oConomy
February 2, 2009 by Amit Bakshi

Are you sick of hearing dreadful news every day about the U.S. economy?  40,000 job cuts here, 15,000 layoffs there.  Unemployment potentially rising to 10% in this recession.  Fortunately, we have some good news for Americans today.

We see over 11,000 jobs posted every month, and historically many of those jobs have gone offshore to lower-cost countries.  But, oDesk is a free market, and over the past year we've seen a resurgence in homeshoring, or U.S. companies outsourcing to U.S.-based talent. Why is this the case?  While rates are higher for U.S. providers, feedback scores tend to be higher, too.

Work done in the U.S. grew at a rate of 367% from 2007 to 2008, 50% faster than oDesk's overall rate of growth.

United States Hours by Week

This growth was faster relative to other countries known for outsourcing, like India and Russia.

Growth in New Hires - US vs India vs Russia

One driver for offshore outsourcing has been the lower cost of living in other countries like the Philippines and Ukraine.  Software developers and other skilled professionals in these countries require less income than their counterparts in the U.S.  As seen in the chart below, the U.S. average hourly rate is more than $6 higher than our average.

United States Hourly Rates vs oDesk Average

In fact, when we break U.S. rates into job categories, we see that they are actually rising in skilled categories like software development.

United States Hourly Rates

So then why are businesses choosing to outsource their jobs to U.S.-based providers?  One possible explanation is that there are more U.S. providers today, providing buyers a wider variety of U.S.-based skills and experience, than ever before. In December alone, over 20,000 new U.S. providers signed up on oDesk, the largest monthly percentage increase (over 40%) that we have seen since 2005.  Other possible reasons could be better ability to co-ordinate due to time-zone differences or fewer language and cultural barriers.  Regardless of the exact cause, the chart below shows that U.S. providers' average feedback score has been consistently higher than the oDesk average:

US Average Feedback vs oDesk Average

It seems that customer satisfaction on work done by U.S. freelancers is playing a key role in this promising new trend for talented U.S. professionals.  It goes to show that outsourcing is not just about finding the lowest price, and that's why U.S. professionals are able to command higher rates.  We will keep monitoring this trend and keep you updated on our findings.

Amit Bakshi

Vice President of Marketing at LawPivot

Amit Bakshi is the Vice President of Marketing at LawPivot. He formerly served as Product Marketing Manager for oDesk.

  • http://none shane

    looking for work online e-mail me at swhite1737@jcjc.edu

  • http://jobquestion.net/ arumib

    Finding and retaining employees nowadays wash facilities grow more difficult as the unemployment rate continues to fall.

  • http://bangladesh-freelance.com bangladesh freelance

    Happy news for the freelancers!

    Feeling thrilled and exciting!

    Cheers!

  • sunrisedatacare
  • http://www.jobquestion.net/ tamaras

    Sometimes, you don't have an option. In either case, it's important to be prepared to change jobs - because you never know what happen to the company in the future.

  • http://www.onlineuniversalwork.com thomas

    If you really did find a working formula that made you, say $1,000 a week online on average and it kept producing income no matter what, would you want to sell that idea to a bunch of noobs for $47 a pop and expect to retire on the proceeds? No way, man! It does not compute. It does not add up. And it does not make any sense to do that. I certainly don

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  • jimmy johnson

    Hi, I think your website is interesting very colorful. Good job! I feel helping job seekers finding their ream home jobs are a fulfilling quest. Good luck in your quest too.

  • henrylow

    Having been a part of the Online Universal Work Marketing team for 4 months now, I

  • tossyannjom

    There is a massive change underway in the mobile media market as it becomes unshackled from the operators

  • tossyannjom

    There is a massive change underway in the mobile media market as it becomes unshackled from the operators

  • http://www.commoninterviewquestions.org Sophia Hudson

    Well this is absolutely awesome news for the people who doesn't want to bind themselves in the regular office hours.They enjoy working in a free atmosphere and just stay way from the rules and regulations.

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  • http://javafusionllc.com Peggy

    I normally apply for positions that are in the US and as near to me as possible. I have had a number of buyers contact me specifically because I live near them or at least in the same timezone.
    They like the fact that I am speaking the same language, have the same time zone and possibly can even meet in person. At the very least we can talk and chat without one of us having to stay up all night.
    I think US buyers are more than willing to pay US prices for a US worker who will perform the job well and stay in contact with them.

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  • http://www.eltalearning.com Elearning

    this is something strange but at one point this is good for the people who are victims of layoff. they can use their expertise in a way by freelancing and they can get money...at least something better than nothing...

  • http://www.theaccidentalmedicalwriter.com Cyndy Kryder

    Outsourcing was a popular topic of discussion among freelance medical writers at the annual AMWA conference in October, 2008. As a USA-based freelance medical writer, I hope the homeshoring trend continues.

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  • Supermike

    Sean - realize that those rates are average. Meaning, there's a low and a high. When looking at averages, you'll always consider them low because they are always talking about the middle of a chart. Also, there are many tasks in PHP that you can zip in, knock out quickly, and walk away, such as unstick someone's PostgreSQL query, or install their WordPress site. So, some of those fees I think reflect some of those smaller chores. Therefore, you're probably looking at something like $50 and $60 an hour for the common 2 and 4 month projects that you or I might take on.

  • Sean

    I agree with Trevor - what kind of developer would work for under $30/hour and pay their own healthcare, SSI tax, et. al. when they could work for a company and get more money plus all those benefits?

  • http://dinemag.net Katherine

    This is refreshing to hear.

  • Trevor

    Those rates are utterly pathetic, I can't imagine anyone accepting such low pay would be very good.

  • http://www.myerman.com Tom Myer

    This isn't surprising. There are just too many established business cases now and it's easy for a project that features a freelancer/consultant in your own city to go wrong, much less a project that involves folks on the other side of the globe.

  • http://dcglobal.us/ Virtual Specialist

    great post i think this is true outsourcing finds many of the company as an alternate solutions to there business and more and more people are in to it by choosing a career on outsourcing whether virtual assistants or any type of outsourcing career.

  • http://yonopelo.com Yonopelo Ramirez

    Refreshing news!.