Online contracting is long-term strategy, not short-term stopgap, survey shows


oDesk's Gary Swart at GigaOM 2011This morning online labor platform oDesk announced that it raised a further $15 million in funding with T. Rowe Price Associates leading the round, and continued its impressive growth. That’s good news for the folks at oDesk but not exactly a shocker for those who have been tracking previous reports of the company’s rapid rise. What is more interesting is a large-scale survey of contractors who hire workers on the platform, the results of which oDesk released along with the news.

In conjunction with Genesis Research Associates, oDesk reached out to more than 7,000 clients, ranging from solopreneurs looking for some extra help to managers at medium and large enterprises, asking them about their views on online contracting and the future of sourcing talent through platforms like oDesk.

The results put a final nail in the coffin of the argument that increased interest in online labor platforms like oDesk is largely down to the troubled economy and firms’ short-term scramble to get by or their need to cut costs.

  • A massive 76 percent of respondents told oDesk that their use of contractors was a long-term strategy.
  • Only 24 percent characterized their remote hiring as a temporary solution to short-term problems.
  • More than 80 percent either agree or strongly agree that remote hiring increases competitiveness and that the practice will soon be common.

“The CIO of AOL came to us and said: ‘Hey, I’m having a hard time finding and hiring enough technical talent,'” oDesk CEO Gary Swart told GigaOM to illustrate the point that, for many of his company’s customers, online contracting is about strategy and competitive advantage, not just cost pressure. “oDesk enabled engineers at AOL to hire, as [the CIO] calls it, ‘a brain extension,’ so the ability to get leverage by enabling any engineer to hire talent in order to get more work done.” Gene Zaino, the CEO of MBO Partners, made a similar point a few months ago, noting that his firm has seen more and more businesses touting their ability to be agile through the use of contracting talent as a competitive advantage.

Also of interest was what respondents told oDesk about the alternatives to remote hiring. When asked what they would have done had there not been a suitable oDesk contractor available, 50 percent said they would have found someone through another contracting source, 22 percent would have simply worked longer hours and nine percent would have delayed or canceled a project. Only 15 percent would have made a local hire, indicating that oDesk-style hiring isn’t replacing local jobs but creating new, if small-scale, gigs.

The company also announced a new CFO, Gregory Stanger, who formerly served in the same position at Expedia and Chegg.

Do you agree with Swart that enthusiasm for online labor platforms like oDesk outlive the tough economic times?

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