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Freelancers wanted
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March 15, 2000: 6:34 a.m. ET
Agencies, recruiters seek independent workers in tight labor market
By The Applegate Group
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NEW YORK (CNNfn) - Not too long ago, a freelancer was looked upon with pity and disdain because others had a "real" job. But today, more than 20 million of the 131 million workers in the U.S. civilian labor force have ditched their real jobs to work independently from home or in the field.
Thanks to an explosion in online recruiting, freelancers rarely have to knock on doors looking for work anymore. Online recruitment, a $100-million industry today, is expected to grow to $1.7 billion by 2003, according to analysts at Forrester Research. Access to a bigger pool of talent reached online helps agencies find help for their clients in this tight labor market.
"More than anything, the advantage of using an agency is the speed," said Liza Ahearn, vice president of human resources for Santa Monica, Calif.-based X:drive, a fast-growing company which offers free file storage on the Internet. "We've grown from 15 people in October to about 70 today."
Ahearn said the company, which is planning to go public this summer, liked one freelance Web designer so much, they offered him a full-time job after only one day. By offering him stock options, they were able to offer him a lower salary.
While clients benefit from help in finding workers, freelance art director Jaeson Kay says he's happy to have the steady, well-paid work.
"Etalent allowed me to work in-house and out-of-house," said Kay, an interactive art director who has used Los Angeles-based Etalent to find him interesting, well-paying jobs for the last eight months. "They call you, check in with you to see how you're liking the project. They ask if you're available for other work, and they try and get you a better rate for your next job."
Companies are willing to pay a premium for talent that has been pre-screened, reference-checked and tested on specific software skills before they show up for work.
"When you need a freelancer, you usually needed them yesterday," said Leslie Berliant, general manager of Etalent Agency, which places designers and artists in many dot.com companies. They can be reached at http://www.etalentagency.com/.
Business owners and managers are willing to pay top dollar for talent they don't have to recruit. If they like the freelancer enough to hire them full-time, they pay the agency a finder's fee of 25 percent to 35 percent of the first year's salary.
According to Berliant, many small businesses make the mistake of posting job openings only on their company's Web site.
"Unless freelancers have heard of your company, no one's going to find your ad," said Berliant.
First-year revenue for Etalent was about $3 million. The parent firm, Artisan, which has offices in Chicago and New York, was founded in 1987. Prior to launching its Web site, Etalent worked offline, using advertising, direct mail and meetings to connect candidates with companies.
"Our Web site is a great resource for us now, but in this business, especially at the high-end creative level, we still have to connect people one-on-one," said Berliant.
To compete in the online staffing world, agencies are adding more perks and services every day. At Boston-based Aquent, formerly known as MacTemps, freelancers can sign up for invoicing services as well as health insurance.
"We found that freelancers like finding their own work, but they have problems getting paid and obtaining insurance," said Mark Keehnle, general manager of Fast Cash, Aquent's financial-services division.
Fast Cash, which opened last summer, assists independent contractors by doing their invoicing -- for 5 percent of the bill's amount -- and directly depositing the checks into the person's bank account.
Fast Cash also offers independent contractors access to insurance coverage for liability, their home offices and equipment. Fast Cash finds an appropriate health-insurance plan, but the premiums are still steep. About 40 of Aquent's 200 independent contractors rely on Fast Cash to obtain health insurance.
Old-fashioned offline recruiters say the online boom hasn't hurt their business.
"We use the Internet, but that's just a starting point," said Dennis Inzinna, president of FORTUNE Personnel Consultants, based in New York City. Fortune recruits people for middle management to upper level jobs in the manufacturing, pharmaceutical, chemical and auto industries.
"We're not just the matchmaker, like these other agencies," said Inzinna, who has been a recruiter for 22 years. His firm is paid 30 percent of the first year's salary for every candidate they place.
Personal relationships are everything in the recruitment world, he said.
"We know the players in the industry, and they know how to contact us," said Inzinna. "It's not like we're just placing ads in the newspaper."
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