Financial Advice by Women for Women
By TARA SIEGEL BERNARD
Published: April 23, 2010
The titles may seem better suited for the cover of Glamour magazine. But that doesn’t mean women don’t face special financial challenges. Women live longer, earn less and take more breaks from the workplace to care for children and elderly parents. And though studies show that women tend to save a slightly higher percentage of their paychecks then men, they ultimately end up with smaller balances because of their lower earnings.
Does that mean women need specially tailored financial advice?
Women who are suddenly single, like divorcees and widows, obviously may need help. And singles, in general, may have special needs, like disability insurance, because they don’t have a spouse’s paycheck to fall back on (though you can make the same case for single men). Financial advisers also say many women need to be prodded to evaluate whether they’re being paid what they’re worth.
But the vast majority of the financial advice is the same, regardless of sex.
The real issue, experts say, is that many women, despite strides in education and in the workplace, simply aren’t as confident and knowledgeable about financial matters as men. This problem persists even as women handle many of their families’ routine money management duties, like paying bills and making many purchasing decisions.
“Research has shown that women, even professional women with good jobs and successful careers, tend to be less financially literate than men,” said Annamaria Lusardi, an economics professor at Dartmouth College who has studied the issue. “The gap in financial literacy between women and men is large not only among older people, or those 50 and older, but also among young adults, an age group where women are more likely to have a college degree than men.”
That’s similar to what Eleanor Blayney, a financial planner who focuses on middle-age women, said she found when she gave a speech to her fellow alumnae at Mount Holyoke College a few years ago. “At the end, the hands went up, and they were all stuck at the very beginning of my speech,” said Ms. Blayney, who has a new book on the subject, “Women’s Worth: Finding Your Financial Confidence” (Directions). “They were scientists, professors, municipal elected officials. These were women with brains and jobs, and they were just at a loss to even know where to begin.”
Not all women lack financial skills, of course, and many may simply lack time. But studies show that women don’t find money and investing as interesting as men. Women also prefer to learn about money in person or in groups with others in their situation, as opposed to curling up with a book (the jury is out on whether pink covers help).
According to a 2007 study on gender differences by Tahira Hira of Iowa State University and Cäzilia Loibl of Ohio State University, women are still less likely to be socialized in financial matters, and they are more likely than men to find investment decisions stressful, difficult and time consuming. The study also found that it often takes a life event, like getting married, to prompt women to save and invest, whereas men were more likely to start investing gradually.
But while women may be less likely to enjoy investing, studies show that they may inherently be better investors than men. Females are less prone to risky behavior, for instance, and, unlike their confident male counterparts, they’re more likely to fess up to their own ignorance.
“One reason that women might be better financial decision makers, despite displaying, in general, lower literacy than men, is that women know what they do not know,” said Professor Lusardi, who is director of the Rand Financial Literacy Center..
Tuesday, April 27, 2010
Wednesday, April 21, 2010
Strategies for Effective Human Resource Management
Strategies for effective human resource management
Management of personnel and human resources has changed over the past three decades, partially due to increasing employment legislation, education issues, employee awareness, and changes in demographics. Thus HR managers need to find a strategy, which addresses issues of stability and change, to enable effective leadership of staff.
ISSUES OF STABILITY
Stability of the workforce is just as essential as uninterrupted sources of raw material and transport. This situation is even more important in service sector industries. In these businesses, the employee represents the main profit and revenue-producing element.
Disruptions caused with or by employees, such as insufficient numbers, union problems or other difficulties can seriously affect the business aim, namely to bring success and added value to its stakeholders. Therefore stability is important and it is the role of Human Resource to ensure this is achieved. However, they will face a number of problems in this respect.
To maintain correct staffing levels businesses need to recruit the right quality of staff. This includes people for production, administration, sales, accounting, and management levels. Historically, businesses have relied upon schools and colleges to supply this new input.
However, in recent years standards have fallen. This problem is resulting in the diversion of billions from job improvement and learning to what is in effectively remedial training, and is causing problems to HR.
