Online staffing is the subject of this month’s Counterpoint. Jay Lash argues it is really just online freelance, but Andrew Karpie says online staffing is a platform that can support many types of work arrangements.
ARGUMENT: It is really just online freelancing
By Jay Lash
Online staffing is primarily a manifestation and enabler of virtualizing freelance work.
Largely focused on the creative freelancer, oﬀshore developer, moonlighter and administrative home worker, companies in the segment act as a vehicle for low cost, “just-in-time” talent. They oﬀer a strong solution for tactical, small, easy-to-deﬁne projects that can be managed remotely.
Many (not all) workers are willing to provide services for very low rates because they are either oﬀshore with a lower standard of living than U.S.-based workers, or they have lower income requirements because they are moonlighting and happy to receive supplemental income. This segment of worker is typically not a core part of the staﬃng industry; rather it is a new worker pool.
I do believe, however, this online freelancing industry and those that use it may face strong headwinds from regulatory agencies. To date, they have operated largely under the radar, but these services make it easy to avoid regulatory compliance with local and international labor law, sales taxes, payroll taxes and income taxes.
The staﬃng industry needs to be careful about encouraging these platforms without providing caution, advice and solutions to mitigate abuse. Let’s not facilitate a connection that can backﬁre from an industry perspective. Just like the ﬁnancial industry (whether justiﬁed or not) is faced with serious brand and ﬁnancial damage due to a lack of self-restraint on lending practices, let’s not perpetuate practices that enable regulatory avoidance — especially with a political hot potato of sending non-taxed income to oﬀshore service providers. Online freelancing is here to stay, but let’s use it responsibly.
Jay Lash is vice president of market strategies for MBO Enterprise Solutions. He can be reached at email@example.com.
ARGUMENT: It is more than “gigs online”
By Andrew Karpie
Online staffing platforms can support many kinds of work arrangements, not just limited freelance work.
According to a recent survey, well over half of oDesk clients reported they were interested in forming long-term relationships with online workers as project team members or a part of blended workforce. Online staﬃng platforms can enable more than limited freelancer gigs.
While not a core part of the staﬃng industry today, it could be a growth market segment going forward. Online staﬃng platforms have begun to make visible new areas of opportunity, new forms of work arrangements through which supply and demand meet. We seem to equate online staﬃng with cheap oﬀ-shore labor, but there are many contractors, who are able to sell and bill their services at higher rates, based on things like quality, level of expertise, reliability. And some of the highest growth areas for online contractors are in the U.S. areas of high unemployment.
It is interesting that we ﬁrst think about how online work platforms might be a way to circumvent taxation and regulation, whereas we might also consider how such platforms could actually be a way to enable tax and regulatory compliance (over ICs, for example).
I think the issue for the staﬃng industry is not that of “encouraging these platforms,” but rather coming to grips with how to leverage these models to serve clients better — satisfy more demand through speed, eﬃciency and new work arrangement service oﬀerings. There is no doubt much evolution and risk ahead — and being on top of change and risk is essential to pursuing almost all emerging opportunities. But dismissing new areas of market demand and ways of doing business carries risks as well.
Andrew Karpie is a research analyst with Staffing Industry Analysts. He can be reached at firstname.lastname@example.org.