Given that the gig economy is on the rise and Industry 4.0 continues to cut jobs, it comes as no surprise that the Global Freelance Platforms Market is growing at a fast pace. Apart from the veterans Upwork and Freelancer.com, there are new and emerging players entering the Global Freelance Platforms Market each year.
Freelance jobs are becoming attractive to more people than ever before as some see them as a source of extra income while for others it is a small business of their own completely under their control. Although freelancing may be hard at the beginning, once freelancers build trust and a portfolio of satisfied clients likely to refer even more customers to them, freelancing becomes a source of steady and predictable cash flow. On the contrary, salaried employees may lose their jobs on short notice due to business transformation, cost-cutting or adverse market conditions having a negative impact on the company they work for. As the word ‘’freelance’’ suggests it, freelancing is about the freedom to select the projects to work on and the clients to work for. Freedom comes at a cost though, as, in the beginning, it is hard to find clients. Most freelancers search for gigs and freelance jobs online and that’s when the freelance platforms step in.
Freelance Platforms Business Model
In substance, most freelance platforms are marketplaces enabling freelancers and clients to meet, agree on freelance jobs terms and deliverables and transfer payments. However, when it comes to pricing, there are various freelance platform pricing models.
Are freelance platforms taking a cut on freelancers’ earnings?
Not all of them. Some freelance platforms like Upwork and Freelancer.com take a cut on freelancers’ earnings while others like Transformify are at no cost to the freelancers. The pricing model has a big impact on those freelancers earning USD 5000 or more per month as the fee charged by some freelance platforms is a percentage of their earnings and the more they earn, the more they pay.
Are freelance platforms charging the employers for listing freelance jobs and transferring payments?
Most of them do so. Again, there are different pricing models. Onlinejobs.ph has an option for posting freelance jobs for free but then, the recruiters need to pay in order to be allowed to communicate with the candidates and schedule interviews. There are also paid freelance jobs posting packages that include a pre-defined number of jobs that can be listed and a pre-approved number of candidates who can be contacted.
Other freelance platforms allow recruiters to post jobs for free but then charge a fee as a percentage of the payment transferred to the freelancer. For example, Freelancer.com charges for fixed-price projects, a fee of 3% or $3.00 USD (whichever is greater) that is levied at the time a project that has been awarded by the recruiter has been accepted by each freelancer. If the recruiter subsequently pays the freelancer more than the original bid amount, Freelancer.com will also charge the project fee on any overage payments.
For hourly projects, a fee of 3% is levied on each payment that the recruiter makes to the freelancer.
Short-term Gigs versus Long-term Freelance Jobs
Another differentiating factor is the type of assignments each freelance platform is focused on. Some freelance platforms offer mostly fixed price gigs like designing a logo, writing a guest blog post, optimizing a Facebook campaign, setting up a Google Ads account and the like. Many such gigs can be found on Upwork, Freelancer.com, Gigster, PeoplePerHour, Fiverr, Guru, etc.
On the other hand, freelance platforms like TopTal and Transformify are primarily focused on long-term freelance jobs and attract highly skilled freelancers. These may include interim CEO and CFO contract jobs, SAP and Oracle experts, senior developers and Product Managers, etc. Typically, the freelancers specify hourly, daily or monthly pay rates. These highly skilled freelancers and independent contractors work on long-term freelance projects, typically for more than 3 months.
Although bidding may lower the price for the recruiters, it is not seen as a socially responsible practice. As the living costs around the world vary a lot, open bidding results in very low pay rates that are not in favor of those freelancers living in the Nordics, the US, etc. It is impossible for them to lower their rates to match the bids of those freelancers living in India, Bangladesh or the Philippines where the living costs are much lower. Put simply, the purchasing power of USD 1 in the USA and the Philippines is not the same but online bidding for freelance jobs completely disregards this fact.
On the other hand, Freelance Platforms like Transformify which is focused on creating jobs for social good do not allow bidding and encourage recruiters to pay a fair pay rate in line with the median pay rate for the respective country.
As business models differ, it is not surprising that some freelance platforms are growing faster than others.
Which freelance platforms are expected to achieve fast growth in 2020?
The gig economy is growing fast in the Philippines and while the country was mostly associated with online companies providing virtual assistants or sales outsourcing, nowadays it becomes a freelance hub. Lots of skilled freelancers offer their services online and attract the interest of companies in the US, UK and Europe. Based in the Philippines, Onlinejobs.ph taps into this growing talent pool of skilled freelancers. Business clients posting freelance jobs are mostly based in the US.
Onlinejobs.ph offers three different packages. The Free plan allows up to 3 job listings, the clients can see the applicants but can’t communicate with or them or hire them. The free plan is intended to provide an overview of the functionality and the profiles of the freelancers who would be interested in applying for the posted jobs. The Pro plan costs USD 69 per month and also allows 3 job listings. However, the recruiters can communicate with a maximum of 75 freelancers and hire them. Finally, the Premium plan costs USD 99 per month, allows up to 10 job listings, the recruiters can contact up to 500 candidates per month and perform background checks.
