Rate Statistics

Sachin,

An important factor to consider is the explosive growth of knowledge process outsourcing
work (data entry, writing, etc) on oDesk.  The average hourly rate for
KPO work on oDesk is $5.15, compared to IT's average hourly rate of
$14.72.  Twelve months ago, KPO work constituted 9% of work on oDesk. 
Today, that total has grown to 29%.

Rates within work categories are staying relatively flat or in some cases, increasing.  See the "India Hourly Rates" & "US Hourly Rates" charts here:

http://www.odesk.com/community/oconomy/outsourcing_india

http://www.odesk.com/community/oconomy/outsourcing_united_states

Amit Bakshi, oDesk
Product Marketing Manager

So you are saying that no longer high quality work like programming gets transacted through oDesk and now big share of work involves mundane data entry job.

I look at charts at India and US and there too I see downward rate revision of 20%, with a continuous downward trend.

Further at any time there used to be around 10K jobs open which now is less that 6K.

I think its lot to do with global slowdown and also might depend on how oDesk is tackling the slowdown. May be its time to re think the strategy to allow more and bigger projects posted at oDesk.

Thanks
Sachin

About me: *advertising removed by admin*

Sachin,
you got the point.

Personally I started to make such suggestions to oDesk team last fall - see this discussion, and my comments under this thread above.

As said, one of the approaches could be to put "fee caps" on the fee oDesk takes for hourly rates higher than some reasonable value. That way it'd be more affordable for buyers to hire more professional & experienced providers with higher hourly rates, therefore spreading share of bigger & complexier top-notched projects vs. cheaper jobs such as data-entry so on.

That idea wasn't accepted by oDesk team unfortunately, so the results we're seeing today  (downwards trades) were absolutely predictable. I've been writing about this trends in this thread as you can see above.

And, due the fact that half-of-year was missed, now that "reasonable hourly rate value" should be between 20-25 UDS per hour (so starting from this rate oDesk would take *plain* fee of $2-$2.50 instead of 10%) to have real impact on the oDesk market in my opinion, whereas last autumn rate of $30 seemed to make sense.

Everybody knows that global slowdown still getting deeper, and all world markets suffer from that processes. Being a global marketplace, oDesk  isn't an exception.

Best regards,
Oleksandr Barabanov.

They have to cap the fee charged because rightly pointed whether a provider charges $5/hr or $50/hr they get the same service by odesk.

What they are doing makes no economic or logical sense and it discourages good providers quote for projects because their high hourly rates would further increase the cost to buyer by a lot of amount.

They should cap it at 10% or $1/hr which ever is minimum. This way providers would be encouraged to quote better, buyers encouraged to post more and better projects (which do need high quality work at reasonable cost), without getting discouraged by fat commission oDesk charges.

This is going to help oDesk also as more hours would lead to more money for them by way of commission.

Has oDesk heard about economies of scale? In India 6 years back cellular network usage charges were Rs. 3 per minute which today is Rs. 0.5 per minute and revenues and profits of the companies providing these services are 10 times they were 6 years back. So lowering their commission the were able to bring much more users in their network.

Imagine a good programming project where I expect reasonable quote to be $25/hr now if oDesk comes in with is $2.5 commission, it throws buyers budget off track and he is dithered in posting the project here. Even for provider would stay away from bidding at say $22.5/hr because it would result in lot lower payments ($5000 a year). So good projects end up in stalemate due to big commission in between.

If oDesk need to survive this downturn they need to re-invent themselves.

Is anyone listening.

Thanks

Sachin

About me: *advertising removed by admin*

Hi,

I am taking off my oDesk CS hat and I am putting on my provider/buyer hat.

Just to put a few things into perspective here. There is rarely a discussion about the fees oDesk charges (which I feel are reasonable having been a provider and a buyer).

I'll give you just a few examples that immediately come to mind:

Elance charges a monthly fee - they also charge $2.75 to withdraw to paypal - they also charge an additional commission on every job you work!  I cannot quote you the exact amount but if I'm not mistaken it's some weird formula that is based on hours.  And since it's a 'rolling total' if you work three weeks at 40 hours and then 3 at 10 hours and the rolling is back 6 weeks then your 'fee' is based on 10+10+10+40+40+40 - not so good -especially if you don't work a consistent number of hours.  So this is how it reads:

Then for those writers who like to sell their work:  Helium Marketplace - the amount you see there is after Heliums fees - which are 50%

Constant Content - you submit one article and the Max price that the buyer is willing to pay is sent to you. So if you are paid $50 for an article - you're not really paid that - because Constant is going to deduct their 35% fee from that too.