Having achieved the levels of staff that are required, the last thing that a business wants is to have a large portion of them leaving. In an effort to avoid this, HR has to operate systems that attract and keep staff loyal to the company. There are a number of ways this can be achieved, by assisting with relocation and ensuring staff involvement in the business. Many Human Resource experts see a partnership approach with Unions on employee issues as a positive step in building strategies in the retention process. The difficulty sometimes exists in persuading the Unions to move from traditional styles to a more co-operational approach.
Another issues that impact upon retention are the rewards or pay and career path. Irrespective of their loyalty to a business, an employees first concern is to himself and his family. If a package offered by a competitor firm represents a significant increase over current pay and benefits, his loyalty to family are likely to come first.
Succession of staff also affects stability in the workplace. To operate successfully, continuance of skills and line management is vital. To ensure this is maintained, HR managers need to implement training and leadership programmes. Structured training needs to match the employees with the skill demands of the business. In service industries, the most important areas of training must concentrate on customer service and care. If this is not right, the business will suffer.
Business also needs an efficient line of management. It ensures information is communicated throughout the organisation and that problems can be quickly addressed. Developing these people from in-house staff members is often a good way of achieving succession in this area.
ISSUES OF CHANGE
No business can stand still; there will always be change. Some change is self-sought, whilst other changes are forced on the business by economic or legislative factors. Change needs to be addressed and the most successful businesses are those that anticipate change and react to it. Change will also affect employees, some more directly than others. Thus HR has to produce strategies to deal with these changes.
a) Internal Changes
It is important that HR involves the employees and researches the issues affecting them, for example in the case of technological improvements. In this situation, normally known in advance, HR should pre-empt the affect this has on the workforce by setting up a training schemes to increase the employees knowledge development to a level capable of allowing for a smooth transition from old to new procedures.
b) External Change
Most changes that affect businesses are because of external factors. The changes that affect the service sector most come from legislation and governmental demands. These include issues such as minimum wage, discrimination, health and safety and Trade Union situations.
Because of the significance and interrelationship between stability and change, it is important for HR to learn how to manage the strategies for both so that their businesses are prepared to deal with the inevitable changes that will occur within the next decade. It is also important that these strategies be reviewed at least annually. They should include: -
a) Employee involvement.
b) Training programmes that encompass the latest changes in company policies and technological changes.
c) Customer care and service issues should be paramount in the training schedule.
d) Consideration should be given to a mentoring programme for talented staff, which could be valuable to the company's future.
e) Staff evaluation should take place at least every six months. At this stage identifying of staff with leadership potential is important.
a) Regular staff meetings and contact with representatives, including Trade Unions.
b) Discussions with staff on issues that need changing, allowing staff input.
c) A disciplinary process and set of company policies to ensure the business does not fall foul of discrimination issues.
d) Regular Health and Safety training and update.
It is not possible for a business to stand still and any movement toward success or of retraction will involve change. To achieve the best result needs a stable environment. In a service industry this means involvement of the staff becomes essential. Human Resource management has to be equal to the task with a combination of stability and change strategies.
Management of personnel and human resources has changed over the past three decades, partially due to increasing employment legislation, education issues, employee awareness, and changes in demographics. Thus HR managers need to find a strategy, which addresses issues of stability and change, to enable effective leadership of staff.
ISSUES OF STABILITY
Stability of the workforce is just as essential as uninterrupted sources of raw material and transport. This situation is even more important in service sector industries. In these businesses, the employee represents the main profit and revenue-producing element.
Disruptions caused with or by employees, such as insufficient numbers, union problems or other difficulties can seriously affect the business aim, namely to bring success and added value to its stakeholders. Therefore stability is important and it is the role of Human Resource to ensure this is achieved. However, they will face a number of problems in this respect.
To maintain correct staffing levels businesses need to recruit the right quality of staff. This includes people for production, administration, sales, accounting, and management levels. Historically, businesses have relied upon schools and colleges to supply this new input.
