Starting a new company does not mean you have to hire from scratch. More start-ups are scouting for temporary workers through websites which offer a global pool of freelancers ready to take on tasks that range from Web design to software development.
Take Roomorama, an online service that offers rooms to travellers who are willing to stay at someone's home while on a vacation, for instance. In 2008, the company, which competes directly with the likes of AirBnB, hired a project manager, two developers and a designer to build its prototype website.
"We are not technical people and we have never built a website before," said Roomorama co-founder Teo Jia En. "We had not raised money at that time, so we did not have any cash to pay someone full-time."
Ms Teo trawled the Internet for expertise and found Elance, an online job website that matches companies with freelancers. She posted a Web design job, along with a design brief, for freelancers to take up.
Roomorama received several proposals and awarded the job to a design firm in India that was registered with Elance. "That helped us to get off the ground quickly without hiring someone. It also let us test our business concept before hiring a team," Ms Teo said.
Besides tapping the pool of freelancers who will work remotely from any part of the world, work websites also help cash-strapped entrepreneurs lower their manpower costs. Through Elance,
Ms Teo believed she saved half the cost of hiring full-time employees during the company's early years.
Gushcloud, a digital marketing company, also reaped cost savings by hiring freelance intellectual property (IP) lawyers in India to draft its patents. It paid about $3,000 to draft each patent, which co-founder and chief executive Vincent Ha said could cost up to $11,000 in Singapore.
With the cost benefits, it is not surprising that companies which hire freelancers through online work websites tend to be small- and medium-sized enterprises (SMEs). At Elance, they make up 90 per cent of employers.
In a recent Elance study, 82 per cent of Singapore employers said they hire online freelancers to enjoy cost savings, while 52 per cent said they hire freelancers to fill talent shortages in the tight labour market.