Effective management of remote freelance workers. A thesis presented to. The Graduate School of Business University of Cape Town.

Transcription

1 A thesis presented to The Graduate School of Business University of Cape Town In partial fulfillment of the requirements of the Masters of Business Administration Degree MBA FT 2010 Prepared by: Steven Beaumont Supervisor: Associate Professor Jon-Foster-Pedley

2 DECLARATION: 1. I know that plagiarism is wrong. Plagiarism is to use another person s work and pretend that it is one s own. 2. I have used the APA convention for citation and referencing. Each contribution to, and quotation in, this report from the works of other people has been attributed, and has been cited and referenced. 3. This report is my own work. 4. I have not allowed, and will not allow, anyone to copy my work with the intention of passing it off as his or her own work. 5. I acknowledge that copying someone else s assignment or essay, or part of it, is wrong, and declare that this is my own work. This report is not confidential. It may be used freely by the Graduate School of Business. Signature: Steven John Beaumont 2

3 ACKNOWLEDGEMENTS: I would like to thank all that contributed to this report. In particular, Mr. Jon Foster-Pedley for his excellent guidance and for the faith that he placed in me. Further thanks to Clive Lotter, Astrid Stark, Ian Roberts, Rene Sorrel, Mohammed Shaik, Jo Duxbury, Linda Pretorius, Marc Cloete, Rachal Watson and Werner Geyser for taking valuable time away from their activities in order to contribute and for allowing me insight into their experiences within the freelance industry. Finally, many thanks to my wife, Kim, whose endless patience and support throughout the year cannot be overstated. 3

4 ABSTRACT: Purpose - This research set out to understand what factors must be managed well in order to have a successful practice model for outsourced electronic freelance work. With this project, the researcher offers a contribution to academia in the form of a substantive theory. Design/Methodology/Approach The research is inductive and qualitative in nature and makes use grounded theory in the development of a theoretical substantive practice model. Semi-structured interviews were used to collect data from 9 active individuals active in the remote freelance industry. The data represents their perceptions, experiences and views in relation to the factors that should be managed well my employers of freelancers in order to ensure the successful delivery of projects. Findings and Analysis Open coding of data resulted in 36 notable findings. Through axial coding 8 key variables emerged that are influencing factors in the successful delivery of elance projects: Openness of Communication, Clarity of the Brief, Quality of Recruitment, Thoughtfulness in elancer Selection, Explicitness of the Terms of Agreement, Appropriateness of Project Management, Reliability of Freelance Network, Explicitness of Review. Selective coding determined the relationships between the variables and allowed the development of a substantive theory. Research Limitations The substantive theory developed in the form of a causal loop model is based on the views of a small sample of geographically similar respondents. Further testing of the validity of the variables and the causality of the relationships is required. Practical Implications In the absence of alternatives the substantive theory offers an initial practice model that might help increase the likelihood of success of projects outsourced to electronic freelancers. Originality/Value This paper identifies the key variables associated with the success of outsourced electronic freelance projects and offers a practice model that might improve appreciation of the responsibilities an employer holds in the engagements. Key Words elance, remote work, virtual teams, freelance, management practice, practice model Paper Type Conceptual 4

5 TABLE OF CONTENTS: DECLARATION:... 2 ACKNOWLEDGEMENTS:... 3 ABSTRACT:... 4 TABLE OF CONTENTS:... 5 TABLE OF TABLES:... 7 TABLE OF FIGURES: Introduction Research Area and Problem Research Questions and Scope Research Assumptions Research Ethics Literature Review The role of the literature review in grounded theory Discussion Conclusion Research Methodology Research Approach and Strategy Research Design, Data Collection Methods and Research Instruments Sampling Data Analysis Methods Research Criteria Research Findings, Analysis, and Discussion The Interviewees Research Findings Research Analysis and Discussion

6 5. Conclusion Implications for practitioners Future Research Directions References: APPENDICES: APPENDIX 1 Interview Pilot Guide APPENDIX 2 Interview Transcripts

7 TABLE OF TABLES: Table 1: COMPARISON OF QUALITATIVE & QUANTITATIVE RESEARCH METHODS Table 2: POTENTIAL BIASES & IMPLICATIONS Table 3: GLASERIAN VERSUS STRAUSSIAN SCHOOLS OF GROUNDED THEORY. 27 Table 4: INTERVIEWEE OVERVIEW Table 5: OPEN CODE LIST BY GUIDING QUESTION TABLE OF FIGURES: Figure 1: THREE PHASES OF RESEARCH DESIGN Figure 2: PROCESSES & OUTCOMES IN GROUNDED THEORY Figure 3: PROCESS FOR THE FORMULATION OF INTERVIEW GUIDES Figure 4: AFFINITY DIAGRAM Figure 5: INTERRELATIONSHIP DIGRAPH Figure 6: SYSTEMIC SCORECARD Figure 7: BASIC CAUSAL LOOP DIAGRAM Figure 8: LOOP 1- SOURCE THE RIGHT TALENT Figure 9: LOOP 2 - DEFINE PROJECT TERMS Figure 10: LOOP 3 - MANAGE DELIVERY WELL Figure 11: LOOP 4 - DEVELOP FREELANCE NETWORK Figure 12: MODEL OF E-COLLABORATION EFFECTS (Qureshi & Vogel, 2005) Figure 13: PRACTICE MODEL- WHAT MUST BE MANAGED WELL IN ORDER TO ENSURE THE SUCCESS OF ELANCE ENGAGEMENTS?

8 1. Introduction 1.1. Research Area and Problem The virtual workplace in which employees operate remotely from each other and from their managers is a reality for many organisations now, and all indications are that this will become even more prevalent in the future. Information Technology, in particular the internet, has blurred boundaries (distance, time, organisations) that once limited how work could be structured. Jobs previously restricted to the employers premises can now be performed anywhere. (Goldstein, 2003) With the introduction of powerful personal computers and broad electronic networks information can be shared instantly and inexpensively among many people in many different locations. Managing employees who are located remotely from their manager is a key issue in virtual organisations. Managers roles are changing as traditional hierarchical management methods become inappropriate because distributed working arrangements make observing behaviour more difficult or inappropriate. The command-and-control model of organisation is untenable in this era of rapid change and heightened complexity. (Lissack & Roos, 2000) Further complicating managers roles is a growing trend in outsourcing. The rapid dissemination of the Internet and liberalization of emerging market economies created the conditions for a major burst of outsourcing in the 1990s, particularly in non-manufacturing sectors, such as telecommunications, retail trade, and finance (including banking and insurance). While the actual rate of increase in outsourcing is very difficult to determine research demonstrates that it seems safe to tentatively conclude that the outsourcing of intermediate goods and business services is one of the most rapidly growing components of international trade. (Grossman & Helpman, 2005) According to Grossman & Helpman (2005) outsourcing means finding a partner with which a firm can establish a bilateral relationship and having the partner undertake relationship-specific investments so that it becomes able to produce goods or services that fit the firm s particular needs. Often, but not always, the bilateral relationship is governed by a contract, but even in those cases the legal document does not ensure that the partners will conduct the promised activities with the same care that the firm would use itself if it were to perform the tasks. 8

9 The goal of most organizations that engage in outsourcing and offshoring is to enhance their competitiveness by achieving a higher return through less capital commitment and the increasing ability to adjust quickly to a changing environment. (Ghosheh & Messenger, 2009) However, a recent survey by PWC (Price Waterhouse Coopers, 2009) demonstrates that businesses are outsourcing for a variety of strategic reasons beyond cost savings. Factors that support business growth, like access to talent and capabilities and maximising business model flexibility are key drivers. For example, 70% of respondents said access to talent is an important or very important reason why they outsource. In addition to cost advantages the ongoing outsourcing of business services jobs to South Africa among others has also been attributed to the widespread acceptance of English as a medium of business communication, a common accounting and legal system, the time differential determined by geographic location that allows for overnight turnaround, and the steady supply of technically trained graduates. (Bardhan & Kroll, 2003) The idea of hiring outside non-permanent employees is nothing new in business; however a relatively new trend that is emerging is a rapid growth in the use of electronically connected freelancers. These electronically connected freelancers (elancers) join together into fluid and temporary networks to produce and sell goods and services. When the job is done - after a day, a month, a year - the network dissolves and its members become independent agents again, circulating through the economy, seeking the next assignment. (Malone & Laubacher, 1998) In response to the demand for freelance workers many websites have emerged to facilitate the trade of elance services. The most common type of market mechanism for e-lancing, is the online reverse auction, where the buyers post projects such as software development and website design as a form of RFP (Request for Proposal), and then elancers bid for them. Amongst the largest are: and According to a survey by the Human Capital Institute, a global association of talent management groups, the average portion of work outsourced has grown from 6 percent to more than 27 percent since Outsourcing to elancers is growing at a furious rate. odesk reported an 82% YOY increase in elancer earnings in their July 2010 Online Employment Situation Summary ( It is clear therefore that outsourcing of electronic freelance work is becoming ever more prevalent and that the effective management of the engagement with the temporarily contracted 9

10 electronic freelance worker is an increasing priority to businesses. In addition, while there are clear strategic advantages to such outsourcing it introduces new complexities with which the managers of the activity must grapple. The purpose of this study is to explore what factors must be managed well in order to have a successful practice model for outsourced electronic freelance work. According to Schiller & Mandviwalla (2007) who reviewed 45 research articles relating to virtual teamwork there is no dominant theory in virtual team research and the foundations and theoretical development research in the area remain unclear. The same authors state that researchers have recommended that future virtual team research should include the development of new theories but that there has been little progress in this regard. Bestseller publications, such as Free Agent Nation (Pink, 2001) and The 4-hour Workweek (Ferris, 2007) have done much to further popularise freelancing amongst workers and offer much advice to those seeking or forced into more flexible work arrangements. However, little has been published relating to the management of such workers. Research relating to e-lancing is embryonic and has been primarily focussed on cost benefit assessments in this relatively new electronic market environment. The purpose of this research is to explore the employer-elancer engagement in outsourced electronic projects in order to identify the key variables that influence the likelihood of successful delivery of the project by the elancer and how they might be best managed by the employer. The subjects of inquiry include individuals actively participating in electronic freelance engagements as employers of elancers, elance practitioners, or as intermediaries facilitating the elance engagements. The individuals are primarily active in two traditional freelance fields; information technology and journalism. The diversity of the subjects offers the opportunity to learn from their broad range of experiences, both positive and negative. With this project, the researcher offers a contribution to academia in the form of theory development in accordance with Schiller & Mandviwalla s recommendations. The significance of the proposed research to practitioners, in this case those managers responsible for elancer performance, is that in the absence of alternatives it offers an initial practice model that might help increase the likelihood of success of projects outsourced to elancers. 10

11 1.2. Research Questions and Scope Questions: As detailed in the later section on research methodology, the research approach made use of Grounded Theory. Whilst the Grounded Theory approach is outlined in that section its use has implications with respect to the research questions and scope that are worth noting at this stage. What most differentiates grounded theory from much other research is that it is explicitly emergent. It does not test a hypothesis. It sets out to find what theory accounts for the research situation as it is. It is responsive to the situation in which the research is done. (Dick, 2005) Because the study focus may change depending on the data generated, the original question merely lends focus to the study. A truly accurate research question is impossible to ask before beginning any grounded theory study (Hutchinson, 1986). The research question in a grounded theory investigation identifies the phenomenon to be studied. More specifically, the question lends focus and clarity about what the phenomenon of interest is. (Strauss & Corbin, 1990) Recognising that the research questions required for a successful Grounded Theory approach should allow the flexibility and freedom to explore the phenomenon under investigation in depth, the following overarching question was used: What factors must be managed well in order to ensure the success of outsourced electronic freelance work? The sub-questions that are aligned to the main question and that emerged over the course of the research are: What outcomes define the success of work outsourced to elancers? What are the key factors affecting the success of work distributed to elancers? How can these factors be managed well in order to have a positive effect on the outcome? 11

12 Scope: The research area is broad, ambiguous and often difficult to interpret. Time, cost and access factors have limited the degree to which theoretical saturation could be achieved and therefore the scope of the research. In particular all research subjects were geographically located in South Africa. Whilst some have had experience in working with electronic freelancers abroad their experiences may be limited and reflect differently to those elancers from other more developed elance markets. The purpose of the research was not to develop a grand theory but rather a middle-range theory. Middle-range theories, unlike grand ones, operate in a limited domain. They attempt to understand and explain a limited aspect of social life. (Bryman & Bell, 2003) In this case, the research is limited specifically to electronic freelance engagements and does not extend to permanent virtual employee engagements or to temporary engagements where the employee is physically present Research Assumptions The research assumptions stemmed firstly from the phenomenon explored and secondly from the epistemological framework employed. The phenomenon explored was that of the interaction between elance workers and those managers responsible for their output. The research was premised on the assumption that there would be sufficient elancers and managers responsible for elancers who would be willing to participate in the research. As detailed later in the report, nine participants volunteered their time and input to the research. Whilst it is not claimed that theoretical saturation has been achieved the researcher believes that the sample has offered sufficient depth of insight to generate a reliable medium-level theory. The epistemological framework used is that of qualitative research and a grounded theory approach as outlined by Strauss & Corbin (1998). Strauss & Corbin state that Because emergence is the foundation of our approach to theory building, a researcher cannot enter an investigation with a list of preconceived concepts, a guiding theoretical framework, or a well thought out design (1998, p34) However it was noted that due to the nature of the proposal commitments and the researchers background, as outlined in the later section on the role of the researcher, some preconceived 12

