On Aug. 1, Elance previewed some findings from its Q2 Employment Report (to be released later this month). Unlike rough-grained government labor reports, information monitored on the Elance platform provides insights into what is happening in some fine-grained skill/expertise segments of the economy (and also suggests what is happening in the types of “e-work” intermediated online by platforms like Elance).
Overall, the Elance preview suggested strong growth in online staffing spend over the past year. In its preview, Elance reports that on its platform, “earnings for U.S. freelancers are up 69 percent over the prior year.” In other words, spend for U.S.-based online freelancer work is increasing at a fast clip (especially in certain specialized categories).
It should also be noted that, on the Elance platform, U.S.-based contractors are reported to be by far its largest group of contractors and account for the highest level of cumulative spend. U.S.-based contractors on the platform also tend to be high-skilled in a range of fast growing technical areas, including data science, app development, 3D printing, CAD, and networking and security.
So what does the preview enable us to see about this highly skilled and specialized, micro-entrepreneurial workforce of professionals (within the U.S. economy) that prefers to freelance and to do business on the Elance platform?
Here are a number of key findings about year-over-year growth in work and earnings:
- Hiring of STEM freelance workers on the Elance platform has increased 51 percent over the last year.
- Demand for data scientists and statisticians is up 200 percent while the average hourly rate for U.S. based statisticians on Elance more than doubled
- Demand for U.S.-based software application developers was up 62 percent
- Demand for U.S.-based CAD talent grew nearly 70 percent and average pay grew 17 percent
- Demand for networking and security experts saw remarkable growth on Elance with an over 300 percent increase in hiring. In the U.S., networking and security professionals earned a 20 percent raise in their hourly rates on average
Now, these findings on what is happening on the Elance platform may not seem to differ that much from what is happening in the economy in general — that is, for these specific STEM work categories (yes, we know they are in high demand, with shortages all over the place).
But what it does suggest is how a platform like Elance can support the rapid, flexible, efficient allocation of scare specialist talent/resources.
It does make sense that scarce talent might very well prefer “virtual e-work arrangements,” because they are so market-efficient. And the businesses who need their support may be willing to embrace more of a “pay per drink” procurement model to consume only what they need to (with no waste).
So this information provides some interesting food for thought about how certain work markets may, more and more, be beginning to function. Online platforms may be proving the optimal marketplaces for both buyers and sellers to affect the arrangement of work performed by scarce, high-skilled, high-cost, geographically-distributed knowledge workers.
But most of the adoption of this mode of procurement has been occurring within smaller, and even startup, companies versus large-scale corporate enterprises. Could this possibly imply a disconnect between the largest companies that need this kind of talent (and try to buy it) and the actual limited labor pool which consists micro-entrepreneurial e-workers? Larger companies can, in the short term, bear a higher cost for procuring these kinds of workers, but cannot in the longer run. The economics don’t work for the buyers (and they may not work for the sellers either, if it’s just an efficient supply chain that is absorbing all the cost).
Larger enterprises may be slow to react to these signals, but lean individual e-worker specialists in high demand can process these signals very quickly and move their service offerings out of the traditional (relatively slow and inefficient) talent supply chain to fast, efficient online platforms that allow these e-workers to optimize their own economic outcomes.
Is it possible that this Elance data is the reflection of the tip of the iceberg in terms of how new forms of specialized knowledge work are being intermediated, arranged, transacted?
Read the Elance press release in its entirety here.