices are simply not affordable for many.
Another issue we’d like to raise is the degree by which the quality of a delivery can be estimated prior to it’s being made. To paraphrase the old parable about the three stonecutters, one IT developer can write code, another one can make a website or an app, and the third one can actually make a successful product.
Which of those software developers do you want to cooperate with?
We did this research to show how price, one of the most important criteria used by companies to select development resources, is distributed across European countries.
We chose Elance as the most suitable platform for retrieving and comparing the hourly rates of individual freelancers offering IT services around Europe. For this survey, we considered only the countries with at least 200 representatives in the category ‘IT & Programming’ and divided these countries into regions.
1. Post-Soviet states
The region we call “post-Soviet” includes five states – Belarus, Ukraine, Russia, Armenia, and Moldova, and contains 15,250 individuals and 2,328 companies, registered on Elance. This is the largest IT market in Europe.
Ukraine alone has the second largest number of IT specialists in Europe after the United Kingdom. The country is home to 9,272 freelancers, or 16% of the total European developer population.
Why is this information so important?
While making this report we came to a conclusion that the more developers there are in a particular country or region, the better the value for money of the service found there. This can be explained by the economic concept of emulative consumption, or the struggle to possess and outdo your neighbor.
One of our first observations about the post-Soviet region is that prices are distributed unevenly across the constituent countries. The chart below shows how exactly the pricing landscape specific to how a particular country looks.
We can see that the most popular price for IT services in post-Soviet countries is in the $20/hour range, whereas the highest cost, over $100, is charged by only 0.3% of the respondents. Russia is the only country in the region with more than 1% of companies and individuals (2,2%) charging $51-$100 per hour of work. At the same time, a vast majority of the region’s representatives, about 90%, charge $30/hour or less per hour of work.
The world loves words, begs for fresh new words, and businesses fervently hire freelancers to write those beautifully crafted words. In fact writing is one of the most popular skill categories on Elance. Our friends at Essay Tigers are hip to this and have created an eye-catching infographic on how to make sure your successful freelancing on Elance:
How to become a successful freelance writer [Infographic] by the team at EssayTigers
No big surprise to those of us who work remotely (or with freelance teams), the folks at Intuit-U.K. have a sneaking suspicion that traditional offices are quickly becoming obsolete.
As technology advances and work/life values shift, they’re noticing that physical locations are less and less important. To spotlight this transformation, they created an enlightening Infographic outlining the evolution of the office. Check it out:
A recent study by Staffing Industry Analysts (SIA) reveals that mid-market and enterprise companies are turning to online freelance teams at record pace.
Centered around research conducted by the SIA team, the article reports that 10% of firms now employing a contingent workforce plan on using online staffing in the next two years. This is a dramatic increase from last year’s SIA study, where similar estimates were at 3%.
SIA asked Jon Diller, our VP of Enterprise Solutions, for his take on the trends behind the uptick in online hiring.
He pointed to three key reasons for the increased adoption of online staffing by large companies:
1. Online work is the new norm.
“Contingent Workforce leaders are recognizing that online staffing is the new frontier for finding the talent their organizations need and accessing them on-demand,” Diller said. “Almost half of the world’s population is now connected to the Internet. And the people with the latest skills have essentially grown up online. Many are freelancing online even before graduating from college. Working online is the new norm. And this new breed of talent is simply not accessible through traditional staffing channels.
2. The war for talent is becoming fiercer and leaders must find innovative ways to find the talent they need—quickly.
“Beyond the ability to reach across the country or globe to find exactly the right skill at exactly the right time, the flexibility to ramp up and down as needed with a bench of pre-qualified professionals, coupled with the speed to value achievable through online staffing has captured the interest of these same leaders who must innovate just to keep pace with the changes around them.
3. HR is realizing that independent contractors can no longer be managed like vendors.
“Our data also shows that contingent workforce leaders are increasingly dissatisfied with their current solutions for working with independent contractors. These individuals cannot be managed like vendors, nor can they be managed like FTEs. Online staffing platforms like the Private Talent Cloud™ provide the right solution to engage with this workforce efficiently and in compliance.”
