Swart said that competition for talent is rapid, despite economic woes. He specified two big problems: getting work to workers, and the hiring process, in terms of investment of time and resources. How to deal with both those problems has been steadily evolving: Work 1.0 was rigid, single-employer, and on location, probably what describes your grandfather’s career. Work 2.0 was about more flexible work schedules, better collaboration between remote teams and some ability to take work home with you. It’s sort of the model that’s still in place at big tech firms in Silicon Valley.

Work 3.0 is where we’re at now and where a good chunk of work is heading, according to Swart, and it’s only just getting underway. It means “access to the best people no matter where they are in the world,” and the “ability to work with those people as if they’re in the room with you.” Swart says it’s a transparent process, one that takes place primarily online using tools with built-in reporting elements. It’s a very situation-based, ephemeral mode of staffing, too: He applied a movie production analogy: the team comes together to accomplish something specific, then separate again.

He discussed examples of companies forming in order to source and staff remote work projects. Thumbtack is one, which serves 170,000 customers today, Swart says, and provides access to the services of 230,000 service professionals in discrete areas for on-demand, just-in-time labor requirements.

In short, we’re moving from rigid, structured, non-specific workforces to on-demand, targeted transparent freelancer-based staffing. Doing so saves on infrastructure, by cutting back on costs like transportation and facilities, and also leverages talent on a global scale that otherwise might go unnoticed and unappreciated. Swart sees Work 3.0 as just getting started, with its most significant effects on how we do business yet to be felt.

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Corporations fail at authenticity not just in the sense of connecting with consumers as genuine when it comes to their products (though some have suggested mega brands will struggle as Facebook and the like acculturate us to expect greater authenticity and apparently personal relationships from brands). Instead, the great authenticity challenge of corporate American is in relation to workers.

Author Daniel Pink took to Fast Company recently to discuss this issue in relation to his book, Free Agent Nation. In the post, he explains that one of the biggest and least discussed drawbacks of climbing the traditional corporate ladder is a need to hide your true self. He writes:

As free agents around the country told me their stories, they repeatedly used the language of disguise and concealment to describe their previous jobs. They spoke of putting on “masks” or “game faces” at work. They talked about donning “armor” and erecting “smoke screens,” because exposing themselves in a large organization could be perilous. Only when they returned home after work could they shed the costumes and protective gear and return to being who they truly were.

The double life endured by many workers employed at big firms can be stressful and draining, according to Pink, who quotes industrial psychologist Peter Krembs to illustrate the point: “’Optimizing’ the organization almost necessarily means ‘suboptimizing the individual.’”

One of the great benefits of independent work, Pink concludes, is being able to more closely align who you are with what you do. But this collapse of work self and real self isn’t without its struggles.

“In free agency, work becomes more fully integrated with who you are. That can be rewarding. But because work is more deeply woven into yourself, it can be harder to cast off–which means work can occasionally consume and even smother identity,” he writes.

In your experience, do corporate jobs require a greater sacrifice of authenticity than independent work? Is gaining authenticity by working independently worth the increase in stress?

At Net:Work, we’ll explore how independent contractors, particularly those who work remotely, often struggle with stress and workaholism. The event will be held in San Francisco on Dec. 8.

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They’re out there, and their stories aren’t all the same tales of solo practitioners earning the ability to work in their bathrobes and take home a comfortable but not impressive income. When we talked to oDesk CEO Gary Swart earlier this month, he shared examples of members of his platform who had built businesses by growing their client base to the point where they couldn’t handle all the available work on their own. Joshua Warren, a Dallas-based web designer, Swart told WWD, is a perfect example of this new breed of independent contractor turned mini-mogul. He started on oDesk at $15 an hour, then:

[W]ithin months he stair steps his way from 15, to 30, to $85 an hour, and even at $85 an hour he has got more clients than he can handle and he’s making more money than he was at his traditional brick and mortar job in Dallas. What he figures out is he’s an entrepreneur. He stops turning away business; he creates his own firm. So in March of this year he created a company by the name of Creatuity, and he expects to do over a million dollars in business this year. And he now is hiring on oDesk.

