The Evolution of Outsourcing Marketplaces
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The Evolution of Outsourcing Marketplaces

From Blind Dating to Matchmakers

Currently, there are dozens of Outsourcing Marketplaces where freelancers and companies alike may search for Outsourcing best matches towards fulfilling their business needs and aspirations.

You may find a comprehensive list (by vertical skill set) here.

Between 10 and 5 years ago, a freelancer would have to entice several types of initiatives to search for a potential contractor that would happen to be requiring his/ her set of competencies as well as companies that needed to outsource specific work would have to undergo the “traditional” hiring process or resort to an agency alike company.

We can say that roughly over the last 5 years, an on-line based Outsourcing Services market vertical has exponentially grown, even with some mergers and acquisitions taking place over such period of time.

These Outsourcing Sites have evolved from merely enabling the match between offer and demand to become focused on assuring transparent, secure and assertive cash flow between the parties (freelancer and contractor).

Some examples of the leading marketplaces within this category are Upwork.comFreelancer.com or 99designs.com.

Upwork.com Business Model focuses on enabling a wide range of corporate clients to assess a broad skillset landscape ranging from business consulting to translation services or from web development to new edge digital marketing focused on SEO. The main marketplace features are the ability to place money in escrow, hence assuring both freelancer and client a safe delivery/ payment process; a complete freelancer profile; a complete client reviews registry supported by success classification and a wide pool of on-line tests that support freelancer's capacity claims. Freelancers may choose among a base free profile getting each once a month 60 credits (called connects) which they may spend while bidding on job postings (usually 2 connects per bid unless invited where no connects are required or very specific opportunities that only require 1 connect to apply) or a "professional" profile that makes possible for available connects to accumulate over time (to a maximum of 140) and allows the freelancer to check each job posting's bidding range (maximum, average and minimum).

Freelancer.com the model is very similar to Upwork.com but the number of free of charge credits is limited to 8, there is no escrow feature in place, certifications (tests) are paid and the freelancer profile is not so rich nor well structured as in the case of Upwork.com. It is nevertheless a generic Outsourcing marketplace with a wide range of available skill sets.

The last example is 99designs.com which in opposition to the previous two marketplaces is focused in the specific context of Design. The client is invited to undergo a specification process where his/her need is clearly mapped and given the choice of several "service packs" (higher price leads to broader capacities from the number of designs turnover for assessment to the designer's proficiency and expertise level, including project management). This Outsourcing Marketplace at its highest "service pack" offers a "Concierge" alike feature of selecting the most suitable professionals for the job posting at hand.

One major concern when hiring some complete stranger is the ever so present question of whether being doing the right choice (the best match towards one’s need), so most of these tools enable past projects displayed alongside with inherent client reviews about the freelancer performance.

It is somehow a valid “best-fit” reassurance, moreover when the freelancer has performed several jobs and the appraisal is positive and constant. Nevertheless, there may be some specific type of task or project that although, the freelancer having developed several projects in the same context may not result in this specific one due to special specific capacity or know-how that is not easily identifiable by the client while going through the freelancer’s profile.

Year to date, Outsourcing is no longer a “Blind Date” but more of a “Refer a Friend” alike process. This guy has been performing well (at least such is the feedback of several past clients), therefore he must be a good match.

outsourcing platforms

The event of Concierge platforms

The latest market evolution is the arrival of “Concierge platforms” that support you as a client by enabling a service that proposes the best matching freelancer towards your specific need.

This is a tremendous competitive edge since it allows some perks that current “standard” platforms are unable to provide:

  • Support is accurately defining and translating the “need” into words – I would dare to say that the majority of job postings in these Outsourcing Sites is at least “vague”. Find the best fit highly depends on being assertive while explaining what one needs.
  • Many platforms make some skills tests available so that freelancers may have a way to “prove” their stated capacities, but these new platforms go one step further like Toptal.com or Contently.com where a freelancer cannot merely register his/her profile and start applying to jobs.

Both platforms differ in their market approach. Contently allows the freelancer to sign up leaving the "proof of capacity" to the input of valid links to existing on-line portfolio while also enabling a Content Management Software tool that supports content development and acts as an online library. This was the way to avoid resorting to high fees both towards freelancers and clients while enabling a paid service, but one that directly supports the activity on the platform and adds value to the marketplace itself.

Toptal lead marketing message is that they will provide the best 3% talent to their clients and to give credit and assure such pretention it presents the freelancer with a detailed and thorough application/ selction process comprehending several steps, such as an initial assessment interview, followed by a tough on-line test (specific to the freelancer’s core competencies) and an interview with an expert to assess the freelancer’s skills 1o1.

  • These new edge platforms provide the client with a “best matching” freelancers shortlist so there is no open-market competitive process of freelancers bidding on job posts, but a professional consulting service by the platform towards the client with the end result of enabling the most accurate set of soft and technical skills to tackle the need at hand.
  • In the case of any given miss match, the platform undergoes the needed proceedings to swiftly find an appropriate replacement so that the impact towards the client is mitigated.
  • Time to market as well as the need fulfillment cycle is shortened, so the client may in these cases post the needed job and wait for the solution, not having to spend countless hours reading profiles and reviews and performing interviews.

Concierge

“Concierge Platforms”  mean that “traditional” Outsourcing companies have found their match.

Several companies (especially, but not limited to IT), either have Outsourcing as their Core Business or have created specific Business Unit that has it as their sole portfolio item.

These companies usually have a pool of expert resources that are “leased” to client companies upon request or need, but that implies OPEX and Overhead.

The new “Concierge Platforms” do incur additional overhead costs than the other platforms, while assuring the best fit profile towards client’s specific requirements, yet they do not have the OPEX inherent to paying salaries to a pool of expert resources whether they have projects to work on or not.

Last, but not least, the established Outsourcing companies will enable local resources or at best nearshore ones in very specific cases, but these platforms widen the range of potential support expertise to the entire globe.

The near future seems to be an interesting kaleidoscope of market transformation and expert skill sets flying around to meet the “perfect match” while “traditional” offering, namely the market established companies may well find themselves being overrun without early warning.

Note:

The meaning of OPEX - The Operational Expense is the set of expenses inherent to a specific type of operation, meaning and in the case above mentioned bearing salary costs, rent, equipment, inventory costs, marketing, payroll, insurance and other fixed costs.

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