However, in recent years standards have fallen. This problem is resulting in the diversion of billions from job improvement and learning to what is in effectively remedial training, and is causing problems to HR.
Having achieved the levels of staff that are required, the last thing that a business wants is to have a large portion of them leaving. In an effort to avoid this, HR has to operate systems that attract and keep staff loyal to the company. There are a number of ways this can be achieved, by assisting with relocation and ensuring staff involvement in the business. Many Human Resource experts see a partnership approach with Unions on employee issues as a positive step in building strategies in the retention process. The difficulty sometimes exists in persuading the Unions to move from traditional styles to a more co-operational approach.
Another issues that impact upon retention are the rewards or pay and career path. Irrespective of their loyalty to a business, an employees first concern is to himself and his family. If a package offered by a competitor firm represents a significant increase over current pay and benefits, his loyalty to family are likely to come first.
Succession of staff also affects stability in the workplace. To operate successfully, continuance of skills and line management is vital. To ensure this is maintained, HR managers need to implement training and leadership programmes. Structured training needs to match the employees with the skill demands of the business. In service industries, the most important areas of training must concentrate on customer service and care. If this is not right, the business will suffer.
Business also needs an efficient line of management. It ensures information is communicated throughout the organisation and that problems can be quickly addressed. Developing these people from in-house staff members is often a good way of achieving succession in this area.
ISSUES OF CHANGE
No business can stand still; there will always be change. Some change is self-sought, whilst other changes are forced on the business by economic or legislative factors. Change needs to be addressed and the most successful businesses are those that anticipate change and react to it. Change will also affect employees, some more directly than others. Thus HR has to produce strategies to deal with these changes.
a) Internal Changes
It is important that HR involves the employees and researches the issues affecting them, for example in the case of technological improvements. In this situation, normally known in advance, HR should pre-empt the affect this has on the workforce by setting up a training schemes to increase the employees knowledge development to a level capable of allowing for a smooth transition from old to new procedures.
b) External Change
Most changes that affect businesses are because of external factors. The changes that affect the service sector most come from legislation and governmental demands. These include issues such as minimum wage, discrimination, health and safety and Trade Union situations.
Because of the significance and interrelationship between stability and change, it is important for HR to learn how to manage the strategies for both so that their businesses are prepared to deal with the inevitable changes that will occur within the next decade. It is also important that these strategies be reviewed at least annually. They should include: -
a) Employee involvement.
b) Training programmes that encompass the latest changes in company policies and technological changes.
c) Customer care and service issues should be paramount in the training schedule.
d) Consideration should be given to a mentoring programme for talented staff, which could be valuable to the company's future.
e) Staff evaluation should take place at least every six months. At this stage identifying of staff with leadership potential is important.
a) Regular staff meetings and contact with representatives, including Trade Unions.
b) Discussions with staff on issues that need changing, allowing staff input.
c) A disciplinary process and set of company policies to ensure the business does not fall foul of discrimination issues.
d) Regular Health and Safety training and update.
It is not possible for a business to stand still and any movement toward success or of retraction will involve change. To achieve the best result needs a stable environment. In a service industry this means involvement of the staff becomes essential. Human Resource management has to be equal to the task with a combination of stability and change strategies.
Wednesday, April 14, 2010
Are Companies Paying Enough Attention to Employee Work Related Stress?
Are Companies Paying Enough Attention to Employee Work Related Stress?
Author: Kathryn Arnold
Posted: 04/01/2010 4:09:00 PM EDT
This is the $1 million question: Do we work to live, or do we live to work? In the U.S., this question hits home harder than in other industrialized nations. The American “work ethic” seems to make sense from a productivity level, but in reality is antithetical to our basic human needs. The U.S. worker is the hardest-working employee on the planet, and this may not necessarily be a good thing.
