The Evolution of Employment: From Free Agent Nation to On-Demand Distributed Workforce

REDWOOD CITY, CA--(Marketwire - Jun 28, 2011) - Businesses and contractors are thriving -- and 9-to-5 employment has nothing to do with it. While national unemployment rates remain frustratingly high and traditional staffing firms are touting a global "employment crisis," a recent survey by oDesk, the largest and fastest-growing online employment platform, shows encouraging trends of a new employment paradigm, and a significant shift in how businesses and workers are succeeding worldwide.

With online employment platforms enabling unprecedented access to talent and jobs, employers and workers alike are thriving in a virtual, borderless economy. Businesses are growing by leveraging remote contractors to build distributed teams, and contractors, in turn, are earning more money and even starting their own small businesses.

"Location, Location, Location" Has Little Meaning
Twenty years ago, few employers hired workers outside of centralized locations. Only large enterprises, with extensive resources, tapped global talent by relocating workers to their headquarters or building brick-and-mortar satellite locations.

Then, 10 years ago, in his book "Free Agent Nation," author Daniel Pink postulated that a global workforce of "free agent" entrepreneurs would replace the old corporate reality¹. oDesk's extensive survey of 3,353 employers and 12,712 contractors has proven many of Pink's ideas to be reflected in today's workplaces. The survey also uncovers new data that shows that many of the fastest-growing employment opportunities are driven by interconnected, global businesses and remote work philosophies.

According to the survey:

• Building a distributed core workforce has become a key element to the success of both businesses and workers. By leveraging online work capabilities during the last year:
  • One-half of employers surveyed stated they have been able to grow their business in terms of revenue, size or scope of service.
  • Two-thirds of contractors said that they will make more in 2011 than they did in 2010.
  • 17 percent of employers have grown their business by 50 percent in the last year.
• The workplace itself has become virtual, reflecting the evolution toward a truly borderless economy. Work happens regardless of location:
  • 54 percent of employers do not have a preference where their workers are based.
  • 71 percent of workers do not have a preference around where their employer (or the source of work) is located.

In addition, connecting talent and opportunity locally has persisted as a challenge for businesses and workers alike. As stated recently in Manpower Group's 2011 Talent Shortage Survey², as many as 34 percent of employers are having difficulty filling vacancies locally, making finding online talent to fill that gap even more imperative. According to oDesk's survey:

• 28 percent of employers indicated the primary reason for building a distributed team is to access talent that is hard to find locally.
• 21 percent of employers said that the ability to hire an online workforce enabled them to scale up or down quickly, responding in a nimble fashion to the real-time needs of their businesses.

"We are seeing a new employment reality," states Gary Swart, oDesk CEO. "Location is less crucial to thriving employers and workers than it used to be, and today's workplace is even more interconnected and global than Daniel Pink anticipated. There has been a substantial shift in the entire employment model."

Distributed Teams Are Plugged In
Distributed teams may be geographically remote, but workers and employers consider themselves connected and engaged.

According to the survey:

• As a result of frequent communication and collaboration on critical tasks with employers, online workers feel engaged, empowered and connected:
  • 55 percent of employers assign "core" or "critical" work to remote contractors.
  • 87 percent of contractors, in turn, feel that they are an integral part of their employers' staff.
• Contractors and employers communicate frequently:
  • 77 percent of employers communicate with their contractors several times per week.
  • 81 percent of contractors reported the same.
• E-mail and Skype dominate communication methods:
  • 58 percent of communication between contractors and employers happens via e-mail.
  • 32 percent is through Skype (voice or IM), and only 4 percent occurs by phone.

Employment Loyalty Is Sprawling
In addition, the survey found that employers and workers are collaborating laterally, enabling businesses to grow rapidly and new entrepreneurs to emerge. Specifically, workers have shown increased interest in growing their own horizontal networks and building reciprocal networks that lead to job opportunities. So, while workers collaborate in their work for employers, they are also developing loyalties to other workers. On page 102 in "Free Agent Nation," Daniel Pink called this dynamic "the new loyalty³:"

Horizontal loyalty (is the) successor to vertical loyalty, which flowed upward -- from an individual to an institution or authority figure.... By contrast, the new loyalty flows laterally. It is a fierce, and usually reciprocal, allegiance to: teams, colleagues, and ex-colleagues, to clients and customers; to industries and professions; and to family and friends.

oDesk's survey found that:

• Workers are harnessing their horizontal networks to support one another and network professionally:
  • 35 percent of contractors primarily find work from other contractors.
  • 59 percent participate in online groups/forums around work.

"Big" Isn't the Only Business in Town
The distributed workforce model is changing the nature of the business world. Access to global talent allows businesses of all sizes to grow and prosper. Contractors, specifically, are evolving into entrepreneurs and establishing their own small businesses. In other words, individuals are increasingly thinking of themselves not strictly as employers or workers, but as both.

oDesk's survey found that:

• Workers in distributed teams are growing their own businesses.

  • 77 percent of contractors consider online work as their own businesses.

• In addition, the majority of workers is reporting a higher expected income in 2011 than in 2010. Specifically:
  • 66 percent of online contractors are expecting higher income this year than last.
  • 57 percent of workers are reporting a higher hourly rate.

Conclusion
While the traditional economy may be challenged, the virtual one is booming. In today's new employment paradigm, online work is a bright spot in an otherwise troubled economy. Businesses that are building distributed teams, and the workers engaging in online work relationships, are succeeding in ways that are drastically different from the generations of workers and entrepreneurs before them.

oDesk Report Methodology
oDesk's Online Work Survey, conducted in June 2011 during a five-day period, draws on 16,065 responses from employers and contractors worldwide.

About oDesk
oDesk (www.oDesk.com) is the world's largest and fastest-growing global employment platform. With $18 million in work performed every month, and nearly 1.5 million tested-and-rated contractors offering their services, oDesk enables any business to hire, manage, and pay a flexible online workforce.

Doubling in size over each of the past four years, oDesk is rapidly changing how the world works.

Find oDesk on Facebook at: www.facebook.com/oDesk
Follow oDesk on Twitter at: www.twitter.com/oDesk

¹ Pink, Daniel H. "Free Agent Nation: The Future of Working for Yourself," Business Plus, May 2002.
² ManpowerGroup's Talent Shortage Survey, May 2011 < http://manpowergroup.com/research/research.cfm >
³ Pink, Daniel H. "Free Agent Nation: The Future of Working for Yourself," Business Plus, May 2002.