This idea of the million-dollar freelancer might seem unlikely, but Warren isn’t the only one to manage it. IT pro Sanjay Dange, in Nagpur, India, used various online labor platforms like Freelancer.com and oDesk to build a million dollar company. He recently spoke to Entrepreneur Journeys about how he built up his business using these sites:

I wasn’t very sure about venturing into the overseas market… Our Indian operations were yielding an annual revenue of around INR 10 million ($204,332). However the profit margin was going down and competition was increasing due to new players coming in. That’s why we also thought of expanding our reach by entering into the overseas markets. At that time, Freelancer.com was GetAFreelancer.com. We thought of bidding on it for three to four hours a day….

We started getting small value orders in 2005. The first major order was from ZZPerformance.com, a Grand Prix components manufacturing company in the USA. The order was to deliver a complete e-commerce site. We took it at a very low price of $1,000. The project was quite big in terms of technical requirements and it took us five, six months to complete it. It gave us a major breakthrough. Since then, we have worked on hundreds of dynamic content management sites and e-commerce applications.

We started with a small office of 200 square feet and three people… Today, we have a total office space of 6,000 square feet in Surat and 2,000 square feet in Baroda. We have 100 people on our payroll. We are on Elance.com. We are on PeoplePerHour.com. We are on various contest sites such as LogoGuru.com, Hatchwise.com, 99designs.com and a few others.

Curious to learn more about Dange? Check out the lengthy interview for a lot more detail. Or read our interview with Shane Pearlman, who turned too much freelance work into a sort of thriving freelancers collective, no online labor platform required.

Do many of us have outmoded and overly limited visions of what independent work can be?

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Plenty, argues a recent piece by Rieva Lesonsky on MSN’s Business on Main site, which argues that the tepid pace of small business hiring, while obviously impacted by the dreadful economic situation as a whole, is partially down to rise of freelancers and platforms, like oDesk and Elance that enable small firms to find them. She cites a study from the Kaufman Foundation from earlier this year as evidence:

The Kauffman Foundation suggests the job deficit is actually not recession-related. In fact, Kauffman’s study, “Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation,” shows that new employer businesses have declined 27 percent since 2006. However, when newly self-employed workers are added to the mix, the level of startups hasn’t declined, but instead has “held steady or even edged up since the recession.”

To put this in perspective, in the 1990s, new businesses opened their doors with about eight employees; today, that’s down to five. The culprit? The traditional business model doesn’t apply anymore, due to a number of factors, including technology and a globalized market.

Essentially we’ve created a contingent, freelance economy. There’s still money to be made, innovations to be marketed and ideas to be harvested. The difference is that many businesses today are choosing to hire on an as-needed basis, relying on a freelance workforce.

Numbers from office space provider Regus earlier this month tell a similar story. A survey of 12,000 companies worldwide by the firm found “47 percent say they plan to hire freelance staff and 44 percent plan to hire remote workers over the next two years.”

But this decline in small business hiring might not be entirely a bad thing, according to a recent piece by James Surowiecki in the New Yorker. In it, he notes that while small businesses are beloved by politicians, they are less productive than large firms and therefore do less to raise living standards. Countries with miserable recent growth like Greece and Portugal have some of the highest percentages of workers employed by small firms, he also points out.

Maybe the rise of the freelancer will make for a more dynamic economy even if it means less small business hiring. Does that sound plausible to you? 

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But is this the whole story? Writing on the American Express OPEN Forum blog recently, small business consultant Barry Moltz suggested these sorts of sites might have an often overlooked dark side for independent web workers: They drive down prices by broadening the supply of services. That’s good for companies shopping for remote workers, of course, but lousy for those hoping to keep their fees up. Moltz writes,

While these crowd-sourcing models have been around for a while, especially on the consumer side, they are not without complaints from people seeking this type of work.  This method tends you to drive down the price of services with less barriers to supply. Fabio [Rosati, CEO of Elance] compares it to shopping on Amazon.com, “You are no longer limited to the stores on main street. You can almost buy anything, anywhere.”

