Contracting Beyond Borders

“Gig economy platform can enable remote contracting with distant workers,”

Globalization of labor services has lagged early expectations.The potential wage savings from outsourcing service tasks abroad are enormous, but employers’ adoption of new hiring channels is relatively less.

New employers who try out online hiring never end up using it to fill a vacancy.

The wage savings that attract employers for online hiring do not overcome offsetting factors that make early online hiring costlier. Firms with many internal workers prefer to use alternative labor sources. Potential reasons for low adoption:

1. The challenge of outsourcing at the task-level creates most of the distance cost, rather than the geographic distance between employers and workers.
2. Employer-specific costs of fragmenting production and coordinating with individual online contractors, a large firm may find it more cumbersome to manage the internal bureaucracy of contracting
3. Benefits from online hiring accrue only after a period of learning by resources

Solution

1. Dedicated Account manager offered by platform to coordinate the outsourced task-level work with employer internal production activities
2. Codifying the collaboration between employer team and platform account manager
3. Dedicated Collaboration Platform to collaborate on the assigned tasks