13 concepts may have existed in the mind of the researcher. Through a reflexive approach the researcher has made every attempt to expose these preconceptions to the reader in order that the reader might make an informed judgement on the credibility of the research Research Ethics Ethical issues in business research revolve around such issues as the following: How should we treat the people on whom we conduct research? Are there activities in which we should or should not engage in our relations with them? (Bryman & Bell, 2003, p. 127) Ethical considerations for this research are limited to confidentiality and workplace obstruction. Confidentiality has been addressed by ensuring that all data gathered by means of interviews cannot be linked to the individual participant. Aliases have been used in place of names where it has been necessary to represent the views of participants. Interview responses have been treated as confidential and no names have been linked to the specific responses. All interviewees were informed and agreed verbally to the interviews being recorded. All interviews have been transcribed in such a manner as to attempt to capture the conversation as accurately as possible. Every attempt was made to limit the obstruction of participant s normal workplace activity. All interviews were conducted telephonically or outside of the participant s workplace. Appropriate consideration has been given to referencing both in terms of the literature review and to interview responses. An application for ethical clearance for research was submitted to the University of Cape Town (UCT) Graduate School of Business (GSB). This application was approved as being in accordance with the GSB s Ethics in Research Policy guidelines. 13

14 2. Literature Review 2.1. The role of the literature review in grounded theory There is much controversy over the role and relevance of the literature review in a grounded theory approach, for two reasons in particular. Firstly, it is impossible to know prior to the investigation what the salient problems will be or what theoretical concepts will emerge. Also, the researcher does not want to be so steeped in the literature that he or she is constrained and even stifled by it. (Strauss & Corbin, 1998, p. 49) According to Charmaz (2006) the classic grounded theorists Glaser and Strauss advocate delaying the literature review until after completing the analysis in order to prevent the researcher from seeing the data through the lens of earlier ideas, often known as received theory. Charmaz points out that Glaser s (1992, 1998) position on prior knowledge is ambiguous as he speaks to the importance of possessing prior knowledge in his discussion on setting theoretical codes. Nonetheless, Glaser (1978) advocates reading widely while avoiding the literature most closely related to what you are researching, which provides the models to help make sense of the data. Dick (2005) suggests that literature should be treated in the same way as all other data and should not be given a position of privilege. Rather, he goes on, it should be treated as emergent data and accessed progressively as it becomes relevant. Strauss and Corbin (1998), describe how technical literature can be used in an emergent study drawing to attention the benefits of literature in making comparisons between the emergent theory and others, the idea that literature can serve to enhance sensitivity to subtle nuances within the data, that published descriptive literature can serve as a source of data, and that literature can be used as a source that stimulates questions and guides sampling. Specifically, Strauss and Corbin (1998, p. 51) suggest that at the beginning of the project the researcher should turn to literature to formulate questions that act as a stepping off point during initial observations and interviews. 14

15 Considering the inductive nature of the research the remainder of the literature review seeks to add more depth to the description of the research problem area and insight into the motivations behind the research questions Discussion Technology enabled business trends Bughin, Chui, & Manyika (2007) describe 10 technology enabled business trends that they claim are profoundly reshaping business strategy. Advancing technologies and their swift adoption, they say, are upending traditional business models. A number of the trends identified by Bughin et al add context to the business imperatives related to the usage of elance workers. Firstly, they explain that distributed co-creation is moving into the mainstream, by which they mean that the ability to organize communities of Web participants to develop, market, and support products and services has moved from the margins of business practice into the mainstream. Secondly, they suggest that more and more companies are building and managing flexible networks that extend across internal and often even external borders. The importance of which is that the more porous, networked organizations of the future will need to organize work around critical tasks rather than moulding it to constraints imposed by corporate structures. They identify that the number of people who undertake knowledge work has grown much more quickly than the number of production or transactions workers and that because they are typically paid more than others increasing their productivity is critical. The result is that there is broad interest in collaboration technologies that promise to improve these workers efficiency and effectiveness. In addition they point out that software as a service (SaaS), which enables organizations to access services such as customer relationship management, is growing at a 17 percent annual rate. Finally they note that the adoption of technology is a global phenomenon, and the intensity of its usage is particularly impressive in emerging markets. 15

16 The overarching theme from the trends identified by Bughin et al is that businesses are recognising the value and importance of managing more flexible networks of participants in creation. Aside from describing the trends they go on to suggest that organisational structure will need to become more flexible in order to accommodate these changes and that businesses are looking to technological solutions to assist in increasing this flexibility. Bughin et al s description of technology enabled business trends are congruent with the views of the authors of most literature reviewed. According to Goldstein (2003), industry analysts have declared the death of distance and information technologies can now deliver computing power that makes it possible for people to work together seamlessly, wherever they are in the world as if they were in adjacent offices. Qureshi & Vogel (2005) suggest that emergence and widespread use of collaborative technologies for distributed project management has opened up a myriad of opportunities for business. Harrison (2006) concludes that it is widely recognised within the literature of vocational psychology and career counselling that shifts in post-industrial society, the global economy, and information technology have altered the world of work. Malone (2004) forecasts that the fundamental changes in the economics of communication and decision making will continue working their way through the economy, company after company, industry after industry, for many, many years to come Impact of emergent business trends on management practices As Bughin et al (2007) suggested advancing technologies and their swift adoption are upending traditional business models. Recognising the impact of these emergent technologies academics have sought to explain the challenges that they present and go on to offer suggestions as to how managers need to respond. Malone (2004) claims that most managers have models of management, deep within their minds, based on the classic, centralised philosophy of command and control. He goes on to suggest that it order to be successful in the world that we are entering a new set of mental models, that will need to encompass a much wider range of possibilities, will be required. Lissack & Roos (2000) are in agreement and state that the command-and-control model of organisation is untenable in this era of rapid change and heightened complexity. 16

17 There is a sense that as people and organizations do business with each other over the web, the need for collaborative technologies, processes and structures will become necessary. (Qureshi & Vogel, 2005) Malone (2004) states that managers need to shift their thinking from command-andcontrol to coordinate-and-cultivate. He explains that managers can find innovative ways to coordinate business activities by looking deeply at the structure of the organisation and that good cultivation involves finding the right balance between controlling and letting go Managing virtual teams A fast growing trend in today s global economy is the increased prevalence of virtual teams individuals collaborating in geographically dispersed work teams who may reside in different time zones and countries. (Horwitz, Bravington, & Silvis, 2006) It is this trend towards decentralisation that the literature recognises and it is the management of virtual teams that has attracted much attention from researchers. In assessing the literature on virtual teams the researcher initially took the approach of seeking an overarching model that might be applied to the proposed research on elance workers. However, a review of Schiller & Mandviwalla (2007) demonstrates that the foundations and theoretical development of virtual team research remain unclear. These authors reviewed 45 research articles relating to virtual teamwork and concluded that there is no dominant theory in virtual team research. The same authors state that researchers have recommended that future virtual team research should include the development of new theories but that there has been little progress in this regard. Research on virtual teams tends to focus on behavioural and communications issues, decision making, mechanisms of co-ordination and social and output controls. (Horwitz, Bravington, & Silvis, 2006) Horwitz et al (2006), sought to identify enabling and disabling factors for virtual team effectiveness by assessing the perceptions of both managers and team members with respect to effectiveness. Generally respondents agreed that their teams performed effectively and the researchers were therefore unable to draw comparisons between effective and ineffective teams. The research sought to determine the relative importance of the following factors: team forming, alignment, control, communication and relationships, leadership type and enabling technologies. Findings were based on the responses related to the requirements for a successful start to virtual 17

18 teams. Clarifying objectives, roles and responsibilities was the main contributing factor and relates closely to management responsibilities in team forming, alignment and communication. The second most significant contribution was the importance of face-to-face meetings between team members and managerial leadership. Both of these findings are interesting in the context of the research report in that elancers, are less likely to benefit from either than permanently contracted virtual team members. Helms & Raiszadeh (2002) point out that many companies are exploring many different degrees of virtuality or remote working. They suggest that an important role of the manager is determining when, where and for whom remote work is appropriate. They explore the challenges for managers in setting up virtual offices and conclude that more than just technology is required in order for virtual offices to be effective. They suggest radical new approaches to evaluating, educating, organising and informing workers are required. Staples, Hulland, & Higgins (1999) suggest that their research offered a first step in investigating how virtual organizations can manage remote (virtually connected) employees effectively. The research used self-efficacy theory to build a model that predicts relationships between antecedents to employees' remote work self-efficacy assessments and their behavioural and attitudinal consequences. The results indicated that remote employees' self-efficacy assessments play a critical role in influencing their remote work effectiveness, perceived productivity, job satisfaction, and ability to cope. Furthermore, strong relationships were observed between employees' remote work self-efficacy judgments and several antecedents, including remote work experience and training, best practices modelling by management, computer anxiety, and IT capabilities. Staples et al suggest that because many of these antecedents can be controlled managerially, these findings suggest important ways in which a remote employee's work performance can be enhanced The rise of the elance economy Malone & Laubacher (1998) draw attention to business trends that they refer to as the rise of the freelance economy. Malone, in fact, coined the term elancer. He suggests that these electronically connected freelancers (elancers) join together into fluid and temporary networks to produce and sell goods and services. When the job is done - after a day, a month, a year - the network dissolves and its members become independent agents again, circulating through the 18

19 economy, seeking the next assignment. The article suggests that technology is leading to a disintegration of the large corporation, explaining that People are leaving big companies and either joining much smaller companies or going into business for themselves as contract workers, freelancers, or temps. It states that even within large corporations, traditional command-and-control management is becoming less common and suggests that the primary role of the organisation in the future is going to be to establish rules, standards and cultures for networked organisations Conclusion Due to the emergent nature of the research methodology chosen and the strong guidelines within the methodological literature that suggest that in order to maintain an objective perspective the researcher should avoid literature close to the research phenomenon, the literature review has purposefully focussed on the research area more broadly. It has sought to add context to why the phenomenon of the elancer engagement with their manager has been explored. The literature review has brought to attention that emerging technological trends are having a significant impact on the nature of work which is cause for businesses to seek to either exploit the opportunities that they present or seek solutions to the challenges that they present. It is evident that these trends are having a significant effect on the nature of the management model traditionally adopted. This is particularly the case with respect to the management practices for virtual teams. Recently, as a result of emerging technologies and spurred on by the recession, there has been a significant increase in the number of elance worker engagements. This type of engagement is expected to increase still further in future as cost conscious employers seek to capitalise on the benefits of such activity. The literature review has further highlighted that there is a lack of an overarching management practice model that can be employed in elance engagements. Theory development in the field of virtual teamwork has been slow and researchers within the field do encourage the development of additional theories. 19

20 3. Research Methodology 3.1. Research Approach and Strategy In developing the conceptual practice model as the outcome of this research an inductive approach was adopted. Bryman & Bell explain the approach by stating that the process of induction involves drawing generalizable inferences out of observations. (Bryman & Bell, 2003, p.14) In contrast to the deductive approach whereby the researcher, on the basis of what is known about a particular domain and of theoretical considerations in relation to that domain, deduces a hypothesis (or hypotheses) that must then be subjected to scrutiny (Bryman & Bell, 2003, p.11) with and inductive stance theory is the outcome of research. (Bryman & Bell, 2003, p.14) A qualitative strategy has been employed for this research as supported by Leedy & Ormrod (2010, pg135) who say that when little information exists on a topic, when variables are unknown, when a relevant theory base is inadequate or missing, a qualitative study can help define what is important that is, what needs to be studied. Leedy & Ormrod (2010, p. 136) further explain that a qualitative research approach can be used for the purpose of interpretation in order to enable the researcher to gain new insights about a particular phenomenon, develop new concepts or theoretical perspectives about the phenomenon, and/or discover the problems that exist within the phenomenon. Considering that the phenomenon explored is that of the interaction between elance workers and those managers responsible for their output and the fact that a relevant theory base, as detailed in the literature review, is inadequate to describe the phenomenon, the qualitative approach is most relevant. According to the Emerald Research Zone (Emerald, 2010a) qualitative research is best suited to the types of questions which require exploration of data in depth over a not particularly large sample. One of the strengths of qualitative research is that it allows the researcher to gain an in-depth perspective, and to grapple with complexity and ambiguity. This is what makes it suitable to analysis of particular groups or situations, such as the employer-elancer interaction in question. 20

21 Table 1 adapted from the Emerald Research Guides summarises some of the key differences between quantitative and qualitative research methods in order to support the research approach selected. (Emerald, 2010b) Quantitative Methods Typically use numbers Are deductive in nature The researcher acts as an objective, impartial observer Focuses on root cause and effect Requires Hypothesis Qualitative Methods Typically use words Are inductive in nature The researcher participates and is involved in the research Focuses on the understanding of phenomena in their social context Does not require Hypotheses Copyright TABLE 1: COMPARISON OF QUALITATIVE & QUANTITATIVE RESEARCH UCT METHODS Philosophical Considerations The epistemological position of the research can be described as interpretivist where the stress is on understanding the social world through an examination of the interpretation of that world by its participants. (Bryman & Bell, 2003) Qualitative research operates from an epistemological perspective that acknowledges the essential difference between the social world and the scientific one, recognizing that people do not always observe the laws of nature, but rather comprises a whole range of feelings, observations, and attitudes which are essentially subjective in nature. (Emerald, 2010a) Qualitative research operates from an ontological position described as constructionist, which implies that social properties are outcomes of the interactions between individuals, rather than phenomena out there and separate from those involved in its construction. (Bryman & Bell, 2003, p. 402) 21

22 Constructionism is an ontological position, often referred to as constructivism, which asserts that social phenomena and their meanings are continually being accomplished by social actors. It implies that social phenomena and categories are not only produced through social interaction but that they are in a constant state of revision. (Bryman & Bell, 2003) Assumptions and Issues The primary assumption introduced by the choice of qualitative research relates to the methodology which relies on the researcher s ability to interpret and make sense of what he or she sees is critical for understanding any social phenomenon. In this respect, qualitative researchers believe that there isn t necessarily a single, ultimate truth to be discovered but instead that there may be multiple perspectives held by different individuals, with each of these perspectives having equal validity, or truth. (Leedy & Ormrod, 2010) The primary issue regarding the research relates to the researcher s values and the potential for bias. Values reflect either the personal beliefs or the researcher and according to Bryman & Bell there is growing recognition that it is not feasible to keep the values that a researcher holds totally in check. (Bryman & Bell, 2003, p.30) The researcher accepts that research cannot be value free but made every attempt to ensure that there was no major incursion into of values into the research process. In addition, the researcher offers in table 2 a list of the potential biases that may have arisen at any of the points in the research process (Bryman & Bell, 2003, p.30) as a result of the researcher s values. The researcher offers this table in order to adhere to a reflexive approach which will assist the reader in understanding the role of the researcher in forming conclusions. According to Bryman & Bell there has been growing evidence of reflexivity in organisational research in which the researcher is viewed as implicated in the construction of knowledge through the stance that he or she assumes in relation to the observed and through the ways in which an account it transmitted in the form of text and this understanding entails an acknowledgement of the implications and significance of the researcher s choices as both observer and writer. (Bryman & Bell, 2003, p.712) 22

