The internet is the wild west of the 21st century. There are few rules, few police and a cloak of anonymity that sees many of its inhabitants turn into savages when they’re in front of a keyboard – engaging in behavior so deplorable they’d never dream of it in the real world (see, e.g. Twitter Trolls).
Sadly, these are also truths that carry over to employing staff online. The advent of major freelancing sites, with Upwork (formerly Elance/oDesk) by far the largest, are democratizing the freelancing market at a dizzying pace.
But it has created a two-speed economy. The overwhelming majority of employers are western, English-speaking and living in developed countries. The majority of freelancers are low-paid, in poor countries with English as a second or third language.
Accordingly while people like myself, who have won the lottery of birth and grown up in a peaceful, ‘civilized’, highly-paid economy, can command $66 per hour (my current profile rate) for writing, most are left to fight for the scraps with thousands of other poor souls.
Yes, it is possible to climb the value chain if you’re talented, but you still suffer from the perception of coming from a developing country – and the common belief that your work is, correspondingly, less valuable.
I’ve seen many practices on these sites that make me sick. Examples of exploitation so breathtaking that they hit me viscerally, right in the pit of my stomach.
Here I list 9 examples I’ve seen in real life, from employers who are worth little more, in my view, than pond scum.
Trolling for free work
Upwork is a minefield for freelancers, especially those who are new. At this point in the value cycle, the most valuable component for many is positive feedback.
A 5-star review is the best kind of social proof a contractor can get; it’s a vote of confidence from an employer, who has paid actual money, that the candidate is capable of performing at a high level.
But it’s a vastly imperfect system. Starting out, even with a single hour of work, a candidate can be made, or broken, by a single review. Four or five stars? Go to the head of the class! One to three stars? Forget about getting another job; possibly ever.
Employers know this. Most are supportive and want their employees to do the job well and be rewarded with supportive feedback. However, as in most areas of life, there are exceptions. Like lions on the Serengeti, they circle new workers with offers of “great” feedback in exchange for additional hours of free work on top of what is initially agreed.
Of course they wouldn’t see it this way, but they are keeping their workers in a form of digital slavery. Until the employer agrees they can leave, the worker is at their whim. They would argue that they’re doing the contractor a favor; promising them perhaps better feedback than they deserve – but there is no excuse.
The most common example of exploitation I’ve seen is simple underpayment. In 2014, Upwork moved to a new system of rate-setting, which entailed the introduction of a new, site-wide minimum pay rate of $3 per hour (https://www.upwork.com/blog/2014/08/minimum-rate/).
Prior to this, it was not uncommon for contractors bidding on our lower-skilled jobs to quote 50c per hour – or even less. Incidentally, we had decided independently that we would not hire anyone for less than $3 per hour long before the switchover.
You might think that the new minimum wage is a positive change – and you may well be right. But what we have witnessed has been a shift towards more fixed-price jobs with ridiculous deliverables. For example, it’s now common to see postings like this “50 unique articles, 500 words each, .50c per article”.
Obviously, nobody is churning out 3000 words per hour, so this job will fall well below the new Upwork minimum wage.
This is an issue we raised with the head of Upwork in Australia when we met him in Melbourne in early 2015, but he was surprisingly unaware of the problem. He assured us he would raise it with Upwork management.
But how do you stop it?
Realistically, there is only one way – and that’s proactive policing of the platform and weeding out of these jobs by Upwork themselves. But to do so requires a lot of effort and time by their employees.
In addition, removing these jobs from the Upwork platform would not prevent them from popping up on another, less well-monitored platform (like Craigslist).
Further, it doesn’t help solve the situation where an employer holds the freelancer to ransom for work done. We’ve seen instances where an employer will unilaterally decide they won’t pay the whole amount for a job, after the work is done, using some kind of ‘quality’ issue as the rationale for ripping that employee off.
But mostly, it would require an arbitrary determination of how much a job is worth. For example, maybe an expert article writer could write 1500 words an hour, bringing $1 for a 500 word article within Upwork’s minimum rate of pay.
