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Upwork CEO on how businesses benefit from putting freelancers to work

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·29 min read
Courtesy of Hayden Brown
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On this week’s episode of Fortune’s Leadership Next podcast, host Ellen McGirt talks with Hayden Brown, the CEO of Upwork, about the future of freelancing, the ever-growing relationship between freelance workers and businesses, and why CEOs should stop waffling on the remote vs. back-to-the-office discussion.

Listen to the episode or read the full transcript below.

Transcript

Alan Murray: Leadership Next is powered by the folks at Deloitte, who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to Leadership Next, the podcast about the changing rules of business leadership. I'm Alan Murray and I'm here with my amazing co-host, Ellen McGirt.

Ellen McGirt: Alan, it's so great to be back with you. And I want to say I've missed you. Thevery strange thing about our episode this week is that you weren't able to join. It was a wonderful conversation, but it just wasn't the same.

Murray: I was doing my own COVID recovery. Thank goodness it only took a day or two.

McGirt: All those candles I lit I hope it made a difference. We were really worried but I'm glad you're back.

McGirt: The whole time I was thinking about how much you would love this conversation too. Our guest was Hayden Brown, the CEO of Upwork. Upwork calls itself the world's work marketplace. It's primary function is to connect skilled freelancers with businesses who need their services, a whole new way of thinking about the gig economy. We've spent so much time the past few months talking about the changing world of work and the challenges facing companies who are looking for talent. It was really a very timely conversation.

Murray: Yeah, it's really important too. You know, this kind of Uber-ization of work has been proceeding over the course of the last few years. I think there's a lot more to be done. The fundamental structure of business of the 20th century is changing before our eyes.

McGirt: Exactly. Does that make a more equitable world or not? We don't know yet. But one of the things I want to point out before we dive in, I was really struck by her sense of mission, which I know always rings a bell for you. Yes. Hayden's providing service to companies. But she really sees Upwork as much, much more. And we delve into that right off the top. Thank you so much for being here and welcome to Leadership Next.

Hayden Brown: Thanks so much for having me on.

McGirt: Why don't we start with the very beginning for anyone who's not familiar. Can you tell us a little bit about Upwork, what it does and why it's important?

Brown: So we are really building the future of work, connecting talent on the one side with businesses of all sizes to work together on our platform. The work is largely done remotely. So the skilled professionals working on our platform typically are doing anything from web development to designing creative work, [inaudible], really any kind of work that can be done in front of the computer can be done by one of the skilled professionals on Upwork. And they're coming on our platform, creating the profiles and finding their clients, which are these businesses that range from small mom-and-pop staffs, all the way up to 30% of the Fortune 100 who are really building programmatic ways of engaging with freelance talent and full-time talent that they find on our platform. Really, which is, I think, a part of the future of [inaudible] in a very flexible model that really works for both sides. It works for businesses and professionals that are finding their clients on our platform.

McGirt: Let's dig into a little bit about why Upwork is different. We talk a lot about purpose on this podcast and you bring a unique sense of the possibility of work in the workplace to Upwork. Can you tell us a little bit about that?

Brown: Our mission at Upwork is to create economic opportunities so people have better lives. That is really our guiding light. And the whole reason our platform exists is this idea that has great work can be done from anywhere and that people shouldn't have to lose their homes or families or cross borders, move to the big city, whatever it may be, to do great work. And that's the reason I joined the business two-and-a-half years ago. It was always really inspiring vision and mission for our employees and our team members who are working for us from around the world. And so we've always believed that we can build this very meritocratic work platform where people from anywhere can compete for great work. Clearly over the last couple years of the pandemic many more people have woken up to the fact that great work can be done from anywhere and I think this is really just the beginning of a tectonic shift that we are starting to see in how people think about work, what it means and what's possible. In a world where remote work is something that's much more mainstream and allows frankly, participation and a very different type of work and reality for work in the future which is really [inaudible].

McGirt: I agree with you. Before we dig into the pandemic during which we've seen so many crazy shifts in the talent marketplace. You use the word meritocratic, and it gets my ear because the idea of the meritocracy has so long been a barrier to inclusion. It's been a code word for not a culture fit. The other, not you, people like me, that kind of thing. Can you tell me how you're planning to reclaim that word?