23 Research Process Researcher s value Implication Choice of research area The researcher was attracted to the research area as a result of an aspiration to launch an online reverse auction website for freelancers. The researcher therefore has a personal interest in the result of the exploratory findings. The researcher also has an extensive understanding of the current online elance marketplaces having completed a competitive analysis as part of the business plan formation. Formulation of research question Having developed a business plan the researcher recognised the need to better understand the employer-elancer dynamic before entering the design The researcher harbours the preconceived belief that it is possible to effectively manage elance engagements phase. Choice of method No known effect None Formulation of research No known effect None design and data collection techniques Implementation of data collection The researcher s prior knowledge on the area and belief that it is possible to manage elance engagements may have Whilst the interviewer may every effort to remain objective over the course of interviews, it is accepted affected the line of questioning in interviews. that preconceived beliefs may have influenced the interviewer s prompts and responses to interviewees. Full transcriptions have been provided to allow the reader to form a view in this regard. Analysis of data The researcher has some prior Coding of interview transcriptions knowledge of the research area may have been influenced by prior knowledge Interpretation of data The researcher has some prior Categorisation and relationships knowledge of the research area between variables could be affected Conclusions The preconception that a model can be The model developed may be successfully developed existed influenced by preconception TABLE 2: POTENTIAL BIASES & IMPLICATIONS 23

24 3.2. Research Design, Data Collection Methods and Research Instruments Research Design Research design relates to the different frameworks for the collection and analysis of data. The research design employed was guided by Bryman & Bell s framework for qualitative research making use of the grounded theory methodology and broadly followed a three-phase approach. (Bryman & Bell, 2003, p.406) Literature review to contextualise research and illicit key themes relating to freelance engagements 9 Semi-structured interviews across a cross-sectional spectrum of those engaged in freelance activity Analysis and interpretation of data making use of grounded theory approach supported by systems thinking FIGURE 1: THREE PHASES OF RESEARCH DESIGN According to Emerald (2010c) the popularity of grounded theory in particular and of qualitative methods in general, is part of a trend away from total reliance on positivism towards a more interpretive view. Part of the attraction of grounded theory is that in offering a structured approach to the collecting and coding of data, as well as rigorous theory building, it can refute the claim that qualitative research lacks rigour. The main purpose of using the grounded theory approach is to explore social processes with the goal of developing theory. Also underlying this approach to qualitative research is the 24

25 assumption that all of the concepts pertaining to a given phenomenon have not yet been identified, at least not in this population or place; or if so, then the relationships between the concepts are poorly understood or conceptually undeveloped. (Strauss & Corbin, 1998) Alternatives, as outlined by Bryman & Bell (2003, p.71), include experimental design, longitudinal design, case study design, and comparative design. The experimental design would require establishing an experimental group of subjects to participate that could then be compared against a control group. This approach would not be feasible due to both practical reasons and the difficulties that would be encountered in attempting to maintain experimental validity. The longitudinal design would require ethnographic research over a long period, with qualitative interviewing on more than one occasion. This design is rejected due to the relatively short timeframe afforded to the researcher. It should be noted that some longitudinal data will likely be collected in the form of qualitative content analysis of documents relating to different time periods. Case study and comparative designs are rejected as it is believed that a broader cross-section of data will be required to more fully form a framework for the phenomenon in question. According to Emerald (2010c) grounded theory is often used as a general term for qualitative data analysis, or as a research technique, whereas it is more properly a methodology. Strauss & Corbin state that Grounded theory is a general methodology for developing theory that is grounded in data systematically gathered and analyzed. Theory evolves during actual research, and it does this through continuous interplay between analysis and data collection (Strauss & Corbin, 1994, p. 273) Schools of Grounded Theory According to Emerald (2010c) it is not possible to understand grounded theory without knowing how it developed, in particular the rift that emerged between its two original protagonists Glaser and Strauss. The rift between Glaser and Strauss emerged when the latter collaborated with a nursing researcher, Juliet Corbin, to produce a more clearly defined system. Their approach to data was much more structured and codified, while that of Glaser insists on the emergent nature of theory 25

26 development in data analysis and coding. The table below is adapted from Emerald (2010c) and provides a summary of the key differences between the two schools of thought. Emergence and researcher distance Glaserian school Everything emerges in a grounded theory nothing is forced or preconceived. Researchers are distant and unknowing as they approach the data, with only the world under study shaping the theorizing Straussian school 1987, 1990, 1998: the researcher adopts a more active and provocative influence over the data, using cumulative knowledge and experience to enhance sensitivity. Logical elaboration and preconceived tools and techniques can be employed to shape the theorizing Development of theory The goal is to generate a conceptual theory that accounts for a pattern of behaviour which is relevant and problematic for those involved 1987: conceptually dense, integrated theory development is the only legitimate outcome. 1990, 1998: grounded theory can also be used for developing non-theory (conceptual ordering or elaborate description) Specific, nonoptional procedures Core category The method involves clear, extensive, rigorous procedures and a set of fundamental processes that must be followed The theoretical formulation that represents the continual resolving of the main concern of the participants 1987: grounded theory encompasses a number of distinct processes that must be carried out. 1990, 1998: researchers can cherry-pick from a smorgasbord table, from which they can choose, reject or ignore 1987, 1990, 1998: the main theme of a predetermined phenomenon which integrates all the other categories and explains the various actions and interactions that are aimed at 26

27 Glaserian school Straussian school management or handling the relevant event, happening or incident Coding Open, selective and theoretical Open, axial and selective, but with the following variations: 1987: selective coding is an "emergent" process based on continuous use of memo sorting and integrative diagrams. 1990: selective coding employs the "forcing" mechanism of the coding paradigm. Copyright 1998: paradigm UCT model dropped and an emergent process based on memo sorting is again stressed TABLE 3: GLASERIAN VERSUS STRAUSSIAN SCHOOLS OF GROUNDED THEORY Grounded Theory Outline The grounded theory approach as outlined by Strauss & Corbin (1998) was used in as far as it was possible. The different elements of the method are portrayed in figure 3 as adapted from Bryman & Bell, (2003, p.589) and the process followed by the researcher is detailed thereafter. It should be noted that the process was followed to step 11a and the research has resulted in the development of a substantive theory. Step 12 was not completed as the purpose of the research has not been to develop a formal theory. 27

28 1 Research Question 2 Theoretical Sampling 3 Collect Data 4 Coding 4a Concepts 5 Constant Comparison 5a Categories 6 Saturate Categories 7 Explore Category Relationships 7a Hypotheses 8 Theoretical Sampling 9 Collect Data 10 Saturate Categories 11 Test Hypotheses 11a Substantive Theory 12 Collection and Analysis of Data in Other Settings 12a Formal Theory FIGURE 2: PROCESSES & OUTCOMES IN GROUNDED THEORY STEP 1: The literature review was conducted in order to contextualise the research and illicit the broad themes relating to the management of elance engagements that might be explored. Based on the literature review an initial research question was developed as discussed in section

29 STEP 2: Relevant people and/or incidents were theoretically sampled. The researcher identified 9 willing participants all of whom are active in elance engagements either in their capacity as elancers, employers of elancers or intermediaries. STEP 3: Relevant data was collected through semi-structured interviews as detailed in section STEP 4: Data was coded, which lead at the level of open coding to 4a Concepts. There was constant movement back and forth between the first four steps, as the early coding suggested the need for new data, which resulted in the need for the researcher to sample theoretically from the interview transcripts repeatedly. STEP 5: Through a constant comparison of indicators and concepts categories were generated 5b. STEP 6: Categories were saturated during the coding process and an affinity diagram was produced in order to demonstrate the support of the categorisation. STEP 7: Relationships between categories were explored in such a way that hypotheses emerge 7a. This was achieved through the development of an inter-relationship diagraph. STEP 8&9: Further data are collected via theoretical sampling. At this point the researcher turned to further literature and documentation. STEP 10: The collection of data is likely to be governed by the theoretical saturation principle. The additional literature and documentation was sought in order to support or refute the systemic scorecard developed STEP 11: The data is tested against the emerging hypotheses leading to the substantive theory 11a. Following step 10 and with the support of additional documentation the researcher developed a causal loop diagram which was then used in the development of the final framework. STEP 12: Is relatively unusual in grounded theory because researchers typically concentrate on a certain setting, in this case that of the management of elance engagements and as such the researcher did not attempt to develop a formal theory Data Collection Methods 29

30 A wide variety of data was collected and assessed, but the primary nature the data was crosssectional in nature and acquired by means of semi-structured interviews with an appropriate theoretical sample, detailed in section 3.3, of participants in elance engagements. A cross-sectional design entails the collection of data on more than one case and at a single point in time in order to collect a body of quantitative and quantifiable data in connection with two or more variables, which are then examined to detect patterns of association. (Bryman & Bell, 2003, p.55) Common sources for data in grounded theory research include interviews, observational field notes, documents, journals, participant observation, literature and anything else of potential relevance to the research question may also be used. The only restriction is that the data collected must include the perspectives and voices of the people being studied. (Leedy & Ormrod, 2010, p. 142) This research made use of the following: Semi-structured interviews Bryman and Bell (2007, p. 474) explain that in a semi-structured interview the researcher has a list of fairly specific topics to be covered, often referred to as an interview guide, but the interviewee has a great deal of leeway in how to reply. Questions may not follow on exactly in the way outlined on the schedule. Questions that are not included in the guide may be asked as the interviewer picks up on things said by the interviewees. But, by and large, all the questions will be asked and a similar wording will be used from interviewee to interviewee. Emerald (2010c) suggests that when using grounded theory the questioning technique in interviews should be as open as possible, to allow for the participant s experience to emerge undiluted. Semi-structured interviews and provided a flexible interview process where the emphasis was on how the interviewee framed and understood issues and events. The interviews allowed the interviewees to share their views on what was important in explaining and understanding events, patterns and forms of behaviour. 30

31 Documents Documents provided a wealth of information about the topic of study. They were most useful when used as supporting evidence for other sources of data. Sources of written data in this research: online discussion blog entries, documents on websites, examples of job specifications, freelancer portfolios, online feedback reports, articles, journal articles, and books. All documents used in developing research findings are appropriately referenced within section 4 of this report Data Collection Instruments Copyright Interview guide UCT The researcher developed an interview guide in accordance with the process suggested by Bryman & Bell (2007, p. 485) and illustrated in the diagram below: FIGURE 3: PROCESS FOR FORMULATION OF INTERVIEW GUIDES 31

32 The interview guide developed is presented in APPENDIX 1 Interview Pilot Guide Interview recording and transcription According to Bryman & Bell (2003) qualitative researchers are frequently interested not just in what people say but in the way that they say it and if this is to be fully woven into an analysis it is necessary for a complete account of the series of exchanges in an interview to be available. All interviews were conducted telephonically and digitally recorded. Furthermore, all interviews conducted were professionally transcribed. Full copies of the interview transcriptions are available in the appendices to this report Conceptual Models According to Charmaz (2006) the classic grounded theorists Glaser and Strauss advocate delaying the literature review until after completing the analysis in order to prevent the researcher from seeing the data through the lens of earlier ideas, often known as received theory. Leedy & Ormrod (2010) are explicit in advising that literature should not be used to provide concepts or theories to a grounded theory study, but should only be used for rationale and context as has been the approach. Indeed, two central features of grounded theory are that it is concerned with the development of theory out of data and that the approach is iterative, meaning that data collection and analysis proceed in tandem, repeatedly referring back to each other. (Bryman & Bell, 2003) With this in mind the researcher made every attempt to avoid conceptual frameworks that might influence his objectivity in the study. Folllowing the development of the substantive theory by the researcher the researcher sought conceptual frameworks against which the theory could be compared. All conceptual models drawn on for the purpose of comparison appropriately are referenced in section 4 of this report. 32

33 3.3. Sampling The process used to collect data in the grounded theory method is called theoretical sampling. Theoretical sampling is the process of data collection for generating theory whereby the analyst jointly collects, codes, and analyses his data and decides what to collect next and where to find them, in order to develop the theory as it emerges.(bryman & Bell, 2003, p. 459) Dick (2005) states that just as it is impossible to finalize the research question before a grounded theory investigation, it is equally impossible to know how many participants will be involved. The sample size is determined by the data generated and their analysis. As Leedy & Ormrod (2010, p.142) put it the only restriction is that the data collected must include the perspectives and voices of the people being studied. For the purpose of this research the participants include active elancers, employers of elancers and intermediaries. The participants were acquired through a process of theoretical sampling, either by reference to the researcher or through direct approach from the researcher. It seeking participants the researcher sought the assistance of fellow MBA students and asked if they knew anyone engaged in the online freelance industry that might be prepared to contribute to the research. 6 participants were referred, contacted by the researcher and agreed to participate. In jointly coding and collecting data the researcher identified 3 specific individuals who had the potential to contribute to theory development most appropriately. These individuals were: the developer of the website ; the director of the South African Freelance Association (SAFREA); and the developer and managing director of the website After being approached by the researcher all individuals willingly contributed in the form of recorded telephonic interview conversations. The sample size is determined to be sufficient and consistent with the theoretical sampling approach advocated by Leedy & Ormrod (2010) who explain that sampling in qualitative research is typically purposeful in that the researcher chooses data most apt to help them develop a theory of the process in question Data Analysis Methods 33