Let’s look at some startling facts:
•U.S. workers gave back $21 billion to their employers by not taking vacation last year. Still, that brought no joy to many in the executive suite, who noted that companies lost $150 billion in 2007 in healthcare costs related to worker burnout. –www.courierpostonline.com
•Middle-aged women who took vacations very infrequently (defined as once every six years or less often) had eight times the risk of either having a heart attack or dying of heart disease. –Researcher Elaine Eaker
•Employees who are overworked (i.e., those who do NOT take vacations) are more likely to make mistakes, be angry at their employers and colleagues who don’t work as hard, have higher stress levels, feel symptoms of clinical depression, neglect themselves and report poor health. –Families and Work Institute
Is this living the American Dream?
This cultural propensity for working hard helps make the U.S. the richest nation on earth, but at what cost? There's a widespread feeling among U.S. workers that they must work more hours to get ahead in their careers. Although many employees yearn to work fewer hours, experts say they are often loath to ask for a decrease in hours for fear they'll be branded as indolent or uncommitted to their job (Vedantam 2006). This dynamic can lead to overwork, work related stress and burnout and a range of problems that stem from exhaustion: A greater risk of heart disease, ulcers, increase in depression and other mental illness. Rather than increasing the company’s profits, overwork can result in increased health care costs, lack of productivity and absenteeism, ultimately reducing the company’s bottom line and the employees take home pay.
Most employers are aware that they're involved in a kind of balancing act. They have to boost output and employee productivity even while struggling to shrink employee turnover and keep employee morale buoyant. Employers can lose talented workers because the system filters out otherwise productive workers who don't wish to work long hours for years at a time (Vedantam 2006). Work related stress and burnout was, in fact, cited as a principal driver of employee turnover by three-quarters of U.S. workers surveyed in 2006 by the online career site CareerBuilder.com ("Many Actions," 2006).
So what is the alternative?
Should we question the American work ethic as a way to increase employee productivity and turn the economy around? Will company profits go down if business and personal travel is encouraged? Could it be possible that taking a few days off will not only give the employee a well deserved break, but will infuse the economy at the same time?
Oxford Economics found that for every dollar invested in business travel, companies realize $12.50 in incremental revenue. On the incentive front, “The Return On Investment of U.S. Business Travel” found that pure incentive travel only accounts for five percent of the average company’s business travel budget, and the median return on a $1 investment in incentive travel is $4. The $4 return on investment for incentive travel was similar to that of conferences and trade shows, both of which produce ROI of $4 to $5.99.
Pointing to that $12.50 in ROI, derived from 13 years of government statistics, Adam Sacks, founder and managing director of Oxford Economics adds: “The bottom line of the analysis is that for every dollar that the average U.S. company spends on business travel, that dollar yields an incremental $3.80 in profits.”
Incentive travel is much less expensive than the cash equivalent of a raise and can be much more effective. People actually enjoy going on vacation, especially when the company has paid for or encouraged it. The “Bragging Rights” of a fully paid vacation go a long way for a high performing employee, and this is one perk that can be shared with the spouse or significant other, thus enhancing the personal life of the employee as well.
“What does that mean in terms of that return on that investment? ”Sacks continues,“ This is an interesting way to think it through: If we assume an employee’s base salary is $100,000, that 8.5 percent increase in compensation would be $8,500.” Figuring the average cost of a three-to-four-night incentive trip plus airfare and expenses is $2,000, Sacks says, “it would have cost them more than four times as much to get the motivation and productivity benefit that the incentive trip would have produced.”
That is why Sacks says one of the takeaways from Oxford Economics’ study is “cash is an awfully expensive way to motivate people.”
Most of us understand there is a strong relationship between travel and employee performance and satisfaction. The Oxford report continues: “The ‘sharing of ideas’ was confirmed by 76 percent of travelers as a benefit of internal travel, indicating travel to be an investment in human capital. The majority of business travelers identified internal company travel as key to professional development (66 percent), job performance (58 percent), and morale (56 percent). And more than 40 percent of travelers perceive a strong relationship between travel and staff retention.”
