oDesk – an online employment platform for Internet professionals – tries to prove that the Internet is an ideal conduit for recruiting and staffing.
In many ways, it succeeds.
Founded in 2003 by Odysseas Tsatalos and Stratis Karamanlakis, oDesk appears to be a fairly thorough attempt to take the interviewing, hiring, project flow and payment processes and make them work in a completely online environment.
“Our model is based on Hire, Manage, and Pay,” said an oDesk representative. “We monetize only on the Manage and Pay parts of the business; not on the hiring.”
The company also stresses that its model focuses on time-based work, making it unique from crowdsourcing sites a la Mechanical Turk.
For hourly jobs, oDesk pays weekly. Usually, the employer fee on top of the contractor payment is 10%, and there are never escrows or up-front payments. The company doesn’t make money until the work is performed and billed.
oDesk also claims to be “the first and only service to guarantee that an hour billed is an hour worked and that an hour worked is an hour paid.”
The are some well-thought-out tools here that are clearly designed to eliminate the usual problems managers have with remote employees. Recruiting tools include a suite of company-owned tests that job seekers can take to improve their standings in the searchable database, as well as fields for work histories, portfolios and feedback scores.
Employers can view average hourly rates per recruit, and can limit hours for each recruit to better manage budgets.
This is all tied together with work verification functionality. Online collaborative software includes a Work Diary which shows the user accurate details of hours worked by individual contractor. It can include a program that logs six screenshots per hour so that supervisors can confirm that the time spent is relevant to the work.
This is not foolproof: Dispute resolution is not a strength for oDesk, which normally points to these interviewing and monitoring tools as deterrents. If a dispute does arise, there doesn’t seem to be any in-depth arbitration to resolve it.
“We guarantee payment,” the company representative said. “Because of the nature of the marketplace, poor work reputation is shared with the community.
"So poor workers don't get work again. It's a self-policing system.”
Overall, oDesk claims a payout of more than US$240 million to its contractors since 2003 and says there 250,000 contractors currently on the website.
There’s also an Enterprise option where oDesk will hire the team for you and provide a turnkey program to address projects requiring 20 contractors or more.
Which, I can imagine, leads naturally to this: oDesk can also function very similarly to an employer-of-record staffing agency, offering payroll options for employers and healthcare benefits for contractors.
This includes U.S. W-2 or 1099 payroll processing in the U.S. and Canada, as well as credit card and ACH transaction capabilities. These options bring the oDesk employer charge to 20%, which the company says is still below the rate of a “traditional” staffing firm.
oDesk is even a legitimate source of information for online employment as a whole. While CEO Gary Swart makes sure that the company is mentioned in a whole variety of employment trend articles, to some extent his company can back it up.
In its oConomy section, the site presents monthly trends for billable hours, hourly rates and even a “companion to the Employment Situation Summary issued by the U.S. Bureau of Labor Statistics.”
It’s an interesting glimpse into the world of “online work,” which the company says it generates from its own databases. And it's useful for contractors in setting and improving their rates.
In June of 2011, oDesk claimed an estimated 86,443 jobs posted and for the year – down 4% from the previous month but up 67% year over year. (I don’t see nearly that many on the site.)
The company also estimated its YTD earnings at a little over $18 million.