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IT pros find a place online to broker services

IT pros find a place online to broker services

By  Linda Tucci, Executive Editor

03 Jun 2008 | SearchCIO.com

OnForce Inc., which bills itself as "the world's largest marketplace for IT and consumer electronics service professionals," issued its inaugural "State of the Industry Report" this week, based on work orders completed between Jan. 1 and March 31.

The report offers an interesting snapshot of the IT service economy, in particular of the correlation between wages and the open capacity, or free time, of the 12,000 IT workers actively using the site. Even more interesting than the numbers in the first of what the company hopes will be consecutive quarterly reports, is the model established by the 4-year-old company.

Among the findings from Lexington, Mass.-based OnForce: Wyoming, Vermont and Alaska are the most expensive states for IT services, posting hourly rates nearly two times OnForce's national average. Georgia, Arizona and Oklahoma have the lowest hourly rates, at less than 30% the national average. The cities commanding the highest hourly rates are Akron, Ohio; Topeka, Kan.; Irvine, Calif.; and Parsippany, N.J., while New York, Houston and Chicago top the list as the nation's busiest IT services cities. Florida, Texas and Virginia are home to 40% of the 15 top-volume ZIP codes in the U.S. for IT jobs.

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The rankings do not provide the actual hourly rate but are indexed against a national average pegged at 1.0 that is derived from the roughly 750,000 work orders processed on the OnForce site. Akron posts an hourly rate index of 3.76; Topeka, 3.62; and Irvine, 3.48. At the other end of the spectrum in the top 25 list of states is Denver, with an index of 1.86; Rockford, Ill., at 1.85, and Stockton Calif., at 1.84.

The most expensive IT job? Voice over Internet Protocol telephony, by a mile. The hourly rates are nearly five and a half times OnForce's national average. Server hard drive jobs, by comparison, offer an hourly rate index of 1.52 times the national average.

'Community sourcing'

OnForce is an online hunting ground where providers of IT services and potential buyers hook up and broker jobs in a matter of minutes.

The model resembles an eBay for IT services, where employers and workers meet each other online and agree on an hourly rate that is driven in large part by availability. Unlike employment agencies, which focus on placing IT professionals in full-time jobs or even temporary jobs lasting several months, the jobs brokered in the OnForce marketplace are measured in hours.

"We have taken a very inefficient marketplace and made it very efficient," said Paul Nadjarian, senior vice president of marketing at OnForce.

"OnForce is connecting a need with open capacity. So there could be 1,000 people in an area, but if they are booked solid, the rate will be higher than an area that might have 50 people with 50% underutilized time," Nadjarian said.

"You only accept the work you want to do. If you don't want it, somebody else will pick it up," he said. One of the most common jobs is setting up wall-mounted flat-screen displays.

IT professionals post their resumés, including feedback from prior jobs, and respond to job requests as they come up, typically in a matter of minutes. In fact, the average time to accept requests for work is 5 minutes and 26 seconds, Nadjarian said.

There is no fee to join, but the market exacts a price. OnForce collects a flat fee of $11 per work order from the employer and 10% of the worker's wages when the worker is paid.

"I think they're onto something," said Andrew Bartels, an analyst at Cambridge, Mass.-based Forrester Research Inc. "It seems to work out for everybody, professionals and for buyers, definitely."

Bartels, who was briefed by the company in May, said the OnForce marketplace is used by companies such as Best Buy, for help with installing personal computers or other equipment. "They match up the job and the skills and can get somebody on the spot." But the marketplace also has implications for IT department, he said.

"It's a great opportunity for an IT department that may have to open, say, a sales office in Nevada. Rather than going to a national contractor, they can reach somebody there to go out and take care of it."

OnForce verifies the IT certifications of workers who use its site, but it stays out of the way otherwise. It does very little recruiting of IT professionals, Nadjarian said, relying on "viral marketing," to attract resumés.

Nadjarian demonstrated how the site works by playing "ZIP-code roulette," asking for a place where one might not expect an abundance of IT professionals. Punching in 04294 (a tiny village in central Maine), 27 people popped up as available in the area. The median time to accept jobs is 5 minutes and 3 seconds. The average service fee is $147.71. Brad, from Augusta, Maine, is the top performer with 394 work orders completed and a lot of Dell experience. A prospective employer can view his work history, certifications, skills and feedback from other jobs.

You only accept the work you want to do.
If you don't want it, somebody else will pick it up.

Paul Nadjarian
senior vice president, marketingOnForce Inc.
"We make all of that information transparent," Nadjarian said, claiming the biggest issue in hiring is reference checks, or knowing a worker's true history and reputation.

"We generate all this data within the marketplace based on people leveraging OnForce contracting with professionals," Nadjarian said. The rankings are benchmarked using the nearly 750,000 work orders completed on the site since OnForce launched, Nadjarian said. The company's doubling of volume each year means that a big chunk of the data comes from the past year.

Some companies, like technology service provider Front 15 Inc. in Corpus Christi, Texas, are keeping their workforce busy by using the site. The company told The Wall Street Journal that the annual revenue it generated from using the site had risen from 22% to 31% in just one year.

The model is becoming known as community sourcing, Nadjarian said, and offers CIOs data worth considering as they contract for IT services. CIOs interested in getting the best price and quality for outsourced work should ask their providers if they leverage the OnForce site, he recommended.

"We all make hiring mistakes. Many people interview incredibly well. But those hiring mistakes are really research mistakes," Nadjarian said. The OnForce marketplace gives IT professionals an incentive to build a reputation. "They are proud of it and protect it."

Let us know what you think about the story; email: Linda Tucci, Senior News Writer

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