India, one of the largest economies in the world, shockingly has a reported minimum wage of 16.82 rupees/hour (0.28 USD), according to Wikipedia. Thus, it may not be equally mind boggling to acknowledge the statistic stating it being the second most employable country in the world right after US (which is also incidentally also the highest job provider), as described by Elance’s global online employment survey.
[Image source: Elance]
So the question arises: Are freelancing online companies writing our cheques?
There has been a movement from industrial to digital economy. The lacunae in the big firms for skilled employees and the need for the talented workers to work within their own principle of the three ‘Ts’ (time duration, type of project and takka (money)), lead to the genesis of the idea of “online freelancing contract employment”.
Online companies like Freelancer, Elance, Guru, fivver, to name a few, charge a fee to act as a medium between these businesses and employees making the interaction easier while utilizing online work models.
So, how does it work?
These sites connect companies that require collaboration on specific projects and individuals who are skilled and ready to complete the tasks. The sites display employee evaluations in the form of employment trends for an individual, in order to get the best hire for a task. There are opportunities for the individuals to improve and acquire new skills to stay competitive in the evolving market place.
A recent article in The Times of India stated, that the initial payment from a lot of these online sites is Rs. 60/hr, which with time may increase to Rs 1800/hr, highlighting the reason for the shift of several IT professional to freelancing.
Further, there is a promotion of open labor market policy, therefore providing access to top-quality people in locations from Kansas to Kolkata.
Jobs listed online range from product designing and sales, to building applications for iPhones or Andriods, to writing articles or maintaining company blogs or transcript corrections. Currently, the thriving global skill sets in demands are observed in marketing, finance and IT.
[Image source: Elance]
According to a recent article in the Wall Street Journal, Fabio Rosati, CEO of Elance announced a 3% increase in hourly rates, which was an average of 24 USD in 2013 and an on-going merger with oDesk. In parallel, CEO of Freelancer, Matt Barrie wrapped up acquisition of online internet marketing platform Warrior Forum (one of many), capturing an additional 732,000 users in the process.
These trends suggest exponential shift for employment generation. Industry analysts expect this sector to grow from $1.5 billion last year to $23 billion or more by 2020.
These numbers and the idea of liberation from conformist working environment may romanticize the concept of contract employment. However, we must not forget to factor in certain “hiccups”.
These include lack of job security, health and retirement plans. There is also a distorted ratio between the online staff employees and the number of projects available, leaving several individuals without work and the employed with complaints of low salaries.
From the point of view of the employer, there is dismay about the quality of the work done on projects. Further, the online scenario also highlights the deficiency in establishing a personal long-term relationship between the employer and the specialist.
As shown in the graph above, there exits an approximate inverse ratio between the skills in demand and the corresponding Y-o-Y earning growth. For example- Design & Multimedia is the category with highest percentage (23%) of jobs posted. However, in the same category, the yearly earnings growth is among the least (40%). Similarly, Finance has the highest (88%) y-o-Y growth, with only 2% of the jobs listed.
This clearly indicates the various areas where employers as well as freelancers can take advantage off.
It is important to realize the requirement of the two-sided effort from the employer and the employee. The employee should value quality and be certain of the area of expertise. The company should value the worker and his/her time.
That being said, the concept of “sharing economy” is definitely intriguing but stands at a nascent stage. Perhaps, with a bit of “tweaking”, it may prove to be mutually beneficial to both the sides in the near future.
Feature image source: designrshub
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