34 As has been regularly stated throughout this report, the research methodology employed was that of grounded theory. Grounded theory is a general methodology for developing theory that is grounded in data systematically gathered and analyzed. Theory evolves during actual research, and it does this through continuous interplay between analysis and data collection (Strauss & Corbin, 1994, p. 273) Section of this report outlined the grounded theory methodology and drew attention to the interplay between data analysis and data gathering. It also drew to attention the process of analysis that the researcher followed. The remainder of this section seeks to add further clarity to the analytical techniques employed Coding in Grounded Theory According to Bryman & Bell (2003), Strauss and Corbin distinguish between three types of coding practice: Open coding is the process of breaking down, examining, comparing, conceptualising and categorising data Axial coding is a set of procedures whereby data are put back together in new ways after open coding by making connections between categories. Selective coding is the procedure of selecting the core category, systematically relating it to other categories, validating those relationships, and filling in categories that need further refinement and development. The core category is the central issue or focus around which all other categories are integrated Open Coding Open coding was conducted from all 9 interview transcriptions. 34

35 The software tool Atlas Ti was employed. Interview transcriptions were loaded into the Hermeneutic Unit of Atlas Ti and the interviews were sequentially reviewed and appropriate quotations were allocated codes Axial Coding Following the open coding process the researcher sought to condense the data into more meaningful categories. Each quotation was revisited and checked for validity against the code assigned. In addition categories of codes were developed using the code family functionality within Atlas Ti Selective Coding The interrelationship digraph, systemic scorecard, and causal loop diagram (Pegasus Communications, 2010) were used iteratively and extensively during the selective coding process to determine whether or not the theory developed explained the emerging hypotheses. Once the causal loop diagram sufficiently reflected the concepts and mechanisms involved in the effective management of elance projects it was finalised and the researcher turned to existing literature in an attempt to support or refute the findings. Finally, a practice model was developed on the basis of the research findings Research Criteria The trustworthiness of qualitative research is made up of four criteria: credibility, transferability, dependability and confirmability. (Bryman & Bell, 2003) The establishment of credibility of findings entails both ensuring that research is carried out according to canons of good practice and submitting research findings to the members of the social world who were studied for confirmation that the investigator has correctly understood that social 35

36 world. (Bryman & Bell, 2003) The researcher has undertaken to perform respondent validation in order to seek corroboration or otherwise of the account that the researcher arrives at and in this was enhance the credibility of the research. In this regard the full copies of interview transcripts were sent to each of the interviewees along with a copy of the causal loop diagram and practice model developed. To date no issues have been raised by respondents. Transferability relates to whether or not the research findings will hold in some other context, or in the same context at some other time. (Bryman & Bell, 2003) The researcher has undertaken to provide a thick description of the context and culture in which the research was undertaken in order that the reader might make a judgement as to the transferability of the findings. The research analysis concludes with a comparison of results against a model developed for distributed work teams. In this was transferability of the results is considered. Dependability relates to the reliability of the research data, processes, and analysis. The researcher has maintained complete records of all phases of the research process in order to allow a complete audit of the information should one be required. The comparison of results against the model developed for distributed work teams is aimed primarily at deducing the dependability of the results of this report. Confirmability is concerned with ensuring that, while recognising that complete objectivity is impossible in business research, the researcher can be shown to have acted in good faith and has not allowed personal values or theoretical inclinations manifestly to sway the conduct of the researching the findings deriving from it. (Bryman & Bell, 2003) The researcher has made every effort to maintain an objective approach, but accepting that personal values may have had an impact has shared these values in order to make it clear where complete objectivity may have been impeded. 36

37 4. Research Findings, Analysis, and Discussion This chapter presents the findings, analysis and interpretation of the interviews that were conducted. First, due to that fact that the credibility of the research rests largely on the views and experiences of the participants, each of the participants is introduced along with a brief background of their experience in elance engagements. Anonymity has been maintained in keeping with the ethical clearance requirements. Following this the findings of the interviews are presented. The findings are reflected in line with the following selection of guiding interview questions: elancers: Where do you source elance work? Employers: Where do you source elancers to complete your projects? What factors do you feel employers regard as most important when deciding to select a freelance employee to complete a project and why? How important is the project brief and what do you think are the important things to consider when initially communicating project requirements? Do you think the nature of work has a role to play? i.e. Are certain job types more suited to elance engagements? What type of contractual agreements do you enter into? How important is project planning? What practices or tools do you make use of and why? What are the communication tools and practices that you adopt that you feel are most effective and why? How important is the value and nature of remuneration agreements? On completion of the project how would you define success? Are there any other important factors that you believe are important to a successful project outcome? No consideration of documentary sources was made at this juncture however these are considered as part of analysis of the causal loop output from the grounded theory approach to further 37

38 substantiate the relationships identified. The analysis section discusses both the approach and results of the grounded theory analysis that was conducted The Interviewees Table 4 provides an overview of the background of all contributing interviewees in order to demonstrate the cross-sectional nature of the data collected through theoretical sampling. Experience / Industry / Activity elancer / Employer / Intermediary 1 More than 5 years experience as a elance writer, copy elancer editor and proof-reader. Conducts all projects as an elancer. 2 Editor of specialist magazine. Regularly employs Employer freelance photographers and writers to contribute. 3 More than 5 years experience as a elance software developer. Engages in elance activity in addition to full- elancer & Employer time job. Regularly employs elance developers to assist on projects. 4 4 years experience as a elance graphic designer before starting own specialist graphic design company now regularly employs elance designers to contribute elancer & Employer 5 1 ½ years experience as a elance programmer and web elancer designer. 6 Founder of 3 year old web design business that regularly Employer employs elancers to contribute years experience as a freelance writer. Specialises in elancer & Intermediary niche writing for businesses. Currently director of South African Freelance Association (SAFREA). 8 Currently making use of elancers to develop the website Employer & Intermediary Has spent over a year engaged in and researching the industry. 9 Founder and manager of More than 10 years experience as an elancer in advertising and marketing industry both in South Africa and the U.K. elancer & Intermediary TABLE 4: INTERVIEWEE OVERVIEW 38

39 4.2. Research Findings review. All interviews have been fully transcribed and are available in the appendix for the readers The semi-structured nature of the interviews allowed the researcher to be responsive to points that were picked up on over the course of the conversations and further probe into these areas of interest. This, combined with the varying nature of the interviewees experience, means that while by and large all interviewees were asked the guiding questions in very similar formats the conversations followed different paths. In reviewing the interviews the researcher assigned codes to applicable quotations from each of the interviews, in accordance with the open coding methodology outlined earlier. A total of 36 relevant codes were identified. Table 5 lists each of the codes in relation to the guiding questions. Open Code list by Guiding Questions: elancers: Where do you source elance work? / Employers: Where do you source elancers to complete your projects? 1 Word of Mouth 2 Contact Network 3 Job auction sites 4 Freelancer Advertising 5 Job Postings What factors do you feel employers regard as most important when deciding to select a elance employee to complete a project and why? 6 Freelancer Reliability 7 Portfolio 8 Freelancer Expertise How important is the project brief and what do you think are the important things to consider when initially communicating project requirements? 9 Clarity of Brief 10 Discuss Brief 11 Demo 12 Scope Creep Do you think the nature of work has a role to play? i.e. Are certain job types more suited to elance engagements? 13 Creativity 14 Nature of work 39

40 15 Contract Form Open Code list by Guiding Questions: What type of contractual agreements do you enter into? 16 Clarity of Terms How important is project planning? What practices or tools do you make use of and why? 17 Milestones 18 Project Management Tool 19 Employer Flexibility What are the communication tools and practices that you adopt that you feel are most effective and why? 20 Communication 21 Communication Tools 22 Availability How important is the value and nature of remuneration agreements? 23 Remuneration 24 Payment Terms 25 Review On completion of the project how would you define success? 26 Self Review 27 Reiteration 28 Relationship 29 Quality of Delivery Are there any other important factors that you believe are important to a successful project outcome? 30 Risk Management 31 Freelancer workload 32 Physical Presence 33 Community 34 Employer Credibility 35 Self-discipline 36 Work Type Other: TABLE 5: OPEN CODE LIST BY GUIDING QUESTION Findings In this section findings in relation to each code are introduced. Guiding Question: elancers: Where do you source elance work? / Employers: Where do you source elancers to complete your projects? 40

41 Word of Mouth Despite the online nature of elancers work and the rise in online reverse auction websites both freelancers and their employers indicated that many introductions are still made via word of mouth. Word of mouth in this context pertains to referral of an elancer to an employer via personal contact networks. As such, as will be discussed later, this code is closely related to code 2: contact networks. Elancers in particular drew attention to the importance of managing client relationships because of the value of word of mouth referrals. Interviewee 1 (line 103) states: So I just think in my experience, it s been far more worthwhile to engage with clients that I know and who who have given me referrals to other clients. That has been far more beneficial to me and more profitable and certainly more work. Interviewee 1 (line 359) later continues That is really an important thing to build a relationship with your client. For a freelancer, that is really key...and because if you start off a relationship with a client the industry is full, word travels... Copyright Interviewee 3 (line 25) echoes this sentiment but points out I UCT really don t have the time or money to go and market myself as a freelancer, considering that I do have a full time position as well. Interviewee 4 (line 115), as an employer, described word of mouth as particularly important for job types that required the elancer to have a creative license. The interviewee, who has also worked in London, does however point out (line 127) that this particular characteristic may be more prominent in South Africa than elsewhere. Interviewee 7 (line 87) raises and important point from an employer s talent acquisition perspective when he states that...if you do become known in a particular field you do get looked for. People seek you out Contact Network Few employer interviewees cited contact networks as a critical form of sourcing elancers however the overwhelming sentiment from elancers themselves was that maintaining a contact network was critical to securing new jobs. One could argue that if elancers are experiencing this 41

42 trend then the converse must be true and employers are typically award jobs to people referred to them through their contact networks. Interviewee 2 (line 143) offers an indication of how an employer might access their contact network when the interviewee explained just in terms of how we got a hold of these, a lot of the guys were from other sports so I found some guys in other extreme magazines or others from the surfing industry and said, Would you be interested in sort of expanding your portfolio and doing work with us? Most elancers indicated that they belonged to a professional group with an explicit purpose of extending their contact network. These groups include the Professional Editors Group, the South African Freelancers Association (SAFREA), the South African Writers Network, and Freelance Central. Interviewee 7 (line 91) explains the importance of a contact network to the elancer when he says it is: Very much number one. It s the most important form of marketing for a freelancer that I know. Having said that, you need to keep that alive by networking and self marketing. Not in an obvious way by putting adverts out, but by keeping close to your clients, close to your client groups. Staying informed of what s going on in your area of expertise. And using every opportunity to meet people that would be relevant to your work. And that s something you should never stop doing. Interviewee 7 (line 103) points out that in addition to connecting to jobs contact networks also play an important role is delivery in that people are helping each other with technical questions. And which is, it has been very valuable. Interviewee 9 (line 83) explains that freelance central through the content on our site and our newsletters and every now and then we hold events and that sort of things but it s it s something that I m quite passionate about is helping freelancers to do what they love, do it in a practical way, in a professional way which will obviously help them get more work. From this one can deduce that elancers who are members of professional networks are more likely to have received training that might assist them professionally Job Auction Sites The elancer interviewees typically expressed an aversion to online reverse auction websites primarily due to the competition that they face and pressure that they face to drop their rates. The 42

43 employer interviewees who had experience using such sites spoke positively of the experience and the ease with which they could access talent. Interviewee 7 (line143) explains that employers tend to Go from person to person within this site and try and beat their prices down and play them off against each other which the interviewee found counterproductive and as a result terminated their membership. Interviewee 9 (line 117) raises the point that a lot of South Africans are still very wary I think of outsourcing a project to India or Russia or even the U.S. I think the U.S. would probably be quite expensive for them to do it too, but they they really like the fact that some our freelancers you can pick up a phone and you don t have to dial double zero to talk to them... This suggests that despite the online 24/7 nature of the sites and the communications channels that they offer employers value accessibility over the phone and a communication channel not limited by language differences Freelancer Advertising Self-advertising by elancers takes many forms including: personal introductions, personal websites, regular newsletters, and online network membership that include online portfolio postings. Elancers stressed the importance of this form of self-advertising however no employers indicated that they had sourced talent through these channels, although interviewee 2 (line 219) did concede that I suppose what it does is keeps me, keeps them sort of front of mind. Interviewee 7 (line 139) explained I know that other people find it quite astonishing that I don t have my own website. They feel that a website is absolutely essential. I ve realized actually that it s got, I ve realized that it s got to the point that it has to be done so I m busy working on that now. So, I think most top freelancers will tell you, you do have to have that portal onto the internet that people can come and look at you and see exactly who and what you are. Interviewee 9 (line 79) explains that a focus of freelance central is to offer freelancers an opportunity to showcase their portfolio and be discovered by clients who are looking for them. Despite running this site the interviewee (line 109) advises her clients to list themselves everywhere. 43

44 Job Postings Elancers indicated that they do make use of online job bulletin boards and do apply via such sites. This remains an important channel for talent acquisition. The typical trend amongst the elance interviewees was to make use of industry or niche specific job boards, preferring to steer clear of more centralised sites and the competition that they offer. In the case of freelance central, a site that specialises in job postings, interviewee 7 (line 143) indicated frustration with the monthly membership fee and said...but, my personal experience and those of others that I ve spoken to, although not all, was that we did not get the value back. Interviewee 1 (line 67) indicated that this was the primary channel through which work was acquired. Guiding Question: What factors do you feel employers regard as most important when deciding to select a freelance employee to complete a project and why? Freelancer Reliability Interviewee 2 (line 319) explains that in terms of freelancer selection...the biggest one is probably reliability. I mean if someone doesn t deliver on the work; just doesn t deliver on that line; just doesn t deliver the work when they say they would; we re never going to call them back or get in touch with them again. The interviewee (line 251) explains an issue that occurred and conceded that it could have been prevented if more attention had been paid to the elancers selection. This was a sentiment shared by interviewee 3 (line 113) who shared I just got absolutely rubbish work from mostly new people that I haven t worked with a lot before. So elancer reliability is critical to employers, but what was also clear amongst the professional group of elancers interviewed was a significant level of commitment to the jobs that they took on. Interviewee 3 (line 189) stated You also can t be afraid to work really weird stupid hours...i will sit up until 04:00 in the morning trying to finish something. 44