Brown: I think a platform like ours and what we're trying to build is a place where it's all about your skills and abilities. It's not about the color of your skin. It's not about your gender. It's not even about where you went to school. People on our platform are able to come in and compete based on what they're able to do. And it's really a performance-based platform where it's usually transparent. People earn money based on what they're able to perform on. And because it's a two-sided marketplace where the talent are reviewing their clients are making those reviews and clients are getting their talent and say hey, this person did great work for me and I gave her $1,000 for this project $100 an hour to do this work. All of that is visible and there's a saying that sunshine is the best disinfectant. Because it is so visible people are able to earn with their work on this platform.

McGirt: So I have to believe that the pandemic was bonkers for your business. I got some of the numbers in front of me. Can you highlight some that can really tell the tale of how you grew.

Brown: We saw a lot of growth during the pandemic, for sure. I think a lot of people woke up to the fact that remote work could be part of their business. A lot of businesses started to be interested in freelancers and remote workers off our platform for the first time and that certainly started to show through. A number [inaudible] client registrations over the last couple of years. Some of our best quarters ever as a public company were delivered over the past couple of years.

But for us, I think this is really the story of early innings in a much bigger game. We're going after a trillion-dollar market opportunity. We are in the early stages, even though you know we've been at this game, we're a 20 year old company and we went public in 2018. But I think the bigger potential here is actually what lies ahead of us versus what happened the last two years. And what was exciting I think is the idea that so many workers woke up to the fact that they didn't have to have a horrible commute. They didn't have to trade off time with their family. They didn't have to schlep into an office to do things that they loved. And that now gets to be center stage as they recreate new work lives. Whether or not they actually do go back into the office sometimes or do you know, kind of renegotiate with their employer what the world of work looks like. I think that was really exciting that we can head into a future of work. It doesn't need to look like in 2019 or 2020 and rewriting those rules of work, I think, is what's going to be frankly a win for talent. And what I see every day on my platform is this is a huge win for businesses too. So there's a win win here. I think there's actually very rare [inaudible] tectonic changes is very zero sum. In this case, I think both sides benefit.

McGirt: So let's dig into that freelance economy here. What are you learning about who's winning? What kind of talent is in demand? And what kind of power can freelancers have going forward? Is there really going to be enough of the shift to freelancers and their well being and their economic opportunity in the marketplace for them to carve out a life this way?

Brown: The economy, frankly, I think the numbers are probably astonishing to people who aren't familiar with it. Already one-third of Americans are freelancing. It's over a trillion dollars in the U.S. economy today. And so this is something that was already happening at a huge scale before the pandemic and has only accelerated. We did some research this year. We're finding that the 10 million Americans right now are already thinking about adding themselves to the freelance workforce towards because the attributes of freedom flexibility, defining the terms of who, when, where and how you work. are so attractive to more and more people both in the U.S. and globally. We see every successive generation of workers increasingly participating in freelancing with generations of college grads. Forty-six percent of them are freelancing today. What we're seeing is a huge shift where in the past, I think a lot of workers thought freelancing was not that safe, not that stable, something of a last resort type of career choice.

That has actually flipped, and the narrative is now the opposite. Especially among younger Generation Z workers, they saw the 2008 recession. They've seen their parents go through rounds of layoffs and hardship. The work of an individual employer keeps proving to be very unstable, and people say wait a minute, if I'm going to be at the behest of the single employer, that's actually very risky for me. What we see now is really interesting. I feel more secure in my freelance career where I have four or five clients that are my [anchor] clients than I did previously when I was working for just one employer and I was really. We see every day on our platform, basically seeing peak months of registrations and engagement from freelancers on a [inaudible] through the pandemic, and that's kind of stayed at this peak level over the last couple quarters without dropping down to people just continue to come into the U.S. and be really interested in this way of working.

McGirt: So, I want to switch gears to a topic that is a little less rosy which is what happened to professional women during the pandemic. I think the last number I have in front of me, some 12 million women were pushed out of the workforce. It hit working moms particularly hard for all of the reasons that we know, including access to childcare and just disruption in the home. What have you done with that research? I know that you have started an interesting campaign.

