A Look at the Distribution of Global Payments to Different Countries Across an Online Freelancer Marketplace Platform

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Many are aware there are a number globally spanning online freelancer marketplaces, most notably Freelancer.com, Guru.com and now Upwork, the merged platforms Elance and oDesk. These platforms allow people almost anywhere to engage a freelancer to perform work and get paid for it – all virtually.

In this article we offer a picture of how that work is distributed across the globe, thanks to analysis and visualizations conducted by the Connectivity, Inclusion and Inequality Group, a multidisciplinary group of researchers based at the Oxford Internet Institute, University of Oxford. Their results and visualization were published in 2 articles, “Is oDesk a global marketplace? Visualizing the geographies of digital work” and “Uneven Geographies of Digital Wages.”  

As suggested, it was oDesk, over a year prior to the merger with Elance, that provided researchers with an anonymized data set of the approximately 60,000 completed transactions that occurred in March 2013. According to the article, at that time oDesk had “a million registered employers [buyers], 4.5 million registered workers [sellers], and an annual volume of trade of 500 million dollars.” (Note: “registered” does not indicate that they are all active or, if they are, how active.)

One of the most interesting visualizations was this one, entitled “Dollar Inflow and Median Wage by Country,” from the article “Uneven Geographies of Digital Wages.”

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A few basic observations, which may be evident in a quick glance:

  • Most of the work and payments received are in the Eastern Hemisphere. In order of volume of dollar inflows: India, Philippines, Ukraine, Pakistan, Bangladesh, Russia and China. All of the countries south of China exhibit median hourly wages in the lowest ranges from $0 to $9.90, while from countries China and north exhibit median hourly wages in the highest ranges from $16.10 to $100 ($16.10-$20 and $20.10-$100).
  • Europe is represented by individual countries; however, if these dollar inflows were aggregated into the Eurozone, the total volume of inflows would probably be on par with that of the US.
  • That brings us to the US. Perhaps surprising to some, the US has total dollar inflows (to workers in the US) that are almost as much dollar inflows into India. If US and Canada were combined, the dollar inflows would probably exceed those to India. Median hourly wages between the US and India of course contrast sharply (US: $16.10-$20, India $5.10-$9.90). Perhaps most surprising about the US is that only about 25% of dollar inflows come from outside the US and 75% come from within the US, meaning there are many workers [sellers] in the US that are doing work for businesses [buyers] also in the US.

For further insightful visualizations and analysis of the demographics and trade flows of this particular platform in March 2013, follow the links above to the articles. But for now, let’s consider some take aways for procurement practitioners from what we have seen:

  • Online freelancer marketplaces can provide extensive infrastructures to support work arrangements that span different countries.
  • Remote/virtual work and such marketplaces allows for reach into large deep talent pools in other countries
  • Opportunities for wage arbitrage clearly still exist
  • Mark-ups and time-to-hire are superior to traditional staffing models, though there are some drawbacks and risks, including misclassification, especially when the buyers and sellers are in the same country.

Online freelancer marketplaces, one of a of variety of different work intermediation platforms (WIPs) we are covering, are still developing and evolving, even when they have reached a large scale like Upwork, so there will be growing pains. But it seems clear that these and other WIPs are working, will be developing further, and will become a part of the future contingent workforce procurement sourcing world.

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