Elance minimum rates down from $50 to just $20

30 September 2011
A Delayed Commentary on Elance Minimum Rates for 2011

shocked kitty
This may sound like sour milk to Elance providers, but I was shocked with the major changes to the Elance minimum rates for 2011.

The company apparently lowered the minimum from $50 to just $20 for fixed jobs, and from $5 down to $3 for hourly jobs.

The changes took effect some time August 2011 this year, so this commentary is a delayed reaction. I was away from the system for a long time to do a couple of off-line projects. I logged back in yesterday. Never in my wildest dreams did I anticipate one of the most popular job bidding sites online to take such drastic measure!

Like Opening a Can of Worms

The minimum $50 was already a pain to begin with for a lot of freelancers from the United States and Europe. Lowering the amount by $30 more was just horrible. It's just like opening a can of worms. How so? Read on.

  • More projects are being posted indeed, but majority of the openings are small-time jobs - the same tasks you will find listed on sites such as Microworkers, Freelancer and Craigslist.

  • Vacancies tagged with higher amounts almost always come with a catch. Read the project description, and you will notice a number of potential clients demanding "high-quality" articles from "native English speakers" at $1 to $2 a piece.

  • The impression that there are now more jobs on Elance has attracted an unhealthy influx of providers who would do almost anything just to get hired. You'll notice American providers low-balling their way and some Asian freelancers gaming the system by indicating a geographic home base in the US or in Canada.

  • Elance has some serious branding issues to take care of. The pattern is becoming all too clear: "reasonable" becomes "economical" becomes "cheap." 

Justifications, Justifications

Elance attributes the direction to market pressure. One of the company's goals is to allow clients and providers to meet. If it cannot attract enough paying clients, then Elance will not be able to stay in business.

With a job minimum requirement of only $20, the system is clearly attempting to attract the small-time businesses into the fold, allowing employers who are out to "test the waters" in order to discover the "best" freelancer for the job to post smaller projects.

Fearless Forecast

That part I get, but I'm still not a happy camper.

The Elance minimum rates for 2011 will do more harm than good over long term. Smaller jobs will populate the job boards. Employers will use the limited job scope and budget as their bargaining chip to hire only the cheap freelancers. Decent providers will get ticked off by the insulting rates and leave. Low-ballers will take over.

Sooner or later, Elance will become just like  Freelancer. Scary. * 
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