45 It was also noted that the level of commitment that is expected of elancers by employers is greater than it is for full time employees. Interviewee 4 (line 71) noted...you're expected to work, you know, all nights, all week-end kind of thing, because, and get paid better for your time than you would as an employed member of staff. While Interviewee 7 (line 156) concurred that employers were often expecting 24 hour dedication. And sometimes it gets very ridiculous. I think it also has the freedom to phone you at 5:00 in the morning and whatever. Interviewee 5 (line 113) thought the primary selection criteria for an employer was Whether they believe that you're going to deliver on it Portfolio The elancer s portfolio is a critical factor in the elancer selection process. It enables an employer to see past examples of the work that the elancer has completed and offers some comfort that the skills required for the job are present. Interviewee 2 (line 267) explains Normally if it s someone new that we ve never known, we do ask them. We say can you give us some examples of your work? Do you have a website? Where else can we see some of your work? Interviewee 4 (line 119) explains that the portfolio is a key separator because there is such a low entry level, you know what I mean you can go and do you three months course in some, I don't know, whatever graphic school or whatever and you know get some mediocre qualifications. But you can't operate the software that we operate...that's when the dangerous bits happened. You need to have the creds and the history. Interviewee 6 (line 61) explains the differentiating power of the portfolio: If we can see the designer s portfolio. Yeah, this is a run of the mill website or design and this one's very nice it s intuitive, and it s out the box. Those are the guys that we kind of contacted. Portfolios, particularly those displayed on online auction sites, often contain reviews from previous employers which are highly valuable selection factors. Interviewee 8 (line 89) explains: 45

46 You basically look at the reviews; the past comments. If you find someone with good reviews, it doesn t matter what the price is, he s going to be good. Portfolio based selection within the elancer community is perceived to be positive as it allows differentiation on talent. Interviewee 9 (line 87) aptly points out:...pay peanuts, get monkeys sometimes so we wanted we wanted people to choose freelancers on the basis of the strength of their portfolios. Finally, the portfolio can also serve as a very good basis of discussion relating to the project brief in order to ensure clarity of the requirements, particularly for more creative jobs. Interviewee 9 (line 159) indicates: the portfolio is really important because if the client has looked through your portfolio and says oh, I particularly like this element in this particular work that you did and I love the styling of a light in this image and whatever, just to show the client as many examples as possible and...i think that goes a long way to better create a brief and to the creative then hitting the mark the first time Freelancer Expertise The elancer s expertise is a critical focus area for employers who naturally want clarity on the elancer s ability to deliver on the project requirements within the timelines. The topic of expertise is an extensive and complicated one but for the purposes of this research it pertains to specifically whether or not elancer has an existing set of skills that will allow them to deliver on project requirements without having to further educate themselves. Interviewee 4 (line 115) explains that at times a freelancer might advertise to be able to do a certain thing, you know, this person is really good with concepts, good with thinking, good with you know advertising ideas and when they pitched up and you kind of realize within the first hour that, that absolutely wasn't the case and you know, if there is a not false advertising but just really their perception of being good at XY&Z didn't match up your expectation of that. Interviewee 6 (line 117) notes the importance of clarity of the skill requirement in the brief and a focus on seeking out freelancers with expert skill sets describing...if you actually posted it and said here's a new job for you whoever is out there, it is a Word Press integration, the guys will say great! I can do it in two days because they are absolute experts. 46

47 The elancer interviewees all expressed that they tend to specialise rather than diversify their service offerings. In addition they have an aversion to taking on jobs that may mean that they will need to spend time developing their expertise in order to deliver, as Interviewee 1 (line 155) explains: I don t look just at cost and just at what I m going to get. I I also look at the type of work that I have to do meaning is it something that I m comfortable with, is it something that I can do or is it so unfamiliar to me that I will have to spend lots of extra time to actually do the work. Interviewee 4 (line 79) points out that certain industry standard tools and protocols are what enable effective freelance engagements in that they allow freelancers to just slot in. They need you right at that end point and you'd be able to do your job and get paid by the hour. Interviewee 5 (line 137) echoes this: I mostly do open source development, so all of the tools are freely available. So, things that you can download for free. It s your standard software, development software. Interviewee 4 (line 95) also raises the point that expertise is often built up over time whether that be understanding a particular way that the client works, or just all of the history of the job and there are definitely some jobs where that kind of information takes a hell of a lot of time to passed on to a freelancer, even if the job itself is a thing that could be done relatively quickly. Interviewee 7 (line 87) explains the importance of freelancer specialisation and advises that freelancers...don t try to be jacks of all trades. Though you don t generally turn down any work if you re not busy. But that you do become known in a particular area. Guiding Question: How important is the project brief and what do you think are the important things to consider when initially communicating project requirements? Clarity of the Brief According to Interviewee 4 (line 111) clarity of the brief is massively important and from somebody who employs a freelancer that has got to be absolutely water tight... if you are employing somebody you've never met in your entire life that has got to be, it's got to be drawn up like down to the last detail. 47

48 The importance of clarity of the brief was overwhelmingly recognised by both elancers and employers. The brief in this context refers to a document or verbal agreement that outlines project requirements. This clarity holds true across industries. Interviewee 1 (line 127) points out that it is necessary in order to ensure that you re on the same page as they are so that you can do the right story and write them the right story with the right angle and the right slant... Projects that require the elancer to exercise some creative licence may be looser according to Interviewee 2 (line 167) who explains I tell them that I want certain shots; that I have to get those at least. Like that s sort of the bare minimum for the job. They need to deliver on those requests. The rest, apart from that, I would say I d like them to bring in their own creativity and their own angle on things. However, Interviewee 9 (line155) thinks that being in a more creative industry is no excuse for a woolly brief and sometimes it s more important to have a more kind of pinned down brief if you are doing a creative project than if you re doing a technical spec. The brief is strongly related to developing a good relationship between the employer and elancer too, as Interviewee 2 (line 327) explains That s quite important, but I mean, the relationship through everything to know where everyone stands. What exactly you want out of the job that that freelancer is doing. Interviewee 3 (line 41) explains the importance of a...super exacting scope document. So something explaining exactly from our point of view what we will have to do to deliver this project. If that isn t done properly it also causes major issues. The brief also plays a critical role when it comes to sign-off of the project as Interviewee 3 (line 97) explains...it s much more about what has been initially agreed upon and how I see it in terms of completion or not completion. Therefore, the clearer the brief the less room there is for debate regarding project fulfilment. Interviewee 6 (line 85) explains that in determining the quality of the brief the interviewee would look at the document and say cool, I could personally design a logo or web site design based on this document and then we'd give it to the designers, the freelancers, and say can you design something based on this? 48

49 According to Interviewee 7 (line 216) Once you start understanding the client s business the specs can become loose because you know what they re asking you. Without having to go into a lot of detail. With some clients it just gets to the point where you ll have one short interview to discuss it and then you ll go away for two months and do the whole thing. This suggests that the brief is associated with the relationship that one has with a client and the elancer s level of expertise relating to the clients specific business. However, Interviewee 9 (line 163:163) agrees but believes you still need to be very particular and the main impact that that has is on costing to be able to cost a project accurately Discuss Brief In addition to recognising the importance of clarity of the brief there was strong agreement among employers and elancers that discussing the brief is critical. Interviewee 6 (line 81) notes that...you've always got to confirm that they know what you're talking about. So, you've always got to say okay, send me an of...just the final about what you're going to do so that I know you understand. Indicating that confirming clarity of the brief through discussion, verbal or otherwise, is highly important to project success. Interviewee 1 (line 127) notes that often employers only put down the main points of the brief and what the idea behind the story is and then you check over the phone and set up, find the details and so on so the brief for me is really important. This indicates that it is important for an elancer to understand not only the key points but also the finer detail relating to the requirements and that a discussion in this regard assists. Interviewee 7 (line 168) suggests that the writing is the easy part. Understanding the brief and actually understanding what the client needs that they haven t told you because they don t know how to explain it or they don t even know it themselves yet, is a very important part of the skill. You have to get into the client s head. You have to understand what they re doing or their company s doing. And understand what they need to deliver. The interviewee (line 168) goes on to explain that...very often you have to drive the client to that direction because they don t see it themselves immediately... because In many cases I think the people who are using freelancers are far less experienced than they were five, six years ago. And they re not quite sure what they re doing. And you have to in fact lead them along the road to an end result that they will, they ll have a flash filled moment to know it s what they wanted but they could never have told you that in the brief. 49

50 Interviewee 9 (line 125) states: I do always maintain that the quality of the brief is actually the responsibility of the freelancer because the freelancer should never turnaround and go well, you didn t brief me properly. The freelancer should be asking all those questions, but sometimes freelancers don t know what to ask and that sort of thing, so from the client perspective, if you can be as detailed as possible with your brief then that s always a good start. The finding that elancers don t always know what to ask is important as it raises to attention of the employer the importance of a conversation surrounding the brief rather than assuming that the elancer is clear based on the brief Demo Closely related to the brief and discussion of the brief is the value of a demo or demonstrating an understanding of requirements. Interviewee 5 (line 85) responds to a brief in the form of a proposal and clarifies This is the web site (requirements), this is your goals, and this is what you want in your site. The Interviewee (line 93) further notes You've got to show them what they're getting before they pay for it. That's really the focus point from our perspective. If we can show them what they're buying and we can get the price right, and they can see the value in that, then they'll buy it. This raises to attention the importance of a demo based discussion regarding the project brief. Interviewee 9 (line 159) explains that the portfolio is really important because if the client has looked through your portfolio and says oh, I particularly like this element in this particular work that you did and I love the styling of a light in this image and whatever, just to show the client as many examples as possible and if not from your own portfolio, maybe there s other work that they ve seen so they can give you visual references. I think that goes a long way to better create a brief and to the creative then hitting the mark the first time. Therefore, an elancer s portfolio can, at times, be used as a demo, or benchmark, of the nature of work required Scope Creep The idea of Scope Creep or Brief Creep was introduced by 5 of the interviewees. Scope creep refers to the project requirements changing over the course of the project timescale such that the final required deliverable is no longer in line with the original scope. 50

51 Scope Creep is strongly linked to the number of reiterations of the deliverable required and is typically perceived by elancers to be a result of employers changing the requirements of the brief. Interviewee 1 (line 227) explains in the end for a freelancer the client is the boss and you have to deliver what the boss wants but honestly you go through that of course, if he changes his mind every week and lets you do work redo the whole story for four weeks on end, you ve done four different versions, of course you re going to say hey, this is not this is not what the brief was. Interviewee 3 (line 41) explains that if the brief isn t agreed properly the freelancer can...end up getting a 100 requests for random things that might not be part of what you thought was the original specs. Interviewee 7 (line 200) explains that scope creep can occur for a variety of reasons Where all these little bits and pieces suddenly start getting put on. Can you just maybe do that? Or do that. And it s not in the brief. Or certainly you ve done, gone on a certain direction and then another party you haven t dealt with probably a more senior level within that company suddenly gets involved and changes the brief. And or an important part of it. And then hang on I didn t quote for that and that is not the brief I was originally given. And you have to defend yourself in that case. From an employer s perspective it is clear from the responses that scope creep is something to avoid because an elancer is at liberty to bill for additional work outside of the original specification, which has the potential to result in payment related disputes. Guiding Question: Do you think the nature of work has a role to play? i.e. Are certain job types more suited to freelance engagements? Creativity An underlying theme that emerged from the interviews is that more creative job types present a different type of management challenge to employers. As has already been noted, it is more difficult to define a brief for such job types. Interviewee 2 (line 163) who regularly employs freelance photographers states that he tailors the brief so that it...sort of gives them an opportunity for them to pursue their strengths and where they want to go with their photography while dictating what they want; what I want but notes (line 323) that creativity, I think, is very important because we rely on a lot of that. Like, we need different fresh 51

52 angles; we need different perspectives on things. So that s quite an important thing to manage. We want as much creativity as possible. Interviewee 6 (line 57) explains We wanted to go for something that was quite cool and unique. You know you look at and go gee that's a nice site. So, finding the right person to do that is quite difficult... This suggests that finding creative talent is a priority for some employers but that the skill set can be difficult to source. Interviewee 6 (line 85) simply capitulated On the creativity side, I could not manage the creativity. I actually just you know hoped for the best that they would give me something that was based on the client's original idea Nature of Work It is clear from interviewee responses that product delivery based projects are easiest to manage through freelance engagements. However, there is nothing to say that this type of project is not easiest to manage through any other channel too. Nonetheless, given the challenges associated with freelance engagements this type of project is certainly most common within the freelance community. Interviewee 1 (line 123) explains all my work has been product or delivery based. You get a brief, you do the work, you sent it back, you change you change it if if they re not completely satisfied. You tweak it and then send it back and you engage with each other to finalize the product but I ve never had something that I felt that my clients could have done this to make my work easier or my work flow easier. Interviewee 3 (line 113), by contrast, perceives benefit in outsourcing more creative type jobs that require multiple iterations because I m primarily a developer and I don t really have time to go back and forth with customers. Design is something that is very subjective to what they want Furthermore, there is a cost benefit assessment involved relating to project size. If a project is very small it may be that the overhead associated with finding and contracting an elancer exceeds the efficiency threshold. This is true from an elancer s perspective as Interviewee 3 (line 21) explains I tend not to take very small things like building a one head website. I m not interested in that. It s not a sort of a cost benefit thing for me. I need something that will be an amount of time in order to justify spending after hours working on it. 52

