Freelancer.com is expected to list on the Australian Stock market this week – 15th of November to be precise; at the current offer price the market capitalization would be $218m and the company claims that the stock is already oversubscribed.
It is not surprising because Freelancer.com operates in one of the sweet spots of recruitment, riding the wave of temporary working, that will continue to build in years to come:
One of the fascinating changes in the world of work is the unstoppable rise of remote freelance working. Instead of continuing to play by the rules of the industrial society, we are now entering the era of working ‘when we want and where we want’. This increases the global availability of talent, whilst enabling people to develop stronger local ties; skills and talent are moving, but only electronically. This e-transient knowledge section of society is being supported by the service sector of society, which leads in equal parts to more automation of repetitive tasks and to an increase in casual work.
Casual labour is more prevalent outside the developed nations, particularly in developing countries.
Although casual labour is more prevalent outside the developed nations, overall it is a global phenomenon and a massive opportunity of levelling the playing field for everybody involved. Companies are sourcing workers from across the globe. In the current climate, advanced economies, such as the US and UK, are the leading sourcers of global online freelancers, and – as the slide below from cloud-based contractor sourcing site Elance shows – a significant portion of this labour is sourced from developing countries such as India and Pakistan.
To underpin this with some real numbers: Even though India is a service society, 35% of the all IT coding is written in India. At the same time, it is worth remembering that the Elance’s figures, due to the source, will have a higher representation of the USA, but generally, they are a great representation of what is currently happening in the world of work.
Generally, the casualisation of employment is expected to continue, especially as it is driven by both the employer and worker.
These three trends – continued economic instability, longer-term benefits of temporary workforce and increased workplace flexibility desired by the worker – are the underlying drivers of this ever increasing change, not only in the UK as the example above, but globally.
Let’s have a closer look at the UK (as a proxy for developed nations):
During the economic downturn, the UK has experienced increasing casualisation of its labour market, which has led to a rise in part-time working, temporary employment, freelancing and remote working.
Part-time working has risen as employers limit their full-time hiring and try to retain their most valuable staff. So we see an ever increasing shift towards part-time work as more employees are unable to find full time work (from 10% in March 2008 to 18% in April 2012.)
The increase in temporary employment has similar drivers; it has increased as employers tighten their hiring in response to an uncertain economic outlook. Temporary employment growth has helped offset declines in permanent recruitment, but much of this is involuntary, with workers unable to find suitable permanent roles (see the slide below for figures)
So people need to make the most of the current employment market and as workers take more control of their (under)employment, freelancers have grown to record levels, due to fewer employment opportunities and the need to supplement income.
Remote working has also been on the rise, as it helped employers reduce costs and increase their flexibility. So far, it has all been driven by the economy. That is certainly a really important driver, but not the only one – at the same time, both men and women are increasingly seeking increased working flexibility, with 83% of workers (both male and female) in a recent survey noting the desire to work away from the office.
So whilst the shift is currently driven by the dire economic situation, it will become a mainstay of the working world, even when we are reaching calmer waters. Ultimately, like money skills and talent will be moving fluidly around the globe, enabled by technology and shifts in values and priorities.
The emergence of new business models
A number of new business models have emerged to address the casualisation of the labour market. The level of backing of these businesses and the success achieved so far indicates that this is not a blip or a fad. Not at least the valuation of Freelancer.com
– Companies like Grockit serve the part-time, flexible working market: They are an online platform that connects students with tutors and provides tools to facilitate tutoring online and have received around $27m in funding.
– Companies like Taskrabbit and Amazon Mechanical Turk are sites built for task-related work. Taskrabbit connects people who want a job / task done, with people who will do the task for cash and have received around $18m in funding. Amazon launched the “mechanical turk” as an online marketplace launched in 2005 where people (mainly computer programmers) can post micro-tasks that cannot easily be automated and require a degree of human intelligence. So far around 500,000 workers are registered on the marketplace from 190 countries.
In the longer-term, increased casualisation is likely to continue, as lasting economic uncertainty will likely result in employers favouring the flexibility of more casual work contracts and workers continuing to have limited employment alternatives. Many employers plan to carry on using temporary workers based on their positive experiences to date, even when we leave the current economic situation.
At the same time, workers are increasingly seeking flexibility to work away from the office and the labour market is becoming increasingly international, with companies sourcing workers from across the globe (partly driven by the socio-economic developments in developed and developing nations (shrinking populations, rising middle classes and the effects on migrations as explained in the post “The rise of the internal headhunter”). Expect this trend to continue, an improved economic situation might even speed it up instead of slowing it down.
The data t is based on an in-depth study by Evenbase into the casualisation of the labour. I published a slightly different version of post before Evenmore.