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Crain's New York Business Article (09-2013)


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Crain's New York Business Article (09-2013)

  1. 1. Hired temporary employees in hot demand | Crain's New York Business[9/18/2013 9:21:43 PM] Print Email Reprints Comment Hired guns in hot demand Corporations farm out work to army of temps as costs and mandates rise. BY ELAINE POFELDT SEPTEMBER 8, 2013 12:01 A.M. ARTICLE COMMENTS (2) RELATED NEWS It would have been easy for Debbie Feldstein to stick with her high-visibility career as executive director of the New York Emmy Awards. But, after rising through the organization for 25 years, the Manhattan resident yearned for a change. She quit and, while figuring out her next move, found herself poking around the Silicon Valley freelance marketplace Elance. On a whim, she bid on a gig writing a press release, work she'd done at the Emmys. She won the job and got a rave review from the client. That was in late 1999. Excited by that success, she kept pursuing copywriting projects, and soon found herself with a new full-time career—as a freelance copywriter. She's still at it, and recently helped a large international food company create marketing materials to introduce its pasta to the U.S. It's the type of work that once might have been done internally. Many of the clients that have hired Ms. Feldstein in the past have been small businesses, but recently she has heard more from larger ones, like the pasta maker, often with offers of repeat work. "Far more clients are looking for someone who can be a long-term partner," she said. Ms. Feldstein's career as a freelancer has given her a front-row view of a growing trend. Big NY consultants outpace peers Stocks mixed; Apple sinks after iPhone news Jeff Levick plays a different tune at Spotify Stocks rise, gains push Dow above 15,000 Primary time An essential alert for small businesses in New York that helps them learn what they need to succeed. VIEW SAMPLE  |   NEWSLETTERS Small Business Alert Business Lists Top 20 Benefit Consulting Firms Top 25 Women-Owned Businesses Top Professional Sports Teams List Top Construction Companies Top 25 Architecture Firms MOST POPULAR LATEST NEWS Fraud drained Peninsula Hospital, suit says Exit clarifies race for council speaker Thompson concedes; Democrats unify behind de Blasio Dimon spells out JPMorgan changes Bill de Blasio, part-time populist DIRECTOR OF DEVELOPMENT New York, NY - A Better Chance Dean, School of Business & Technology Job Board POST A JOB WEDNESDAY, SEPTEMBER 18, 2013 9:20 PM LOG IN REGISTER SUBSCRIBE News Home Current Issue Real Estate Small Business Health Care Politics More Industries Home News Opinion Features Events Calendar Resources Multimedia Data & Lists Newsletters Enter your email address Subscribe Search Go
  2. 2. Hired temporary employees in hot demand | Crain's New York Business[9/18/2013 9:21:43 PM] 21,119—Number of new "nonemployer" businesses, NY state, 2011 Source: U.S. Census Bureau companies—aided by platforms like Elance, with the technology to separate experienced freelancers from those with fewer skills—are farming out work they once did in-house to a swelling army of temps, contractors and freelancers to save money, reduce benefits costs, plug talent gaps and stay nimble in a more global economy. "I think we're heading into a new era of doing business, where corporations are no longer viewed as paternal or nurturing—they're just pay sources," Ms. Feldstein said. New York state freelancers earn more than those in other states, and local businesses top the nation in employing freelancers. Hiring on Elance rose 51% nationally in the second quarter of 2013, compared with the same quarter last year. "A sizable portion of that increase is from midmarket and enterprise companies," said Rich Pearson, Elance's chief marketing officer. Meanwhile, the average hourly wage for U.S. freelancers on the site rose 5%, to $28, he said. Big companies are tapping into the top tier of a growing group of workers who aren't permanently tied to any company, though estimates of exactly how many people there are in this workforce vary. Accenture recently estimated that the percentage of the U.S. workforce that is "contingent," which includes freelancers, contractors and temps, may be as high as 33%, up from 6% in 1989. Another report by Intuit projects that such contingent workers will make up 40% of the U.S. workforce by 2020. Cautious approach "Individuals want to work this way, and employers want to engage labor this way," said Jeff Wald, cofounder of Work Market, a cloud-based "contractor management" platform in Manhattan. Work Market serves enterprise clients, including Adecco, Lockheed Martin and NCR, and is backed by investors such as Union Square Ventures, Spark Capital and SoftBank. Work Market, like Elance, tests its workers' skills and know-how. Larry Velez, founder and chief technology officer of Sinu, a 10-year-old Manhattan-based firm that serves as an outsourced IT department for about 