53 Interviewee 4 (line 75) suggests that elancers don't really care about what type of work it is. I mean, when I was working in London, we were pulled in to do sort of fairly basic DTP work which rarely was you know, copy changes and you know, moving bits around that were ready designed. There was no kind of real thinking involved Interviewee 4 (line 87) believes that it's better, if you can, to hire a freelancer on a project basis. (a) it's better for money because you can agree a term and you know then it's up to them to deliver the end goods as opposed to just paying by the hour and you could be paying into a big black hole really if they don't crack it or you know take longer than originally thought. So on a project basis they then are immersed into the job right from the beginning they have a better understanding of it, they work with you through the entire process and then responsible for and accountable for an end result and so I think it's just it's better, it's much better all around. So that's what I try and do a where possible but then obviously, there's going to be instances where you know something might fall off the wagon and you know find myself floundering too much, stuck on the go and then get somebody just to quickly wrap up the tail end of a project Interviewee 4 (line 67) notes that often elancers are very valuable when an employer has a sudden need for additional staff stating:...it's generally at the last minute and where they suddenly find themselves running out of time and under-staffed. Guiding Question: What type of contractual agreements do you enter into? Contract Form Contract forms varied widely by interviewee and by the relationship that the interviewees had with the counterparty. It emerged that more engagements are now being formally underwritten by a contract but that the contract must be clear, succinct and appropriate to the level of engagement. Many engagements are underwritten using the standard contracts available through association or on elance websites and few additions or alterations are made. Interviewee 2 (line 301) for example said contracts were verbal and it s on as well but it s not that formal as in you sign this contract and we ll go from there. Whilst Interviewee 3 (line 41) has recognised the importance of:...a very solid contract. So that we can adjust it very specifically to what we need to do first before whatever work we re getting involved in. 53

54 Interviewee 7 (line 103) explains that SAFREA have collected and put onto the sort of members only part of the website, like contracts and copyright law, best practices and how to deal with clients and the like. Interviewee 7 (line 160) notes that expectations have evolved when he shares that Up until I d say three years ago just about everything that I did was handshakes and you would invoice and you d know that you d be paid within 30 days. That was accepted that it would happen. But obviously through money pressures and I also think the lessening of respect for freelancers is that many clients are now taking the gap. And delaying payments or trying to get, even ask for discounts after the job has been delivered. Or looking for reasons to pay less or just unfairly, they felt they haven t, say that they haven t got the value even though you met the brief and trying to get out of it. So, I m advising everybody and I have to actually change my own business to being strictly contract up front and 50% before I have to start work...and they respect that. You actually get more respect from the client by doing that. And you get to play ball. Yes. By contrast, Interviewee 7 (line 212) explains, longstanding clients would be very offended if I suddenly went to them and started demanding contracts and payment upfront. Because we have relationships going back years and it was, and they ve always, they ve been successful. Interviewee 8 (line 285) notes that a contract should be succinct and appropriate to the circumstances otherwise they might even raise doubts saying that I must be honest, if somebody gives me a contract with a huge document, with 100 pages of terms and condition and he s my freelancer, I don t even know if I would sign it. I ll give you a 50 percent deposit to do the work but I also don t want to be signing these huge documents. I don t even like them. I mean, if you re not good; if you re not going to be good; you know, if I can t trust you like that then I don t really like to deal with you at the end of the day Clarity of Terms Despite the array of different contract forms used by the interviewees all agreed that clarity on the terms relating to the project was critical. Interviewee 1 (line 135) explains that it is critical to ensure that the freelancer is...on the same page as they are and to confirm that that you accept the conditions, you accept the deadline work for the the rate that they offer or or if you have to negotiate according to your work schedule just so that everyone knows where everyone stands. 54

55 Additionally, Interviewee 2 (line 327) explains that terms should cover exactly what the deliverables are and exactly how they re going to be achieved and how they re going to be returned, and sort of payment or, you know, what the compensation is going to be. Interviewee 3 (line 41) described terms as an SLA (service level agreement) and suggested that it is the first thing that is important as far as managing a freelance project goes because he knows of freelancers or employers who haven t contracted in properly and things have got very complicated and they ve had major scope creep and it just turns into a nightmare. Interviewee 3 (line 69) explains that clarity on terms also goes a long way toward maintaining good relations because They need to know that I work after hours. I work on weekends. You might get s from me at strange times and I m unfortunately not flexible on the timing structure, on the scope and how long it s going to take. Unless of course you want to extend the contract at another point and pay more furthermore (line 77) things like timeframes and when I will be able to contact and when I ll be able to deal with something that you come to me with or how I deal with you back. All that stuff need to be communicated up front. I can t get into a project with someone and then they send me an at 1:00 in the middle of the day and expect me to reply straight away. They need to know that that s not the position I m in. Interviewee 7 (line 156) describes that it is necessary to make agreements for extenuating circumstances for example My current agreement because of the pressure of the job is that I ll be available for the next two weeks to go drive into a boardroom on 2 hours notice on any time night and day but I ve accepted that. That s part of the contract and I have charged for it. Interviewee 7 (line 188) explains that in relation to project sign-off clarity on terms cuts out a lot of room for argument over what was done and what wasn t done. Interviewee 9 (line 125) suggests that to protect both parties terms should be agreed around...milestone based payments and communication around certain milestones and making sure that everybody knows what s happening at every stage of the project for instance (line 133) Are you going to have a Skype call once a week just to discuss progress even though there s nothing a whole lot to report on, just have the call so you ve got the contact and you can discuss what s happening, and of course the major thing to watch out for is scope creep. 55

56 Guiding Question: How important is project planning? What practices or tools do you make use of and why? Milestones Project Milestones were, with a single exception, perceived to be a very valuable factor in managing the successful outcome of freelance projects. Many interviewees made use of project planning tools, as discussed later, in order to create and track progress against milestones. Furthermore, linking payments to milestones within the terms of agreement is perceived to be a key risk mitigation factor for both parties. The only general exception to these findings is for projects that are delivery based and too small to justifiably separate into milestones. In the case of Interviewee 2 (line 331)...the jobs are over for the freelancers in a day Interviewee 3 (line 133) provides a developmental domain, I have subdomains for the clients and then they can go there any time and look at how far I ve gotten with it, what I ve added and anything like that. Interviewee 3 (line 153) points out that in an electronic environment communication milestones are important because You re managing the fact that things get done. You need to get them done and they get done... and that it is his view that Timeframes and when and how and why aren t really your domain anymore. He continues So, it s kind of just a sense of there are two deadlines for me. There s the deadline that something needs to be delivered and a deadline when I m to be told if something is going to be or not going to be delivered. Interviewee 4 (line 135) by contrast feels that having milestones...is the absolute, the only way you know, having as many check points along the way as possible and sort of bringing those milestones down into the kind of smallest chunks possible. So if it means more work for you as a manager but at the end of the day you don't get any nasty surprises along the way Project Management tools. Project management tools emerged as a key tool used to track milestones and plan projects for both elancers and employers. No single tool was dominant and interviewees offered many examples of tools used ranging from personally developed applications to forms as simple as excel tables. 56

57 Interviewee 9 (line 283) noted that many online elance sites offer built project management tools, I think that s very handy for freelancers, particularly people who don t have that sort of background Employer Flexibility A factor that emerged was the fact that elancers, like other independent businesses, often have multiple projects for different clients running simultaneously. Employers must be sensitive to this fact, understanding that changes to requirements will require some flexibility on their part. This can present an issue when as Interviewee 7 (line 224) explains...everybody wants the work at once or if somebody shifts their schedule and it s suddenly closer to somebody else s schedule. It becomes a bit of a dance party. But that s your problem. I find they start criticizing you when you start to landing your problems on them. Interviewee 9 (line 137) however disagrees Obviously things will change, but if that happens, make sure that the implications both in terms of costs and timings are very well understood by both parties. Interviewee 3 (line 149) explains...flexibility is very important. They need to understand that they are dealing with somebody, okay well, it s still true if you re a professional freelancer. If that s what you do. But, as a freelancer in terms of you work elsewhere as well, the customer needs to be flexible in terms of things like communication and understanding that work will get done but it will get done at strange hours and they ll get s at 15:00 on a Saturday evening and that kind of stuff. Guiding Question: What are the communication tools and practices that you adopt that you feel are most effective and why? Communication A significant contributing factor to the success of freelance engagements is communication between the employer and the elancer. This has already been evidenced in previous codes such as discussing the brief, demo, clarity of terms, milestones and employer flexibility. It is clear that there 57

58 are a number of changes that might emerge over the course of the project that will need to be discussed. It is also clear that the employer should be kept abreast of project progress. As a result, interviewees stressed the importance of communication channels, availability and responsiveness. As Interviewee 1 (line 372) explains I do check my s throughout the day, and even if I can t respond immediately, I always respond within the day even even if it is 12 o clock that night... Interviewee 2 (line 243) took a firm view...i mean without that, I mean, without communication there s nothing. Without being able to get something instantly, which is often what happens in the magazine industries, things happen and things need to happen on deadline. You ve got to be available for that so In addition to the importance of communication the difficulty associated with communicating with people of other languages was noted. Interviewee 6 (line 81) points out that a lot of elancers are from Pakistan or India, which means they're Indians and they don't speak very good English. That's been a very big challenge. We've actually moved our freelancers more into China where you can see the intelligence is there and it is easier to deal with the guys as well. Interviewee 4 (line 167) raised the importance of communication in keeping abreast of milestones...you have to make more of an effort to set those deadlines and to regularly specify what you're going to be responsible for in a certain amount of time, and just keep that, keep those checklists bouncing backwards and forwards between the two parties. Yeah. It's hugely important. Interviewee 8 (line 181) referred to a successful project manager who was Being on top of them (elancers) and follow then up, you know, at least once every four days just to track the progress, and seek my milestones like I was supposed to, you know. I think that s probably the most important way. Finally, Interviewee 2 (line 175) noted the importance of face to face communication in building effective working relationships Just the general communication with someone over the phone is not as good as if you re sitting down with them and you re interacting with them regularly and they get to know what you like and what you re looking for in the magazine specifically. 58

59 Communication Tools The use of VOIP (Voice Over Internet Protocol) software such as Skype, and instant messenger programs such as Microsoft Messenger were widely recognised by the interviewees as being significant contributors to regular communication. Telephone and services are still used. Furthermore, only interviewee 2 recognised the use of post as a means of communication. Interviewee 1 (line 55) notes it s so easy to communicate with a client in Cape Town or in London, for that matter, through or Skype or or anything. You can you can upload big files through through servers or download files. You don t have to post things around anymore or actually you don t actually have to come face to face with a client to have a meeting. Interviewee 6 (line 93) points out that often, rather than send an or draw up an extensive brief...it s much easier to just explain it on Skype. Everyone's connected to Skype or Gmail or whatever and you can connect into all these designers and freelancers. Copyright Availability UCT Interviewee 1 (line 323) points out that freelancer availability is an important element to managing a project because If they don t pick up the phone or they don t answer your you you have very little control to actually get the stuff so if they haven t done the work and they re just running around you and not answering your calls or not returning your s or something then you might you might find that you have to do all the you have to prod them several times to get it and if they don t deliver then suddenly you have to find someone else to do the story While Interviewee 3 (line 69) pointed out that it is important for a freelancer to specify their availability in advance They need to know that I work after hours. I work on weekends. You might get s from me at strange times and I m unfortunately not flexible on the timing structure...things like timeframes and when I will be able to contact and when I ll be able to deal with something that you come to me with or how I deal with you back. All that stuff need to be communicated up front. I can t get into a project with someone and then they send me an at 1:00 in the middle of the day and expect me to reply straight away. 59

60 Interviewee 6 (line 109) notes that time-zone differences have aided in improving his businesses work rate and availability because you've kind of got an open shop for many more hours during the day. So you're not just working eight hours a day. You're working 16 to 20 hours a day with all your freelancers. Interviewee 7 (line 152) also implied the importance of availability when he spoke of the person in Camps bay who has now structured his life around the American market. So he sleeps in the day and is awake most of the night. That s his market. The interviewee (line 156) also notes employers see freelancers not as a freely available professional, but somebody who can very often be brought in at the last moment because something s gone wrong...and expect 24 hour dedication. Interviewee 8 (line 185) echoes this when he noted I ve got one s that are available 24 hours which is a little bit of a bigger company so they come on in on different shifts. And these guys I that have kept my attention. I keep giving them return business because they actually have three teams. Guiding Question: How important is the value and nature of remuneration agreements? Remuneration Elancer Interviewees shared the sentiment of Interviewee 9 (line 239) who stated: I think it s also making sure that you re being paid fairly for what the work that you do. That s from one side and also the other side is not ripping your client off. It was noted by interviewees that The rates are continually being squeezed (Interviewee 7 line 111) The key take away from an employer perspective is that whilst price should be a consideration one should not select elancers based solely on that criterion because more highly skilled elancers will charge according to their skill sets at market related prices. Interviewee 8 (line 89) advises There s only one thing and it s not price; you never look at the price. You basically look at the reviews; the past comments. If you find someone with good reviews, it doesn t matter what the price is, he s going to be good. So obviously you are looking at someone with a lower price than other people but just look out for the lowest price; you re going to burn your fingers lots of times. 60

61 Within the South African media sector publishers adopt standard rates for content and will pay either on an hourly rate or per word. These rates have not increased in real terms for approximately 10 years Payment Terms Payment terms relates to the nature and timing of remuneration. The key findings were that from an elancer s perspective an up-front payment was seen as a gesture of goodwill on behalf of the employer, providing the elancer with the security that if they complete the work they will receive the remainder of the payment. Employers saw this as a risk. The website elance offers an escrow payment service whereby the employer deposits the funds with the intermediary and they are only released on completion. There was also consensus that milestone related payment terms worked effectively for both parties. In addition, the importance of agreeing the elancer s rate, should any scope creep occur was noted. Interviewee 3 (line 157) raised the importance of meeting payment terms as an employer when he explained The guy just lost their funding. So they paid me half what they owed me and they still owed me another $60 00 or $ and they suddenly couldn t pay. And if I was a business I probably would have discussed with them and found a way around it and still carried on working with it. And, but because I m a freelancer my time is more important, more directly important. I flat out said okay well I ll carry on work when you pay me. So, I stopped working completely. I stopped working on the site and when they paid me money with instalments I carried on working. So, it needs to be, they need to understand that a freelancer is working for cash. Interviewee 4 (line 151) suggests that one should avoid hourly rates as an employer that is the one thing that people battle to resolve in the industry is, you know, how do you cost your time? 61

