Major trends research notes

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.
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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
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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.
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• 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
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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
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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
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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
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~Source: oDesk Blog, March 31 2012

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
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9. Besides organic growth, Freelancer.com aggressively accretive growth through
acquisition. CEO Matt Barrie describes Freelancer.com 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 Freelancer.com.
• 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. Freelancer.com takes 10 per cent of the freelancer’s fee, or $5, whichever is
higher.
Matt Barrie, CEO Freelancer.com
“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
iTechReport.com.au
Freelancer Project Traffic Graph: Red Project Request Green Project Fulfillment
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~Source: Freelancer
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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
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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
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Freelancers Are A Fluid Talent Pool
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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.
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13. The Cambrian Cloud
Inflection Points
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• 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
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