CWS 3.0: February 15, 2012

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News: Cloud Hiring Takes Off

Earlier this month, eLance, an online platform that connects independent contractors and companies, announced it had secured funding to expand, which is a sign the business model has taken off.

The company announced it had secured $16 million in expansion capital, from the Stripes Group and existing investors New Enterprise Associates (NEA) and Kleiner Perkins Caufield & Byers.

The news is significant because it indicates that “smart money” is selecting a contingent workforce management business as a hot target for investment (based on future growth). Second, it may portend a shift that is occurring in how businesses and contingent workers are connecting, with information technology acting as the “great global disrupter and disintermediator” of at least some parts of the traditional temporary staffing industry. 

ELance is just one of a growing number of freelance and crowdsourcing platforms that can be accessed anytime and anywhere to secure specialized talent on a temporary basis. Other freelance platforms, like Guru.com , oDesk, vWorker, Freelance.comProject4hire.com, provide not just a “meeting place” for businesses and contingent workers, but also a whole outsourced platform for conducting and managing temporary work assignments (including billing/payment, quality control, etc.). Other such platforms are more specialized in their focus, such as Serv.io (creative, content generation) or ProZ and GetLocalization (translation and localization).

With the ongoing development of web technologies and applications, more and more work has been shifting to online, remote forms — not just work related to information processing tasks, but more and more work related to complex human interactions (from phone reception to doctor visits). With the ongoing, heady technology and work model innovations (e.g. IP telephony, crowdsourcing, etc.) and the tendency of businesses to use contingent workers for “special skill/expertise” assignments, the phenomenon of freelance and crowdsourcing platforms is clearly not a passing fad and should grow considerably in the current business and economic climate.