62 Guiding Question: On completion of the project how would you define success? Review It was widely agreed by the interviewees that on completion of any work by the elancer the employer should set aside some time to review the work properly and provide constructive and helpful feedback to the elancer in order that they might efficiently make any corrections or changes required. Interviewee 9 (line 219) suggests that the client needs to just set some time aside and do a final thorough check of everything and do that when they get the first sort of iteration of the artwork so that or whatever it is so that the freelancer can do all the bulk of the changes in one go. Interviewee 7 (line 232) explains that elancers expect the client to review their work and will build in (to the contract terms) two or three rounds of corrections. Interviewee 9 (line 159) explains that Creatives need very detailed feedback. You can t just say oh, I don t like it. You have to say what you don t like and why because otherwise they they re just going to go back and do another design and they ll come back to you and client doesn t like it again and I mean it can be an absolute nightmare Self-Review Interviewee 3 (line 97) interestingly noted that self-review is actually something in agreement to the freelance business. Your delivery in our position is much more about how you see it than how the customer sees it. I know that sounds a little bit ridiculous because you are still doing business. But if I get to a stage where I ve done the amount of work that I ve agreed to do and I ve covered all the basics in terms of the scope and what we agreed upon initially I ll hand over that project and I ll say here it is... it s much more about what has been initially agreed upon and how I see it in terms of completion or not completion. brief. This finding is relevant in that it further raises the importance of clarity in the original project 62

63 Reiteration Reiteration in this context refers to the number of times the elancer needs to make alterations to the final deliverable before the project is signed off as complete. This takes two forms. Firstly, when an elancer s delivery is not in line with the original brief or requirements and expectations of the employer, and secondly when an employer requests changes subsequent to receiving the final deliverable as a result of a change in requirements. As a result the number of reiterations can be construed to be an indication of the level of success of the overall engagement, although not necessarily of elancers performance as Interviewee 1 (line 223) explains Sometimes you just deliver and and the client says oh, that s good...so so it isn t some indication of success, but it is iteration it doesn t mean that it wasn t successful. Interviewee 9 (line 219) explained that...if there s a good relationship between the client and the freelancer I don t think that phase is necessarily problematic. It s normally just like you say fine tuning and tweaking Relationship The quality of the relationship, or development thereof, was universally recognised by all interviewees as both a significant contributing factor to the successful delivery of a project and also as an outcome of successful delivery. The quality of the relationship is intrinsically linked to many other factors identified. Particularly, from the elancer s perspective, it is linked to acquiring further work through word of mouth referrals. As such all elancer interviewees placed significant importance on developing and maintaining the relationship. This desire explains the aversion that some exhibited to online job auction sites where they perceive there to be less of an ability to develop the relationship. Interviewee 1 (line 179) expressed this as something that I feel is almost intangible. I don t know how to describe it for you but but it s important to build a relationship with your client and also feel comfortable with your client and sometimes it just takes time to build that up and get to know each other and and how you work so so that is one thing that that I consider when I take on a job. 63

64 Interviewee 4 (line 95) explains that as far as successful delivery goes it's more to do with intellectual capital. Something that you would have built up over time whether that be understanding a particular way that the client works, or just all of the history of the job and there are definitely some jobs where that kind of information takes a hell of a lot of time to passed on to a freelancer... Interviewee 2 (line 327) explains that you ve got to manage the relationship as a whole. That s quite important, but I mean, the relationship through everything to know where everyone stands. What exactly you want out of the job that that freelancer is doing. Interviewee 3 (line 153) notes that...even if you re dealing with a freelancer you re dealing with their personality and their quirks and how they do work and goes on to explain the nature of the relationship I ve never looked at a customer as a boss. They are my customer. Interviewee 3 (line 173) explains that maintaining a good relationship helps a lot when I needed to convince them on a deadline or make sure that they ve done something. But because I m talking to them in a decent way, I m not talking to them like an employee, they tend to be more open. Interviewee 6 (line 69) explains that continuity in the relationship is highly valuable...and because we've been working with them for about four or five years now, they know exactly what we're looking for, how we're looking for it, when we're looking for it...the credibility that gets built up over time is a very important element Interviewee 8 (line 109) as an employer explains how a relationship emerges from previously successful engagements...you do sort of, after a while, get good guys and you just stick with them you know. And it s an excellent, excellent resource Quality of Delivery The quality of delivery refers to the quality of the project output delivered by the elancer. There is a divide within the interviewee base between those like Interviewee 3 (line 97) who believe that the quality is measured by whether the deliverable...covered all the bases in terms of the scope... and those like Interviewee 2 (line 251) who believe I m the sole judge of that in a way and I ve got to say, yes, those are good photos or that person didn t get good photos so I m not going to use them again. 64

65 Interviewee 6 (line 149) explains...for me managing a successful project is one where I send an , they do it, and it s hundreds. Guiding Question: Are there any other important factors that you believe are important to a successful project outcome? Risk Management A number of findings emerged relating to the importance of risk management in freelance engagements. Firstly, the security of the employer files. Interviewee 6 (line 125) recalls...we outsourced that and we didn't pay them in the end because they didn't do it correctly. Out of spite, you went and deleted things out of that FTP, which caused a lot of trouble. Interviewee 8 (line 101) raised the importance of using an intermediary when a dispute arises when the interviewee recalls I also had projects go really obscure, then you have to use Elance s dispute resolution centre which basically means, I m having a problem with this freelancer. He s not performing so lodge this dispute right. Interviewee 8 (line 197) raised the danger of dropping in all these things through Skype all the time and then having no reference when I go back to the actual workroom Freelancer Workload It was apparent from all elancer interviewees that they work very hard and that the nature of their workloads from multiple clients is erratic. Interviewee 1 (line 139) explains that...it s always busy but when it rains it pours. That that is pretty good I just prioritize and and you also have to remember that a day has a day just has just 24 hours of which you really can work at most 18 hours a day absolute most. 65

66 Employers should therefore be conscious of the existing workload of elancers in determining whether or not they are appropriate for the project because, as was also noted, elancers are often reluctant to say no to work that comes their way Physical Presence Physical presence, or more particularly the lack thereof, presents a challenge to employers as explained by Interviewee 1 (line 323) if it is someone on your staff who sits in the cubicle next to you or on the floor just below, you can actually go down there and say hey, where is your stuff? Interviewee 4 (line 175) noted the importance of physical presence in building working relationships...we got into a way of working you know, we sort of re-established those connections and since then it's been a completely different working environment I mean, to be able to share ideas, to be able to work properly over Skype. Therefore, a consideration for an employer might be the ability to meet with the freelancer physically in order to develop a better working relationship Community Community in this context refers to an elancer s membership of a professional society that provides both access to jobs and support in the form of training or advice. The challenges associated with adopting a freelance lifestyle are significant and one could suggest that training would assist the elancer in overcoming these and therefore being more effective on the job. Interviewee 7 (line 107) explains that one of the purposes of SAFREA...very importantly is helping freelancers to understand the business side of being a freelancer. Many of us are very skilled in what we do, but get lost when it comes to managing our finances, invoicing properly, calculating jobs, that you worth the jobs properly and holding our clients to timely payments. Interviewee 9 (line 79) explains that aside from job introductions for Freelance Central a...secondary objective is for for us the Freelance Central team to help equip freelancers with the skills and the knowledge that they need to freelance professionally. 66

67 The following additional findings emerged over the course of the unstructured interviews: Employer Credibility Whilst elancers certainly are very conscious of maintaining their credibility within the freelance community it seemed less apparent that employers are as conscious of doing the same. However, Interviewee 1 (line 167) indicated that this should also be a concern for employers when the interviewee noted I won t take on an unfamiliar new client but if you know that other people have had problems with this specific client word travels people say oh, I ve been with I ve been doing work for these guys and after six months and repeated letters, I ve not been paid or in the end I was paid less than what was agreed on or blah, blah, blah Self-discipline Elancer interviewees all agreed that being self-disciplined is critical to delivering successfully on projects. Interviewee 7 (line 264) commented It s something that has become more important to me personally. I haven t, I ve tended to go with the flow. And I ve belonged to the work hard party hard model. So I work really hard and then I do socialize. So I haven t personally done much else. But, over the past year and a half I ve gone a long way to organizing my own business a lot better. Managing what should be happening better. Whilst it is not a factor that can be explicitly managed by employers, sensitivity to the selfdiscipline challenge may assist in the development of the relationship Work Type In addition to the above codes the researcher created a code for work type which captured the interviewee industries noted in the interviewee overview for the purposes of consideration in the analysis. 67

68 4.3. Research Analysis and Discussion The results of each phase of coding activity precede a discussion thereof Axial Coding Results: Key Variables Codes were categorised by the researcher making use of Atlas Ti network functionality. The researcher particularly considered linking quotations in forming categories. A total of 8 categories were identified. The resulting Affinity Diagram is presented in figure 4: FIGURE 4: AFFINITY DIAGRAM 68

69 Selective Coding Results: Variable Interactions and Relationships Variable interactions were determined and are represented in the Interrelationship digraph presented in figure 5. The Interrelationship Digraph technique ensures that every possible interaction is considered. Through this approach the researcher identified Drivers and Outcomes and developed an understanding of the Systemic Scorecard presented in figure 6. FIGURE 5: INTERRELATIONSHIP DIGRAPH 69

70 FIGURE 6: SYSTEMIC SCORECARD The basic Causal Loop Diagram presented in figure 7 outlines the variable interactions and causal relations identified. Openness of Communication and Clarity of the Brief were identified as the key drivers within the system. The overriding assumption within the development of the model was that by managing the variables identified a successful electronic freelance project will be delivered. So, while successful delivery is an overarching outcome Reliability of Freelance Network and Explicitness of Review were determined to be strongly associated outcomes within the system. All causal relationships within the system follow the same direction (S), i.e. when one variable changes in a certain direction the others change in the same direction. (Pegasus Communications, 2010) The Casual Loop Diagram consists of 4 loops which are all reinforcing (R), i.e. the causal relationships between the 4 groups create corresponding exponential growth or collapse. (Pegasus Communications, 2010) 70

71 FIGURE 7: BASIC CAUSAL LOOP DIAGRAM Discussion The research set out to answer the question: What factors must be managed well in order to ensure the success of outsourced electronic freelance work? Through a grounded theory approach 4 causal loops consisting of 8 variables have emerged as the key factors to which employers of electronic freelance workers should pay attention. The following sections discuss each loop, further substantiating each in their relation to the sub-questions: What outcomes define the success of work outsourced to elancers? 71

72 What are the key factors affecting the success of work distributed to elancers? How can these factors be managed well in order to have a positive effect on the outcome? Loop 1: Source the Right Talent FIGURE 8: LOOP 1- SOURCE THE RIGHT TALENT According to Grossman & Helpman (2005) outsourcing means finding a partner with which a firm can establish a bilateral relationship and having the partner undertake relationship-specific investments so that it becomes able to produce goods or services that fit the firm s particular needs. Furthermore in a recent survey by PWC (Price Waterhouse Coopers, 2009) 70% of respondents said access to talent is an important or very important reason why they outsource. Horwitz et al ((2006) in reviewing the literature on virtual teamwork note that effective vertical and within-team relations are potentially quite difficult when people must work collaboratively and interactively, but may not physically meet, and that these challenges require diverse organisational skills; one of which is careful team member selection (especially for virtual teams where members may work in different countries; cross-culturally and in different time-zones). 72

73 Michaels, Handfield-Jones, & Axelrod (2001) comment in the preface to The War for Talent that they have observed time and time again the fundamental importance of a talent mindset. Without this mindset, recruiting becomes an activity...performance suffers. The author s define talent in the most general sense as the sum of a person s abilities his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgement, attitude, character and drive. The emergence of sourcing the right talent as a key factor in the effective delivery of electronic freelance projects is therefore consistent with the literature on the rise in outsourcing in a quest for talent and the importance of talent in performance. Answers to the question of how sourcing the right talent can be managed well have emerged through the research findings. A summary of loop 1 and how the causal interactions can be positively influenced is presented in figure 8. The process of sourcing talent begins with defining the requirement for talent and developing a project brief that can be used to explain the project requirements to potential elance hires. Clarity of the Brief emerged as a key driver within the causal loop system and its importance in sourcing the right talent was clear in the research findings for two reasons; firstly its clarity will allow an elancer to understand whether or not they are capable of performing the job before applying for the project and secondly its clarity will assist an elancer in properly costing and therefore quoting for the project. The brief should be communicated through reliable channels and in this way is associated with Quality of Recruitment. The employer should be aware of the finding of aversion to online auction sites by some more experienced elancers and ensure that the brief is shared through successful channels such as personal contact networks in order to maximise the quality of word of mouth referrals that are made. Thoughtfulness in Selection pertains to the employer act of reviewing elancer applications for the job advertised. The level of thoughtfulness that can be applied will be affected by the quality of recruitment as better applicants will have a greater number of references and more extensive portfolios. In addition to these the employer should consider factors pertaining to the applicants circumstances such as their physical and electronic availability, their current workload, and their support structure typified by membership to a freelance community. 73

74 At this juncture the employer should not dismiss consideration of those elancers with whom they may have worked before. Repeat work and the value of working relationships emerged strongly in the findings, thus loop 4 inputs to Thoughtfulness in Selection. Finally, Openness of Communication acts as a driver to any reconsideration of the brief that may be required. As Interviewee 7 (line 185) explains the elancer should become an advisor to the client while going through the process of discussing the brief and provide advice on an equal level to that person Loop 2: Define Project Terms FIGURE 9: LOOP 2 - DEFINE PROJECT TERMS Loop 2 deals with defining the project terms between the employer and the elancer. This process involves negotiation of the terms between the two parties. According to Chiu & Chung (2005, p. 52) Traditionally, negotiation binds with contracts as an outcome. Similarly, negotiation of contracts also involves two or more parties multilaterally bargaining for mutual gain in order to achieve a mutual beneficial agreement, but each of them may 74

