Does online freelance work pay off?

No. At least that goes for most freelance writing projects, virtual assistance jobs and graphic design projects posted on online freelance boards.

 

chimpansee working on oldtime typewriter

Compete with monkys and earn peanuts…

 
This post is inspired by the blogpost Dabbling in Online Freelancing by Clarence Ceniza and related discussions about the low rates for international projects – and a beautiful job posting I saw on a freelance board.

 
How online freelance boards work

Freelance boards are global auction-style labour markets where companies can source virtual freelancers, and freelancers can source projects. International freelance work comprises tasks that can be delivered via the Internet – typically article writing, graphic design, programming and virtual admin assistance.

The freelance boards are designed to offer transparency and security for virtual freelancers and employers and for that, the boards charge a commission or subscription fee.

It works like this: the outsourcer submits a project brief to the board with a suggested price and list of desired qualifications, and freelancers from all over the world submit quotes through the system to get the work. The project goes to the qualified person who is willing to do it cheapest.

 

elance front page anno 2011

Online freelance board

 
Security features include lock-in payment systems (where the board holds the payment till the work is done) and dispute resolution systems. Transparency features include public feedback and eBay-like rating of outsourcers and freelancers, and advanced freelancer profiles with online skills-tests.

The security features ensure that freelancers get paid for their work, and that outsourcers’ only pay for work that has been done. The transparency features enable outsourcers to evaluate freelancers’ abilities (crudely), and enable freelancers to assess outsourcers’ reliability.

Online freelance board sounds great… a world of freedom and unlimited global freelance opportunities. However, in many cases they simply serve as channels where:

 
Outsourcers can find monkeys to work for peanuts

I used to think that online freelance boards comprised a world of work opportunities.

I spent time creating profiles and took online tests (great feature, by the way). Then I browsed the job boards. Tip: do it the other way around.

The rates offered for freelance writing are unliveable. Who can work for USD $1-3 per article? or USD $30 for a days work? The pay includes research, editing, grammar checking, and all related office tasks and expenses. No wonder the Internet is full of junk. I suspect freelance boards are the pipes the junk keeps pouring out of. Money like that can’t even pay for a coffee per article… in Australia.

And that’s the point … the work goes where the living costs are abysmal, and people can afford to work for peanuts.

 

empty tuk-tuk vehicles

What sounds better – Tuc Tuc driver or freelance writer?



 
Erica Douglass, US business shark, warmly recommends the opportunity to outsource menial work to low paid virtual labour in her post O’Desk review: is outsourcing worth the effort?

Erica says a definite ‘yes it is’, because:

 

You don’t have a whole lot to lose–since you can expect to pay USD $3-$10/hour for most basic work, it’s low-risk if you hire someone and he/she doesn’t work out. (…) And, if someone doesn’t work out for whatever reason, you can simply “End Assignment” and start a new job with new candidates.
Erica Douglass

 
Erica devises a step-by-step process for successful virtual outsourcing and specifically recommends Philippine workers who work happily for $3/hour. She explains why she doesn’t think it is exploitative:

 

In the Philippines, the median annual income is 111,000php, or about $2,450/year in U.S. dollars. (…) Divide it out into an hourly rate, and you’ll find it’s about $1.18/hour–which means people earning $3/hour are similar to folks earning $60,000-$90,000 annually in the U.S.
Erica Douglass

 
It makes perfect sense. I would outsource menial work if I had too much to do and resources to hire someone. Although it looks exploitative from the West, if you sit in a third world country and apply the talent and hard work it takes to bring your English level up to ‘good’ (if you are not a native speaker of English), then the Internet may really provide a world of work opportunities. Not to forget the learning and empowerment that can come with it.

I think defenders of globalisation can argue that this is how the globalisation aids poor countries. I do agree with Erica when she says:

 

It’s all a matter of perspective. Should you still have concerns, I encourage you to spend time in third-world countries. See for yourself the type of people you’re giving opportunities to. It will change your perspective entirely.

Erica Douglass

 
I don’t rule out the possibility that the rates are so low that they attract only desperate workers who are willing to be taken advantage of because they have no better choice. I just don’t think that is necessarily so.

 
The global monkey business

To bid for generic writing jobs on freelance boards is to offer your service as an unbranded wholesale product alongside other wholesale products. You become a slave of sweatshop parameters like bottom low pay and rush to produce high volumes of sub-standard work.

Come join the army of mass producers of web junk!

 

a bulk of harvested wheat, instagrammed

International freelance services = wholesale bulk products

 
For example:

Photographess tells in Elance.com Isn’t a Scam But… about her experiences trying to make money as a virtual customer service assistant in a job found on Elance, an major freelance board.

She was paid USD $10/hour for answering the phone, but only for the time she was literally on the phone. Since phone calls typically took 1-3 minutes, it didn’t add up to much in the end although she was available for phone calls full time for two months. She doesn’t think much about international freelance boards at all:

 

Is it worth it? Maybe if you’re so broke and you can live on third world salary. Otherwise, it’s a waste of time.

Photographess

 
Still, projects are hard to win:

 

I’ve probably submitted over 50 proposals and I got 3 jobs from it after 2 months into the search for a great work at home job only to find out I found out I was competing with HUNDREDS of big companies with SHIT loads of job experience on eLance from third world countries where they only charge $2 an hour.

Photographess

 
Losers, liars and winners

Many comments on online freelance board reviews, forum posts and blog posts echo Photographess’ experiences. However, there are also people who claim they do make a decent income from freelance boards.

I don’t believe all of them. I don’t believe people who claim to make good money on content writing jobs found via freelance boards when their posts about it are written in poor English. They might have done those jobs, but I don’t believe they were paid well.

