How the Freelance Economy is Taking Off

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June 16 2014 11:55 AM

It's a Good Time to be a Freelancer

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No more office chairs

Photo by Mandel Ngan/AFP/Getty Images

This post originally appeared on Business Insider.

It's a good time to go independent. 

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New data from freelancer marketplace Elance-oDesk suggests that businesses will spend $930 million on hiring remote independent workers around the globe in 2014, with American freelancers pulling in $500 million of that figure.

It's part of an upward trend: Gross freelancer earnings have grown 50 percent, compounded annually over the past five years. 

"The growth is a clear indicator of a transition of work online," says Fabio Rosati, the marketplace's CEO. The company helps connect companies needing skills and freelancers needing gigs. 

He compares the movement of work online to other parts of the economy that have already migrated into the digital space—namely commerce. 

Think back in the Web 1.0 years at the turn of the millennium, when commerce became eCommerce. 

"It started with really simple things like books and Beanie Babies," Rosati says, "and now you can buy everything online." 

Work, he says, started "primitively," with job boards that were essentially translations of your newspaper's classifieds section put on the web. Then came the next phase: The résumé went online, people starting becoming professional friends on LinkedIn. Now, with platforms like Elance and Odesk, organizations can directly work with individuals and individuals can get gigs. 

The relationship is mutually beneficial. 

Anyone who's worked in human resources knows that searching for talent is a pain. Execs at super-successful companies ranging from Google to Sam Adams pride themselves on leaving jobs unfilled for months for lack of qualified candidate. 

Marketplaces like Elance and oDesk help solve that. Just like Amazon Prime delivers you an inflatable mattress the day before your friends arrive at your house, these online work platforms let businesses — especially small businesses — get the skills they need when they need them, without having to bring someone on full-time. 

  • Patent law ($112/hour)
  • Voice acting ($72.70/hour)
  • Ruby programming ($61.00/hour)
  • Startup consulting ($54.00/hour)

These are all skills that a startup will need around launch: sorting through patents, creating awesome content, building a slick web presence, and getting coached on how to make it all fit together. 

Being able to get all of that just when you need it, only for as long as you need it, explains the relentless growth of freelancer earnings. 

"A company's ability to be successful is about agility and speed," Rosati says, echoing a refrain from Jeff Bezos, Marissa Mayer, and Mark Zuckerberg. "In this world, removing friction, reducing time to hire, time to results is extremely important. We're providing a venue for that." 

Drake Baer reports on strategy, leadership, and organizational psychology at Business Insider.