It is important to note that “human capital” not numbers is what drives employee productivity and profits. It’s up to companies to look long term and evaluate how cut backs and holding the iron fist over employees may in fact have a negative impact on the bottom line. Sacks concludes, “It’s up to companies to evaluate the research’s implications for their decisions. But at Oxford Economics, we believe that decisions to cut travel are very short-sighted. There are indeed bottom-line benefits to be realized in the immediate horizon, but over a 12-month period, we’ve seen that cuts in business travel would generally be pennywise and pound-foolish.”
Author: Kathryn Arnold
Posted: 04/01/2010 4:09:00 PM EDT
This is the $1 million question: Do we work to live, or do we live to work? In the U.S., this question hits home harder than in other industrialized nations. The American “work ethic” seems to make sense from a productivity level, but in reality is antithetical to our basic human needs. The U.S. worker is the hardest-working employee on the planet, and this may not necessarily be a good thing.
Let’s look at some startling facts:
•U.S. workers gave back $21 billion to their employers by not taking vacation last year. Still, that brought no joy to many in the executive suite, who noted that companies lost $150 billion in 2007 in healthcare costs related to worker burnout. –www.courierpostonline.com
•Middle-aged women who took vacations very infrequently (defined as once every six years or less often) had eight times the risk of either having a heart attack or dying of heart disease. –Researcher Elaine Eaker
•Employees who are overworked (i.e., those who do NOT take vacations) are more likely to make mistakes, be angry at their employers and colleagues who don’t work as hard, have higher stress levels, feel symptoms of clinical depression, neglect themselves and report poor health. –Families and Work Institute
Is this living the American Dream?
This cultural propensity for working hard helps make the U.S. the richest nation on earth, but at what cost? There's a widespread feeling among U.S. workers that they must work more hours to get ahead in their careers. Although many employees yearn to work fewer hours, experts say they are often loath to ask for a decrease in hours for fear they'll be branded as indolent or uncommitted to their job (Vedantam 2006). This dynamic can lead to overwork, work related stress and burnout and a range of problems that stem from exhaustion: A greater risk of heart disease, ulcers, increase in depression and other mental illness. Rather than increasing the company’s profits, overwork can result in increased health care costs, lack of productivity and absenteeism, ultimately reducing the company’s bottom line and the employees take home pay.
Most employers are aware that they're involved in a kind of balancing act. They have to boost output and employee productivity even while struggling to shrink employee turnover and keep employee morale buoyant. Employers can lose talented workers because the system filters out otherwise productive workers who don't wish to work long hours for years at a time (Vedantam 2006). Work related stress and burnout was, in fact, cited as a principal driver of employee turnover by three-quarters of U.S. workers surveyed in 2006 by the online career site CareerBuilder.com ("Many Actions," 2006).
So what is the alternative?
Should we question the American work ethic as a way to increase employee productivity and turn the economy around? Will company profits go down if business and personal travel is encouraged? Could it be possible that taking a few days off will not only give the employee a well deserved break, but will infuse the economy at the same time?
Oxford Economics found that for every dollar invested in business travel, companies realize $12.50 in incremental revenue. On the incentive front, “The Return On Investment of U.S. Business Travel” found that pure incentive travel only accounts for five percent of the average company’s business travel budget, and the median return on a $1 investment in incentive travel is $4. The $4 return on investment for incentive travel was similar to that of conferences and trade shows, both of which produce ROI of $4 to $5.99.
Pointing to that $12.50 in ROI, derived from 13 years of government statistics, Adam Sacks, founder and managing director of Oxford Economics adds: “The bottom line of the analysis is that for every dollar that the average U.S. company spends on business travel, that dollar yields an incremental $3.80 in profits.”
Incentive travel is much less expensive than the cash equivalent of a raise and can be much more effective. People actually enjoy going on vacation, especially when the company has paid for or encouraged it. The “Bragging Rights” of a fully paid vacation go a long way for a high performing employee, and this is one perk that can be shared with the spouse or significant other, thus enhancing the personal life of the employee as well.
“What does that mean in terms of that return on that investment? ”Sacks continues,“ This is an interesting way to think it through: If we assume an employee’s base salary is $100,000, that 8.5 percent increase in compensation would be $8,500.” Figuring the average cost of a three-to-four-night incentive trip plus airfare and expenses is $2,000, Sacks says, “it would have cost them more than four times as much to get the motivation and productivity benefit that the incentive trip would have produced.”
