How to Successfully Use Online Marketplaces to Outsource Jobs and to Find Contractors

They say success is where opportunity meets preparation. In the world of commerce, opportunity (the employer) and preparation (contractors) have always faced the challenge of finding each other on that elusive crossroad. It’s no wonder then that the Internet, as the largest communications highway, has become the platform of choice for intersecting the two.

Marketplaces like oDesk, Elance, or Freelancer.com (to name a few) have emerged and offer a robust one-stop-shop for facilitating the entire process, from evaluation and hiring to payment and review. This can be a of great value to small and medium size businesses, considering the amount of time and resources they can save on salaries and administrative tasks.

Here’s a simple guide that will help you use them effectively:

Choosing a marketplace

Before you get started, take some time to determine which marketplace is right for you (here’s a list of 10 popular outsourcing sites). Then, go over the Terms and Conditions.

• Know your rights and obligations while using the platform.
• Make sure you understand the payment structure and how it's distributed.
• Find out the financial options available.
• Know your recourse in the event of a dispute.

Determining your budget

Once you’ve chosen your platform and reviewed the governing terms, comes time to count your chips.

• What's the job worth to you/how much can you afford? There are many ways to determine what a position or a given job is worth to you (this Suite101 article can give you some helpful ideas). You can also investigate the going rate for employees in your local market using a service like Payscale. This will give you at least one solid line to use as a benchmark. A contractor in your region should generally cost less than an employee, and an overseas contractor should be cost-effective when compared to a contractor in your region. These are, of course, only guidelines, and the decisive factor will be the quality of work an individual can deliver.
• Look up bids for similar jobs in the marketplace. Try to find jobs where the scope, nature, company size, and quality expectations closely resembled your own (avoid comparing apples to oranges). For instance, if you need a highly specialized article written by an expert in the medical field for a high profile medical website, don’t compare it to a simple copy commissioned by some Internet marketer for his affiliate product page. Follow the link (whenever available) or try searching Google for the end product to get an idea of the value that was purchased at that given price point.
• Consider if the job is appropriate for overseas contractors. Perhaps the biggest innovation of using online marketplaces is the ability to trade directly with overseas contractors. Outsourcing overseas is a great way to economize while supporting an emerging economy, and can be advantageous on both sides. Just keep in mind that not all tasks take equally well to the conversion. Generally, technical projects (coding, programming, etc) tend to do better than language oriented tasks (writing, translation, etc) if only because they rely on a universal language the world round and not as dependent upon cultural and regional influences (slang, idioms, etc). Again, that’s just a general guideline, and there can always be exceptions to the rule.
• You always get what you pay for. You may have heard the saying: “there’s a difference between looking for a bargain and looking for a rip-off”. A bargain offers value to both parties, even if one side gets the longer end of a stick. A rip-off, on the other hand, is purely one sided (the value gained by the second party usually doesn’t justify the trouble or expense incurred). Don’t set yourself to failure by harboring unreasonable expectations. You’ve probably learned to stir clear of anything that looks too good to be true while shopping online for products—now, don’t make the mistake of asking ‘too good to be true’ to come find you as you shop for services.

Creating your job posting

You’ve learned the rules of engagement and figured out how much you have to play with. Now comes time to sit at the table.

• Provide a detailed description of the job so that bidders will know exactly what they’re bidding on. Resist the temptation to skim over the job description or to use something generic—spending a bit more time now will save you hours of plowing through unqualified applications later.
• Be selective about special criteria or skills. While indicating mandatory qualifications will help you receive more qualified applications, over-qualifying a position can actually work against you. For instance, suppose you need to get a video edited. It’ll be a good idea to specify a particular NLE software (i.e. Final Cut Pro) if there’s a decisive reason this software must be used (compatibility, etc). However, if you only mention it because someone told you Final Cut is the best—guess what, you’ve just excluded many qualified users that simply choose to use different tools and effectively narrowed your pool of talent. So qualify only what’s mandatory. You can always narrow it down further down the road.

  (Education too can be a double-edged sword. Many freelancers are self-taught. So again, unless you have a clear reason for demanding academic criteria, you may do better judging them by merit.)

• Indicate your budget. This will set a benchmark and help further qualify your applicants: your time won’t be wasted by applications priced out of your range, and vice versa. Furthermore, some contractors (especially those who are more qualified and attach a higher value to their time) will simply not bother responding to a posting with no budget indication.
• Include your company’s name and website. Trust is where eCommerce starts and ends. Just as you want to be sure you’re dealing with a reputable person when choosing a contractor (as discussed below), so you’ll want to make it easy for contractors to trust you. While online platforms take measures to protect both providers and purchasers of service, if you already have a website, providing a link can be a quick and simple way of establishing your online presence.

Hiring a contractor

So you've put the word out and got plenty of responses. Now comes time for choosing.

• Look at the Contractor’s Feedback score and history. Feedback is the online barometer of trust. But while a high feedback score is certainly a good place to start, you may want to dig a bit deeper and look at the number of jobs the feedback score is based on, as well as the dollar value of each job. How do they compare to yours? It’s usually easier to satisfy a client when you have a lower price-tag than it is the other way around. Consider how much you are likely going to spend, and check if the contractor you’re considering has handled something of similar magnitude before.
• Ask to see work samples. Works samples give you a chance to evaluate the contractor’s actual ability. If the samples are dated, ask if they have something more recent. Preferably, try to get samples for projects completed over that freelance marketplace, so that you may go back and look up the attached terms to get a better sense of value.
• Ask for a pilot if a contractor lacks feedback or samples but you’d still like to give them a shot. Don’t ask for a 1500 words article or a fully functional iPhone app; perhaps a short entry or simple applet, basically to show you that they're serious. Better still, let them come up with a proposition. Just be reasonable in your expectations and you’ll find many will be forthcoming.

  Of course, keep in mind that pilot projects are meant for unproven contractors looking to gain some trust. Don’t approach someone already established on that platform and expect them to take kindly to the idea.

Resolving disputes

While most transactions go smoothly, there may be times when you'll have to work out a dispute.

• Always communicate first, don't just leave negative feedback. Feedback is extremely important in an online marketplace and can make or break a contractor’s profile. Misunderstandings can happen naturally (especially with overseas contractors, where a language barrier may exist), and it’s only fair to give the benefit of doubt.
• Try to reach an understanding if there is a disagreement. Avoid assigning blame and instead try to come from a positive place to work out a solution.
• Contact the marketplace administration for dispute resolution. While for the most part both contractors and employers are reasonable people, there is always the odd bunch. If communication fails, file a ticket or contact the platform’s administration for support. Most online marketplaces offer some form of arbitration or dispute resolution.

Keeping these things in mind will help you successfully utilize virtual marketplaces for hiring and managing an online workforce, whether they're your local employees or overseas professionals.

Good luck!