So complain if you will - but none of these services offer the marketplace that oDesk does - they even require you to do your own invoicing

Doreen

Hi All - Thanks for starting this thread.  I think there is confusion
about the data that might be leading some of you to the wrong
conclusions.

There are two questions here:

1.  In what direction are pay rates trending on oDesk?  
The average hourly rate within nearly every job category has trended up
or is nearly flat over the past two years.  This chart shows the
average hourly rates by job category over time: https://url.odesk.com/zgcvq

As Amit said above, the decline in the blended average hourly rate
(across all categories) simply reflects faster growth among some
lower-rate categories as a percentage of the total work done on oDesk. 
A couple years ago, virtually all work done on oDesk was web or
software development, but over the last 12-18+ months we've seen rapid
growth in new categories like customer service, writing, and data
entry.  The technical job categories are also continuing to grow, but
at a slower rate (measured on a percentage basis) than the newer
categories.

On a related note, oDesk is seeing unprecendented job posting
volume in all categories and it is absolutely untrue that there are 
fewer jobs being posted in any job category.

2.  Should oDesk change its fee structure for higher hourly-rate work? 
While we have no plans to change our rates in the near term, we are
interested in hearing your feedback on this question.  It is important
to note, though, that higher rate providers do get more value from
oDesk and they do cost more to support.  For one, our "guaranteed
payment" policy means oDesk carries more risk the more a provider
earns.  Second, payment processing fees are a (nearly) flat percentage
of total charges, so capping our fees at some fixed rate per hour could
quickly become uneconomical.

Again, thanks for your feedback and let us know if you have more comments or questions.

--bg

Payment processing fees are charged separately. Every time I withdraw money via bank wire I am charged $25 - $30 which is the bank charge oDesk requires to pay.
Regarding risk, for fixed price buyer has to make payments before in the agreed installments. So where is the risk. For hourly again buyer should make a (prorate) weekly payment before weeks commences and providers payment should be adjusted from them. Why is the risk premium imposed on providers and not buyers. I think in order for oDesk to differentiate it has to make changes somewhere.
All these market places started out with intention to connect programmers to projects and now they have turned simply a place for data entry and other low level jobs.
I am afraid this is where oDesk is also heading.

Next eLance should not be compared with other sites as its intention is mainly to serve small companies and not individual providers.

Lastly, you have very smartly posted breakup trend fro rates, can similar be posted for the no. of jobs in each category.

About me: http://www.assembla.com/wiki/show/sachin_mittal

gdev is new to odesk so I can give a "newbie" point of view. gdev has over 100 long term hourly jobs available on odesk. We would like to post more - however the 10% fee stops us. We have only put the lowest paying work on oDesk and we keep the high paying (up to $100/hr) off.

We have also noticed that it seems that for long term work the "culture" of odesk is to take it "offline". Almost every provider we have hired has said something to the effect of "are you sure you want me to bill via odesk long term? My other employers have me bill for a few weeks to make sure I am credible, but then they take the work off odesk and pay me directly". We only want to work via oDesk long term, but it seems that the 10% is driving a lot of people to different behavior.

We like oDesk and can see putting $10's of millions of more work on the site, but we would need to see it more as Amazon's EC2 (great value, amazon always passing the savings along in lower pricing) rather than the expensive niche site we see it today.

You should know that providers who offer to "take the work off oDesk" are going against the agreement they made. I don't know how you feel about people who are that cavalier about their agreements, but it would give me pause.

And, for perspective -- I charge a lower rate at oDesk than I do for private clients, in part because of the safeguards built into the system. Even with the 10% fee, I'm still a bargain here. I don't know whether others do the same, but my oDesk buyers get my agency rate.

Once trust is established between buyer and provider there is no sense of keeping things online.

Infact oDesk should encourage to take things offline, this way they would turn out to be good people (I am not saying they are bad).

You only tell after a point where is the 10% commission needed. There is no risk for payment (as the project is long term and mutually agreed between buyer and provider) so oDesk does not come in between at all. It may be needed only as a platform to make payment and for that there is a transaction fee involved which oDesk charges developers.

This way many buyers would be happy to post long term projects and even offer better rates to attract quality developers.

So yes we have many marketplaces and many types of projects and each suite for each type of project. So its up to you to make best use of resources available on internet.

