More than 59 million, or one-third of the US population participates in the “gig economy,” a revolutionary way of working that allows talented professionals to work on small projects and one-off assignments instead of full-time jobs.
While some perform gig work—driving for ride-sharing companies, delivering food, freelance writing, online tech support—as a part-time supplement, there are others that work in this economy full-time.
Online platforms like Upwork and Fiverr have dominated the gig work industry, connecting freelancers to businesses in a simple-to-use format.
Why Outsourcing is So Popular
There are a number of benefits to using an outsourced platform for freelance work, making them attractive to small business owners.
- A transparent rating system means you know exactly what you’re going to get. You can review the freelancer’s past work, reviews and on-time performance.
- An easy to use payment platform means that you don’t have to worry about the business side of things like invoices and accounts payable—just pay and order instantly
- Simple dispute resolution. If you’re not happy with your project, there are steps that you can take to remedy the problem
Fiverr’s business model is quite simple.
Freelancers, or sellers, offer their services for the low price of $5 per job, or “gig.” The low cost makes it appealing to cash-strapped business owners or creatives who simply need a freelancer to complete simple tasks.
The real profits come in, however, with the upgraded services that the freelancers offer. A seller might offer to create a simple logo for $5, but if you want customization, faster delivery or multiple formats, there are additional costs. In the end, the logo ends up costing about $30, which is still a deep discount over a traditional graphic designer.
Fiverr’s freelancers offer their services in a marketplace and you simply choose the one you want to work on your project. There are benefits and drawbacks to this, and many business owners find it challenging to search for the freelancer who can perform their exact task. Fiverr doesn’t offer a way for the business owner to simply post the job and invite freelancers to apply. Despite this, with more than 7 million users on the site, it is not hard to find one who can complete your project.
One of the big draws of Fiverr is the ability to search and sort for a freelancer based on a few key factors. You can sort by budget, location, quality rating and skill. This makes it easy for you to narrow down the right person for the job.
Communicating with your freelancer on Fiverr is easy. Once you have selected the talent to work on your job, you can use a simple messaging system to communicate the details of your project, share files and review documents. Fiverr’s freelancers are based all over the world, and the site handles time differences by displaying the current time in your freelancer’s location, making communication a breeze.
- Allows for easy scalability
- If you need a small job done, you can start there, adding on more as needed
- Great for micro-gigs and small tasks
- If you just want someone to edit a short video, perform some Web searches or manipulate an image, Fiverr is a simple and affordable solution
- Lower costs mean that you can use the platform to test out multiple freelancers for a relatively low investment
Founded in 2013, Upwork resulted in a merger between Elance and oDesk, two popular freelancer platforms.
I have personally made well over six figures with Upwork and would recommend it for any freelancer looking to make money online.
Upwork’s model differs from Fiverr’s in a few distinct ways, most notably the starting price point for freelance jobs. Freelancers set their own pricing on the site, charging hourly or flat rates for projects.
One of the most convenient features of Upwork is the ability to post jobs and allow freelancers to submit bids.
This makes it easy to compare pricing, availability, and skillsets without having to search through endless profiles to find the right freelancer.
Upwork also offers a variety of tools that make it convenient for small businesses
- Skills tests that freelancers display on their profiles. Search by skill level to narrow down the pool of eligible workers
- An easy to use messaging system that allows you to easily communicate with your freelancer, make updates and share files
- An extensive review system means you don’t have to hire blind. See what other business owners have said about the freelancer
- Payment protection plans mean that in the case of a dispute, you will have a representative to solve the problem
Upwork’s Scaling Features
Businesses often start with Upwork as a way to source quick talent, then later scale-up, hiring a freelancer on a full-time basis. It is an excellent way to test out the freelancer’s talents and skills before making a long-term commitment. For larger companies,
Upwork has introduced an Enterprise program that allows for volume pricing and the hiring of freelance teams to complete larger, long-term projects.
Upwork Payroll is one of the best ways to easily classify your W2 employees and remain compliant with local and federal regulations.
Upwork Payroll offers a streamlined system of hiring, managing and paying employees, as well as takes care of the HR function when it comes to IRS compliance. Upwork Payroll also handles the management and administration of the Affordable Care Act mandates, notifying your team of their eligibility and getting them signed up for healthcare programs. Upwork Payroll also handles the payment of employee premiums, when applicable.
Small businesses love Upwork Payroll because it allows them to test the waters with a few freelancers before bringing them onboard as regular employees. Companies save up to 40 percent of the costs of hiring through a staffing agency, and the Upwork platform allows managers to start their projects faster.
A business that has run a successful marketing campaign might use Upwork as a means to bring on a team of freelancers to quickly meet demand.
Microsoft and Airbnb are just two of the companies that have used Upwork Enterprise for their project needs.
Custom reporting dashboards allow managers to track billable hours, costs and workflow data to determine the best return on their staffing investment. Upwork Enterprise allows you to easily curate the right freelancers for the team, integrating with Upwork Payroll in order to correctly classify and pay your workers.
Companies that use Upwork Enterprise receive a dedicated account manager who can handle talent sourcing, team building and new project creation in order to help businesses reach their goals. With volume pricing and discounts,
Upwork Enterprise is an affordable hiring solution for companies both large and small.
Fiverr vs. Upwork: A Head to Head Comparison
Fiverr and Upwork offer similar products but use two distinctly different formats. As such, it is hard to compare the two in an apples-to-apples fashion, but there are some similarities when it comes to considering the two as viable sources of freelance talent.