100 companies, has often supplemented his 25 employees with freelance help he's found on Work Market. This lets him tackle projects in distant cities where he has no full-time staff. "If we can deploy someone from Wichita for two hours, versus flying someone out there, it's way more efficient," he said. Certainly, many big companies are still taking a cautious approach. Firms that make a mistake can face steep federal and state penalties for failure to withhold the proper taxes—a problem that can be especially acute in New York, said Paul Gevertz-man, a partner at accounting firm Anchin Block & Anchin. "In New York City, people would potentially have another layer of tax that is not getting withheld—that ultimately the employer is responsible for if the worker doesn't report properly," he said. Fluctuating teams Elance offers its clients, which include Amazon, Cisco, CareerBuilder and Walt Disney, help in classifying workers according to labor laws and will, on request, act as the employer of record for its freelancers, to reduce potential liabilities. One sign that the trend is likely to continue is the number of fast-growth companies that are tapping into the freelance marketplaces, which include oDesk. If they expand using contingent employees, they're more likely to maintain a workforce that includes them in the future. Antonio Evans, an Upper West Side resident who is CEO of Friends-EAT, a seven-year-old restaurant directory and social network for foodies, relies on a fluctuating team of about 15 contractors found through freelance marketplaces like oDesk. He said he doesn't need full-time help at the bootstrapped company—which has a little more than $2 million in sales and is profitable—and would have trouble occupying a traditional team. "If we have a guy just sitting there and working on a Albany, NY - Excelsior ADJUNCT FACULTY New York, NY - New York University Marketing Coordinator New York, NY - Rkt&b Architects Principal New York, NY - M Public Affairs See All Jobs Post a job for $199 Jobs by SimplyHired Facebook Twitter LinkedIn YouTube RSS Crain's Connects Advisory Panel Contact Us Staff Directory About Us
  3. 3. Hired temporary employees in hot demand | Crain's New York Business[9/18/2013 9:21:43 PM] NEXT ARTICLE Red Hook's Sandy revival is deceptive UNION SQUARE VENTURES ECONOMY SMALL BUSINESS TECHNOLOGY SMALL BUSINESS REPORT LAW NEW YORK CITY Print Email Reprints Comment project that doesn't matter, and we're paying him $100,000, we could be spending that in a different place in the business," he said. One factor that could loom for employers depending on contingent labor is an uptick in full-time hiring. Freelancers sometimes tire of the economic insecurity that comes with self-employment. "I don't know anyone who doesn't want to be fully taken care of, in terms of 'Do I wish I had full benefits? Do I wish I had a weekly paycheck?' Of course I do," said Ms. Feldstein. Then again, she pointed out, she has more security than many people in traditional jobs—and no desire to go back to one. "If any one income stream slows down, I have the flexibility to augment that," she said. Traditional workers are often at the mercy of employers, she said, and wonder, "Are they going to keep me?" A version of this article appears in the September 9, 2013, print issue of Crain's New York Business as "Hired guns in hot demand". Crains recommends From around the web [what's this?] Bronx landmark struggles in new life Sony to head south Is the iPad era already drawing to a close? Seward Park developer named De Blasio's political operatives: To the victors go the spoils 17 Books You Should Have Read Last Year DailyCandy Time to take ex's Social Security benefits The BEST Fries We've Ever Tasted...No Ketchup Needed! Refinery29 Best 5 Schools to get a Degree Online Education Portal 15 Celebrities Most People Don’t Know Are Black MadameNoire Comments (2) Sign in or register to comment... Lynnwrote on 09/10/13 at 11:52 AM Truly the shift in the last four years as been from small to mid-sized businesses relying on flex work to help grow their businesses to large corporations using temps as a means of filling gaps & controlling costs. Certainly something the members on are seeing and requesting new services to better market their skills. REPLY Bredwrote on 09/10/13 at 2:50 PM Completely agree with Lynn. Employers of all sizes, as well as investors, have been using sites like Skillbridge to access the most talented consultants to help them with their businesses. REPLY
  4. 4. Hired temporary employees in hot demand | Crain's New York Business[9/18/2013 9:21:43 PM] Crain's New York Business Media Partners Crain Publications Advertising Age Business Insurance Crain's Detroit Crain's Chicago Crain's Cleveland Investment News Modern Healthcare Pensions & Investments Staffing Industry Analysts ENTIRE CONTENTS ©2013 CRAIN COMMUNICATIONS INC. Facebook Twitter LinkedIn RSS About Us Staff Directory Privacy Terms and Conditions Advertise Reprints Contact Us Newsstands Site Map Corrections Editorial Calendar Subscribe