Q&A: Matt Barrie, Freelancer.co.uk, discusses the next big sector in outsourcing

UK unemployment trends have hit the headlines once again recently. First, the Chartered Institute of Personnel and Development (CIPD) announced the results of a survey which suggests that businesses have found it much harder to source employees with much needed specialist and technical skills over the past year. In addition, while official unemployment figures show a slight fall, many are still braced for a continuation of the bleak circumstances for UK jobseekers and businesses.

Matt Barrie, CEO of Freelancer—the world’s largest online outsourcing marketplace—believes that freelancing is rapidly emerging as a viable solution to current recruitment challenges. According to statistics gathered from Freelancer, which has more than two million freelancers and employers listed on its website, more people are turning to project-based work to tide them over during periods of long-term unemployment. Similarly, businesses—particularly SMEs and start-ups—are increasingly balancing core staff with freelance expertise to access affordable talent in the harsh economic climate. We spoke to Matt to find out more.

What does Freelancer do?

Freelancer.co.uk is the world’s largest online outsourcing marketplace. We are just like eBay but, instead of buying and selling physical goods, we connect people who wish to buy and sell services. We connect people in the western world who need jobs done (anything from graphic and website design, to creating rap songs to teach Chinese students to learn English!) to highly skilled professionals in the developing world who are available online 24 hours a day, 7 days a week.

The average job is under £200. Anyone who wishes to get work done can post a project in a matter of seconds and within minutes, can expect to see people from across the globe bidding on that work. Our users can compare and select bidders based on price, skill set and (just like eBay) a reputation system.

How many members do you currently have and where are they?

We currently have over 2.6 million users from all over the world. The majority of employers are located in the Western world—US, UK, Canada and Australia. The majority of freelancers are located in the developing world—India, Bangladesh and Pakistan are all strong. The Philippines has seen rapid growth over the past year and as internet connectivity becomes more affordable, places like Colombia, Peru and Chile in South America are beginning to figure more prominently.

Why are more people turning to freelancing, particularly in the UK?

There are several reasons why freelancing is experiencing strong growth. First and foremost, the majority of freelancers that are coming online, are coming from developing countries. There are 7 billion people in the world and only 2 billion are currently connected. The rest are connecting at double and triple digit rates and the first thing they want to do when they come online is find work.

They are self skilling, self motivated, driven, and they are looking to raise their level of income and their quality of life. Secondary to that, and particularly in the UK you have two factors at play. The first of these is lifestyle. A successful freelancer has a degree of flexibility and autonomy which would be unheard of in a conventional job.

The second factor at play in the UK and other developing countries is the economic climate. With many businesses taking the opportunity to downsize their workforce and force redundancies, many of these workers have access to an opportunity to seek part-time or ad-hoc work to help them make ends meet while they search for a new job. From time to time these people find that their services are so in demand that they need not return to a job at all.

The much stronger trend however is not a turn to freelancing but rather in the western world and especially in the UK, people are becoming savvy and realising that by tapping the global labour pool they can get just about anything done for an incredibly low cost. They are realising that there has never been a better time to start a business or expand the business that they currently have. The Internet has created this new frontier whereby people who have an idea now have the power to get whatever they need done at a fraction of the cost of what they traditionally would have expected to pay.

How can businesses benefit from freelance workers?

There are countless ways businesses can benefit from hiring freelancers online but in short—lower cost, rapid turnaround time, more flexibility, increased profitability and the potential to facilitate rapid growth. Small businesses now have access to a wide range of resources that previously were unattainable due to cost. Previously, the local fish and chip shop could only dream of having more than just a basic logo, a website or god forbid an iPhone app.

To get all three would cost in the tens of thousands of pounds and this is simply not an option for most small businesses that are already struggling to make ends meet. Now by way of hiring freelancers online, you can get a logo designed for roughly 20 pounds, a website built for under 200 and an iPhone app for just a few hundred pounds. The whole thing can be done in under £1000 and the turnaround time is roughly one to two weeks!

Using freelancers offers a broad range of opportunities for British businesses and businesses owners should be using freelancers to do the things that prevent them from thinking about the bigger picture. Hiring someone in the Philippines or India to do the data entry work that small business owners usually do themselves, for 100 pounds per month, can be life changing—for the business owner and for the person in the developing world that can now feed their family.

Then there are the other benefits, like the ability to scale-up and scale back a global workforce in days or even hours, depending on the business needs. The ability to tap in to experienced professionals in a broad range of areas and expertise. I could write a thesis on the benefits.

The Internet has moved at such a rapid pace and broken down so many barriers to starting a business that a business can be started on a shoe-string budget and become a multi-million pound success story in a short space of time. It’s great to see not only existing Britisish businesses benefetting the use of Freelancer.co.uk but also to see new businesses in the UK emerging thanks to us as well.

What kind of jobs can you outsource?

You can outsource almost anything you can think of. We have 400 categories of work on Freelancer ranging from the standard technical stuff like web and application development, marketing and copywriting through to much more niche stuff like engineering, architectural renderings and patent drafting. We even have a Business Plan category—that’s right, you can even find someone to write your business plan for you!

We also have a free for all category, which is the source of much entertainment among our staff. We once had a guy propose to his wife via a custom built iPhone app which took her on a journey to all of their special spots culminating in where they first met. The app was built for around £500.

Hold on. Is this about taking British jobs overseas at low cost?

Freelancer.co.uk is about empowering entrepreneurs. We are empowering entrepreneurs in the West to go out, start a business or expand the business that they do have and we are empowering entrepreneurs in emerging economies to develop service companies that will eventually lead the transition to turning their countries from developing to developed. We are providing an amazing productivity tool for people in the UK to get things done easily, quickly and cost effectively.

