As someone who has tried diligently to work with the internet’s various crowdsourcing models, I have regularly encountered unpleasant surprises. The many disadvantages of crowdsourcing have evolved into what I now consider to be compelling reasons to avoid this online process — usually involving companies hiring people and freelancers seeking work via internet crowdsourcing websites such as Upwork. With this in mind, I have assembled a time-tested and authenticated list outlining five of the key disadvantages associated with most versions of crowdsourcing:
- The fees are off the charts — 20-40 per cent (of total project costs) and higher is not unusual.
- Quality control is only an afterthought — any quality reviews are likely to be the responsibility of clients rather than the website collecting the hefty fees.
- Anonymity is a core concept — attempts by freelance consultants and business clients to personalize the process will usually be met by swift warnings and penalties by the crowdsourcing overseers.
- A low bid mentality frequently leads to low quality results — most crowdsourcing projects involve low quality projects under $500 (and under $50-$100 is even more common).
- Mergers are making a bad situation even worse — the combination of Elance and oDesk into “Upwork” is a perfect illustration of crowdsourcing at its worst.
For example, Upwork has raised fees from 8.75 per cent to 20 per cent and increased the payout period (for releasing funds to freelancers upon approval of the project by a client) from immediate to six business days. At the same time, most participants cannot point to one single lasting improvement enacted by Upwork. Even the name “Upwork” is a marketing disaster, replacing the Elance brand that capably represented a mixture of e-commerce and freelance projects with a new name that represents a combination of what? In this case, the “Up” apparently refers to increasing fees and payout periods as much as anything.
Anonymity on a Business Project — What Could Go Wrong?
Arguably the biggest disadvantage of the entire process is how the crowdsourcing websites rigidly require anonymity. Conceptually the principle is designed to prevent freelancers and clients from working offsite — this would, of course, eliminate crowdsourcing sites from receiving their vig (aka vigorish) of 20 per cent, 35 per cent, 40 per cent and beyond 50 per cent in many cases.
Ironically, most crowdsourcing participants would gladly pay the (often excessive) fees in exchange for eliminating anonymity from the entire process. Why? Because personalizing the work process is likely to facilitate better communication and quality while fostering long-term working relationships.
The Exodus of the Best Freelancers and Clients from Crowdsourcing
With crowdsourcing disadvantages such as those enumerated above, the absence of a “quality environment” will eventually cause the best clients and freelance consultants to find a better way of working together. While the first lesson learned is to avoid crowdsource websites, the second lesson learned is to evaluate more “traditional” forms of outsourcing (i.e., without the crowd mentality) and business consulting.