That is why Sacks says one of the takeaways from Oxford Economics’ study is “cash is an awfully expensive way to motivate people.”
Most of us understand there is a strong relationship between travel and employee performance and satisfaction. The Oxford report continues: “The ‘sharing of ideas’ was confirmed by 76 percent of travelers as a benefit of internal travel, indicating travel to be an investment in human capital. The majority of business travelers identified internal company travel as key to professional development (66 percent), job performance (58 percent), and morale (56 percent). And more than 40 percent of travelers perceive a strong relationship between travel and staff retention.”
It is important to note that “human capital” not numbers is what drives employee productivity and profits. It’s up to companies to look long term and evaluate how cut backs and holding the iron fist over employees may in fact have a negative impact on the bottom line. Sacks concludes, “It’s up to companies to evaluate the research’s implications for their decisions. But at Oxford Economics, we believe that decisions to cut travel are very short-sighted. There are indeed bottom-line benefits to be realized in the immediate horizon, but over a 12-month period, we’ve seen that cuts in business travel would generally be pennywise and pound-foolish.”
Tuesday, April 6, 2010
Enlisting a Global Work Force of Freelancers
Enlisting a Global Work Force of Freelancers
By KERMIT PATTISON
Published: June 24, 2009
Small businesses increasingly are tapping a new talent pool: the world
A new generation of online service marketplaces is giving small companies more opportunities than ever to find specialized expertise and affordable labor. Main Street businesses can shop a virtual international bazaar of freelancers to recruit computer programmers in Russia, graphic designers in San Francisco or data analysts in India.
“This is one more step in the path to leveling the playing field between small and large businesses,” said Thomas W. Malone, a professor at the Sloan School of Management at the Massachusetts Institute of Technology and author of “The Future of Work” (Harvard Business School Press, 2004). “A small-business person in a company of one can look to the world like a very large company and have access to all kinds of services — and that’s largely because of this kind of model.”
These online marketplaces are fueled by several trends. The recession and recent wave of downsizing have forced many corporations to eliminate in-house services and use independent contractors instead. Buyouts and layoffs have pushed many skilled professionals into the freelance marketplace.
Meanwhile, technological advances make remote work and virtual teams more feasible. Business processes are allowing companies to mix and match services with more ease than ever. An array of freelance marketplaces are making services tradable online, much as eBay and Craigslist made goods tradable a decade ago. These sites include general freelance marketplaces (Guru, Elance, oDesk) and others offering specialties like software (Rent A Coder), personal assistants (virtualassistants.com), graphics (99designs), or creative services (CrowdSpring).
Some of these freelance marketplaces are booming. In the first quarter of this year, oDesk freelancers logged 830,000 hours, more than double the figure for the same period the year before and five times the rate in 2007. Nearly 234,000 jobs were posted at Elance last year, an increase of 64 percent over the previous year.
Fabio Rosati, chief executive of Elance, said his clientele was shifting from an earlier wave of technology-oriented companies toward more traditional small businesses, which now represent about 80 percent of his clients, including mom-and-pop retail stores, manufacturing companies, real estate agencies and physicians. “We’re shifting from early adopters to mainstream,” he said.
These platforms are diversifying beyond mainstay tasks like Web and software development and graphics. Freelancers increasingly are taking on assignments like customer service, data entry, writing, accounting, human resources, marketing, payroll, accounting — and virtually any “knowledge process” that can be performed remotely. Some businesses even are hiring freelancers to set up and manage their corporate profiles on social networking sites like Facebook or Twitter. Using these platforms does not necessarily mean going overseas. In many cases, they are used for “homeshoring” to freelancers in the United States for services like graphic design, writing, sales or customer service. The research firm IDC says homeshoring is growing by 18 percent a year.