Others write in proper, but uninspired style about the virtues of freelance boards as if they were mekkas of opportunities, but I suspect they write about the topic solely to target an audience (like me) and get traffic. I don’t trust those guys’ opinions either.

I do believe this Indian guy:

 

Am from your so called, 3rd world countries, India (but i don’t believe it). I have entirely different experience with elance. I charge $8 per hour, which gives me $7.3 after deducting elance fee. Am there since march and pretty running my family just with that. earning minimum 1300 to 2000$ per month.

As per me, what happened to you was, the category you selected. It was an unskilled category. those works anyone with english and internet knowledge can do. So the big may go that low. If you go to good works such as programming, wordpress, graphics etc, i never seen anyone quoting less than 5$ an hour. Moreover you can take fixed price job as well.

 
Indian freelancer WibZ in a comment on Elance.com Isn’t a Scam But…

 
There are also some freelancers in the ‘rich’ part of the world who are happy to freelance online. Clarence Ceniza, whose post Dabbling in Online Freelancing inspired this topic, lives in Europe and does find online freelancing worthwhile:

 

Though I was highly skeptical at first, online freelancing is turning out to be a good way not just to earn a little pocket-money but also to keep myself productive and intellectually stimulated.

Clarence Ceniza in Dabbling in Online Freelancing

 
The secret is to know one’s worth and boundaries:

 

Before applying for any project, I always remind myself what I am worth. As each project brings something different, I always consider the time and effort that the task requires to determine whether the proposed compensation is fair. When done right, online freelancing offers good opportunities.

Clarence Ceniza in Dabbling in Online Freelancing

 
Monkey wanted to wear a beautiful professional hat

Here is the beautiful job posting. I like it because the employers and clients present as enthusiastic, team spirited and demanding in a positive way. I think I would enjoy to take it on as a new professional hat.

 

Fanatical Email Support Needed

 
Summary
======
Our small, passionate team of two is looking for a fanatical email support person to handle first level support for an online entrepreneur community.

 
Why You Should Apply
===============
The job is awesome because our customers are awesome; courteous and patient. We treat them like gold and they love us.

Our work environment is second to none: you will have leeway to handle issues your way; no micro-management. No specific times where you have to be online. We love finding gifted, motivated experts and letting them do their job.

This is also a great project for your resume. It’s a successful, public-facing paid online community so it’s a good project with which to impress future employers or clients.

My co-founder and I handled support for the first year, then we’ve had a VA handling it for the past 6 months but she is moving on to bigger and better things (completed her Masters and found a great job).

 
What We Need
==========
We are in need of a native English speaking with awesome email etiquette who loves to delight customers. You will check the support account every 12 hours during the week and respond to all issues; typical range is 5-30 minutes per day. There is also a month-end process that takes around an hour.

Basic familiarity with PayPal preferred, and you will need to learn two pieces of basic web software (FogBugz for tracking the issues, and WishList Member for working with customer membership records). I will provide training as needed.

I will provide you with a custom training screencast and share a Google Doc containing outlines of our processes. You will take it from there – most situations will be covered by the doc, but you and I will work together to handle new ones as they arise.

I own several other applications so if things work out your workload will pretty easily double or triple, assuming you have the interest and availability.

I look forward to working with you!

Job posting on O’Desk

 
However, the pay isn’t beautiful:

They say they’ll pay USD $10/hour, and they expect the work to take 5 – 30 minutes per day. 30 minutes is just $5, and they require the person to be available for to answer emails every 12 hours. If answering emails takes 15 minutes per day on average, then it takes about 4 days to earn USD $10… for being available some time every day.

A sandwich costs AUD $5-9 in a local cafe around here, so that is not even real pocket money.

 
 
 

The Earth seen from Space

Online freelancing – a world of work opportunities and extremely cheap labour

 
Note 2015: this is an old article, and changes such as mergers and services development have happened in the freelance board market since it was written. Likewise, the links may be broken. However, it is my impression that the key issue I wrote about is still the same.

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7 thoughts on “Does online freelance work pay off?

  1. shobavish

    Great post! You have accurately captured the reality of the situation.
    I am a freelancer who uses online boards as part of my overall business plan. While I have had some success with places such as Elance, it is near impossible to consistently make good money there. I think a judicious mixture of brick-and-mortal and virtual clients is the ideal balance. Good luck with your journey!

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  2. maxmichel

    The situation for journalists world wide is really going down-hill. No wonder there is so much crappy ethics going on in the occupation (phone hacking etc.). Professionals have to throw their ethics out the window to get the best stories, because they know that there are hundreds of others who do it for the same job. Quality suffers with a pay like this.

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  3. Clarence

    Excellent article you have written here. This is a very objective look at online freelancing and would help a lot of people who might be considering it.

    My article does come across somewhat more positive but it’s merely based on my limited experience with one platform…so it can still change. I guess I have also been lucky to find fairly decent projects to start with. Furthermore, I don’t rely on it to pay the bills so I am not pressured or forced to accept jobs that I may not be happy with. That makes a lot of difference.

    At the end of the day, it’s really just a matter of finding employers who are willing to pay for quality. I know it’s easier said than done, but it must be done.

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    1. Mados

      Thank you very much for your positive feedback Clarence!

      I agree: the real challenge is to find the customers who care about quality and are willing to pay for it.

      My article does come across somewhat more positive but it’s merely based on my limited experience with one platform…so it can still change.

      I look forward to read your future experiences!

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  4. Pingback: Dabbling in Online Freelancing | Clarence Ceniza

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