Companies Increase Outsourcing during Recession
 |
 |
 |
 |
“The business of America,” famously observed U.S. President Calvin Coolidge, “is business.” Economic recession or not, work must continue to get done. Last month, we reported on the acceleration of homeshoring (US-based companies turning to U.S.-based freelancers to get work done) and the growing freelance economy. Today, we’re releasing some new survey results that fall right in line with the previous data.
We surveyed 600 small businesses to determine how the recession is affecting their outsourcing plans. Our survey results showed that 41.9% said they planned to outsource more in the near future, either because they’ve cut full-time staff (7.0%) or because they’re simply unable to hire full-time staff (34.9%). They are also outsourcing more functions than ever before – 28.5% said they are now outsourcing something that they previously thought they couldn’t. In light of such numbers, it’s hardly any surprise that 14.6% of them report that they have replaced employees with contractors in the last year, and 14.5% have hired a contractor who would have been otherwise unemployed or a victim of the economic downturn.
| Outsource more in current recession | 41.9% |
| Because you have cut full-time staff | 7.0% |
| Because you are unable to hire full-time staff | 34.9% |
| Outsourcing something you previously thought you couldn’t | 28.5% |
| Replaced employees with oDesk providers | 14.6% |
| Hired an oDesk provider who would have otherwise been unemployed or a victim of the economic downturn | 14.5% |
It should come as no shock, then, that many who have lost work recently are turning to freelancing. 32.1% of the 350 freelancers we surveyed reported that they’d lost their job within the last year. A majority (59.0%) said that if they weren’t providing freelance services, they wouldn’t be able to meet their financial obligations and nearly a third (32.4%) said freelance earnings are their primary source of income. A vast majority said that there are enough jobs on oDesk to meet their needs (73.9%) and feel they are earning fair rates (77.9%). They cited “flexibility to live and work anywhere” as the number one reason for using our platform, followed by guaranteed payment for hourly work and the ability to set their own hourly rate.
| Lost their job in last year | 32.1% |
| oDesk is my primary source of income | 32.4% |
| Wouldn’t be able to meet my financial obligations without oDesk | 59.0% |
| There are enough jobs on oDesk to meet my needs | 73.9% |
| I earn fair rates on oDesk | 77.9% |
American workers seem to be doing well in the global marketplace. 53.9% of the surveyed small businesses reported employing at least some U.S.-based contractors, while 84.3% of U.S. contractors are working for a U.S.-based buyer.
Outsourcing on oDesk nearly tripled during 2008, and the trend looks likely to continue.
It may be too early to describe what’s happening as a seismic shift in how Americans find and relate to work. However, the numbers do clearly show a greater acceptance of contract work in the general culture. Clearly, U.S. businesses are taking full advantage of the pool of freelance talent that’s out there, at the same time that more and more people are discovering the possibilities that contract work provides.
Md. Mahmud Ahsan
March 23rd, 2009 at 11:47 am
nice article.
Amjith PS
March 23rd, 2009 at 10:20 pm
cool one
__________________________________
Amjith PS
Senior Developer[PHP/Ruby on Rails/Javascript]
Skype : amjithps
Yahoo : amjith56_ps
Prominentlabs technology solutions and Services
Shefali
March 24th, 2009 at 6:42 pm
Very informative survey, worth reading!!!!
Hectic Capiznon Bloggers 2009
March 25th, 2009 at 6:51 pm
Thanks for the info. Yeah it is true. I agree!!!
In spite of recession’s protectionist stance, offshore business outsourcing increases | Trends Updates
March 26th, 2009 at 1:56 am
[...] oDesk blog RSS Feed Subscribe by Email [...]
Jennifer Russell - Virtual Assist Me
March 26th, 2009 at 6:10 pm
Good and Bad..Good for Virtual assistants, Bad for the full-time employee getting laid off. I was laid off in November 2008..I have 5 children all under 16 and I started my own VA Biz…Virtual Assist Me..Supporting Small Businesses..It’s a process but I don’t miss the crazy mornings rushing around.
Employees vs Contractors – comparing the UPS & Fedex models | Freelancing and Outsourcing Tips, Commentary, Analysis, and News from oDesk
March 30th, 2009 at 8:52 am
[...] their own efficiencies and decrease their expenses. At oDesk, we’re certainly seeing an increase in outsourcing and homeshoring, as more small businesses discover the value of contractors. Only time can tell [...]
Mahmud Ahsan
March 30th, 2009 at 10:43 am
very informative. thanks
WTF is homeshoring? | theCLog
April 2nd, 2009 at 6:40 am
[...] from manufacturing to technology to communications. There’s even a label for it now: homeshoring” – U.S. companies turning to U.S. freelancers to get work [...]
Why this recession is a great time for new freelancers - Free Pursuits
April 6th, 2009 at 12:05 pm
[...] to a survey issued by oDesk, more than 40% of small businesses are planning to outsource more during this current recession. [...]
WorkShak » What Makes a Home Business Recession Proof?
April 13th, 2009 at 12:06 pm
[...] writing. During a recession, freelancers of all stripes find that they are in high demand as companies boost their outsourcing in order to cut [...]
suhaskatti
April 15th, 2009 at 1:42 am
It totally makes sense for companies to outsource work ; be it during recession or not. With the exception of core functions; an company should outsource all non core functions. This way, an organisation can be lean & mean; thus braving tough times much better..
suhas katti.
America’s Workforce Adapts | Freelancing and Outsourcing Tips, Commentary, Analysis, and News from oDesk
April 15th, 2009 at 10:14 pm
[...] whiners. Displaced U.S. workers are not idly waiting for their old jobs to magically return. An oDesk survey found that of its 70,000+ U.S.-based contractors, 32 percent had taken up freelancing after recently [...]
suhas katti
April 16th, 2009 at 1:57 am
suhaskatti
April 15th, 2009 at 1:42 am
It totally makes sense for companies to outsource work ; be it during recession or not. With the exception of core functions; an company should outsource all non core functions. This way, an organisation can be lean & mean; thus braving tough times much better..
suhas katti.
Kim | Web Design
August 13th, 2009 at 5:28 am
I would have to agree with Suhas, out sourcing isn’t always the best solution as this can actually cost the company more in the long run making it worse financially.
TPL Management Retreat « Transcend People Limited | Inside Outsourcing
October 27th, 2009 at 7:33 am
[...] WordPress.com TPL Management Retreat October 27, 2009, 2:33 pm Filed under: Uncategorized With the economy showing signs of recovery TPL is looking forward to 2010. As more as more businesses look forward to financial growth, many are starting to consider the option of outsoucing. True to the old adage, spend money to make money, making an early investment in outsourcing truly pays off. Many companies that outsourced early faired better during the recession and now is a better time then ever to start building a relationship with your outsourcing provider. [...]