The Future of Freelancing

Sites like Freelancer.com make it easy to outsource work, but some people say bidding sites push prices too low.

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At Freelancer.com, you can hire someone on the other side of the world to design a website for you, which means you’ll probably pay far less than you would for a local designer. Users post their projects, wait for bids to come in, and then accept one. The most popular jobs include design work, online marketing, search engine optimization, and copywriting—work that can be done from anywhere and then delivered online.

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The website—and others like it, including Elance.com and 99designs.com—are powerful tools in the new freelance economy, in which workers are looking to take more control of their income by earning money through various side gigs and businesses are looking to cut costs by outsourcing more tasks. But there is a dark side to the phenomenon, too.

Graphic designers have been particularly vocal, arguing that sites that allow buyers to bid on projects drive down prices and make it more difficult for them to earn a fair wage. They are, after all, competing with designers from all over the world, many of whom are willing to work for far less than they are. As the Canadian design company Headspace explained on its blog, “99designs is bad for the design industry as a whole because it cheapens the profession, literally and figuratively. It perpetrates the notion that graphic design is easy, and all you need is the right software and a ‘good eye’ to be able to do it effectively.”

Headspace also pointed out that asking freelancers to bid on work by submitting their designs, as 99designs does, means requiring designers to spend time and effort to create work without any guarantee of payment. Headspace founder Kyle Racki writes, “To ask a designer, who would normally charge money by the hour or by the project, to give away free design work ‘competing’ to win a project is like asking a carpenter to build you a chair with the hopes of getting paid if you like it.”

On Freelancer.com, which has close to three million global users, jobs tend to flow from wealthier nations, where companies, start-ups, and entrepreneurs are looking to outsource their work to countries where the cost of living is lower and workers are hungry for those projects. Together, the United States and Great Britain make up 50 percent of outsourcing offers, while one-third of the freelancers using the site come from India. Pakistan, Bangladesh, and the Philippines make up an additional 20 percent of freelancers. (Some 11 percent are in the United States.)

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Unlike 99designs.com, freelancers at Freelancer.com don’t complete the work before they are selected, they simply submit their bid. Still, freelancers in wealthier countries who charge more for their services face a distinct disadvantage, since they are competing with workers around the world.

That might be an unavoidable dynamic in the new, border-free economy of the Internet, and Matt Barrie, chief executive of Freelancer.com, argues that much good comes out of the arrangement. He says his site empowers entrepreneurs, both by making it easier to outsource work for an affordable price and by enabling workers in the developing world to sell their services online. Most people in the world, he points out, live on $10 a day or less. “Now, by going online, you can earn your month’s salary in a few hours or days. This creates incredible opportunities for freelancers to raise their economic circumstances, creating not just opportunity for themselves, but also for their local community,” he says.

At the same time, he adds, his site helps small business owners in the West build their own businesses. “Want to build a website? We've got someone in India that will do it for you for a few hundred dollars. Need a logo? We have a great graphic designer that will do it in Romania for $30. Previously, there was so much time, hassle, and cost involved trying to find someone that many people just give up when they see a quote for $20,000 or more to build a website,” he says. In total, he thinks Freelancer.com has saved small businesses and entrepreneurs between $500 million and $1 billion.

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In Barrie’s eyes, everyone benefits from freelancing. “Freelancers are motivated to deliver the best because it makes for a good portfolio, while employers are deeply involved in each step of the process… it’s a very dynamic, collaborative process,” he says.

As for why so many freelancers are pursuing jobs through sites like his, Barrie says it’s simply because they can. “It’s never been easier as it is now to juggle multiple jobs without sacrificing your main source of income,” he says. Not that everyone on the site is freelancing part-time only. Says Barrie, “There are people out there who have chosen to become full-time freelancers instead of employees. Freelancers have control of their time, and they get to work when they want to and with who they want to. It’s a very liberating experience.”

Twitter: @alphaconsumer