But many couldn’t.
We’re not trying to offer the solution – we don’t have the right answer here – but we need to talk about it, and we each need to assess our own level of comfort with what we’re doing.
Play candidates off against each other
This ploy involves an employer who is at the interview stage trying to tender the work to the lowest bidder, or extract greater promises from the potential hires.
Especially in the early stages of their freelancing career, many virtual workers are desperate to get a job. And often, they assess their skills on the basis of others in the marketplace with similar experience.
Unscrupulous employers will sometimes use this information asymmetry to exploit potential hires. Have you heard of the Prisoners’ dilemma? That’s what we’re talking about here.
The closer you get to hiring someone, the more committed they become and the more they want the job. It’s at this point that sometimes the employer is tempted to think: “What the lowest I get these guys to agree to?”
So they say to candidate one: “I really like you, but Candidate Two is a bit cheaper than you – is your rate negotiable at all?” And so Candidate One feels pressured to give in – just a little bit – to secure the job. After all, they’ve come this far…
For the employer, it’s no different to playing off Delta against United to get a better price on a flight.
But to the employees, it could be the difference between having money left at the end of the month and falling below the poverty line.
If these employers saw the human cost of what they were doing, we’d like to think they would be a bit more human.
Hold unpaid trials
For freelancers, time is money.
In the west, we’re accustomed to applying for a job, being invited to an interview, turning up, leaving, waiting – and not being paid a cent until we have actually worked in a job.
This dynamic is acceptable, because we understand that if we land that job it will lead to a large amount of income – perhaps for a lifetime.
The online world is vastly different to this. Many jobs are tiny, just an hour or two – and others have no guarantee of longevity.
Yet, many employers require potential hires to subject themselves to the same rigorous hiring process that they are themselves used to in the west.
They invite candidates to apply, interview them and then move them onto a 1 or two hour, unpaid, trial.
This isn’t acceptable when you’re hiring virtual staff. If you require a trial, you need to pay for it. And you need to pay that employee’s full rate.
Why? Because if they are working for you they aren’t working for someone else, or applying for another job.
For virtual staff, it’s a zero-sum game. And freelancers don’t get to dictate how many hoops they jump through in order to get hired. Besides, you can use this as an opportunity to get real work done. And you should never let anyone work for free.
So as employers it’s our responsibility to budget for the costs of the hiring process, including paying freelancers for any work they do for us in the trial phase.
Treat candidates like cattle
This is a very general criticism, based upon numerous instances we’ve seen of dehumanizing behavior on freelancing platforms.
The mere fact that an employer is sitting behind a keyboard does not absolve them of the responsibility to treat their potential staff like animals.
Every freelancer seeking work harbors their own dreams, hopes and aspirations – perhaps on a micro-scale – and when employers forget this it can be truly heartbreaking.
Examples of shocking behavior we’ve seen include:
- Cutting off a contract after 1000s of hours and not providing feedback (presumably because they couldn’t be bothered, because if it was a quality of work issue you’d think it would’ve ended sooner!)
- Giving negative feedback because a $1 flat-rate job was left ‘incomplete’
- Job listings that are themselves dehumanized; for example: “I need a gopher to do some very basic data entry – cheaper the better”.
The sad thing about the last one is this particular listing had over 30 live applications.
It’s just sad, the way human beings treat each other sometimes. The mere fact that this person was born into comfortable middle-class America, and not the foothills of Tarin Kowt, doesn’t make their life any more valuable – and yet inherent in this posting is their obvious belief that it does.
Refuse to pay for work delivered
This one is particularly egregious. When a freelancer is on an hourly contract they are afforded particular protections by the Upwork platform, including a rolling weekly payment for work completed.
Accordingly, there is an inbuilt limit of one weeks’ wages (not always an insignificant number) that they could lose if an employer decides to dispute their work for any reason.
This is not the case for fixed-price gigs.
As mentioned earlier, much of the work previously undertaken by low-wage freelancers has moved to fixed-rate jobs as this allows for a greater level of exploitation by employers under the new minimum hourly rates of pay.
