CWS 3.0: November 7, 2012

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Online Staffing Great for Certain Jobs

“Earlier big companies were saying that they want their CRM behind a firewall and they didn’t trust that they could have their data on the cloud. Today, their mindset has shifted. We see online staffing as following that same trajectory.”
— Gary Swart, oDesk CEO

Online staffing has gotten more than its fair share of positive attention but contingent workforce professionals are not a part of the fan club. It’s not because they have tried and rejected it. Staffing Industry Analysts’ 2012 Contingent Workforce Buyer Survey indicates that 78 percent of contingent workforce buyers are not familiar with online staffing services, an additional 10 percent said they were familiar but don’t know whether their organization uses online staffing services and 7 percent have no plans to use online staffing services. It’s time contingent workforce give it a try. Here’s why.

The Internet has leveled the playing field for workers both temporary and permanent. Telecommuting is a way of life in many parts of the globe. And this freedom gives the contingent worker tremendous leverage. “Say you are a contingent worker in the Bay Area who lives in Montana. You are willing to pass on some of those commute savings to the employer because you don’t have to get into a car every day, and it’s cheaper to live in Montana,” says Swart. Price can be a benefit with online staffing. Swart uses oDesk to demonstrate the pricing advantage of online staffing. We have 110 employees and 250 full-time equivalent contractors that come to work for us every day and the leverage that we get is about 5:1, says Swart. “We can afford five contractors on average for one full-time employee,” he adds.

However, it’s not just about rate advantages. It’s the ease of hiring and the easy logistics that follow once the worker is hired. “We are going to help you find the right talent, contract with him, manage him and pay him, and we are going to provide the infrastructure to do all of that. We are not the employer of record, oDesk isn't hiring the contingent to come to work for you, that would be a staffing firm or a temp agency, what we are doing is we are giving you the ability to hire the worker directly,” says Swart.

One of the big concerns around using contingent workers is the buyer trepidation around co-employment. And here’s how companies like oDesk deal with it. Since oDesk is just the platform and not the employer of record, the company (depending on the project) allows the client to determine whether the contingent worker should be treated as an employee (W-2) or independent contractor (1099). Then oDesk takes care of all the tax obligations and insurance requirements that go with employee or contractor status.

But it’s not a hands off-approach. oDesk steps in to monitor the working arrangement. For example, if the client has been working with a contingent and it’s been for 90 days, about 30 hours a week, and the contingent doesn't have any other clients on oDesk, (he may have other clients at other places), oDesk will make sure the client understands that the situation may trigger a red flag with tax authorities. At that point, oDesk will recommend that the client consult with an attorney.

Of course, globally this is an evolving arena. Online staffing is great for certain types of  jobs but many of the laws were not framed to apply to online staffing so rules vary widely by jurisdiction. “We have spent a lot of money on attorneys to make sure that the client is protected, the worker is protected and oDesk is protected. And I'd say that we have work to do there not to unlike other companies in the space,” says Swart.

Online staffing involves the buyer of labor using a website — such as oDesk— to contract with workers for tasks that can be done remotely. The buyer and worker will likely never meet in person

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