Brown: Yeah, the numbers here are staggering. And we've seen in the U.S. alone, more than 1 million women, moms specifically pushed out of the workforce [inaudible]. It's really something. We looked at the numbers we thought we had to act. We launched this campaign around Motherhood Works. And this idea that the skills that in this case women have as moms as parents, these are skills that you want as an employer, around multitasking, around creativity, around delegation, around leadership, ike these are all the things that people have honed as parents and when they show up in your workplace with those skills, even more valuable employees than ever before. And so, really shining a light on the fact that these are valuable employees that the traits that they have as parents make them so valuable in the workplace. I'm really calling on corporate America to bring these people back into the workforce, make space for them, seek them out intentionally and really recruit for them. We have a whole campaign on that, a page where you go and actually surface this talent through our website. This was really important to us because again, these women have the skills and the employers have the needs in the works, seeing the openings in all time highs. And so really connecting the dots between the supply and demand sides of the equation. Just make sense. And obviously again, it's good for both sides.

McGirt: And speaking of good for both sides, where are employers on this? Hiring freelancers is typically not been the preferred method of staffing up. We're hearing that a lot but the tension of coming back to the office for traditional manager who just wants you to come in, sit there, watch you do your work, you know and then go home. But freelancers adds an extra layer of complexity to what felt like a traditional managed workplace. What trends are you seeing there?

Brown: Yeah, I think this is where mindsets and behaviors are really starting to change. You know, contingent staff have always been a future in the American workplace and globally. Now that people have gone through this experience I think of waking up to the fact that they could incorporate remote employees and much more into their workforce strategy, whether it was full time team members, whether it was freelance staff, suddenly what we're seeing and hearing from companies is they're realizing, okay, if I can have a team that can be anywhere, that means I can tap into freelance team members who can be anywhere. This opens up a huge pool of talent that previously wasn't [inaudible]. In this era, where the war for talent is at such an all time high, every business is trying to recruit. And now as we head into a potential recession, this is about thinking also about more flexibility. A lot of businesses are saying well, we don't want to commit to that full time staff, I might need to have a little more flexibility [inaudible]. We're seeing a lot more., I think, awareness now that this is something that people can't overlook as part of their [inaudible], it has to be a centerpiece.

McGirt: I don't know as much about this as I should. But having been a freelancer for a good chunk of my life, actually, I missed a lot of things. It's not just the typical benefits, but the sense that I had protections in case of harassment or other kinds of issues at work, the sense that I can participate in the equity of a company things like that. Do you anticipate a changing in the access to those kinds of benefits and protections for the freelance class?

Brown:Yeah, I think this is where the ecosystem is really evolving. We see this even with renaming their talent function from talent acquisition, which I think is becoming more of an outdated term, to talent access. Because they realize it's kind of about acquiring the talent, so access and talent and much more of an argument way. Now they're also evolving their benefits programs or policies and sort of think more holistically about, well, how do you onboard people who may not all be full time employees but also include freelance workers? What does that look like? What are those benefits? How do we evolve the benefits package? How do we have to evolve the different aspects of what we're offering in a way that is equitable, even if it is different, because these different populations may need different things, which is a much a different model, I think, for kind of thinking about different populations that the workforce.

[Music]

Murray: I'm here with Joe Ucuzoglu, the CEO of Deloitte U.S. and the sponsor of this podcast for all three of its seasons. Thank you for that, Joe.

Joe Ucuzoglu: Pleasure to be here.

Murray: So the biggest issue that I hear companies talk about these days and CEOs talk about is the battle for talent. People talk about the great resignation. How do you hire great people? How do you retain great people? It really seems to be the leading challenge most companies are facing. Do you agree?

Ucuzoglu: I do. The intensity level in the talent market is high. We certainly see the challenging aspects of worker shortages of turnover levels. But Alan, we're also seeing the leading companies realize that there's some opportunity in all of this. Market forces are at work. That's driving differentiation or talent experience and the companies that do this well are going to be big winners, attracting and retaining more great talent. There's a lot of good competition, driving better outcomes for employees.

