However, it’s not just a lack of accountability. It is the cavalier attitude toward the ones who are basically putting bread on their table… namely, their contractors (the freelancers who bid on the thousands of projects that Elance posts).
If you’re new to freelancing, there’s a good chance you’ve heard about Elance. It’s one of the largest online job boards (if not the largest), with 2012 earnings of over $200M.
If you’re a freelancer, I want you to consider verrrry carefully that figure: $200 million dollars. Elance made over $200 million dollars in 2012.
They take 8.75% from your earnings. That is money made off your skills and talent. Got that? Okay. Moving on.
So, yes. Elance has thousands of jobs posted, many of them will be right up your alley. However, remember the warning to buyers, Caveat emptor? With Elance, it is Sit vendit cavete: Let the seller beware.
Although I have found clients through a variety of ways (networking, referrals, etc.), I decided to try Elance. Why not? I figured there were many people who had a need and it would be a quick way to earn money.
There are many pitfalls to using Elance. One is that you are bidding against contractors who live all over the world. These contractors will bid at a ridiculously low price compared to the U.S. pricing because often, their standard of living is much lower. As a result, most, if not all of the services have been commoditized, which is great news for the buyer but not so great for contractors.
Of course, in a highly competitive market, pricing is a large factor in determining who to choose as a supplier. But it’s not the only factor and rarely should it be the deciding point (if it is, you usually are dealing with someone who can’t appreciate the value you bring to the table). So that’s one aspect of bidding on Elance’s job board.
But the other aspect, the one that got my knickers in a twist was this:
Elance does not protect the freelancer.
Case in point: When you view a job posting, the buyer can post either an hourly rate, or a project rate. It is recommended that a contractor choose an hourly rate because Elance can then guarantee payment. Every contractor gets 15 credits per month (those who pay for a premium subscription get more) and it usually takes 1 credit to submit a proposal.
Recently, I submitted a proposal for a large writing project. The hourly rate was between $40 – $50 per hour. (Note: I usually do not work on an hourly rate, but I submitted a proposal for this project because it was in an industry that highly interested me.)
The job opportunity closed within 24 hours, given to someone who submitted a bid for $10 per hour.
I contacted Elance to ask that my credit be returned because had I known that the buyer would choose a $10 per hour contractor, I would not have submitted a proposal.
Elance’s answer? No.
And not just “no,” but 1) they misinterpreted my question and said they can’t force a buyer to award their project to a provider (which was not my concern. Of course you can’t force a buyer to award a project and I wouldn’t want to do that. Free enterprise and all, you know..) and 2) they said it was the freelancer who was to do “due diligence” in studying the buyer’s history.
Yes, you can check a buyer’s history. But if they’ve made their payment history private (as this buyer did), then you have no idea how much they’ve paid for projects in the past. (It’s a good thing to always check, though. Stay away from buyers who are only paying contractors $2 per hour. Yes, you read that right. $2.)
My concern is this: Elance is making a boatload of money off the skills of their contractors. But yet they won’t protect the contractors. If the buyer had been honest and posted that they only wanted to pay $10 per hour for a job, then they should have posted that.
Instead, Elance allows a lack of accountability in the buyer’s posted fee and the contractor loses a credit for bidding for a project that was awarded at lower fee than the one posted — a project they probably wouldn’t have bid on if it was posted at the lower fee.
What happened was the buyer posted a fair hourly rate, which brought contractors forward who were looking to win a project that paid that posted amount. And then the buyer (and Elance) shafted everyone.
I wish I could say this was the first time it happened, but it wasn’t. I’ve not submitted many proposals on Elance, but my experience with them has been rather abominable. Buyers have no qualms about posting a fee range, and then when a contractor submits a proposal for that range, rejects it saying the bid is too high.
Yes. You read that correctly. A buyer can reject a bid for $49 as “too high” even when they set the fee within the range of $40 – $50 per hour. And Elance does absolutely nothing about it.
I will close with what I sent to the Elance representative:
Do you know what this does for Elance? It sends a strong signal to freelancers that “if” you happen to get lucky and get a buyer who was honest by offering the rate they posted, then consider it a rarity. There are many freelancers who refuse to do business with Elance. I’m beginning to understand why.
I thought I’d try Elance. But because I now feel that Elance isn’t protecting the freelancer by holding the buyers accountable to the fees they are posting, my opinion is changing. I will be blogging about this and alerting all of my freelancer community groups to be aware of this situation.
It’s a poor policy when within the buyer/contractor relationship, the contractor realizes that even after doing “due diligence,” it still makes no difference. There are NO consequences for the buyer to not adhere to their stated proposed hourly rate.
A very poor policy, indeed.
Update: Elance just refunded my credit. I’m thankful, but still believe they need to have a policy for buyers who do not award projects at the advertised rate.
Second update: If after reading this post, you wish to send me an email telling me about your service, please read this post now before you send it. Thank you.
NEW: I’m starting to respond to comments in a separate blog post. Please visit the category “Comment Response” under the tab “Freelancers.” I’ll be updating this category regularly.
Added 2-7-14: Interview with direct response copywriter, trainer and world traveler, Steve Roller. He also has some thoughts about being a freelancer and how to find clients.