75 have conflicting interests... During negotiation, proposals are sent to the other parties, and a new proposal may be generated after receiving a counter proposal. From another aspect, the order of a negotiation process should guide the actual business interactions. The process continues until an agreement or a deadlock is reached, or even one or more parties quit. Loop 2 is congruent with the negotiation process described by Chiu & Chung and involves a constant reiteration until a point is reached where both parties can agree to final terms and bind the negotiation through a contract. Answers to the question of how defining project terms can be managed well have emerged through the research findings. A summary of how the causal interactions can be positively influenced is presented in figure 9. The process of defining terms begins with the project brief. Being cognisant of elancer input to the brief as outlined in loop 1is a critical first step in effectively defining project terms. Any alterations to the brief that may be required as a result of elancer input should be made. Along with the brief the employer should provide a project plan, paying particular attention to project milestones and the final delivery date. Sterling, Dietz, Sterling, & Lieder (2002, p.9) extensively reviewed the nature of binding agreements for Prime or Subcontractor arrangements. As covered in the findings of this research they too noted that many free agents have shared with them stories of disappointment, upset, and frustration that have come from Prime or Subcontractor arrangements gone wrong. For want of a good written agreement, otherwise great collaborations have produced heartache and financial losses. According to Sterling et al (2002, p.9) Fundamentally, good agreements tend to make the involved parties more thoughtful about engaging with one another, surface innocently hidden assumptions, and increase specificity around money. With respect to the nature of the contract Sterling et al (2002, p.9) paraphrase Albert Einstein in suggesting the agreement should be "as simple as possible, but no simpler" and go on to explain that the agreements should form specific boundaries for each transaction, define roles and responsibilities, set out timing for certain activities, create a safe context for sharing ideas and their derivative products, and make clear how money will be exchanged for services and products. 75

76 The findings of this research are congruent with the suggestions of Sterling et al whose work further substantiate and clearly summarise those factors that an employer must manage well in order to ensure the Explicitness of the Terms of Agreement Loop 3: Manage Delivery Well FIGURE 10: LOOP 3 - MANAGE DELIVERY WELL Loop 3 is an extension of Loop 2 and defines those variables and causal relationships which, if managed well, will successfully aid the elancer in delivering against the clearly defined project milestones and brief. Loop 3 takes its input from Loop 2 in the form of a clearly defined project plan and contractual agreement that outlines both elancer and employer obligations. In managing delivery well the employer should notify the elancer of any employer driven scope creep as soon as possible in maintaining Openness of Communication. This output will then drive a revision of the terms of agreement in loop 2. Burke (2010) suggests the use of a change request document. 76

77 As such, the (S) same direction system flow between Openness of Communication and Explicitness of Terms of Agreement is via loop 2. It should go without saying that the first factor that the employer should manage is meeting their predetermined commitments as outlined in the terms of agreement. From the research findings these include, but are not limited to: making timely payments, attending meetings, and timely review of output. The research findings also bring to attention the variety of project management tools in use by both elancers and managers. By and large there was no single predominant tool and the emphasis should be on ensuring that both parties are able to track and view progress against the original project plan in order to enable following up against project milestones. In addition, the findings drew to attention a variety of risks that can emerge within electronic freelance engagements. The employer should ensure that appropriate measures are taken to address the security of intellectual property, IT security, and payment security. Finally, employer availability to address issues and questions that may arise is critical. Consideration of these factors, whilst important, will differ depending on the nature of the work involved in the project and the key task of the manager therefore determining the Appropriateness of Project Management. The Appropriateness of Project Management is a driver of the outcome Explicitness of Review, i.e. the better a project has been managed the less likely the need for reiteration and extensive review on the part of the employer. Ideally there should be no need for reiteration, as Interviewee 6 (line 149) noted...for me managing a successful project is one where I send an e- mail, they do it, and its hundreds (i.e. 100% perfect). However, the employer does have the commitment to review milestones and provide explicit feedback in a timely, clear and complete manner. If the review reveals the need for changes the output then enters Loop 2, through Openness of Communication, for review against the original brief to determine if a renegotiation of terms is required. The most desirable outcome is that the elancer has successfully delivered against the originally agreed brief and in line with the terms of agreement. In this event Loop 3 exhibits an output from Explicitness of Review to Loop 4 paying recognition to the fact that the employer may require the services of the elancer in future. 77

78 Loop 4: Develop Freelance Network FIGURE 11: LOOP 4 - DEVELOP FREELANCE NETWORK The new knowledge economy for both public and private sectors is founded on having ready and effective communications across collaborative partnership-networks of all kinds. It is not just What you know but rather Who you know and how well you know them that leads to viability and well-being... As Burt points out (Burt, 1992; pp. 52), a critical property of Social Capital is that it creates opportunities for the transformation of Human Capital and Financial Capital into profit. (Smith, 2003) The findings demonstrated that freelancer reliability was critical to employers and brought to the attention the importance of previous working relationships in determining this reliability as Interviewee 8 (line 109) explained...you do sort of, after a while, get good guys and you just stick with them you know. And it s an excellent, excellent resource. 78

79 Loop 4 is an extension of Loop 3 taking the input of a connection to an elancer who has successfully delivered on previous engagements and draws to attention the importance of maintaining a good relationship in order to Develop the Freelance Network. In turn this factor acts as a critical input to Loop 1 in the form of reliable relationships and word of mouth referrals. In addition to developing the freelance contact network through prior engagements and referrals, reliability of elancers, it has been argued, could also be determined by sourcing from reputable freelance communities that provide training to members Comparison of Results to Model of e-collaboration Effects Qureshi & Vogel (2005) presented a model of e-collaboration effects from the findings of their research which aimed to uncover the effects in the way distributed projects are managed. FIGURE 12: MODEL OF E-COLLABORATION EFFECTS (QURESHI & VOGEL, 2005) Qureshi & Vogel (2005) claim the results of their research suggest that successful outsourcing relationships should consider electronic collaboration effects and their outcomes. They further claim that insight from the model can be used to manage projects across different organisations. 79

80 This model is relevant for comparison in that Qureshi & Vogel sought to determine effects in outsourced electronic collaborations that exhibit similarities to the elance engagements under consideration in this report. The researcher compares the models for the purpose of discussion with respect to the dependability of the findings of this report. Qureshi & Vogel (2005) find Communication plays a major role in virtual teams and, consequently, distributed project management. Under circumstances of multiple cultures and lack of a common language, consistent communication becomes even more important, especially given distributed constraints, e.g., general inability to meet face to face or even at the same time. A noted success factor in virtual teams has been sustained communication in pursuit of shared understanding. This effect is highly congruent with the elance based model developed by the researcher where Openness of Communication is central to all causal loops. The circumstance constraints noted by Qureshi & Vogel are also consistent with the findings of this research adding further to the dependability of these findings. Copyright The communication effect noted and in particular the pursuit of UCT shared understanding is also highly congruent with this report s findings on the need to clearly Define Project Terms (loop 2). Qureshi & Vogel (2005) further find Coordination is a constant challenge in distributed teams and management becomes a central issue. Tried and true practices in traditional contexts are not necessarily as potent in distributed circumstances, especially in multi- cultural considerations. The challenges are many but, also, opportunities exist as multiple perspectives and round-the- clock work advantages emerge. The coordination effect is consistent with loop 3 of the causal loop diagram where the research identified the need to manage delivery well and had as a central variable Appropriateness of Project Management, which by its nature recognises the need for adopting a supporting management technique that is not necessarily consistent with tried and true practices. Qureshi & Vogel (2005) conclude Adaptation is essential for distributed project management and presents many challenges as well as opportunities. Sensitivity to the need for change and its timing can dictate project success or failure. Whilst no direct comparison can be drawn between Qureshi & Vogel s adaption effect and any of the causal loops identified in this research it should be noted that its findings do include the 80

81 need for employer flexibility and adaptability to technology in the form of project management tools, communication tools and online reverse auction services. In conclusion, the researcher believes that whilst there are effects in the e-collaboration model that are not explicitly accounted for or directly correlated to the causal loop diagram developed in this report on the whole there is a significant level of consistency between the two models. In the researcher s opinion there is no element of Qureshi & Vogel s (2005) findings that might call into question the research criterion of dependability of the findings in this report and the e- collaboration model offers some indication of the transferability of the results of this research Research Limitations The proposal for this research was premised on the assumption that there would be sufficient elancers and managers responsible for elancers who would be willing to participate in the research. The researcher actively sought contributors and a diverse cross-section of subjects was considered in the research. However, due to time, geographical and accessibility limitations all respondents sourced were resident South Africans. The researcher believes that this may limit the transferability of the model to elance engagements in other geographical locations. This transferability issue will have been offset to some degree by the prior experience that some research subjects have had in other geographic locations. In particular, the researcher believes that the use of technology such as online reverse auction websites may have emerged as a key factor if subjects from locations where their use is more prevalent were interviewed. Time constraints necessitated that the researcher could only conduct and assess the findings from a sample of 9 respondents. This limited sample size would suggest the need to further confirm the results through additional research. Due to geographical and time constraints on the part of the interviewees all interviews were conducted telephonically. 81

82 The semi-structured interview approach led to the researcher, on a number of occasions during interviews, asking leading questions that may have affected the outcome of the findings. The conclusions reached in this research are the result of assumptions and inferences made on the perceptions, experiences, and views of the interviewees and the manner in which the researcher has interpreted and analysed these. Bryman & Bell (2003) suggest that it is somewhat doubtful whether grounded theory, in many instances, really results in theory. It is likely that the grounded theory that emerges from the research will be substantive in nature and it will therefore be difficult to test the hypotheses in order to develop a formal theory. Whilst this limitation exists it is likely that the substantive theory may have broader applicability. This research has not sought to develop formal theory but rather offers a substantive theory in the form of a practice model that follows. The research therefore does not claim to offer a universal truth but rather the reader has the freedom to judge the applicability of the findings to his or her own context. 82

83 5. Conclusion This research set out to understand what factors must be managed well in order to have a successful practice model for outsourced electronic freelance work. With this project, the researcher offers a contribution to academia in the form of a substantive theory. The significance of the proposed research to practitioners, in this case those managers responsible for elancer performance, is that in the absence of alternatives it offers an initial practice model that might help increase the likelihood of success of projects outsourced to elancers. The research began with a broad review of literature relevant to providing the context for the research questions in accordance with the guidelines for a Grounded Theory approach outlined by Strauss & Corbin (1998). In particular the literature review drew to attention that: Emerging technological trends are having a significant impact on the nature of work which is cause for businesses to seek to either exploit the opportunities that they present or seek solutions to the challenges that they present. It is evident that these trends are having a significant effect on the nature of the management model traditionally adopted and that this is particularly the case with respect to management practices for virtual teams. Recently, as a result of emerging technologies and spurred on by the recession, there has been a significant increase in the number of elance worker engagements. This type of engagement is expected to increase still further in future as cost conscious employers seek to capitalise on the benefits of such activity. Using the base knowledge developed through a review of the literature a cross-sectional sample of 9 elancers, employers of elancers and intermediaries, whose experience in electronic freelance engagement ranged from 1 year to 15 years, were interviewed. A semi-structured interview approach was employed which allowed the researcher to adapt to perspectives and respond to any points that were picked up on. The perspectives of the interviewees were based on the following guiding questions: 83

84 What channel is the primary source of engagement for elance work? What factors do employers regard as most important when deciding to select an elance employee to complete a project? What role does the project brief play in the success of an engagement? Does the nature of the work required impact the management of the project? How important are the nature and form of contractual agreements in elance engagements? What role does project planning and management tools play in elance engagements? What communication practices are necessary in elance engagements? Then, making use of open coding methodology, as suggested in the Grounded Theory approach, responses to these themes were coded to form 36 notable findings. Through a process of reduction, axial coding, codes were further reduced to form 8 key variables that are influencing factors in the successful delivery of elance projects. These key variables are: Openness of Communication, Clarity of the Brief Quality of Recruitment Thoughtfulness in elancer Selection Explicitness of the Terms of Agreement Appropriateness of Project Management Reliability of Freelance Network Explicitness of Review Finally, through selective coding, these key variables were systematically related it to one another, relationships were validated through the research findings and further substantiated by additional documentation. The result is a causal loop diagram that differentiates driver, outcome and linking variables. Outcomes: Whilst the overarching outcome for the model is the successful delivery of the project by the elancer, intrinsic outcomes within the model were the 84

85 improvement of the reliability of the employer s freelance network and a reduction in the need for extensive review of delivery and elancer reiteration of the deliverable. Links: The quality of elancer recruited and the degree of thought that the employer gives to the selection of an elancer are key links in the causal relationships. The importance of clarity of the terms of engagement and of the appropriate selection of project management techniques and tools was also clear. Drivers: The primary driving variable within the causal system is the level of open communication that the employer adopts. This variable is central to all loops and is implicit in the second key driver of establishing a clear and mutually understandable project brief. Finally, the research concludes with a comparison of the causal loop diagram developed with the e-collaboration Effects model (Qureshi & Vogel, 2005). The purpose of the comparison was to establish the dependability of the research findings and to assess the potential for transferability. It was established that there is a significant level of commonality between the two models and that no element of the e-collaboration Effects model directly contradicts or calls into question the findings of this report. Furthermore, the close correlation between the models offers some indication of the transferability of the results of this research. The resultant causal loop diagram, supplemented by the intervening practices recommended, clearly and holistically define the factors that must be managed well in order to ensure the success of outsourced electronic freelance work. In so doing, the model addresses what outcomes define the success of work outsourced to elancers, the key factors affecting the success of work distributed to them, and how can these factors be managed well in order to have a positive effect on the outcome. The model therefore offers complete and reliable answers to the research questions that the researcher set out to address Implications for practitioners 85

86 As this research set out to understand what factors must be managed well in order to have a successful practice model for outsourced electronic freelance work. The researcher offers in conclusion to this report the practice model presented in figure

87 FIGURE 13: PRACTICE MODEL- WHAT MUST BE MANAGED WELL IN ORDER TO ENSURE THE SUCCESS OF ELANCE ENGAGEMENTS?