The idea that price competition is getting tougher out there for freelancers isn’t confined to Moltz’s post. Blog Freelance Folder also recently ran a post entitled “The Great Freelancing Pricing War.” “It’s a war out there–or at least it can feel like one when it comes to the prices freelancers charge for their services,” writes Laura Spencer before offering tips on how to fairly price your work and maximize your fee. She doesn’t expressly implicate the like of Elance in this increased price pressure, however.

What’s been your experience as an independent web worker – are sites like Elance and oDesk making it harder for you to charge a fair wage for your work?

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These skilled professionals have decided to decline the nine-to-five regime and fit work in around their other passions, interests, and commitments. You may already unknowingly give freelance or contract work to people who fall into this growing part of the remote web workforce.

The prevalence of technology means that your favorite freelancer could be building a business in a city just like yours, or they could be living in a jungle and tackling your projects between epic surfing expeditions. So long as they have a reliable web connection, you may never know the difference.

Are these “untemplaters” a good skill resource for growing businesses? To many employers, this breed of digital professional might seem flighty and unreliable — after all, they might pick up and vanish into the wild, blue yonder once they finish this job. Where’s the accountability? Can a project as important as yours rest on their contribution?

In most cases, the answer to all these questions is, “yes.” Here are a few of the main reasons why these “rebels” are good for business.

They’re passionate and skilled

The non-conformist freelancer prioritizes things other than work, sure. But they champion quality of life. As such, they may be more likely than your regular business-building freelancer to restrict themselves to projects that really interest them.

Think about it: If you were to restrict the work you did, you’d want the projects you took on to be extra-rewarding. Instead of taking on anything and everything that comes their way, the smarter web workers in this group pick and choose projects they feel will use their skills, ignite their passions, and satisfy their need to contribute.

The idea of the rebel-freelancer being a “drop-out” is no longer current; you’ll likely find your remote resource highly skilled. These individuals are effectively relying on their own, evolving expertise to make a living in less time than it takes the rest of us. To do that, you’ve got to be good.

They can commit

The idea that a freelancer who’s working from a rented room in Salvador to fund their next Amazonian trek won’t be committed or accountable isn’t likely to play out in reality. The days of fly-by-nighters making it online are over. And if your recruitment and screening processes can’t pick them out, then you have bigger problems than working with untethered remote workers.

Solutions to the issues of commitment and accountability are ultimately rooted in the rapport you build with freelancers, regardless of their locations (or how they spend their spare time). If you need a freelancer to be around after they deliver their part of the project, make that clear up-front, just as you would with a local, more traditional freelancer or contractor. If they can’t commit, they’ll be able to tell you so, and you can move on to other candidates.

They are connected

What’s web connectivity like in Salvador? Depending on where you operate, it may be a step up from what you’re used to. Most people who pursue an “untethered” lifestyle know that to support that lifestyle they need to be reliable, and available. And most are extremely tech-savvy — the less technologically capable are less likely to be able to make remote-location freelancing work.

So if your untemplated freelancer comes with good references, work samples, and communicates with you easily through the selection process, you’re unlikely to encounter show-stopping troubles during the project. Again, set your expectations for contactability and availability up-front, and make sure everyone’s comfortable with, and capable of, meeting those needs.

If you’re really concerned — for example, the individual is located in an area where there’s unrest, issues with freedom of information or connectivity, and so on — discuss that with the candidate and develop contingencies that can be implemented if the worst-case scenario turns into a reality.

Are they for you?

Whether the non-traditional freelancer is right for your business will depend as much on your operation as it does on the remote worker.

Your timeframes, project management approach, expectations, and philosophy may all prevent you from working successfully with an “untemplated” freelancer — or any freelancer.

