With U.S. unemployment hovering around 8% and the number of job seekers even higher in some regions, you might think companies would have no trouble finding eager and suitable candidates for open positions.

But as Leigh Buchanan recently reported here on Inc.com that's simply not the case--many employers still struggle to find talent with the skills they need. She interviews Wharton professor Peter Cappelli who chides employers for letting the perfect be the enemy of the good and urges companies to provide more training for hires that are less than exact matches for their openings.

That's one compelling option to work around the limitations of your local labor market, but if you're a smaller firm and providing such training would stretch your resources, a new survey from online hiring platform Elance suggests another solution--broaden the talent pool in which you're fishing by hiring online contractors.

The survey spoke with 1,500 businesses around the world who are already using the platform. Obviously this is polling the converted, so there's no shock that most of those who already hire online think hiring online is a good idea. But the magnitude of positive opinions of the process may be enough to suggest more small businesses might consider looking online. The survey found:

  • 84% of businesses said that hiring online gives them an advantage over competitors. With cost savings, faster time-to-hire, and access to talent not otherwise available being the most commonly cited reasons.
  • 73% of firms polled said they intended to hire more contractors online in 2012 than in 2011.
  • 40% of companies think the quality of online talent beats the quality of talent available in their local market; 29% say it's equivalent (22% were unsure, leaving just 9% to report that online talent is worse than local talent.)

The number of businesses hiring online is currently quite small.

"Right now the number of businesses that have online teams, it's hard to estimate, but probably less than 10%," said Fabio Rosati, CEO of Elance. But the company believes this number is set to grow rapidly. "We're at the very beginning and in the next eight years we're going to see substantial acceleration of this trend. It will become a mainstream phenomenon," said Rosati, who notes Elance predicts "one out of every three people hired in 2020 will be hired online."

And Rosati isn't the only fan of online hiring. Sara Sutton Fell, founder of Flex Jobs, told Inc.com she sourced the entire team for her start-up online. Partly, she explained, her motivation was flexibility and better work-life balance, but cost also played a role.

"Especially for start-ups and ones that are really either bootstrapping or on a really tight budget. People located in non-urban areas tend to have a lower cost of living and therefore have a lower salary or hourly expectation," she said.

Start-up Kashoo had similar success with so-called ruralsoursing, finding a lower cost hire who lived in a less expensive region through the Internet. Neither company, it should be noted, found these distant workers through Elance--Flex Jobs, predictably, used its own platform, and Kashoo hired someone from within the company's online community--suggesting that whatever your opinion of Elance as a specific hiring tool, the general idea of hiring online might be worth considering.

What experience, if any, have you had hiring talent online?

Published on: Jun 14, 2012