Although Onlinejobs.ph doesn’t take a cut on freelancers’ earnings, the payments don’t go through the freelance platform leaving the freelancers vulnerable to incorrect employers. The billing process and the issuing of invoices is also to be taken care of by the freelancers.
What is positive is that no commission-based roles are allowed on Onlinejobs.ph. The same is valid to the so-called ‘’business opportunities’’ requiring freelancers to sell products to earn a commission or even to pay a fee in order to be included in a multilevel marketing scheme.
Actually, Transformify Freelance Platform is part of an integrated single sign-on HR Suite comprising of ATS, HR Software, Freelance Platform, Employer Branding, Diversity Hiring, billing & payments. As part of an HR Suite, Transformify Freelance Platform is used by employers who are not only looking to hire talented freelancers but also to automate the management of their contingent workforce.
The single sign-on allows employers to source both freelancers and salaried employees. Powerful matching algorithms help to select those freelancers who best fit recruiters’ criteria around skills, experience, location, pay rate expectations and more. As Transformify Freelance Platform and ATS are integrated with each other, the recruiters can manage the entire hiring process including the creation of shortlists, scheduling of interviews and messaging candidates.
Once the most qualified freelancers are selected, they can be assigned to freelance jobs via the platform. The entire invoicing and payments process is managed by the freelance platform which includes payment transfers to any bank account all over the world (although there are some restricted countries like Cuba, North Korea, Iran, etc.)
The employers are encouraged to create jobs for social good and to provide equal opportunities to all candidates regardless of their location, gender, race, or personal situation.
There is a 7-day Free Trial which allows recruiters to post unlimited job listings and contact and hire unlimited candidates. After the free trial, there are flexible plans addressing various hiring needs. The Pay-as-You-Go plan costs USD 50 per job listing, allows recruiters to contact unlimited candidates and use the integrated ATS. The monthly and quarterly plans cost USD 3500 and USD 9400 respectively and include 100 job listings per month, unlimited candidates and usage of Transformify ATS. The Enterprise plan is customized for each client to meet their unique hiring needs.
Payment processing fee applies if payments are processed via Transformify Platform.
Transformify takes no cut on freelancers’ earnings. Payment guarantee is offered only if the freelancers receive payment via Transformify Freelance Platform which has integration with Payoneer. Although receiving payment outside of Transformify Freelance Platform is not encouraged, it is not restricted either, and it is up to the freelancers to negotiate how to get paid.
Bidding is not allowed, and employers are encouraged to pay a fair pay rate that corresponds with the median pay rate in the country where the freelancer is based. Most freelance jobs are long-term projects and the freelancers are asked to provide their desired hourly, daily, weekly and monthly pay rate.
Invoicing and payments are automated if the freelancer is assigned to a freelance job and gets paid via Transformify Freelance Platform.
Trusted by recruiters from 150+ countries, Transformify Freelance Platform encourages diversity hiring and creating jobs for people in need including those living in high unemployment areas, stay at home parents, people less able to move, etc.
What differentiates TopTal from the other freelance platforms is their vetting process. To work via TopTal, the freelancers have to go through a 5-step screening process. This allows TopTal to claim that their freelance talent pool consists of the top 3 % of freelance talent. Although most employers insist on testing freelancers on their side as well, the fact that the candidates have already been vetted provides extra confidence. Over the years, TopTal has attracted many top tier clients. However, the 5-step screening process may have a downside as it limits the pool of available freelancers and not all client’s needs are likely to be addressed on a short notice.
The no-risk trial and quality guarantee are also something most employers are likely to be attracted to. As employers negotiate the rates of the freelancers directly with TopTal, the price range varies across several factors. Indicative pricing information is disclosed on TopTal’s webpage.
As mentioned before, all freelancers undergo a 5-step screening process prior to joining the freelance talent pool of TopTal. The pay rate is discussed with TopTal as well as all other arrangements that might be in place.
At first glance, Hubstaff is a freelance marketplace where employers and freelancers meet and exchange information about available freelance jobs and freelancer’s skills and availability. The major difference is in its business model as Hubstaff Talent is not directly charging both freelancers and employers. Instead, the freelance talent directory is maintained by Hubstaff, a company that provides a time tracking platform for remote teams. Once employers hire freelancers, those freelancers often work remotely and are paid an hourly rate. Thus, employers need the time tracking software provided by Hubstaff and pay a licensing fee.
Dedicated to lawyers, Lawclerk is expected to grow fast. It serves niche freelance talent which allows attracting more clients who are specifically looking for legal help. Put simply, LAWCLERK is a niche freelance platform where attorneys go to hire freelance lawyers. According to the latest Clio Report, solopreneurs now represent nearly half (49%) of the legal industry. In 2020, this growing group of practitioners will be disruptors of change, especially regarding the use of freelance lawyers. There are no sign-up fees and no subscription fees. LAWCLERK charges a service fee for the use of its freelance marketplace.
Although new freelance platforms emerge all the time, the 5 freelance platforms listed here are expected to achieve high growth in 2020 because of their business models and client and freelancer acquisition strategies that differentiate them from the rest.
Are you looking to hire talented freelancers and create jobs for social good? Start your 7-day Free Trial with Transformify now!