Not too long ago, a freelancer was looked upon with pity and disdain because others had a "real" job. But today, more than 20 million of the 131 million workers in the U.S. civilian labor force have ditched their real jobs to work independently from home or in the field.

Thanks to an explosion in online recruiting, freelancers rarely have to knock on doors looking for work anymore. Online recruitment, a $100 million industry today, is expected to grow to $1.7 billion by 2003, according to analysts at Forrester Research.

Access to a bigger pool of talent reached online helps agencies find workers for clients in this tight labor market.

"More than anything, the advantage of using an agency is the speed," said Liza Ahearn, vice president of human resources for Santa Monica-based X;drive, a fast-growing company that offers file storage on the Internet. "We've grown from 15 people in October to about 70 today."

Ahearn said the company, which is planning to go public this summer, liked one freelance Web designer so much that officials offered him a full-time job after only one day. By including stock options, they were able to give him a lower salary.

While clients benefit from help in finding workers, freelance art director Jaeson Kay says he's happy to have the steady, well-paid work. He has used Los Angeles-based Etalent Agency to find interesting, well-paying jobs for the last eight months

"Etalent allowed me to work in-house and out-of-house," said Kay, an interactive art director. "They call you, check in with you to see how you're liking the project. They ask if you're available for other work, and they try and get you a better rate for your next job."

Companies are willing to pay a premium for talent that has been pre-screened, reference-checked and tested on specific software skills before they show up for work.

"When you need a freelancer, you usually needed them yesterday," said Leslie Berliant, general manager of Etalent, which places designers and artists in many dot-com companies and can be reached at

Perks aplenty

Business owners and managers are willing to pay top dollar for talent they don't have to recruit. If they like the freelancer enough to offer a full-time job, they pay the agency a finder's fee of 25 percent to 35 percent of the first year's salary.

Many small businesses make the mistake of posting job openings only on the company Web site. "Unless freelancers have heard of your company, no one's going to find your ad," said Berliant.

First-year revenues for Etalent were about $3 million. The parent firm, Artisan, which has offices in Chicago and New York, was founded in 1987. Prior to launching its Web site, Etalent worked offline, using advertising, direct mail and meetings to connect candidates with companies.

"Our Web site is a great resource for us now, but in this business, especially at the high-end creative level, we still have to connect people one-on-one," said Berliant.

To compete in the online staffing world, agencies are adding more perks and services every day. At Boston-based Aquent, formerly known as MacTemps, freelancers can sign up for invoicing services as well as health insurance.

"We found that freelancers like finding their own work, but they have problems getting paid and obtaining insurance," said Mark Keehnle, general manager of Fast Cash, Aquent's financial-services division.

Fast Cash, which opened last summer, assists independent contractors by doing their invoicing (for 5 percent of the bill's amount), and directly depositing the checks into the person's bank account.

Fast Cash also offers independent contractors access to insurance coverage for liability, their home offices and equipment. Fast Cash finds an appropriate health-insurance plan, but the premiums are still steep. About 40 of Aquent's 200 independent contractors rely on Fast Cash to obtain health insurance.

Old-fashioned offline recruiters say the online boom hasn't hurt their business.

"We use the Internet, but that's just a starting point," said Dennis Inzinna, president of Fortune Personnel Consultants in New York. Fortune recruits people for middle-management to upper-level jobs in the manufacturing, pharmaceutical, chemical and auto industries.

"We're not just the matchmaker, like these other agencies," said Inzinna, who has been a recruiter for 22 years. His firm is paid 30 percent of the first year's salary for every candidate placed.

Personal relationships are everything in the recruitment world, he said. "We know the players in the industry, and they know how to contact us," he said.

Starting your search

Here are some tips for working with agencies and recruiters designed to save business owners and managers time and aggravation:

-Before you call an agency or recruiter, list all the technical skills and job experience you require for the project.

-Ask employees who will be working with the temporary employee what kind of skills they need help with.

-Determine the scope of the work you need done. Be as specific as possible.

-Determine how long you think the project will take.

-Ask the agency to provide a range of hourly costs so you can prepare a budget.

-Explain any company policies or rules that may affect their work.

-Make sure a staff person is available to welcome the temporary worker, show him or her around the office, and make introductions to colleagues.

Jane Applegate is the author of "201 Great Ideas for Your Small Business," and is founder of, a multimedia Web site. She can be reached via e-mail at

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