The businesses that are likely to be best suited to collaboration with these individuals will be flexible, technologically adept and versatile, communicative, human, and results-focused. If this sounds like you, “untemplated” workers might be a sensible and flexible asset to your team.

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Here are a few reasons why side projects make good business sense.

1. New skills. I love to use side projects as a way to stretch myself and learn new things that I wouldn’t normally do as a result of my regular work. In the past, I’ve had side projects where I co-founded a nonprofit to organize community technology events, co-founded a location-based startup, wrote a book about community, wrote a cookbook, started blogs and much more. Out of each of these efforts, I’ve learned many new skills that I’ve applied in my day job. I’ve personally benefited from each of these efforts, but the companies I’ve worked for have also benefited from the skills learned in my off-hours.
2. Connections and networking. Most of my side projects have given me an excuse to meet new people. I’ve made friends and valuable industry connections that I can talk to about new ideas or trends. Especially for those of us working in technology, many of these connections bleed over from one project or company to the next. Having additional contacts in your industry gives you a broader base of people to talk to about new side projects or interesting things that you are working on in your day job.
3. Sense of accomplishment. While many of us are lucky enough to have great jobs where we get a sense of accomplishment from our regular work, it isn’t always the case. There is nothing quite like launching a fun project to boost your overall mood and give you a sense of excitement. For me, the accomplishments from my side projects tend to have a positive impact on my regular job, too, since my improved mood makes me even more productive when it comes to other work. Employees with improved self-confidence from a big accomplishment can often become better workers in other areas.
4. Safety net. In today’s economy, we need to be prepared for a potential job loss. The people who have wrapped their entire identity and life around their job at a company can be devastated when they lose a job. Those of us with healthy side projects can throw ourselves into these existing projects and maybe even generate a little income while we look for a new gig. Having some projects to fall back on and keep your skills current can help to maintain your sanity and prevent you from becoming despondent over your loss.
5. Fun. Most importantly, side projects should be fun! In many cases, side projects can be hobbies that you enjoy spending your free time on. If your side projects start to suck the energy out of you, then it’s time to find a new side project that leaves you energized and with a sense of enjoyment. This is part of why I organized tech events in my spare time for so many years. They were hard work, but it was great to get all kinds of different people together and create an amazing and fun experience. After a while, I had done so many of these that it ceased to be much fun, which is when I dropped them from my side projects and moved on to other projects.

What types of side projects do you most enjoy?

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1. What tools do you use? It doesn’t usually make sense to try to get your entire team to conform to a particular freelancer’s tools, but you do need to know if the methods and software a freelancer uses will be compatible with your approach. You may also need to see if you can get the freelancer on board with the tools you already work with.
2. Who will actually be working on the project? Some freelancers will bring in subcontractors for certain parts of a project — and that’s not usually a problem. But if they aren’t up for managing a team, you can see issues creep in at your end of things. Asking who you should expect to be working with ahead of time makes the process much easier.
3. How do you schedule or prioritize your work? No matter how much you hope that your project is at the top of a freelancer’s list, the fact is that most freelancers are usually working on at least a couple of projects at any given time. You need to know how the freelancers you work with prioritize their work so you know exactly where you are in the queue.
4. How do you handle working with multiple stakeholders? If you’re the only person from your organization working with a given freelancer, managing revisions and sharing information should be straightforward. But if you’ve got more than one person involved in making decisions about the project, you need to know how to most effectively communicate all that information to a freelancer. Maybe the best option is for all information to go through one person, or perhaps it’s better if the freelancer has full access to everyone — either way, you need to ask.
5. What methods of communication do you prefer? It may seem obvious to you that you’ll communicate with freelancers through email or phone, but many freelancers have certain ways they handle communications. Some may not answer the phone in the evenings, while others may only check their email on specific schedules. Find the best ways to make sure you can get in touch with the freelance you’re working with, both in the regular course of things and in the event of an emergency.

