Elance report: Freelance is the new full-time

While the national unemployment rate hovers at 10 percent, one segment of the workforce may be in higher demand than ever. Elance, a web-based network for freelance internet workers released a company report today showing a 40 percent increase in the amount earned by its community of freelancers year over year.

In the first quarter of 2010, the 106,000 workers in the network earned about $20 million. This is a high figure for Elance — highlighting the current market shift toward temporary or freelance employment. Based on the company’s report, it appears that businesses are in fact leaning more toward project-based hires, which give them more flexibility while also lowering costs.

The strongest argument for traditional, full-time hires has always been location. Having an employee show up to work in-person can have tremendous benefits. But with advancements in work-flow management and telepresence software, provided by companies like Elance and well-known Clarizen, freelancers can be remotely productive no matter where they are — like India or the Ukraine, the two top countries for information technology freelancers, according to the Elance report.

Elance allows freelance workers to post profiles spotlighting their skills and hourly or project rates. Companies looking to hire freelance employees can visit the site and browse through thousands of worker descriptions. Once a company finds someone it’s interested in, Elance provides all the tools it needs to work out terms, track and manage work, and make payments. The site hosts a diversity of skill sets — everything from technical writing to web site development.

Notably, the company says that four sectors have seen exceptional growth in freelance hires over the last quarter: mobile, social media, open-source software and cloud computing. Social media savvy, ranging from viral marketing to Facebook development, has also become one of the top five most popular skill sets on Elance. All of these areas have seen tremendous growth in general over the past year — and many of the companies that fit into these categories are light, capital-efficient operations that would logically be looking for short-term employees.

The biggest demand on Elance is for workers specializing in mobile development. The company attributes this spike to three trends: the launch of Apple’s iPad, Google’s continued push into the mobile space with Android, and the expected release of a new version of the iPhone.

Based in Mountain View, Calif., Elance is privately-held and hasn’t reported any external funding history.