[Futurework] FW: Wired: So Much for the Freelance Economy

[Cordell . Arthur]

Meanwhile back in the workplace things are not going as forecasted.

arthur

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So Much for the Freelance Economy

http://www.wired.com/news/business/0,1367,59003,00.html

By Amit Asaravala

The nation's job market will seem even smaller for America's 25 million freelancers next month when job matchmaker Guru.com shuts its doors.

Guru Worldwide, which runs Guru.com, announced in an e-mail to its registered "gurus," or freelancers, that it would shut down on June 30.

"After serving the needs of job seekers and employers for the past four years," read the brief message, "we at Guru regret to announce that we will no longer be matching talent with employers effective June 30th, 2003."

Another recruiting software company, Unicru, bought Guru last year. As part of the acquisition, Unicru had always planned to close down Guru.com, a Unicru spokesman said. But the purchase hadn't been disclosed publicly, and the announcement surprised many in the freelance industry who had come to rely on the site for job leads.

"It caught us off guard," said Diane Connell, an independent Web designer who estimates that she and her husband obtain nearly 50 percent of their contracts with the help of Guru.com. "The only way we found out was by the e-mail notice. There wasn't any forewarning that we could see."

Connell is just one of many private contractors who feel they are running out of places to look for work. Freelance message forums are dotted with postings from individuals seeking advice on how to reel in more projects. And a handful of Guru competitors such as Ants.com and eWanted.com have already shut down because of a dearth of job postings.

The trend suggests that predictions of an economy run by freelancers -- such as those made by Daniel Pink in his book Free Agent Nation, and by MIT's Thomas Malone and Robert Laubacher in their 1998 paper, "The Dawn of the E-Lance Economy" -- were shortsighted.

In 2000, research firm EPIC/MRA of Lansing, Michigan, estimated that 41 percent of all Americans would be private contractors by 2010. But today, the U.S. Bureau of Labor Statistics reports that self-employment numbers have not grown at all over the past four years.

Meanwhile, the number of available jobs continues to decline, pushing freelancers to compete for fewer projects at lower rates.

Freelancers now crowd the few remaining project marketplaces, resulting in situations like that at Emoonlighter.com, where a reported 316,000 contractors vie for jobs from just 30,000 businesses.

Hans Bukow, CEO of eWork Exchange, says he has seen IT staffing opportunities drop off by at least 50 percent since 1999. He readily admits that his company's marketplace is no longer functional because of such dips in available projects.

"There are really no jobs in the Exchange right now," said Bukow. "Sure, some people can use it to find contracts, but not in a sustainable manner."

In order to cope with the changing market, Bukow is shifting eWork's mission away from serving freelancers and more toward providing businesses with automated staffing software.

The move may further disenfranchise freelancers who say that the current buyer's market already favors businesses, but Bukow believes the shift is a necessary evolution for the industry.

The sentiment is shared by executives at Elance, a Sunnyvale, California, services procurement company that takes its name from the Malone and Laubacher paper about the e-lance economy.

"A lot of contractors don't realize that corporations have to comply with a number of restrictions on hiring," said Elance vice president Tim Reed. Software will help companies better manage those restrictions so they can open up more of their business to outsourcing.

"We will see an e-lance economy," said Reed. "It's just a matter of how quickly companies can manage the change process."

Unfortunately, for freelancers that change isn't coming quickly enough.

"There are definitely more people looking for this type of work than there are jobs available," said Connell, adding that companies are using this to their advantage to negotiate low fees for high skill sets. "It's becoming more dog-eat-dog."