Why Online Contractors Are the Best Thing That Ever Happened to Employers

Electronic commerce has revolutionised the workplace. It has created a labour marketplace with no known borders and with as little regulation possible. With a lot of people competing for jobs, it is truly an employers’ market. Employers no longer need to worry about labour shortage nor turnover rates as online recruitment is teeming with potential candidates for jobs that are project-based in nature (e.g. IT projects, writing jobs, etc) and those involving non-core or support functions within a business (e.g. accounting, administration, etc).

Online work is attractive to people who prefer working from home due to domestic situations or simply because they like the flexibility in hours, self-employed people, working students, people who are returning to the workforce and those wanting to earn extra cash. People who are burnt out from their present jobs and would like to pursue a new career path also find online work a good way to transition between jobs.

Hiring Online Contractors – The Benefits

• Cheap labour. Online vacancies have a global reach and therefore attract candidates from all over the world. Given the disparity in the standard of living between developed and developing countries, employers are able to bring down the compensation rates to a level that is ludicrously low for an applicant from a first world country but relatively generous for a worker based in a third world country. For example, an administration support job in Australia fetches at least $18 per hour. Online rates for a Virtual Assistant range between $1 – 3 per hour.

• No employer-employee relationship. Employers don’t need to worry about employment agreements or awards as workers hired online are considered as independent contractors governed by simple and straightforward terms of engagement which are a lot easier to rescind. In the absence of an employer – employee relationship, the employer doesn’t need to worry about dealing with unions, performance management, employee counselling and other non-productive HR issues.

• No fringe benefits. Being hired as a contractor means non-entitlement to the fringe benefits that a regular employee receives such as leave entitlements, superannuation contributions, etc.

• Savings in operating expenses. Given that online jobs are done remotely, the employer doesn’t have to provide an office space for the contractor. As the contractor is usually working from home, the worker also uses his own personal tools for the job such as a computer, telephone, internet connection, stationery, etc. All these translate to savings in operating expenses for the employer.

The downside for the employer is having little control on the quality of work of the contractor. The employer cannot also expect the same level of commitment and dedication of a regular employee from a contractor. This however is of secondary importance especially if the business function that is outsourced is non-critical to the daily operation of the business.

Online Work Opportunities – What It Means to the Workers

• Flexibility. Online contracting offers flexible working hours and the convenience of working from home. This means savings in travel time, transportation costs and other costs associated with going to work (e.g. work clothes, food allowance, etc.). For parents with young families, working from home allows more quality time with the kids and savings from not having to pay child care. The cost savings are however offset by a drastically reduced income from working from home.

• Fusion of work and personal life. Another aspect that is worth looking into is the way that online work is blurring the divide between one’s work life and personal life. Conventional work means going to the workplace, dropping work concerns at the end of the agreed working hours and retreating to your personal sanctuary called home. Being an online contractor means using your home as your workplace and letting the job encroach on your personal living space.

• Working in isolation. In the same way that Facebook forever changed the way of social interaction, online work is changing the social dynamics of organisations. Being an online contractor means working in isolation majority of the time with the occasional remote communication with the employer. Video conferencing is an alternative to face-to-face communication but non-verbal messages from body language are lost in the process. There is also the question as to how working in isolation affects one’s capability to build relationships. Working in an organisation offers the opportunity to cultivate lasting friendships and in enriching one’s personality through interaction with people from different backgrounds. Man is a social animal and working in the confines of one’s home can prove to be lonesome.

There are certainly trade offs from being an online contractor but looking at the whole equation, this new working arrangement definitely works to the advantage of the employers. Outsourcing business activities is a strategic move for a business as the benefits to be derived are great from a cost perspective and also in terms of keeping the business lean and agile. From the point of view of the contractors, online contracting offers tremendous flexibility but little or no safety net to protect the interest of the contractors. In the absence of standards governing online labour contracts, it is a breeding ground for employer abuse and exploitation.