Outsourcing 2.0: oDesk CEO Gary Swart (Part 5)

Sramana: Tell me more about the work management portion of your platform.

Gary Swart: The management portion is also interesting. We have a lot of customers in the U.S. who are hiring onshore workers. Hiring onshore workers is tricky because companies would like to assume everybody is a contractor, but the IRS would like to assume they are not. They want to make sure everyone is paying their taxes, and there are strict laws around 1099 versus W2. oDesk can help you regardless of which way you go. We can’t make the determination, but we can give guidance to let you make your own determination.

Sramana: The IRS does not make you file 1099s for independent contractors outside of the country, does it?

Gary Swart: They do make you file certain papers for certain countries where workers are doing certain things. We have spent a lot of money on global compliance and attorneys to protect you as an employer, or you as a contractor, and oDesk as a business. There is a lot of IP around that.

In the event a contractor looks more like a W2 worker, oDesk can help the buyers. They check a box indicating they would like that case to be treated like a W2, and oDesk can facilitate that relationship. oDesk becomes the employer of record so the buyer does not have to. We can charge a few more dollars for that. As a result of that feature we have clients bringing their own relationships onto our global relationship platform. Instead of companies having to pay 50 contractors around the world they just pay us and we take care of all of it.

Contractors started asking us for benefits, but buyers were cautious. With the amount of working going through the U.S. we were able to go to a dozen insurance companies and begin offering health insurance.

Sramana: What do you offer in terms of health insurance?

Gary Swart: Any contractor in the U.S. who has worked an hour is entitled to guaranteed insurance. We have a basic plan which has a max threshold of $20,000. It would not cover anything major, but it is enough for you to get a co-pay on drugs and a doctor’s visit. We then offer a catastrophic plan that covers everything above that. When you put the two together, you have full medical coverage that is better than anything you can get on your own.

Sramana: That is an interesting proposition, because in the U.S. there are an enormous number of people out there without jobs and without healthcare. You obviously have a lot of projects as well.

Gary Swart: We have projects and jobs that are going unfilled. Sometimes employers could not find what they were looking for. I don’t even think we are even reaching the market potential for this. We believe the world of work is changing. Companies are starting to realize that they can use remote workers.

There is a massive trend to go with more contract workers. What we think is disruptive and different is remote contractors. Some businesses may have 100 employees, of whom 10% are contractors. The real question is, what percentage of them could be remote contractors.

Sramana: With a few exceptions my entire team is remote.

Gary Swart: You are an innovator and an early adopter. I think innovative companies are tapping into it but we have not touched the masses. The growth in this market will be massive. There is a world of remote workers out there that is available.

Sramana: Do you think companies are going to figure that out?

Gary Swart: I think we are still very early. I speak to larger companies that wonder why they have not done this earlier. We are getting pulled up into larger companies who have thousands of contractors. We are starting to look at enterprise deals now.

This segment is part 5 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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