Fiverr’s entire model is based on a one-off or small-scale “gigs.” Fiverr’s freelancers may be working for pennies, completing creative jobs for below-market rates. Because of this, Fiverr’s freelancers tend to work quickly, churning out “good enough” quality work that they can deliver quickly. Fiverr’s platform is great for creating “contests” in which companies can affordably test out freelancers’ skills before hiring them for larger projects. A company that wants a logo, for example, can hire 10 Fiverr freelancers for $10 each, spending only $100 to get a quality logo. Many companies prefer this to hire one freelancer and paying him $100 to design a logo that they may or may not like.
Fiverr’s freelancers are skilled, mainly because they work on volume. Fiverr’s rating system allows you to review their work, making an informed hiring decision. One major drawback of Fiverr is that, due to the low cost of the freelancers’ work, they may be swamped with other projects, working other full-time jobs or simply inactive. So you may hire a great freelancer for one project and never see him again on the site. There is high turnover on Fiverr.
Upwork’s model of allowing the freelancer to set their own pricing means that you get better quality work, but miss out on the cost savings at Fiverr. This may mean taking a chance on a freelancer that charges $100 an hour to design a logo, and facing dissatisfaction with your choice. Ultimately, this is where Upwork’s revision policy and dispute resolution services earn their salt.
In most cases, you can ask for the freelancer to make changes to the work until you’re satisfied.
Which site has the best freelancers?
Upwork, hands down. Because Upwork is geared toward longer-term, higher-cost jobs, it attracts freelancers who treat it as a full-time job instead of a one-off gig. The competitive nature of Upwork means that you get better talent for your job, and are more likely to be able to retain that talent long-term.
There are 12 million freelancers on Upwork and an average of three million jobs posted at any given time. This means you can create a bidding war, hand selecting only the best freelancers to compete for your project.
Fiverr takes the top spot, however, when it comes to certain types of projects. If your company is looking for projects that require a human touch—Web research, editing, or micro tasks, Fiverr is definitely the better choice. Fiverr’s freelancers tend to gravitate toward these types of jobs that they can perform quickly and move on. If you’re looking for more in-depth work that requires specialized skills, Upwork is the better bet.
Which site has the better work structure?
Upwork really functions more like a traditional remote employer than a freelancer flexible platform. Upwork has a high percentage of freelancers who work on an hourly basis, so it takes steps to ensure the client gets the most value from these hours. Upwork allows freelancers to opt into a monitoring system called “Work Diary” which monitors their hourly productivity.
The company software tracks keystrokes and clicks, takes screenshots of the freelancer’s screen (up to six per hour) and can activate their webcam to ensure they are working. This monitoring system means that the client can be assured that they are getting the full benefit of the funds they have paid per hour. If there is ever a dispute about the value of the freelancer’s work, Upwork uses this data to solve the dispute, and if necessary, pay the freelancer directly.
On Fiverr, since the gigs are paid by the job instead of the hour, there is no such monitoring included. You simply agree to the freelancer’s terms of completion and wait for your work to be delivered in that timeframe. Fiverr truly puts the control into the hands of the creative more than the client.
Which has the better vetting system?
Upwork takes the top spot here as well, as there is a rigorous screening required for new freelancers. Upwork even offers an expert-vetted option that is by invitation only.
The best freelancers on the site are invited to apply for this distinction, and earning the badge requires a series of interviews, skills tests, and portfolio items. Freelancers must demonstrate expertise in their field, a command of soft skills like communication and professionalism, and agree to regular reviews of their work.
Fiverr’s platform is open to any freelancer who signs up, and there is no in-depth vetting or skill requirement necessary. Businesses depend on reviews in order to make the right choice of freelancer—-a real problem when hiring talent that is new to the site. Because this represents a conundrum for the freelancer as well, they often offer their services at a lower price or offer more free add-ons in order to attract clients and start getting reviews. So hiring a new freelancer is often a good bet for a company on a budget.
Upwork’s freelancers are required to send a cover letter with each application, and only get a limited number of free applications per profile. After they have exhausted their free applications, they pay a small fee to buy a “bucket” of applications. This means you get freelancers who are serious about earning your business. They’re not simply mass applying to every job.
Which site has the better review system?
Upwork has a pretty elaborate review system that allows both clients and freelancers to review each other. The system is double-blind, meaning that one cannot read the other’s review until they have both submitted them. Clients are able to leave two types of feedback for the freelancer.
- Public: This type of feedback is visible to everyone on the platform, and helps clients make the right hiring choice.
- Private: This feedback goes directly to Upwork and helps them to improve and maintain quality control
This feedback is used to create a “Job Success Score” that is displayed on the freelancer’s profile. This score is based on the aggregate of the freelancer’s reviews, communication effectiveness and jobs completed on time.
You can see my Job Success score below from when I did Upwork and made six figures per year.
Fiverr’s rating system is a bit more streamlined, with both freelancer and client able to leave feedback for the other. Fiverr’s algorithm will display the highest scoring freelancers first, so the first page of results displayed is usually comprised of the best workers.
When it comes to a determination of which platform is best, the answer is that it depends on your needs. Fiverr appeals to new startups, creatives on a budget and those who need one-off gigs or short projects. If you’re in the market for a long relationship with one freelancer who has specialized skills, Upwork is definitely the better option. Both platforms have robust communication platforms, in-depth review systems and customer service assistance.
Overall, we find Upwork to be the better deal for the investment when it comes to hiring the best quality freelancers online.