Thanks
Sachin

About me: http://www.assembla.com/wiki/show/sachin_mittal

ps: please don't remove my signature, I am not affiliated with anyone, I have removed the text that might have sounded like an Ad. 

As a Provider, I disagree with you 100%.  I have hired over 8 people through oDESK, 5 which work with me ongoing for over 3 months now  and if they asked me to take things offline, I would find someone else. 

One thing you must keep in mind is that from a providers perspective, the team room, invoicing, payment scheduling, reporting, screen shots, managed admin, 100% guarantee and all the other wonderful aspects of oDESK is worth way more than the 10%fee.  Most of the other sites out there do not offer providers even half of what oDESK provides as well as oDESK is managed and updated by buyers just like you!  As someone who hires for business and also provides service for customers, it is critical to have a checks and balance.  I know from experience, that in the past when I have hired off of job boards, forums, other sites that do not have the features oDESK has, you loose money one way or the other.  For providers that take their work offline, their guarantee just disappeared and eventually their buyer will too, when the next big job or opportunity comes along and the loyalty is gone.  Its human nature.

Thanks
Sachin

About me: http://www.assembla.com/wiki/show/sachin_mittal

oDesk Marketplace User Agreement see section 2.10

Billing & Payment Policy see section "Circumvention of oDesk Fees"

Does this clarify the policy for you?

---
Jacqui Pittenger :: Forum Moderator :: Need help? Visit the Help Center :: Submit a Help Ticket

http://www.odesk.com/community/node/6885#comment-21504

I agree that 10% is a competitive rate compared to other online market places. However, as oDesk believes to be encouraging long term relationships between buyers and providers, why can't oDesk offer a special rate (less than 10%) for such long term hourly assignments? I understand it's not very easy to implement by monitoring all the ongoing and future assignments. Just my thought.

Pothi.

And I have been loathe to respond to this because I 'officially' have oDesk  as a client - - however - ODESK HAT IS OFF AND PROVIDER/BUYER HAT IS ON!!!

 Let's quit arguing about this 10% - - it's SOOO stupid.  Let's stop and think WHAT we're getting for that 10%.

Providers: on Fixed Rate Jobs:

A) Guaranteed Payment

B) Multiple Payment options (sure they have fees but so what)

C) weekly payments (if you're working weekly)

Providers: Marketplace

OK I'm not even going to elaborate on this one - figure it out

Buyers: - For Convenience:

A) One place to post ALL your job needs

B) oDesk provides skills tests, resumes, cover letters - practically build in pre-screening

C) oDesk tools so you can monitor work if you elect to

D) ONE BILL FOR EVERYONE who works for you through oDesk

Grow up folks - 10% is NOTHING.  BUYERS ARE PAYING IT not providers!!!

Do you realize that 10% on 40 hours at 20 dollars an hour is $346per MONTH? - - You are getting an extra Accounts Payable/Receivable Rep for a mere: 2 dollars an hour (based on 40 hours per week)  If you want to break it out further - it's  86 dollars a WEEK - so even if you were to spend 10 hours a week managing payroll/etc. you are getting a BARGAIN at 8.60 per hour

Have a great night while you MULL that one over

Can anyone suggest here how to obtain work without lowballing yourself.. thats what I need to know right now..

Hi if anyone out there has any recommendations on how to obtain at least $8-10 admin job on Odesk please fill me in.  All I have seen are the fixed and less than $5.00 an hour jobs and I really needed something like Odesk just to fill me in until the job market opens up again.  I did see one nice opportunity but it came in at 11:56pm, I am on the West Coast US so I understand first come first serve.  Can anyone please advise.

Leslie

Grow up folks - 10% is NOTHING.

You do realize you just told at least one buyer (client) to grow up? 

I mean, it's one thing to tell providers that they have the wrong perspective regarding the 10%, but when a buyer is telling you the same thing, it warrants consideration.

Peace

You could be right - but let me say this about that (a) I wasn't working for oDesk when this comment was made - and just because the oDesk logo shows up next to my name does not mean that my opinion is their opinion (b) I am a buyer as well as a provider.

Doreen

As a buyer I agree!  I'm more than happy to pay to ensure I get top performers,(which I work with 5) and love them!  Ive worked on other service providing sites, and I have to say as a marketing person who manages a variety of different types of work for the company, Odesk by far has been the best in : customer service, value, communication, choices and feedback.  I also work with a few providers on other sites and the communication tools are not anywhere as advanced and user friendly as odesk.  You get what you pay for and im quite content with a 10% charge for the quality of people I get to work with!

