heads in the cloud

Here comes a wave of work-from-anywhere freelancers who can do your job for less

November 19, 2013
Obsession
The Cloud
November 19, 2013

Forget Twitter, Royal Mail or Chrysler. The most significant IPO of 2013, at least for those working in service industries, is arguably a much smaller one that took place in Australia on Nov. 15. Even though the company raised just $15 million on the Australian Stock Exchange, it would be hard to name a more direct play on the globalization of high-skilled labor.

Sydney-based Freelancer.com taps into the “cloud labor” revolution—the cloud-accelerated outsourcing boom that gives companies access to higher-end workers virtually from around the world. Proponents have praised the trend for helping resolve to labor shortages in the technology sector (whether these shortages exist is debatable); detractors say it’s driving down wages and threatening living standards in the developed world. 

Freelancer—which has lower revenues than US competitors like Elance and oDesk but more users (over nine million of them)—makes its money from advertising, memberships and commissions both from the small businesses and startups (mainly in the developed world) that post work on its site, and from the workers (generally in emerging markets) who take the jobs. Its revenue has nearly quadrupled over the past three years to an expected $A18.4 million ($17.3  million) this year.

Unlike companies like TaskRabbit, a much-hyped temp work site in the US, most of the work on Freelancer is relatively high-skill, including website design, software development, mobile applications, computing, writing, accounting and legal. India, where just 11% of the population has access to the internet, already provides the site with its biggest source of traffic (22%), according to web traffic measurement company Alexa.com.

Penetrating cheaper labor markets like India’s pays off for Freelancer’s business customers. According to the company’s IPO prospectus, the average value of a project on the site is less than $200. A crude search for projects with an average value of $200 lasting a week or less and with an average hourly rate of between $0 and $4 returned more than 2,000 entries.

But there may also be a market for Freelancer in developed countries like the US, where cheaper freelance work (without the usual salaried benefits) abounds amid a sluggish full-time job market. Already, the US hosts the biggest share of the corporate and freelance customers for rival Elance.

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