Globalization of Labor Markets: major trends research notes


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Major trends research notes

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Globalization of Labor Markets: major trends research notes

  1. 1. Globalization Of Labor Markets Labor markets are rapidly changing to reflect the impact of globalization, technology maturation and availability and the desire of companies to run more lean. Copyright 2013 OmniPresent Media 1
  2. 2. Convergence of 10 Major Trends Minimal & Diminishing Startup Costs All Location Independent Social Networks Easier Access To Capital CrowdSourced Labor Innovation Ecosystem Access To Scientific, Engineering & Manufacturing Tools Big Data Artificial Intelligence Leapfrog Technologies Collaborative Culture Risk Management Innovation Ecosystem • Labor markets are changing • Rise of a global contingent labor force • Elance, oDesk, Guru, Freelancer • New Digital Entrepreneurs • International opportunity seekers 2
  3. 3. The Labor Market Is Changing • Companies favoring flexible cost structure. Companies are moving away from traditional, high fixed labor cost structures in favor of a lighter and more flexible cost framework afforded by contingent and outsource employment. • Global employees are mobile and flexible. A growing number of global employees are reflective of emerging trends and tend to be mobile , enjoy flexible work routines as well as more frequent job changes. Global labor markets are adjusting to reflect the opportunities afforded through online employment. 3 • Online employment is location independent, enabling more efficient matching between opportunities and talent, including a growing reliance on talent sourced from emerging economies • Online job markets facilitate part-time work. On demand work makes it easier for part-time and side employment opportunities Copyright 2013 OmniPresent Media
  4. 4. 2011 CIO IT Insight Survey • 45% expect to increase their outsourcing spend in 2012 • 76% use “flex work” options- such as contractual employees, temps and offshore talent- to account for up to one quarter of their entire staff • 84% are looking to increase or maintain their current user of “flex” labor • Nearly one third will spend up to 25% of their entire IT budget this year on outsourced activity Companies increasingly emphasize flexible labor practices 4Copyright 2013 OmniPresent Media
  5. 5. The Outsource Labor Market “We estimate that 160 million jobs, or about 11 percent of the projected 1.46 billion service jobs worldwide, could in theory be carried out remotely, barring any constraints on Supply.” ~Source: McKinsey Global Institute Report: The Emerging Global Labor Market Freelance labor will exceed $1 billion in 2012 5Copyright 2013 OmniPresent Media
  6. 6. Copyright 2013 OmniPresent Media 6
  7. 7. oDesk CEO Gary Swart expects the market for online work to exceed $1 Billion by the end of this year Month of March 2012 March 1, 2012-March 31, 2012 Contractors Earned $28,537,099.00 Average Job Size $4,176.00 Jobs Posted 149,768 Hours Worked 2,806,774 Over 600,000 Billable Hours per Week • Revenue has grown by 100 % each year since 2007 • Over 600,000 Billable Hours per Week • Contractors earning more than $300 million a year 7Copyright 2013 OmniPresent Media ~Source: oDesk Blog, March 31 2012
  8. 8. 2012 Q1 Report Contractor Earnings $43,000,000.00 Jobs Posted 193,000 New Contractors 180,000 Annual Platform Spend $173,000,000.00 “We have reached a tipping point” “Our first quarter this year will be the fastest growth we’ve had in our company’s history.” Elance CEO Fabio Rosati ~source: Mashable March 2012 Elance and oDesk’s customers include well-known companies such as Google, Microsoft, Dell, Cisco, HP and AOL. Graph Period August 2011-February 2012 source: eLance source: eLance 8Copyright 2013 OmniPresent Media
  9. 9. Besides organic growth, aggressively accretive growth through acquisition. CEO Matt Barrie describes as an Ebay for services with a focus on low cost fulfillment. 90 % of the site’s contract workers are from India To Date: • 3.2 million users and 1.5 million jobs posted on • Over 1 million projects have been completed on the site. It costs $5 to post a project listing, which is refunded when the employer chooses a freelancer. takes 10 per cent of the freelancer’s fee, or $5, whichever is higher. Matt Barrie, CEO “We have over 400 categories and can service the needs of just about anything you can think of! I posted a job for a lion tamer as a joke one time and managed to find a guy who worked in a circus and someone that worked in a zoo bidding on it! There really is no limit to what you can get done.” ~Source: 2011 interview Freelancer Project Traffic Graph: Red Project Request Green Project Fulfillment 9 ~Source: Freelancer Copyright 2013 OmniPresent Media
  10. 10. Global Sourcing Disrupts Industries Global sourcing for talent is becoming more mainstream and is broadening from traditional technology jobs to include more diverse industries, such as engineering. “Engineering Services Outsourcing (ESO) is a rapidly evolving economy. Global spending for engineering services is $750 billion per year, an amount nearly equal to India’s entire gross domestic product. By 2020, the worldwide spend on engineering services is expected to increase to more than $1 trillion. Of the $750 Billion spent today, only $10-15 billion is currently being offshored-a tiny fraction of the total. “ ~Source: Booz Allen Hamilton: Globalization of Engineering Services 10Copyright 2013 OmniPresent Media
  11. 11. 22% of freelancers say finding clients is a top challenge ~Source: 2011 Freelance Industry Report Most freelancers report having either experimented on a number of freelancing websites or actively maintain multiple accounts on a number of freelance platforms ~Source: 2011 Freelance Industry Report The labor pool is dynamic, uses the Internet and word of mouth to cast a broad net to connect with opportunities and goes where opportunities are available 11 Freelancers Are A Fluid Talent Pool Copyright 2013 OmniPresent Media
  12. 12. The Rise of Global Entrepreneurs The freelance / contingent talent market represents a growing pool of workers who exhibit entrepreneurial-like characteristics and embody its culture. Flexible time schedules permit the pursuit of more jobs or alternative opportunities. Collectively, freelancers seek opportunity and novelty and have marketable skills that lend themselves to the new, digital economy. In short, they are new digital entrepreneurs in an emerging global economy. 12Copyright 2013 OmniPresent Media
  13. 13. The Cambrian Cloud Inflection Points 13 • Millions in developed and emerging economies are finding employment opportunities online • Companies are seeking a lighter, more flexible labor structure • The freelance market is approaching a tipping point and will exceed $1 billion in market transactions in 2012 • A growing, deepening and diversifying pool of opportunities and talent • The online employment marketplaces enable individuals to supplement their income or work on a contingency basis • 160 million jobs (11%) of the estimated 1.46 billion service jobs could theoretically be carried out remotely • The global contingent labor market embodies entrepreneurial ethos and culture and is growing a global talent pool acclimated to opportunity discovery, remote work and an awareness of available online tools and resources. Freelance / Offshoring Copyright 2013 OmniPresent Media