Hi Brian, and thanks for replying.

Indeed, there is some sort of confusion. Looks like you're missing the point. We're not about how to decline oDesk's income, we're about how to increase it. Let me try to explain.

Right now, if you look at the charts above again,  the share of jobs at $25 is roughly 10 times less comparing to those at $15, and about 17 times less comparing to jobs at $10. And if we look at $35+ jobs - well, it's share is ridiculous - about 100 times less than max ($10) share.

I believe, you're at oDesk too concentrated at "risks" and some assumptions as "capping our fees at some fixed rate per hour could
quickly become uneconomical", and that prevents you from seeing situation clearly. There is no any risks at all. Why ? Because you don't have that share (I mean $35+ jobs), just have a look at "Hourly Jobs, Rate Distribution" chart. You're too afraid of losing something you don't actually have .

So, idea which I'm trying to attract attention to since November 2008 (see that thread), is clear and simple: oDesk should put fees caps on assignments with higher rates, in order to become more attractive marketplace for projects which are more complex and more long-term than average. That doesn't mean fee must be flat starting from some point ($25, $35, whatever), it can be "progressive scale" similar to those many taxes are being calculated against. So, for rate of $35 fee could be of $2.50-$3, and for rate of $100 - e.g. $5 or whatever what makes economical sense (sure if we see oDesk has contracts at $100 per hours ).

So in nutshell, we're not about to make oDesk "uneconomical". We're about to help oDesk become even more economical As clearly stated by jliemandt in the thread above: "10% fee structure does reduce jobs posted" - note he was talking about "high paying" jobs/projects they have and will to post, but keep them off oDesk. And as a provider being with oDesk for ages, I can confirm I saw such situations when long-term projects with higher rates were started at oDesk but went on off the system.

You might ask: why I'm so eager ? The answer is very simple: I work in that 'almost-non-existing' share (can u believe it - I found myself in that situation ), and I'm interested personally. So are many decent US-based (and I'm not US-based) developers & engineers & project managers, who wonder how they could earn their families living at oDesk with such lower hourly rates. It's not possible for them right now, hopefully we'll see that's possible soon. That would be more patriotic oDesk. And all oDesk has to do for that is to make impact on higher-rates contracts share, lowering it's fees for that share only - there is no need to lower fees for everything.

So this is about how to get additional market share while not loosing existent ones. Quite feasible task  for oDesk marketing department, isn't it?

PS: moderators, would you be so kind to revert the "Average Hourly Rate" diagram at the top of the thread? I noticed it was replaced by "Hourly Rates by Job Category" one, which is off-topic here. You probably know that there is special Rate Distributions by Job Categories thread where it'd be at it's place. Thanks!

I am so new here that I am still building my profile and preparing to take my tests.    I came upon this section as I was trying to learn more about a system which I find ingenious.    I have been the part of three successful business startups and have worked for some very good companies as both an hourly and an exempt employee.  I have also worked a lot of freelance.     The 10% fee Odesk charges is admirable on so many levels.   The services provided include advertising, headhunting, and providing the provider with a working environment he or she physically chooses.  By making it a flat 10 percent, it keeps it very simple and across the board.   Those who can only work a bit here and there and those who put hours and hours in are paying money only on what they earn. 

This is one of the most efficiently and openly run businesses I have ever encountered.

As far as the economy goes, yes the jobs will fluctuate but nothing is going to change that.   That is the way it has always been and always will be but at Odesk, we have the opportunity of working when we can, as much as we can and it doesn't have to be our only job.     We are literally our own bosses without all the overhead and having been on the paying end of that overhead for three centuries I can assure you that is a big deal.

In a sole proprietorship, it is recommended that your overhead be in the 30th percentile; in reality it ends up being as high as the 90th percentile when clients are slow to pay or file bankruptcy etc.   As the business owner, you still pay the bills and the wages and your slice just gets smaller and smaller.   At Odesk, whatever job you apply for and whatever job you get, you can be assured that your overhead will always be 10 percent.

I see that working for Odesk, I will make 90 percent of the profit on any job I obtain; therefore it is up to me to do the best I can and as much as I can which means that in addition to everything else, Odesk creates healthy competition.   This is good for the buyer but it is also good for the provider as it keeps us on our toes.

No system is perfect, but the more I learn about Odesk, the more bases I discover they have covered.   For their 10 percent, you really have to admit, they have all our backs covered.    They perfectly balance the benefits the buyers get with the benefits the providers get.   And, they don't care if we work for other networks or hold down other jobs.