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In the corporate world, it’s easy to track positive mobility in your career. You could get a promotion (a move upward to a position of higher rank or pay), or laterally to a position of similar rank, but with different tasks or projects. Advancement in a freelancing career is not so easy to track, possibly because we each have different definitions of what a freelance “promotion” consists of.

Here are some ways you can climb the freelance career ladder:

Rates. The most obvious way to climb your career ladder is to raise your rates as you gain more experience and skills. The quality of your work, client support, and even your online presence should reflect these changes. If you want some tips on how to raise your rates, check out the following resources:

• “How to Raise Your Rates Without Losing Clients” at Freelance Switch
• “How to Increase Your Rates for the New Year” from Men With Pens

Of course, just relying on increasing your rates has its limits. Just because you’re increasing your hourly rate by $5, it doesn’t mean that you’ll eventually get away with charging $1,000 per hour. The good news is that there are other ways to give yourself a “promotion.”

Projects and clients. One of the signs that you’re doing well as a freelancer is that you occasionally turn down projects. Still, it doesn’t necessarily follow that you should only take on projects with a bigger scope or work only with high-profile clients. What’s important is to look out for new projects that we’re passionate about. This could mean the following:

• Taking on projects that will allow you to learn and explore additional skills you’ve always wanted.
• Working with people in an industry or field that you’ve always wanted to get involved with.
• Choosing challenging projects that excite you and allow you to push your work quality a notch higher.
• Having the time and resources to work on passion projects that may not be financially rewarding, but are personally fulfilling.

Tasks. If you take a look at your daily tasks, which ones do you like the least? Out of these, which ones can you automate with an app, delegate to an assistant or subcontract to others? Sometimes, advancement in your career means focusing your time and energy on your preferred tasks.

Leisure. It seems like many freelancers work during the weekends or fail to take some time off. While we may be passionate about our work, it doesn’t mean we can’t professionally benefit from leisure time. In one of his TED talks, Stefan Sagmeister discussed the power of taking time off. The benefits include the following:

• We can pursue creative experiments that we don’t have the time or energy for during the regular work week.
• We get fresh ideas and innovate. This prevents repetition and keeps our work from becoming stagnant.

Learning opportunities. Career mobility should also involve learning new skills and becoming acquainted with developments in your field. You can do this via seminars, workshops, reading materials, and even attending conferences. On a smaller scale, you can subscribe to relevant blogs and sign up for online courses. By pushing ourselves to learn more, we improve the quality of our work, hear new ideas, and interact with other professionals.

Business building. For some people, being a lone freelancer isn’t enough. Sometimes we want our jobs to evolve into a business. This doesn’t necessarily mean renting an office or owning a building, but it can mean setting up our own teams, having dedicated staff for client support, or simply getting the right paperwork.

Getting a promotion as a freelancer may not be simple, but as I’ve illustrated with the points above, the freedom and options we have more than make up for that.

How are you climbing the freelance career ladder? Do you do this deliberately or do you find that your career path forges naturally with very little planning?

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But it seems unlikely that the trend of global outsourcing is going to go away any time soon, or that sites which enable it will go out of business. As a result, it’s probably smart for web workers to learn what’s out there, and to figure out how to deal with it. A pair of recent columns from Dan Appleman survey the programming side of this trend. Appleman’s conclusion flies in the face of the accepted wisdom: though he sees the greatest benefit to businesses, he adds “but U.S. workers who are smart, professional and keep their eyes open can find good opportunities as well.”

Appleman’s keys to potential success: understand what you’re bidding on, learn how the system works, be realistic with our pricing, and be patient.

Of course, there are other ways to deal with global outsourcing besides being part of it. Savvy web workers can continue to work on differentiating themselves on skills from the vast global labor pool, and also on marketing those skills. It’s also worth thinking about whether there’s money to be made in being a middleman: taking a job at high rates and farming some of it out to distant freelancers at lower rates, becoming a global project manager.

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