In some cases, the cost savings can be substantial: the hourly rates of programmers in Russia, India or Pakistan are a fraction of those in the United States. These freelance marketplaces also allow companies to assemble teams quickly, find specialized expertise, begin new initiatives and drop everything when it’s no longer needed. Organizations can remain flat and focus on their core missions.
When John Wilde, chief executive of Tailor Made Products, a manufacturing firm in Oconomowoc, Wis., wanted to build a Web site for a new line of children’s kitchen gadgets called the Curious Chef, he turned to oDesk and hired a firm in India. He paid about $20,000, which he estimates is roughly half what he would have paid in the United States.
“This has given our company a chance to play really, good, solid Internet ball at an affordable price,” Mr. Wilde said. “Our little company can afford to have a really top-notch Internet play with this new product line.”
By KERMIT PATTISON
Published: June 24, 2009
Small businesses increasingly are tapping a new talent pool: the world
A new generation of online service marketplaces is giving small companies more opportunities than ever to find specialized expertise and affordable labor. Main Street businesses can shop a virtual international bazaar of freelancers to recruit computer programmers in Russia, graphic designers in San Francisco or data analysts in India.
“This is one more step in the path to leveling the playing field between small and large businesses,” said Thomas W. Malone, a professor at the Sloan School of Management at the Massachusetts Institute of Technology and author of “The Future of Work” (Harvard Business School Press, 2004). “A small-business person in a company of one can look to the world like a very large company and have access to all kinds of services — and that’s largely because of this kind of model.”
These online marketplaces are fueled by several trends. The recession and recent wave of downsizing have forced many corporations to eliminate in-house services and use independent contractors instead. Buyouts and layoffs have pushed many skilled professionals into the freelance marketplace.
Meanwhile, technological advances make remote work and virtual teams more feasible. Business processes are allowing companies to mix and match services with more ease than ever. An array of freelance marketplaces are making services tradable online, much as eBay and Craigslist made goods tradable a decade ago. These sites include general freelance marketplaces (Guru, Elance, oDesk) and others offering specialties like software (Rent A Coder), personal assistants (virtualassistants.com), graphics (99designs), or creative services (CrowdSpring).
Some of these freelance marketplaces are booming. In the first quarter of this year, oDesk freelancers logged 830,000 hours, more than double the figure for the same period the year before and five times the rate in 2007. Nearly 234,000 jobs were posted at Elance last year, an increase of 64 percent over the previous year.
Fabio Rosati, chief executive of Elance, said his clientele was shifting from an earlier wave of technology-oriented companies toward more traditional small businesses, which now represent about 80 percent of his clients, including mom-and-pop retail stores, manufacturing companies, real estate agencies and physicians. “We’re shifting from early adopters to mainstream,” he said.
These platforms are diversifying beyond mainstay tasks like Web and software development and graphics. Freelancers increasingly are taking on assignments like customer service, data entry, writing, accounting, human resources, marketing, payroll, accounting — and virtually any “knowledge process” that can be performed remotely. Some businesses even are hiring freelancers to set up and manage their corporate profiles on social networking sites like Facebook or Twitter. Using these platforms does not necessarily mean going overseas. In many cases, they are used for “homeshoring” to freelancers in the United States for services like graphic design, writing, sales or customer service. The research firm IDC says homeshoring is growing by 18 percent a year.
In some cases, the cost savings can be substantial: the hourly rates of programmers in Russia, India or Pakistan are a fraction of those in the United States. These freelance marketplaces also allow companies to assemble teams quickly, find specialized expertise, begin new initiatives and drop everything when it’s no longer needed. Organizations can remain flat and focus on their core missions.
When John Wilde, chief executive of Tailor Made Products, a manufacturing firm in Oconomowoc, Wis., wanted to build a Web site for a new line of children’s kitchen gadgets called the Curious Chef, he turned to oDesk and hired a firm in India. He paid about $20,000, which he estimates is roughly half what he would have paid in the United States.
“This has given our company a chance to play really, good, solid Internet ball at an affordable price,” Mr. Wilde said. “Our little company can afford to have a really top-notch Internet play with this new product line.”
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