Quite frankly, if they were not making money at this, why in the world would they do it?   An agent gets between 10 and 25 percent and Odesk may seem like a "passive" agent but when you really look at all the almost silent services they provide which each login and keystroke, it's pretty incredible.

There is nothing healthy about $1/hour.

I fully agree and this is $1 an hour under constant supervision by Odesk proprietary software.
Minimum hourly wages should apply by category but i believe this to be a buyers market only and as long as people are willing to accept these rates those who place industry rate value on their abilities will lose out.

Employers who wish to outsource for peanuts will in most cases hire monkeys. Odesk idea is a good one but these rates ultimately damage the telecommuting industry and if rates were set higher then Odesk 10% share would also increase ,wouldn't it? From the Odesk stats the most common rate is ten dollars or less.... the US minimum hourly rate is 7.65 dollars - so the average burger flipper in the US would be classed as too expensive for software programming tasks etc in many cases.

Its quite simple ,employers are taking advantage of people in poorer countries and not providing anywhere near due reward for their work. Since these people need the small amount of money offered ,this practice is,in my view the worst form of exploitation and does not reflect any employer I will do business with.

If these 'employers' are incapable of providing 'a fair day's pay for a fair days work'then they are obviously involved in some area of the many scam sites we have all seen online while looking for genuine freelance work.

I agree. I am disgusted by those buyers who post jobs that specifically
state "Please only apply to this job if you can work for $1/hr". We as
providers really should boycott those buyers. 

Rates within work categories are staying relatively flat or in some cases, increasing

In all but one category, wages have declined.  Even in those links you provided, wage is shown as decreasing.  Sure the drop isn't precipitous, but it is a drop, however "relative" the decline might be.  But down is down, period. 

peace

I completely agree with the comment above.  I was shocked to see how many offers are looking to pay no more than 50 cents to a dollar an hour and still received applicants.  And many of these jobs are located in the US -- not overseas.   It's great for them because they have access to people who are only seeking $1-$2 an hour for skilled work.  

I’m so completely frustrated with the pay rates and the experience required!  “Don’t apply unless you have over 500 hours experience and can work for $0.50 an hour”.  And then most of them require a high quality of English speaking and comprehension!  I understand the economies in other countries and how they’ll work for so much less, but could these buyers realize that if they paid better, the people in the US could afford to purchase their products/services?  I’ll tell you, I am thinking I’ll never get any work through this site!  The pay rates are so very demeaning - they’d make me feel dirty to accept them.  Of course oDesk and some providers suggest to work for this amount, get some good ratings, and then you’ll be able to charge more for your services.  Does that really happen?

I would love to work for oDesk again for all the reasons that have been mentioned as benefits. I can't though.  I still come back in between real paying work in my day but ...well things don't look to be changing.

Until I canceled my updates on jobs, my inbox filled with daily updates that would make anyone cry.

I am not a "researcher" though I do it well, because it is required for what I do. I am not a copy paste or data entry candidate.Those tend to be low paying jobs here at oDesk.

I have tested out with exceptional scores in my areas of expertise and even hide my highest scores to display those. I have excellent feedback on the projects I have accepted here.

I suggest that the people posting the figures  above subscribe to copywriters, technical writers, and creative writers updates for a week.

Then PLEASE come back and say pay rates are rising and that project offers by buyers are not too low on oDesk and sinking not rising.

My typical offering in my mailbox from oDesk was: 

Writer needed to write my book for me. I will supply an outline you need to construct the plot twists, the dialogue the characters and move the story forward. It will be a full length book and perfect English grammar, editing skills, spelling, and punctuation required. Must be talented and committed. Budget $100.00

Need 20  - 750 word articles, must be perfect native-English speaker must be able to proof your own work with no grammar punctuation or syntax errors. Must be able to research obscure topics. Must pass copyscape. Budget $10.00

Need skilled writers, must be native-English speakers. Must have skills in editing, copy writing, research, and knowledge of our obscure market you fill in that blank. No application will be accepted without a 500 word sample on this micro-niche of our obscure niche. We will start you at $2.50 an hour and if you work out a raise may be arranged. 

And so on. If rates are rising or staying stable,well you do the math.

Eventually I began to feel as if I were on a dark corner in the bad side of town listening to people whisper "hey Mister wanna buy..?". It's that sleazy feeling. 

Like I said....I would love to but no actual native-English speaker can, not with any talent or skills.