An Elance press release today announced the publication of the company’s semi-annual Global Online Employment Report, indicating continuing high growth in freelancer earnings (i.e., gross billings) and continuing positive trends in key driving indicators (new clients, new freelancers, number of postings, et al).  The press release also summarized some key findings from another recent Elance report (the annual Global Business Survey) that further support a picture of positive growth trends.

Perhaps the most significant information in the data released was the company’s gross billings of $130 million for the first half of 2013.  We know, from previous Elance reports, that billing levels in the past two years ranged progressively from $64 million (first half of 2011) to $104 million (second half 2012).    So with $130 million in first half of 2013, there was a considerable jump above the trend line.

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Though we won’t know for sure until early 2014 and the next Elance report of gross billings, these data and other data reported seem to indicate notable acceleration occurring in 2013.

Growth in the number of clients and freelancers remained robust and steady over Q1 and Q2 2013, consistent with many prior quarters.  So the increase in second-quarter 2013 gross billings does not appear to be attributable to commensurate increases in the number of clients or freelancers on the platform. 

However, in the first quarter of 2013, “jobs posted” had jumped to 300,000 for the quarter, up from an average number of postings per quarter of about 220,000 over the previous four quarters.

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So it appears that accelerating demand (by Elance business clients for Elance freelancers) may be the significant factor behind the increase in gross billings.

According to Elance, “hiring by businesses on its platform has grown 51 percent since last year.” 

And the acceleration in the demand for online Elancer work appears to be connected to these demand-side developments : 

1. Increasing demand for and difficulty in finding STEM (Science, Technology, Engineering, and Mathematics) as well as Creative workers,
2. Different ways businesses are finding to effectively use online workers (i.e., not just for limited projects, but also as a way of engaging a team of resources for a much longer term or as a way for businesses to expand geographically in an increasing global marketplace).
3. Increasing business acceptance and valuing of online freelancers as viable resource options (my conjecture:  possibly resulting in more frequent postings of jobs or posting of larger jobs) 

While aggregate platform gross billings are being driven upwards by factors like these, pay rates and freelance earnings are also rising in key work categories, further lifting topline numbers.  Elance reports that, “in the U.S. alone, freelancer earnings are up 69 percent over the prior year and hourly wages are ten times the national average.”  US-based freelancers receive approximately 25 percent of all gross billings earned on the Elance platform, and Elance does not indicate whether freelancer earnings are increasing, decreasing, or flat for the remaining 75 percent of earnings received by freelancers outside of the US, so it is not possible to say the extent to which higher rates of freelancer earnings are contributing to the overall growth of gross billings across the platform and all geographies.    

If Elance continues this acceleration for the remainder of 2013, annual 2013 gross billings of $300M could be reached or exceeded.  In this scenario, Elance will have achieved an annual top-line growth rate of 50 percent or more (well over Staffing Industry Analysts’ early 2013 growth rate forecast of 40 percent for the entire online staffing segment).  But we must see.

At this stage, with regard to Elance (and even its competitors) there do not appear to be any significant foreseeable growth limits for many coming quarters, as there continues to be plenty of room for further SMB penetration worldwide on the client/demand side of the platform as well as much potential for expansion of online freelance workforce wherever in the world skilled talent may exist.

In fact, I am finding mounting evidence of accelerating growth across the segment. And this is even excluding the potential for expansion of service offerings for large enterprises with more complex requirements (something which most of the largest Online Staffing platform firms have not yet tried to address in any notable way).  Larger enterprises thus remain another layer of practically unexploited growth potential for Online Staffing businesses, but one with a probably different growth, risk, and business model profile.  But even without deliberate, organized attempts to significantly/extensively penetrate large enterprises, there appears to be plenty of runway ahead for Elance and other platforms in the segment. 

My own individual perspective is that the online staffing segment is at another inflection point, now several years after the last inflection point that was connected with the Great Recession.  If at that time the new acceleration was fueled by desperation and necessity, this time it will be fueled on a larger scale by acceptance, broad adoption, and innovation of use.