The most recent federal jobs report may have looked bleak, but there is a large and growing group of people who have a sure place in this economy — freelancers.
Elance debuted its Private Talent Cloud today to help companies hire, manage, and pay their freelancers on demand.
“Research shows that the No. 1 reason businesses hire freelancers is to scale their business up and down quickly,” Elance’s CMO Rich Pearson told VentureBeat. “Getting access to the best talent often takes time and the process can be very cumbersome for everyone involved. Freelancers are currently managed by disparate people and teams across an organization. Now businesses can bring all of their existing freelance and contract talent into their own private network, which operates much like a social network.”
Elance is a freelance marketplace that connects clients with freelance employees. There are 14 million people in the “contingent workforce” in the U.S., and American businesses spend over $400 billion on these workers, and these numbers are on the rise. Intuit conducted a study which found that by 2020, 40 percent of labor in the U.S. will be comprised of contingent/independent workers.
As the U.S. moved into the recession, contingent workers were the first to go as part of deep labor cuts. Now as the country emerges from the recession, freelancers are the first to be hired back. Businesses want to remain nimble and keep their costs low, but also need to satisfy specific personnel and skill needs. A report on “The Future of Work” released by Tower Lane Consulting found that 60 percent of enterprises plan to increase freelance hiring in 2014.
However, the process of finding and vetting freelancers is time-consuming and may not seem worth it for short-time positions. This is where Elance and competitors like oDesk, Freelancer.com, and Guru step in. Their online marketplaces make it easier for businesses to find skilled people.
Along with the growth of this workforce comes new challenges for businesses, who need to keep track of all the freelancers’ activities.
Pearson said that businesses hire, manage and pay freelancers through a variety of different tools, agencies, and resources, which is expensive, time-consuming, and can lead to errors. This is in “direct opposition” to why they hired freelancers in the first place — to get work done cheaply and quickly.
Elance observed this problem with many of its existing clients, and spent the last 18 months developing the Private Talent Cloud, which CEO Fabio Rosati mentioned onstage at CloudBeat 2013.
“This is the most the most significant shift in Elance’s business since our relaunch in 2007,” Pearson said. “We are currently the only company offering a fully-integrated enterprise platform and we estimate that it will comprise more than 50% of our business in two years.”
This product has tools to assist with every step of freelance work. Freelancers and contractors can complete the on boarding process and get paid online. Information about these workers is stored in a private network, so hiring managers (or anyone else with interest) can access the data to make sure everything is on track.
Companies like Elance and oDesk are doing more than making it easier to use freelance workers. They are driving a fundamental shift in the workforce away from full-time employees with eight-hour shifts, and towards an “open talent economy” that is global, technology-enabled, agile, collaborative, and moves rapidly.
“Global markets and products are driven by accelerating innovation and growing scale, and they demand talent pools and systems that can be rapidly assembled and reconfigured,” said a report published by consulting firm Deloitte. “Business leaders and customers expect agility, scale, and the right skills on demand. These new business and talent models look less like integrated factories and companies and more like highly orchestrated networks and ecosystems with a multitude of approaches to mobilizing, orchestrating, and engaging talent, skills, leaders, and ideas.”
Taking advantage of the potential of the extended workforce is important for remaining competitive. Elance is working with Fortune 100 companies and medium-sized business alike. Its network includes over 800,000 businesses and 3 million freelances around the world. More than 1.2 million freelance jobs are completed every year.
Elance has been around since 1999 and is backed by $95 million in venture capital. Investors include New Enterprise Associataes and Kleiner Perkins Caufield and Byers, which has invested in the company since 2000. Elance is headquartered in Mountain View, California with offices in Oslo, Norway.