An Introduction to Outsourcing

The growth of the gig economy has been transforming labor markets around the world. Skilled freelancers have joined the ranks of remote workers and now provide companies more options to choose from when they dive into the talent pool.

In 2020, independent professionals and freelancers accounted for approximately 50% of the US workforce. This is expected to grow, but what does this mean for companies?

Outsourcing provides opportunities for companies to explore newer, less costly, and more innovative options to boost their operational efficiencies. But where to start this journey?

Through online freelancing platforms, of course.

Upwork 101

Upwork is the result of a merger between two popular freelance platforms, Elance and oDesk. Positioning itself as a “premier freelancing website,” Upwork houses over 12 million registered freelancers on the platform and over 5 million clients. 

With top freelancers from various industries boasting many skill sets, Upwork provides employers an open market platform for connecting with and vetting different freelancers based on their pricing and portfolio of freelance work on their profile.

Upwork is also considered one of the more secure freelancer platforms, known for its strict policies that ensure high-quality work and prevent scams from occurring during the hiring process for clients.

Pros and Cons of Upwork

Upwork provides high functionality options for businesses that choose to go for it and offers the following benefits:

• It has a wide variety of freelancers with niche experiences and skillsets spread across various knowledge bases. Some choose to work full-time, while others work only on a part-time basis. Thus the price range is flexible, offering more choice for businesses.
• The Upwork AI helps businesses match with freelancers that are the right fit for them. Thus, hiring freelancers is made more straightforward, as the platform helps bridge the gap, reducing the effort required on the business’s part.
• Upwork provides several resources ranging from in-depth guides to webinars and articles that help clients get oriented with the platform. Businesses can go in well-equipped with the knowledge they need before they decide to hire freelancers. 

However, Upwork undeniably also has a flip side to its coin. Here are the cons to be aware of:

• Competition is rife and Upwork freelancers are oversaturated. This translates to more time spent in the vetting process for businesses.

• Upwork charges additional fees during the payment time to the freelancer in the form of a processing fee. This goes above and beyond the gig rate.

• Upwork cannot promise a 100% quality of the freelancers on it as with most freelance platforms. There is always the chance of low-quality freelancers making it onto the platform. 

How Does Upwork, Work?

Upwork is a straightforward and easy-to-use platform for businesses and employers.

Having set up a free account, employers can post a job on the public Upwork bulletin, providing details of the hourly rates, the project’s timeframe, the job specifications, and skill requirements to be met by the freelancer hired. The more detailed, the better.

Payments are usually made based on whether the projects are fixed-price contracts or on an hourly basis. A deposit in an escrow account is required for the former, and the money is released when the job is completed.

With hourly jobs, the client is billed every Monday for the previous week’s work hours, shown through screenshots from the freelancer’s work diary. Upwork supports several payment methods, including debit and credit cards, bank accounts (for US clients), and PayPal.

This system is convenient, and it also has in-built security protection for both parties involved.

How much Does Upwork Cost?

For businesses hiring freelancers, Upwork charges a 2.75% processing fee per payment transaction. This is in addition to the payments made to the freelancers for the actual project.

Freelancers, however, have to pay anywhere between 5 to 20%, depending on their lifetime billings with that client.

In effect, this means the more business two parties have, the more beneficial it is for them in terms of fee payments.

The problem here? Some freelancers may build this cost into their project quote, meaning businesses end up paying more to Upwork and the freelancer hired.

Upwork also offers premium services like Upwork Pro and Upwork Enterprise.

With Upwork Pro, the platform will offer hiring managers and account managers to help clients find the best freelancers from the get-go. They conduct various skills tests and rounds of interviews to ensure the best match between the client and freelancer. Upwork Pro costs $149/month with a service fee of 10% across all project payments.

Upwork Enterprise is designed for larger businesses with more significant data science needs and infrastructure (think along the lines of having private talent clouds). Enterprise even incorporates features of allowing the client to manage their larger projects better by customizing onboarding processes and more.

Who uses Upwork?

Upwork is used by various businesses across many industries. This includes Microsoft, General Electric, GoDaddy, Airbnb, and more!

Read more about Upwork’s success stories here.

Fiverr 101

Like Upwork, Fiverr is another popular freelance platform that businesses can tap in to find professional contractors. But unlike Upwork, companies don’t post the jobs to attract freelancers.

On the contrary, on Fiverr, freelancers create ‘gigs’ that represent their different skills and services they offer. Businesses can then search through the freelancers for hire, compare their different packages and decide whom to hire.

Thus, Fiverr is often seen as a better platform for smaller, one-off projects such as graphic design or logo creation.

Pros and Cons of Fiverr

Fiverr’s platform offers several advantages to its users, both the businesses and freelancers on it, including the following:

• Fiverr has a 24/7 technical support team. If you encounter any issues, have questions to clarify, or want to chat with a customer support agent, they are instantly accessible to Fiverr users.

• The pay is done per project. This is often seen as a bigger incentive for quality work from freelancers than hourly rates, where some may feel tempted to extend the project timeline to make more money.

• Fiverr’s community is extensive. Offering abundant resources in the form of public events, their informative blog, and forums, Fiverr builds the community concept and creates a greater connection between freelancers and businesses.