Far from taking British jobs overseas, we are essentially opening up a market that previously did not exist. As I mentioned previously, the small business owner has never been able to enjoy the resources available to big business. Small business owners, especially in this market are not able to spend the tens of thousands of pounds traditionally required to get them the logo, the website, the iPhone app and at the top of the search results on Google.

It’s worth noting that in the UK you have a total of 4.8 million small businesses, 3.6 million of which are sole proprietors—that’s 75% which have no employees. It is these sole proprietors that have been severely disadvantaged in the past. Unable to afford to grow due to the high costs involved in traditional expansion.

And then you have the knock on effect of a small business hiring online which actually opens up jobs to the British people. Take for example the local plumber who goes ahead and hires someone in India to build him a website or an iPhone app for a few hundred pounds. This website or application is able to take inquiries and book appointments. He or she may even have someone in the Philippines managing the back end and the customer communication for one to two hundred pounds a month.

By expanding their reachability by being available online, that plumber is then able to build their brand and exposure and all of a sudden there are too many inquiries to handle alone. They have to hire more local plumbers to manage that workload.

What trends are you seeing in the UK, if any?

The overall trend is undoubtedly the shift towards outsourcing itself—it is going mass market. Our business is booming and has more than doubled in the last year. London is our most active city globally and the UK is our number two employer market. In terms of freelancing, the UK is moving up the knowledge economy, doing more higher value add work e.g. research, engineering etc. The other key trend is that the freelancers are regularly becoming the employers.

We have a truly inspiring case study whereby a British lady who had been fired for being pregnant, took to Freelancer.co.uk in a final act of desperation. She began working as a voice over artist, using her accent as her tool to earn an income. Finding that she was so highly in demand and that people were regularly asking her for male voices as well, she decided to start a voice over business which is now The Great British Voice Company—a limited company (GBVco Limited) with clients in 18 countries worldwide.

She has used Freelancer.co.uk for audio editing projects, logo design for the business, website design, and more recently a freelancer helped her write her first book about getting started in the voice over business, which was published in December 2010. The company is now a huge success and she wholly believes that she would never have even considered starting the company had it not been for us.

What are the most highly demanded freelance skills by UK employers?

The top five skills currently being outsourced by UK employers are: website programming, graphic design (websites, logos etc), search engine optimisation (getting on to the top of the search results on google etc), copywriting and data entry.

What tips, if any, do you have for employers or entrepreneurs looking to hire freelancers to help out with certain business tasks?

The first tip would be to not choose the freelancer with the lowest bid. The bid prices are going to be low respective to where you are anyway and it is much better to pick someone that is right for you rather than someone who can offer you the cheapest rate. Just like in the real world, you should make sure you are fully informed before you choose to hire someone to perform a task for you.

Our reputation system allows employers to view the full history of any freelancer on the site, see how much they have earned to date, what past employers had to say about them and how they ranked on factors such as timeliness, communication and ability. I’d strongly recommend that you review the freelancer’s reputation on their profile before going ahead and hiring them for your job.

I’d also scout around and find some similar jobs in our listings, to help you get a feel for what budget you should be setting and what to include in your project descriptions. It’s likely that there are many projects that have already successfully completed, just like the one that you need done.

What is going to be the next big sector in freelancing?

I think we are only just touching the tip of the iceberg in terms of what freelancing, outsourcing and crowdsourcing can do for the world. There are many problems that individual scientists and academics have grappled with for years. I think the power of the collective is going to play a big part in finding cures to diseases and solutions to some of the world’s biggest issues over the next decade.

How do you ensure fairness with regard to payments?

We offer a “milestone payment” system which is designed to protect both the employer and the freelancer. If our users choose to use this option, the employer can deposit the funds into our site but not release them to the freelancer until they are 100% happy with the work completed.

Depositing the funds reassures the freelancer that the employer is willing to pay for the work providing the services are met. If a situation does arise where the employer and freelancer reach a disagreement and the employer does not wish to release the funds, we have a dispute resolution team available to review the situation and provide arbitration. Less than 1% of projects ever result in a dispute.

Will the number of freelance workers in the UK fall as the economy recovers from recession?

I think that freelance workers in the UK are starting to realise that they don’t need to stay on the working end of the equation. We have noticed that a lot of our users that sign up as freelancers, end up being the ones posting the jobs once they realise the depth of what is on offer. It doesn’t take long for people to realise that they can actually be the ones with the ideas, the ones building and creating the businesses themselves.

Why spend the time bidding on article writing jobs when you can create your own blog yourself, on whatever you like, from craft to cooking to cryptography. You can then monetise that blog by selling advertising and for the equivalent of a cup of coffee a day, have freelancers help you with the upkeep and article sourcing. I believe the economy is beginning to recover because people are being smarter about how they get work done. The savings that a small business can make outsourcing those basic business functions will be put back into the economy in other ways.

A report commissioned by Enterprise UK in November 2010 said that of the 63% of those polled, their biggest barrier to becoming an entrepreneur was funding and getting finance for the business. If you strip out the need for bank lending due to the fact that all of a sudden you don’t need one hundred thousand pounds to get off the ground, the outlook starts to become really positive. Boosting self employment rates by just 1% would boost the UK’s GDP by around 1.5% and add approximately 22 billion pounds to UK economy.

Christian Harris is editor and publisher of BCW. Christian has over 20 years' publishing experience and in that time has contributed to most major IT magazines and Web sites in the UK. He launched BCW in 2009 as he felt there was a need for honest and personal commentary on a wide range of business computing issues. Christian has a BA (Hons) in Publishing from the London College of Communication. In his spare time Christian can be found in a gym, supporting his 8-year-old son from a football pitch sideline, or more likely obsessing over the latest tower defence game.

Our latest thought leaders