But what makes these reports even more newsworthy is, they’re the first to include the combined data of both Elance and oDesk. The significance of this fact was not lost on analysts and journalists who closely follow online work (and rely on Elance-oDesk to be the industry bellwether), including Andrew Karpie of Staffing Industry Analysts.
In a recent article Mr. Karpie notes that the powerful new consolidation brings even greater insights to our collective understanding of online work today and in the future. In his post he points out that the reports “draw from the (combined) Elance-oDesk data warehouse, which contains the world’s largest and most comprehensive set of data available regarding independent work happing (online).”
He went on to further explain the significance of the combined reports:
There were quite a number of interesting data points in this new combined data set. One was a revelation that the current annualized run-rate of Elance-oDesk gross spend/freelancer earnings of $940 million, which CEO Fabio Rosati mentioned in a briefing call, was fast moving toward $1 billion (at that level, Elance-oDesk would weigh in around the same size of the 35th largest global staffing firm — and growing much more rapidly). In addition, there was truly revealing data, such as there now being 2 million U.S.-based freelancers registered on Elance-oDesk (with 248,000 new US workers registering January through May 2014). The report also pinpoints the natural—and ever more rapid — ebb and flow of different skills in demand: Demand for Data Science, Internet Security, and Android App Development is growing noticeably, while demand for Facebook Development, Ajax Programming, and Joomla! Development is noticeably falling off.
And so, while these published reports reveal some interesting data points, they also reveal — like the tip of an iceberg — the enormous data resources and insights that online staffing platforms make possible.
Here at Elance-oDesk we’re excited to now bring additional insight to online work. This will allow our many communities greater understanding of the market. This is especially true for freelancers who can visit our Trends section to see what skills are in demand, so they can adapt, remain relevant and grow their careers.
Elance-oDesk CEO Fabio Rosati also expressed his commitment to providing this increasingly valuable information to our communities. "Never before have we enjoyed such visibility into work — from the number and nature of jobs, to demand for skills, to where and how the work gets done," he said. "We live in a connected age when millions of businesses and professionals can collaborate with anyone with unprecedented ease. Together with our customers, we are re-imagining where, when and how work gets done."
For a few highlights from our online work reports (which cover data from January through May of 2014), you can also check out this quick recap.
As online work picks up steam in the mainstream, the world continues to recognize Elance-oDesk as the voice of an industry.
A case in point is the Wall Street Journal, which recently asked Elance-oDesk CEO Fabio Rosati to pen a blog post for their popular The Accelerators series. It’s a forum for leading startup mentors to discuss the strategies and challenges of creating a new business.
For Fabio’s insights, you can read the post on the Wall Street Journal site. You’ll learn how our “sharing economy” is bringing people more than a warm bed in a foreign city or ride home after dinner and a movie. It’s giving people back precious time in their lives to do what they enjoy most, thanks to freelance workers whocan tackle projects.
More specifically the article touches on topics ranging from the vast opportunities that now exist for freelancers and businesses, to what to expect down the road and how to derive the most from our evolving sharing economy. Read Fabio’s reflections on how online work is impacting the world around us and how our sharing economy is solving critical inefficiencies.
A new report released last week shows that businesses around the globe are increasingly going online to hire skilled technology and engineering professionals.
The monthly report tracks hiring, as well as skill and wage data, for American freelancers. What stood out in February’s numbers was the fact that businesses are hiring U.S.-based technology experts at record pace on Elance. In fact, IT and Programming continues to be Elance’s highest-growing job category in the U.S. (accounting for 51% of total hires in the month). Compared to February of last year, there were twice as many engineering hires and 130% more paid to engineering freelancers from America.
One can infer from these numbers that businesses worldwide are looking to accelerate growth quickly, and for the best results they turn to highly-skilled U.S. freelancers who command higher wages and deliver quality work.
