Elance updates tools for hiring, managing contract labor

Online jobs marketplace Elance is getting a big update next week, designed to bring more small businesspeople into the world of hiring workers they don't know and will never meet.

The service will layer in a workflow that should make the whole Elance process easier for newbies. There's a new time-tracker widget for contractors that automatically feeds data into the project page and the invoicing system. (It can be configured per job, if the contract is for piecework instead of time-based.) Elance, by the way, does not support keyboard logging or periodic screen capture of a worker's PC, as ODesk does.

Also new: free voice and chat communication support for hiring managers and contractors. People will be able to place anonymous calls even to contractors they haven't yet hired, if they want to talk with them first. (The service will call both parties and connect them, protecting the caller from revealing his or her caller ID.)

Elance is also launching a skills testing program, much like ODesk's, that allows contractors to get certified for particular types of work.

As before, hiring managers must place some of the funds for a job into escrow accounts, from which Elance will pay contractors when work is delivered or time milestones are met.

All the tasks that are under way get their own status page where customer and provider can communicate on their project. The system enforces the creation of status reports and requires each page be flagged with either an "on schedule" or "problem" tag. The goal is to keep communication open and keep projects moving.

All these additions to the Elance product set are designed to make users more comfortable with the evolving service economy, although as CEO Fabio Rosati says, the train has already left the station: there's a "huge exodus of work that used to be done in offices and face-to-face, and it is starting to move online."

Rosati's goal is to make Elance into an "online workplace." By providing matchmaking tools, workflow helpers, and communications services he wants to make the site, essentially, into a virtual office building--not just the bulletin board Elance was before.

The business is certainly sound, and the timing is right for this push. Elance takes a cut of all contractor payouts (4 percent to 6 percent depending on the volume of business the hiring party is doing on the site). That's a small overhead to pay given the reticence businesses have now to hire new staff. Elance is about more than just that, of course, but in this economy, that's probably enough to get the attention of a whole new troupe of users.

See also: Crowdspring, Taskmarket, RentACoder.