Freelancing on the Internet

The advent of the Internet has created new opportunities for freelancing, particularly for software developers from countries with low average salaries. A number of websites have become bustling marketplaces for farming out software development projects to freelancers at rates generally considered rock-bottom by Western standards. Such websites typically provide a convenient central forum for posting job requests, rating and documenting history to judge potential buyers and sellers, an escrow system to protect participants from fraud, and arbitration in the event of disagreements between the coder and the buyer. The system for setting prices is usually organized as a reverse auction.

Freelancer Statistic

According to recent studies about 20 percent of contracted websites,software development and graphic designs worldwide are made by freelancers. Customers choose and stay with freelancers because their rate can go as low as 70 percent compared to industry standards.

Coders

The majority of the coders at such websites are apparently from India and Eastern Europe. Nevertheless, there are many from the United States, the United Kingdom, and other countries. Coders vary from individual freelancers, sometimes college students working in their spare time, to small software companies with teams of developers. The rates commanded by the coders generally depend on the scope of the project, and the coder's history of past work done when contracted through the website. First time coders and code monkeys often underbid those with established online reputations.

Buyers

The people hiring freelance programmers via the Internet are probably more diverse than the programmers doing the work. Up to 70% are non-technical. Most are in developed nations. Some are professional programmers seeking special skills to solve specific problems. Many represent companies trying to set up e-commerce on the web. Some are students needing help with homework. Some are business people attempting to automate some business function. Some want to reimplement programs they've seen on other platforms, or translate programs to other programming languages. There are also a number of people that aren't really good at programming, so they find people to do their work cheap, and then just put their name on the project.

A good number hire graphics artists who also sign up for these sites.

Compared to offshore outsourcing

This kind of Internet-based outsourcing can be thought of as a small business variant of the wider business practice of offshoring. Larger corporations may set up their own subsidiaries in other countries. Small businesses, as well as individuals requiring software, find it convenient to get projects done through Internet freelancing sites. A typical project price, as of 2004, is several hundred U.S. dollars, well within reach of a small company with a true business need.

Inherent problems and implications for businesses

Internet freelancing raises many issues for businesses involved in outsourcing some of their work. Protection of intellectual property is one major issue. There is little realistic recourse for a company in the event that a coder from another country should publish or resell the code developed for them. The practice of Open Outsourcing completely side steps this sticky issue by explicitly stating that the code is available to all. Other problems may include difficulty in fully communicating the necessary specifications of the project at hand, as well as the risk of the coder failing to complete the project on time, potentially jeopardizing the buyer's business plans.

Therefore, the projects typically posted on freelancer websites would optimally not represent the core competency of the buyer company. Rather, they would constitute the more mundane and labor-intensive tasks that are much easier to describe accurately in writing than to implement in a complete and polished manner. Outsourcing specialized tasks for which no in-house expertise is available is another good reason to seek a freelancer. Some programmer out there has solved a problem similar to yours in the past, and that hard fought knowledge can save you a lot of money in internal training and discovery processes.

External links

Pros and cons of freelancing online in addition to information on other self-employment opportunities online.
Freelancer blog posting tips and articles by a business blogger and licensed librarian.

Management | Organizational studies and human resource management