CWS 3.0: May 15, 2013


Online Staffing Sees Robust Growth

The online staffing segment showed significant growth in the first quarter. Online staffing is a category of contingent work in which workers and tiny micro-firms anywhere in the world can be sourced, engaged and paid to perform projects and activities. Like crowdsourcing, online staffing offers businesses a “talent-as-a-service” approach to getting certain types of work done, particularly knowledge/information work. At this time, most online staffing is being consumed by smaller businesses or directly (as non-programmatic spend) by line managers in larger businesses.

Staffing Industry Analysts estimated gross billed revenue in this category to be $1 billion globally in 2012 and forecasts 40 percent annual category/segment growth for the next two years. Recent sampling of firms providing information about their first-quarter performance suggests that this forecast is achievable and could be exceeded.

The largest of these platforms in terms of gross billed revenue in 2012 (reported at $375 million) is oDesk, which has not disclosed its first-quarter performance as of this time (though it has recently announced that it is sharpening its focus on services to support offerings for larger enterprises).

Elance, which reported $200 million in 2012 gross billed revenue, did provide a detailed report of its first-quarter performance. First-quarter gross billed revenue was $60 million, representing a growth of about 40 percent on a year-over-year basis. One major factor in this growth was the accelerating demand for STEM/technical expertise, which can be met by a supply of workers outside of the U.S. (not just in underdeveloped countries, but now increasingly in southern European countries where unemployment is extremely high). According to Elance, freelancers with STEM/technical skills seeking work through the site rose 123 percent year-over-year in in the first quarter. Meanwhile, “freelancers hired” through Elance rose 60 percent from the first quarter of 2012, an extremely steep rise from previous two to three quarters as well., which reports that it is the largest online platform in terms of numbers of registered freelancers and countries served, said first-quarter revenue rose 103 percent from the year-ago period. However, these growth numbers include the revenue of two acquisitions made in 2012 (a smaller one, ScriptLance, in July; and a larger one, vWorker, in November). Originally called Rent-a-coder, vWorker was among the first online staffing firms, launching well over 10 years ago). reported that there were 300,000 projects posted on the platform in first quarter (the same number of posted projects reported by Elance in the first quarter of the year).

Most of the smaller firms we talked to reported very high growth in all measures for the first quarter (often in triple-digit percent figures). Another company, France-based is due to report first-quarter results May 28. The company’s growth stalled in 2012, with total gross revenue at just under $65 million, essentially flat from $65.1 million posted in 2011.

Overall, development and expansion of platform-based online staffing talent-as a service continues to look very healthy. Growth is still being fueled predominantly small businesses, but it is likely to see increasing utilization of online staffing work services within larger enterprises over 2013 and beyond. 


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