The freelance economy has grown since the start of the pandemic
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Despite the Great Resignation, the U.S. freelance workforce continues to increase, a new study finds, and there are no signs of a slowdown in the near future.
Freelance workers have contributed $1.3 trillion to the U.S. economy in annual earnings this year, up $100 million from 2020, according to a report from Upwork, a platform for freelancers. The study also found that 59 million Americans — about 36% of the entire labor force — did some kind of freelance work in the past 12 months.
Marketplace host Kai Ryssdal spoke with Hayden Brown, the CEO of Upwork, about the freelance economy. The following is an edited transcript of their conversation.
Kai Ryssdal: I imagine, just given the state of the American labor market right now, in this — I don’t even know what it is — 22nd month of this pandemic or something, these are good times for your business.
Hayden Brown: They are, Kai. I think there was a huge talent shortage for skilled professionals before the pandemic. And as people have gone through the last year and a half-plus, they have really realized that they can tap into remote talent in new ways. And that is what all the skilled professionals on our platform are doing. They work remotely for these businesses. And so the world has really woken up to the idea that they can close critical skill gaps with these folks, and I think that is a tectonic shift, that we’re not going to go back to the world pre-COVID in that regard.
Ryssdal: OK, put a pin in that “not going to go back” thing, because I do want to get there. But should I be a talented professional looking for other opportunities, how does it work?
Brown: It’s pretty easy, actually. You create a profile online, you talk about the skills and expertise you have, and then start pitching yourself to jobs that are applicable to you and waiting for invitations from clients to come to you. And then as those come in and as you win projects, we do all of the work on the backend so that you’re getting paid. We create the contracts. We have a lot of systems to ensure that you actually don’t have to worry about any of the aspects around running your business. You just do the great work for clients and enjoy being an independent freelancer.
Ryssdal: And for which you get some cut, right?
Brown: That’s right, we take a cut of the earnings as our fee for doing those services.
Ryssdal: OK, so what kinds of firms are the clients? Are these sort of small businesses, like mom-and-pop shops? Are they mediums? I mean, who might I be working for, being the talented professional looking for new opportunities?
Brown: It’s everybody. That’s one of the compelling things I think about this work right now and on our platform is people can do incredible work with incredible businesses that are really tapping into these professionals.
Ryssdal: OK, so let’s get back to the pin I put in the whole going back thing. It seems clear that the American labor market in the way we work has changed. Do you believe, I guess, that it has changed now forever?
Brown: It has, Kai, it absolutely has. I think people experimented during the last year and a half with remote work, formed new habits, broke old ones. They realized that things that previously were totally normal, like the daily commute or listening to colleagues while they were working in the office, they can’t imagine going back to those things now. And that’s true for both professionals and for the businesses seeking to work with those professionals.
Ryssdal: Bigger labor market question for you: If I say we have a labor shortage in this economy right now, what do you say?
Brown: I think we have a labor mismatch. Businesses have been looking in the wrong places for the talent they need, and as they’re realigning where to look for that talent — such as in the independent workforce — they’re actually finding those still professionals that they didn’t know existed in those pockets.
Ryssdal: You know, so we did an interview the other day about the mommy track and how remote work and hybrid work can really be detrimental to women who are on the hybrid work track, because they’re not in the office, not a lot of facetime and all of that. Which I’m sure you’re versed in, having done this for a long time. But one of the things I talked about was there are some companies, and I cited JPMorgan and Jamie Dimon and the banking industry and law firms, they’re like, “You’ve got to be in person, man. If you want to compete in this industry, you got to be in person.” What do you say to that?
Brown: Those times have changed. I think that companies that really figure out and lean into how to rewrite the rules of leadership, of mentorship, of customer interfacing, in a much more distributed and remote-first way — augmented with face time, face time doesn’t completely disappear — will find themselves competing and operating in ways that bring in women and diverse talent and actually let them compete more in their spaces. I think they’re going to have a hard time keeping up with those competitors as those competitors forge ahead.
Ryssdal: Last thing and then I’ll let you go. Does Upwork use some of these talented professionals looking for new opportunities?
Brown: Two-thirds of our team is independent talent. So we live and breathe this every day. And we know exactly what these team members are capable of.
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