Research On Service Providers’ And Employers’ Strategy In Online Labor Markets

With the rapid development of the Internet,the emergence of the online labor markets has brought some shocks to the traditional offline physical labor markets.Compared with the traditional labor markets,the online labor markets is no longer subject to the restrictions of traditional employment relationships.Service providers can rely on information technology to work remotely,which increases their work flexibility.At the same time,service providers on the platforms come from all over the world,and thus employers’ options are increased by this worldwide environment.The long-term contractual employment relationship in the traditional markets has gradually evolved into the short-term contract in the online labor markets.The literature on this emerging area mainly focuses on the factors that affect employers’ hiring decisions and the project performance,but a large number of research questions are still unresolved.This article uses the data from a world leading online labor platform Freelancer.com as the research context to explore the key issues of employers’ hiring decisions and project performance in the online labor markets.The specific research contents are as follows:(1)To study the impact of service providers’ skill displaying strategy on employers’ hiring decisions.The first research focuses on the skill section in service providers’ profiles,which serve as signals sent to employers for their evaluation.This study divides the projects on the platform into more-skilled and less-skilled projects and examines the impact of service providers’ skill spanning in these two categories separately.Also,this research examines the moderating effect of service providers’ skill matching on the above relationship.The results of the research suggest that service providers’ skill spanning will reduce their probability of being selected by employers in the more-skilled projects,while in the less-skilled projects,service providers’ skill spanning and employers’ hiring decisions exhibits an inverted U-shaped relationship.At the same time,the skill matching between service providers’ skillset and employers’ requirements can weaken the negative impact of skill spanning in the more-skilled projects,but in the less-skilled projects,skill matching does not have a moderating effect.Therefore,service providers in the online labor markets should reasonably set the skill label in their profiles based on the above conclusions to increase their winning probabilities in the bidding process.(2)To study the impact of inexperienced service providers’ bidding strategy on employers’ hiring decisions.The reputation system provided by the platform helps employers reduce moral risks on service providers’ quality.However,on the other hand,it also creates entry barriers for inexperienced service providers who have just entered the platform.Based on the data from Freelancer.com,this article studies the impact of employer-level and project-level factors on the employers’ selections of inexperienced service providers.The results of the empirical analysis show that compared with employers from developed countries,employers from developing countries are more likely to hire inexperienced service providers;Compared with “employer-worker”employers,“only employers” are more likely to hire inexperienced service providers;Compared with fixed-price projects,hourly projects are more likely to hire inexperienced service providers.As the employer’s experience increases,inexperienced service providers’ probability of being hired is reduced.But this negative effect is weaker in hourly projects.Inexperienced service providers who have just entered the platform and lack feedbacks in the reputation system can change their bidding strategies based on the above conclusions to successfully survive in the platform.(3)To study the impact of employers’ project scheme selection strategy(contestbased VS contract-based)and prize strategy on project performance in online labor markets.Although a large number of previous studies have focused on the factors that affect the performance of projects in online labor markets,most of the studies only focus in one scheme.This article brings the two schemes together for the first time to study the impact of the project scheme on service providers’ participation and employer satisfaction,as well as the different impacts of project value in these two schemes.By constructing different empirical models,the following conclusions are drawn: employers publishing projects in contract-based scheme can help to attract more service providers to participate and reduce their expenditure on projects,but employers are more satisfied with the service quality from service providers in contest-based scheme.At the same time,increasing project value has a positive impact on contest-based projects,but for contract-based projects,the relationship between projects value and service providers’ participation is an inverted U-shaped.The results of this research provide guidance for employers to better configure their project scheme and project value based on their actual needs.