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Upwork: Difference between revisions
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With rising borrowing costs, companies will lay off full-time employees and likely hire freelancers. The freelance workforce will enable them to save up to 50% of employee costs<ref>https://seekingalpha.com/article/4549754-upwork-perfection-not-needed</ref>. A recent report by LinkedIn indicates that US companies are increasingly hiring freelancers as recession fears grow. According to the report, there was an increase in contract job positions posted on the site between May and November 202 by 26% compared to the same period in 2021. On the other hand, full-time roles posted on the site only grew by 6% during the same period<ref>https://www.ft.com/content/53329655-74b3-4820-a5f9-37ae39ad6d7d</ref>. | With rising borrowing costs, companies will lay off full-time employees and likely hire freelancers. The freelance workforce will enable them to save up to 50% of employee costs<ref>https://seekingalpha.com/article/4549754-upwork-perfection-not-needed</ref>. A recent report by LinkedIn indicates that US companies are increasingly hiring freelancers as recession fears grow. According to the report, there was an increase in contract job positions posted on the site between May and November 202 by 26% compared to the same period in 2021. On the other hand, full-time roles posted on the site only grew by 6% during the same period<ref>https://www.ft.com/content/53329655-74b3-4820-a5f9-37ae39ad6d7d</ref>. | ||
During Q4 2022 earnings release, Hayden Brown gave three phases that the company normally encounter during a recession or high inflationary environment. They include<ref>https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3 (page 2)</ref>: | |||
(a) Clients reevaluating budgets. At the onset of a recession of high inflationary environment, businesses cut costs and freeze hiring. This is when Upwork notices reduced spending on its platform. According to Hayden, this is clients are currently in this phase. | |||
(b) Clients turn to upwork to cut costs. This is when businesses start realigning their cost structures to the most efficient areas and redeploy their resources to platforms such as Upwork, where they stand to get maximum benefit. | |||
(c)Clients using upwork to reaccelerate growth at the end of a recession.As recessionary environment diminishes, businesses start hiring aggressively in an effort to accelerate growth. They will choose platforms such as Upwork to drive this agenda due to its flexibility and fast hiring. | |||
When we go back to 2020 recessionary environment brought by Covid-19 pandemic, we notice that Hayden Browns statement above holds true. During Q2 2020, Upwork revenue grew by 17%, the worst in history. However, revenue growth rate started picking up in Q3 henceforth. In fact, Upwork emerged as one of the biggest beneficiaries of covid 19 pandemic, with its revenue growing by 35% in 2021<ref>https://docs.google.com/spreadsheets/d/1HEX9PT_YXkz-eua9tR-FFx-s6gAr-7ZoTmbW8RbRqYE/edit#gid=649874449</ref>. | |||
=== 5. Jobs posted on Upwork platform holds steady === | === 5. Jobs posted on Upwork platform holds steady === | ||