If you’ve never hired on a fixed-rate contract before, here’s how it works:
- You post the job, including the scope of work to be completed (e.g. build a 10-page WordPress website / write 10 500 word articles on Paleo cooking) and the maximum price you’re willing to pay for the job.
- Freelancers on the platform then bid on your job, including the amount for which they will complete the job and the time expected to be taken.
- You interview candidates as normal, then settle a contract with the lucky applicant.
- Unless intermediate milestones are agreed (they usually aren’t) the freelancer doesn’t receive a cent until the work is delivered – in full – and signed off by the employer.
This dynamic puts all the power in the hands of the employer. If they decide not to pay, then the case is taken to ‘mediation’ by Upwork, with no guarantee of any payment to the Freelancer at all.
In short, there’s little downside for an employer to not pay. An especially unscrupulous hirer could receive all the work, pay nothing, and the worst-case scenario for them is eventually they’d have to pay what they agreed.
In the meantime, the worker, having completed (as far as they understand it, at least) all agreed work, receives nothing and still needs to provide for their family.
They made the election to complete the project on good faith, including foregoing other paid work, and have nothing to show for it.
The potential for exploitation in these situations is massive.
It’s not in an employer’s interest to offer milestones – why would you agree to pay 50% for a job half done, especially when the next applicant would agree to receive full payment on completion?
So the workers continue to agree to an agreement that leaves them in a relatively weak position, with no guarantee of payment and a weak recourse to ‘mediation’ if the employer, on a whim, decides the work isn’t good enough.
And they often do. It simply isn’t fair.
Fail to adapt to the rate they’re paying
There are few reasons why an employer would hire virtually, and even fewer that aren’t based on cost.
But too often, we see employers impose their own first-world expectations on the conditions in which their staff work. Here are some facts that we hope all employers will realize:
- In any third-world country, the internet will not be 100% reliable 100% of the time.
- In India, there are frequent (and often unpredictable) power cuts.
- In the Philippines and throughout South-East Asia, typhoon season happens every year and does disrupt power supplies.
- In the Philippines, there are around 17 religious holidays every year, many of which your staff should not be expected to work.
- In Pakistan, you will not get a reliable, high-quality, phone connection.
- Many third-world countries are prone to natural disasters, and recover slowly (e.g. earthquakes in Nepal and India, Typhoons and Tsunamis in the Pacific and Indonesia).
- Output in Muslim countries is likely to drop off during Ramadan, as your Muslim employees are unable to eat during the day.
- Many freelancers have a high overhead, including multiple internet connections, power generators, nannies, etc. Even before they sit down at their computer to work.
These are just a few examples, but our point is this: You can’t expect to pay third-world salaries and receive first-world output all the time.
It’s not going to happen.
Employers need to understand the risks of hiring an employee overseas, and the difficulties they face, and factor this into their business continuity plan. What would you do if your team member loses power for 2 days? Will your emails continue to be answered?
What will happen to your employee? Will you be able to assist them to get back on their feet?
The most important thing is that employers appreciate the risks and factor them in. It is not ok to fire an employee because a tree fell on their house and they can’t work. It’s not ok to let go of someone at their most vulnerable point.
Employment is the one thing that has the greatest impact on poverty.
If your employee has suffered adversity, they will want to get back to work as soon as possible – I promise – once they have secured their family, helped their friends and patched up their house.
It’s truly tragic when their employer abandons them in their time of greatest need – not of charity, necessarily, but of dependable employment to get back on their feet.
Recently, when the Nepal earthquake struck, our employee in northern India, Jeet, felt the effects in his town as well.
Naturally we were concerned because an earthquake is no small thing – but Jeet is extremely resilient and got back on his feet within a day or two, keen to work again. In his words: “We’re used to this kind of thing here”. He didn’t accept any offers of assistance (his house, family and friends were ok), he just wanted to get back to work.
So give your staff whatever they need to get back to work – we can tell you, not only will it help them back to normalcy sooner, they will be extremely grateful for your loyalty and give it back to you in spades.