We regularly publish real-time wage, location and skills data in the Trends section of our website. Our goal is to publish data and reports that help create a truly transparent workplace for freelancers and the businesses that hire them.
One of the hottest fields these days is 3D printing. It’s front and center on most everyone’s mind – from journalists and venture capitalists to manufacturers, consumers and of course, enterprising startups looking to cash in on the next big thing.
In case you’re unfamiliar, 3D printing allows people to use plastics and other materials to print anything from car parts to toys (and who knows what?), right from the factory floor or kitchen table. The revolution is without question shaking up what’s possible.
Here at Elance we’re always among the first to see trends, and we’re definitely seeing a spike in activity related to 3D printing projects. We also have a full-range of freelance 3D experts ready to tackle projects, so feel free to hire a CAD designer for your next project. Right now we have nearly 400 3D printing jobs on Elance, among the 70,000 3D jobs currently listed (ranging from 3D CAD, modeling and scanning to 3D animation). For more information, see our trends section.
Hoping to support those in the 3D printing realm, Elance has also hosted meetups recently to foster better communications and to accelerate development. Much like the “homebrew computer club” that spawned the personal computing industry in the 70’s and 80’s, these meetups focus on the quickly-emerging world of 3D printing. Last week at our Silicon Valley headquarters our 3D printing meetup featured 75 entrepreneurs who enjoyed a presentation by Geoffrey Doyle, CEO of GrowShapes and Steve Nguyen, VP Marketing of Sixense Entertainment.
2014 is shaping up to be a banner year for online work, and particularly for businesses that hire talent in the cloud. If last year’s trends are any indicator, the future looks exceedingly bright. In 2013, over 1.1 million new freelancers and 441,000 new businesses joined the Elance community (a hearty welcome from our team to each and every one of you). The growth in our marketplace has been dramatic and continues to accelerate, driving a 50% year-over-year increase in freelancer earnings.
As we look beyond the numbers, it’s clear that businesses are now getting work done in an entirely new way. In fact, an exciting new future of work is emerging. Based on what we saw happening on Elance in 2013, these are our 4 predictions for online work in 2014:
1. Freelancers will command double-digit wage increases—Freelancers are enjoying higher earnings due in part to increasing demand for specialized talent. In December 2013, the average hourly rate on Elance for a U.S. based freelancer rose to $27. Increased demand for both Creative and STEM (Science Technology Engineering and Math) skills drove hourly rates up 10 percent last year and are predicted to fuel similar increases in 2014.
2. Freelance technology professionals will become part of every company’s team — IT and Programming continue to be the highest-growth online staffing categories, representing nearly 40% percent of hiring last year. In 2014 more businesses will turn to online work marketplaces to find software programmers, application developers, system administrators and data scientists. In 2013, the demand for networking and security professionals increased over 400 percent, enterprise software developers 100 percent, and mobile app developers 50 percent compared to the same period last year.
3. Your next MVP may be a freelancer—More businesses are adopting a hybrid staffing model, comprised of both full-time employees and a trusted extended workforce of freelancers. In the United States, the United Kingdom and Australia, the number of companies hiring across multiple skill categories increased over 30 percent, with German companies increasing 69 percent.
4. Online hiring will be local—Even when hiring online, 2013 data shows that many businesses prefer to hire local talent when possible. The demand for talent that is both local and online talent will continue to grow in 2014.
In addition to the annual Global Online Employment Report, Elance just released our regular monthly U.S. Employment Report for December 2013. Both are derived from hiring and payment data and measure several key indicators, including the number of new jobs created, the number of people looking for work and local data on hiring and wage growth on Elance.
Each report reveals exciting news for the Elance community, as expressed by Elance CEO Fabio Rosati. “With millions of talented freelancers working online, more businesses are meeting their staffing needs online,” Fabio said. “Until recently, a team of Elancers was the secret weapon for entrepreneurs and startups, but in 2013 we saw a noticeable shift in the labor market with many large companies building extended workforces online to engage talent they don't have in-house.”