However, Fiverr is not without its faults.

• Buyers on Fiverr have reported being charged more than once for a project. This indicates the payment system on Fiverr isn’t fault-free and can lead to erroneous double charges for one purchase.
• Historically, more scams have been reported on Fiverr. Certain services require sharing personal sign-ins and passwords (such as website design). This sensitive information can be misused in the hands of an untrustworthy freelancer, resulting in extreme situations of data loss or viruses.
• Fiverr is not as popular or widely used as Upwork and other freelance sites. Often seen as a one-stop-shop for smaller gigs, it doesn’t hold the same quality as Upwork. Freelancers also aren’t vetted, and just about anyone can create a gig on Fiverr, leading to questionable quality. 

How Does Fiverr Work?

Joining Fiverr is easy. Anyone can sign up with their email address or sign in using a Facebook or Google account. Once set up, users are free to browse through the various categories of services on Fiverr to find a freelancer who offers the kind of gig they want.

Similar to Upwork, all communications are done with freelancers through the platform. In fact, it goes against Fiverr policy for freelancers to communicate with clients outside of the platform.

After working with a freelancer, clients are free to leave reviews of the seller, assessing them on delivery times, quality of the work done, and their communication quality. Fiverr also grades its sellers on various levels ranging from new sellers to level one seller and top sellers.

How Much Does it Cost to Use Fiverr?

On Fiverr, freelancers use tier-based pricing, starting with basic packages at lower rates before progressing to standard, then premium packages that are naturally priced higher.

For example, an eCommerce designer may offer to help set up an Amazon storefront within 7 days within the Basic package, but with a faster turn-around of 3 days in the Premium package.

Businesses are free to contact and ask for custom quotes outside of these tier-based packages, depending on their specific needs.

Like Upwork, Fiverr has become saturated with many sellers. To help identify the highest quality sellers, Fiverr introduced Fiverr Pro and Fiverr’s choice that recommends hand-picked professionals by the platform and by popular demand. The rates for Fiverr Pro freelancers tend to be higher but come with an assurance of better quality.

Who uses Fiverr?

Due to the vast range of gigs offered on Fiverr, businesses from several different industries have opted to work with the freelancers on the platform such as:

• Facebook
• Google
• Netflix
• PayPal
• P&G

STAFFVIRTUAL 101

STAFFVIRTUAL is an American-based outsourcing company that helps businesses find support solutions in the Philippines related to back-office, customer management, and IT. STAFFVIRTUAL also provides PEO solutions.

With STAFFVIRTUAL, businesses don’t have to sift through hundreds of freelancers and their portfolios online to find the one that fits. We assign a dedicated team of freelancers to your project. We then manage your team and provide end-to-end support, with precisely the skills needed to help your business fulfill its goals. 

Pros and Cons of STAFFVIRTUAL

Outsourcing offers several benefits, including but not limited to the following: 

• Outsourcing solutions usually carry the assurance of higher quality services due to the teams’ expert and professional nature.
• Operational and recruiting costs are reduced. There is no platform fee (as is the case with Upwork), and instead, businesses are charged a direct price for the overall service provided.
• Businesses can redirect their focus to value-add activities as back-office, and supplementary operations are managed by the outsourced team.

Outsourcing also has specific cons for businesses.

• Outsourcing with STAFFVIRTUAL means contracting work out to the Philippines. Time zone differences may mean coordination can be more challenging.
• Businesses carry the risk of exposing their confidential data to a third party. Researching before deciding to outsource an agency can solve this by checking if that agency upholds specific quality standards like the ISO 9001.

How Does STAFFVIRTUAL Work?

Unlike Fiverr and Upwork, where businesses have to vet freelancers on their own actively, STAFFVIRTUAL does this as part of their service offering, helping build a team that is personalized for those business needs. 

Once given the details of the business project, STAFFVIRTUAL puts together a plan of action for you. This includes screening applicants before the best options are presented to you, the client. STAFFVIRTUAL also trains and manages the team throughout the project.

How Much Does it Cost to Use STAFFVIRTUAL?

STAFFVIRTUAL offers an all-in-one outsourcing model and thus customizes pricing based on your needs. The entry-level quotes start at $1,000/month.

To know more, book a free consultation and obtain a personalized quote.

Who uses STAFFVIRTUAL?

STAFFVIRTUAL works with many companies across various industries and organization types.

Be it travel, logistics, digital marketing, or even food and beverage, STAFFVIRTUAL offers an abundance of solutions, with clients spanning the globe.

Read more about STAFFVIRTUAL’s clients here. 

Upwork vs. Fiverr vs. STAFFVIRTUAL

The Internet offers a plethora of solutions for businesses before making an informed decision on which to go with. To sum up this article, here’s a brief of all three and their essential takeaways:

In Conclusion...

Outsourcing has opened many doors for businesses. Companies are no longer restricted by their geographical borders or even their time zones. Today, companies can cross these limitations and access a much wider talent pool online.

But choosing the right solution depends on each business’s specific needs. 

We can help you find yours today.

Schedule a free consultation with us and we’ll help you take your business solutions to the next level. 

Let STAFFVIRTUAL save you the time, cost, and trouble of outsourcing your talent!