Widjaya Ivan/Flickr. (CC BY-NC-SA 2.0)

In the platform economy, digital technologies enable a wide range of interactions. You’re probably familiar with sharing economy platforms such as Uber and Airbnb. But probably lesser known are the transformative effects that online labour platforms have on contemporary organisations and how work gets done.

As an organisation studies scholar, my work furthers understanding of the adoption of online labour platforms by organisations and the new organisational forms, processes, and practices that are developed to get work done with external people. In the first part of this two-part article, I will discuss what kinds of platforms are out there and how organisations are adopting them. In Part Two (to be published on 25 April), I will outline an organisational perspective on online freelancing platforms, to better assess how the future of work is taking shape.

We know surprisingly little about the diversity of platforms that are out there and what types of work can be outsourced through them.

In past decades, we’ve witnessed how organisations opened up their boundaries and how outsourcing and offshoring has changed the very nature of work. We are now observing another wave of transformations with organisations adopting platforms such as Freelancer, Upwork, Peopleperhour, and Amazon Mechanical Turk to outsource their projects online. As measured in the Online Labour Index, these platforms connect client organisations with millions of workers around the world. They do this at a speed and scale that was unimaginable just a short while ago. Online labour platforms differ from platforms mediating physical services, such as Uber and Taskrabbit, in that the work is conducted online, requiring no physical interaction between worker and client.

In a recent report, Accenture identified online labour platforms as a key trend shaping the future of work in the next five years, which will significantly transform existing organisational forms and management models by 2022. However, while organisations and their members increasingly hire and work with online freelancers and ‘gig’ workers to get work done, we know surprisingly little about the diversity of platforms that are out there and what types of work can be outsourced through them. Such an understanding is important for obtaining a more realistic picture of how platforms are shaping the future of work in the online gig economy.

What labour platforms are out there?

As new intermediaries in labour markets, platforms connect client organisations and independent workers to collaborate on various tasks that can be carried out online. In past years, numerous platforms have emerged to cater to different types of online work, ranging from small micro-tasks to complex technical projects and professional services. This makes it relevant to develop a typology that can differentiate different types of online labour platforms and help us understand for what projects they are used. One can distinguish between crowdsourcing platforms on the one hand, and outsourcing platforms, for sourcing microworkers and online freelancers, on the other.

Online crowdsourcing concerns the simultaneous sourcing of work and contributions from a largely undefined group of people, which is often organised through contests. Crowdsourcing platforms, such as Topcoder and Innocentive can best be used for complex problems where problem solutions and skillsets are unknown (as Boudreau and Lakhani describe in the Harvard Business Review). They are most useful in tackling projects that benefit from experimentation and multiple solutions. Online outsourcing differs from crowdsourcing in that organisations source work and contributions independently from individual people. Online outsourcing platforms therefore match buyers and sellers of services one-on-one.

The table below summarises a common distinction made between platforms that focus on microwork and online freelancing. Examples of microwork platforms are Amazon Mechanical Turk, Samasource, and CrowdFlower. Here, the platform efficiently matches individual workers to small tasks. They are used best for relatively simple, repetitive tasks that require little training and coordination.

Similarly, online freelancing platforms such as Freelancer, Upwork, or Peopleperhour source independent work from individual people. Here, however, projects often concern knowledge-intensive projects and tasks. They are used best for finding freelancers on an on-demand basis, for well-established categories of work that have clearly defined deliverables and skill requirements, and are easy to modularise and evaluate. Popular categories of projects posted online are software development, creative and graphic design work, and writing and translation. But in principle any type of work that can be delivered online can be mediated by online freelancing platforms.

#grettatable td {vertical-align:top;padding:5px 3px;} Dimensions Microwork Online freelancing Task/project size Projects and tasks are broken down into smaller microtasks Larger projects and tasks Task/project complexity Low High Task/project duration Task/project completion takes minutes or seconds Task/project completion takes hours, days, or months Entry barriers Low (little specialised skills or expertise required) High (requires specialised skills and expertise) Task coordination Automated - through algorithmic management by platform Manual – through human management by client Compensation Smaller financial remuneration Higher financial remuneration Examples Amazon Mechanical Turk, Samasource, Crowdflower Freelancer, Upwork, Peopleperhour

Expanding capabilities with online freelancers

I study the motivations of organisations to adopt online freelancing as part of their business models, as well as the new organisational forms, processes and practices they developed to get work done with freelancers. Online freelancing platforms have radically transformed the access that organisations have to freelancers, their talent and their services. Today, startups and innovative Fortune 500 enterprises are adopting platforms to augment their internal workforce and capabilities with on-demand workers. There are at least three reasons that online freelancing platforms form an attractive opportunity for organisations:

1. Platforms enable organisations to access a group of freelancers with highly specialised skills and expertise. This allows organisations to complement their internal capabilities with the skills and expertise of online freelancers. As such, platforms make online freelancers an attractive option to quickly and temporarily complement organisational employees.
2. Compared to traditional outsourcing vendors and contracting agencies, platforms substantially lower start-up and transaction costs. This allows organisations to quickly address project needs and respond to changes in market conditions.
3. Platforms eliminate geographical, informational, and administrative barriers in the hiring and onboarding process. This allows their usage for projects of shorter length and scope, and on a more flexible, on-demand basis.

In my work I argue that the adoption of online freelancing is part of a larger transformation we are witnessing, as organisations move from relatively static hierarchical structures based upon fixed roles towards organisational forms that are based on more fluid and dynamic tasks. People are dynamically teamed together to work on projects, based on their skills, knowledge and staffing needs. Such a task-based form of organising allows organisations to create the speed, flexibility, and efficiency needed to stay innovative and competitive in today’s global business environment.

To recap, in this preliminary article I’ve argued that while organisations and their members increasingly tap into the knowledge and expertise of external workers hired through online labour platforms, we know surprisingly little about the variety of platforms that are out there and why organisations adopt them for outsourcing work. In Part Two I will discuss new ways of organising with online freelancers and the questions that organisations should consider when they adopt online labour platforms as part of their business models.