Freelance Platforms and the Gig Economy: Empowering Small Businesses

The emergence of freelance platforms such as Elance (Upwork), oDesk (no longer in use), and Guru has transformed the way small businesses approach hiring. Many argue that these platforms are causing small businesses to avoid hiring actual employees. However, the reality is far more nuanced.

Empowering Small Businesses

Freelance platforms are not solely responsible for discouraging small businesses from hiring full-time employees. Instead, they empower these businesses to focus on hiring employees who bring significant value and creativity to the table, enhancing the bottom-line profits of the company. Why pay more for an in-house employee when you can achieve the same results more affordably through outsourcing?

Quality and Client Preparation

It is true that the quality of work and workers on such outsourcing job sites can leave much to be desired. However, this issue is more often a result of poor client preparation and planning rather than a direct problem with the freelance platforms themselves. Clients often approach these sites with a casual attitude, expecting perfection with minimal effort. They should invest more time in planning and analyzing potential hires, as well as in thorough communication both before and after the hire.

The Gig Economy

Freelance platforms are part of the broader shift towards the gig economy, but they are not the primary driver of this phenomenon. While these platforms do provide a convenient outlet for business owners unable to afford long-term employment, the gig economy is a more complex and multifaceted issue influenced by a myriad of macro-economic factors. Some gig workers, particularly ex-corporate professionals, find working independently more secure in terms of diversifying their employer profile. However, the global marketplace and the bidding structures of these platforms do drive wages down, making it challenging for high-quality independent professionals to compete with outsourcing options.

Impact on Independence

Freelance platforms serve a valuable purpose for small businesses and economies with limited resources. While they are more harmful to high-skilled independent professionals in advanced economies, they can be highly beneficial to those in high-growth economies and small business owners facing financial constraints. These platforms enable business owners to hire top talent without breaking the bank.

It is worth noting that the growth of these platforms is driven by the need for flexible employment options. To fully understand the impact of these platforms on employment figures, we need to examine the broader macro-economic landscape. For more insights, you might want to consult experts like John Horton, an oDesk Staff Economist, who can provide a comprehensive analysis.

In conclusion, while freelance platforms play a significant role in the modern business landscape, they are more empowering than hindering to small businesses. By leveraging these platforms effectively, businesses can hire top talent efficiently and adapt to the ever-changing economic environment.