Hiring Unknowns: The Rise and Fall (and Rise and Fall) of Freelancer Marketplaces

Freelance marketplaces were supposed to funnel the working masses and the employers that need their services into the 21st century: as an employer, your reach is global, as a freelancer, your workplace location, your appearance, and in some cases your past work history, become irrelevant.

But they're not always the best way to find quality staff. Their failures are the reason we're not seeing a decrease in job search sites, from the generic but well-respected Monster to the more niche jobs sites as MediaBistro.

Recruitment agencies, from the small companies hiring for specific industries to geographically concentrated agencies such as the U.K.'s Randstad too, continue to succeed, freelancer marketplaces come and go, yet the way we look for work appears to remain relatively unchanged.

Are freelance marketplaces last chance saloons?

Perhaps the best example of freelancer marketplaces is the so-called content farm: the internet is an ever-rapacious beast with a boundless appetite for more content, which these outfits promise to fill.

Scale is what these content farms strive for: more clients, more service providers, means better prices, which would explain the recent merger of powerhouses oDesk and Elance.

But scale demands organisation and oversight, and that's when things start to fall through the cracks. To start with, the "initiation" process for freelancers is becoming longer and more involved, with oDesk suggesting extensive portfolios, skill tests, client testimonials and more to build your profile to completion, which will certainly turn off many, and not just the lazy.

Anecdotal evidence would suggest that freelancers use such marketplaces when all other options have been exhausted - industry contacts, family contacts, school contacts, employment agencies, Craigslist.

That's not to say a freelancer can't reach a six-figure salary working on just one of these marketplaces—it does happen, and the owners of the marketplaces like to point to these outliers as something everyone else should strive for.

It's not plain sailing for recruiters

The evolution of these marketplaces also means more work for the client looking for freelancers: from extensive agreement reviews to escrow accounts to freelancer testimonials, to be a successful employer requires more than simply offering a job.

Sifting through what basically amounts to spam - thoughtless applications from unqualified applicants intent on sending out 100 bids a day no matter what - means the savings one would get from working with underpaid contractors are diminished by the time invested in finding them in the first place.

Then there's the ethical question

Hiring from such talent farms, where work is based not on time contributed but on product delivered, can certainly aid unscrupulous employers in avoiding the bare minimums even of a zero-hour contract.

An in-house writer producing 10 articles for $7 cannot be expected to deliver anything resembling the English language, let alone useful enough for the designated audience, and most employers would not request this, yet this is type of work prevalent on oDesk (which has no per-hour minimums) and Elance (which has a $3 per hour minimum). To put it quite plainly, we still live in world where you get what you pay for.

While there will forever be new platforms for finding freelancers, their success, it would seem, depends on acceptance of their work in the marketplace.

The spectacular rise and fall of Demand Media - at one point valued more than the New York times - demonstrates the pitfalls of producing sub-par work for large clients: the clients will suffer from the sub-par work.

It's a special kind of irony that one of Demand Media's biggest contracts, eHow, actually offers a tutorial on how to exclude certain domain names, such as eHow, from Google searches (type in "how to exclude eHow from Google searches" and the eHow tutorial is the second on the list, so there is that).

There are alternatives: SkyWord, for example, works on a curating method, where a curator works directly with a client to find the right talent, and only pre-qualified and carefully screened candidates are given the option of applying for a job (there is no "jobs" board per se on SkyWord).

It's unclear how such outfits will fare in the future, but it is probably a step in the right direction. It's also very similar to the recruitment agency model.

Photo (cc) Kristin Pedder. Some rights reserved.