Hold them to ransom for feedback
As we’ve discussed above, for a freelancer – especially a new freelancer – there is little less valuable than feedback.
Unscrupulous employers know this, so they essentially withhold their feedback, extracting free work from their freelancer in the expectation that they’ll release them at some point.
For a new, eager-to-please freelancer, this is a really untenable position to be in; they have no power to push back on the employer who, with the click of a mouse, can derail their freelancing career.
There’s a simple solution for employers here – if your job has been done to the letter, give your freelancer honest, fair feedback and let them move on with their life.
They don’t owe you anything just because you were the first person to hire them out of obscurity!
Fail to provide fair feedback
This relates to point 7 – employers need to temper their expectations based on what they’re paying.
Time after time we’ve seen the lowest-paid freelancers receive poor feedback because, in the eyes of their employer, they have performed below expectations.
Of those employers, we would ask one simple question: “Exactly what do you expect for $2 an hour?”
Sadly, many would answer: “Quite a lot.”
This is simply an unrealistic perspective to have. If an employer is hiring a freelancer at $20 per hour, the quality of work they receive will, in most cases, be vastly greater than if they are paying 10 or 20 per cent of that.
This shouldn’t come as a surprise, but many times it does seem to.
It’s extremely easy to set up an Upwork account, connect your PayPal and start hiring in 5 minutes. The platform is full of inexperienced managers looking to get help on an essay, or write their resume, or make a funny birthday card.
To a lot of these employers (as well, sadly as a lot of people who ought to know better), they see the platform as merely an opportunity to get the same work done at a much cheaper rate.
But there are so many variable at play that mean it can turn into a bit of a crap shoot – not only for the hirer, but for the employee too.
It’s not realistic, in any endeavor, to give a set of instructions to one person and get the perfect result – no matter what you’re paying. And the less you pay, the worse your odds.
Here’s a list of factors that can affect the end result:
- The employer’s instructions are unclear (extremely common).
- The employer doesn’t have a clear idea of what they want, but they’ll “know it when they see it”.
- The employee’s English is not good enough to properly ascertain the requirements.
- The employer uses different software to the employee.
- The employer thinks the task will take less time than it requires in reality.
- The employee doesn’t feel empowered to make improvements on the basis of their own initiative.
- The employer changes scope part-way through the project.
There are many more, but the point is that none of these scenarios are the fault of the employee – and yet it is the employee that bears all the risk of delivering the product.
And it is the employer that has all the power to provide good, or bad, feedback – on the sole basis of how they feel about the work, irrespective of how challenging the process for the employee.
Yes, it’s true that the freelancer is at liberty to leave feedback for the employer as well. But in a world where money talks louder than anything, the impact of a poor review on a hirer is minute; no matter how bad they seem, they will always have applicants beating at their door.
Freelancing platforms like Upwork have democratized work to an extent unprecedented in human history. With millions of freelancers now able to earn a living online, this movement will perhaps turn out to be the single greatest impact on labor inclusion of our time.
The ability to log on to a website, click ‘start work’ and be paid for the quality of work your produce is bringing hundreds of thousands of people into a golden age of economic empowerment.
We are moving towards a world where people are valued not on the basis of where they live, but simply on the quality of their contribution.
But the system is far from perfect. For one thing, anecdotally it is common for freelancers to have their accounts, including payments, frozen for perceived infractions or indeed for no perceivable reason at all. My freelancing account has twice been frozen for investigation, despite never receiving any kind of complaint from any of my employers. If I were relying on that work to feed my family, I would have been in a very tough spot.
Where opportunity exists, so does exploitation. Eventually, the system will improve and expose some of the worst practices we are currently seeing.
But in the meantime, it’s incumbent upon us to remain vigilant – to commit to fairness and to ensure that our commitment keep pace with the inexorable growth of the freelancing movement.
We will probably never meet our staff in person, but with every action we impact their lives – their hopes, their dreams and their futures.
Let’s take this responsibility seriously.