Murray: And so what's your advice for the companies trying to win the battle for talent?

Ucuzoglu:  Well, first it's not going away. So prepare for the long haul. The demographics would suggest that there will be some level of continued tightness. I also think that it's important to realize that employees are now in the mindset of expecting a lot from employers, including a baseline expectation that they can relate their work to a broader purpose, that they're doing work that they're passionate about. They want to work for an organization that aligns with their values.

Murray: Joe, thank you.

Joe Ucuzoglu: Alan, it's a real pleasure.

[Music]

McGirt: So I know that you've been at Upwork for awhile and you became CEO just before the pandemic began. That must have been an incredibly challenging time. But along with the pandemic, a lot of other things were happening, everything from protests and the murder of George Floyd to now, war in Ukraine, and all of these things are impacting not just your workplace, but workplaces around the world. That puts you central into some really key conversations. I'm curious how you handle it. I'm curious how you handle it as an executive team, and how you make decisions around where to invest, where to weigh in and what role you play in the marketplace of talent.

Brown: I mean, the last few years, I think has just been so challenging for every business, every executive, the environment is just very divisive. Certainly a crisis upon crisis. I think what I've recognized is our role is definitely as a CEO and as executive team, as a business is definitely a lot broader than just stewarding the business. Team members, our customers are looking to us to speak to our stand on certain issues and be very transparent around that and our business has to be prepared to respond in times of crisis. And programmatically, we went from crisis tocrisis in my leadership efforts at the helm in 2020 COVID to all the different ones that you've mentioned and more. And so we've learned that we have to have come to crisis response as a muscle and I get faster and better. And really every crisis presents an opportunity, in my view, to either build trust and build cultural fabric both internally and with our customers or to destroy it. And kind of every crisis is a test in that regard. But certainly for us at Upwork we have had these moments, and they've been very formative for us in terms of cementing us further around our values, our mission, why we're here, why we come in every day, and how we want to show up for our team for our customers. Always being peoplecentric, always thinking about our values and our mission. And knowing that we're here to build something for the long term and make decisions that will stand the test of time. But it was challenging and certainly, you know, we haven't always been perfect, but every time we're trying to learn and inform, what does this mean in terms of how we kind of always show up in a way that we're proud of.

McGirt: We gave an example with working moms in your campaign to make sure that employers understood the value of this very specific demographic, but I imagine that you collect a lot of data about job seeking behavior, about talent. I'm curious how you do it, what catches your eye and how you decide to put your shoulder to the wheel with a campaign or to advocate for a certain demographic. I know it's good business, you're growing your own marketplace, and that's good business, but it also strikes me as part of your overall mission.

Brown: It really does come from a place of our mission. And we're always thinking about the different populations we serve. Women and minorities are a big piece of the puzzle for us. Thinking about that meritocratic platform that we were talking about the beginning in terms of how are we advancing that cause, you know, one of the recent focus areas for us has obviously been Ukrainian refugees. This started back actually with the Syrian refugee crisis, and we started looking at okay, how are we showing up for displaced populations? We have work around that that is ongoing, and I think part of it for us is just looking at as world events are unfolding, some of it is the moment and we think about okay, how can we show up in this moment with the superpower we have as an organization. The capabilities we have to help people who need or to create capabilities that can perform for people in the moment when they really do need help or support or capabilities [inaudible]. And then some of it is more you know, long term programmatic drives that do come out of your growth aspirations in ways that we can support the global population of users on our platform over the long term.

McGirt: I know employers are really struggling and individual leaders to with the design of the workplace and the future of how they want to get things done. Is it remote? Is it hybrid? Is it in-person, do you make demands? What is the combination there? I was wondering what your advice would be for someone who's struggling with this? How can they make the best decision for their teams and their companies and their customers and everyone they need to care about because I'm pretty sure there's not one size fits all solution.

Brown: Yeah, it's definitely not one size fits all, but I think there's two things that can really help people who are wrestling with this. One is experiment. Take this on like you would other business challenges and test models that you think might work for you. Don't feel like you got to make one big proclamation and commit and then call it a day. Because I think everyone is learning, the world is changing, there's a lot of fluidity in the environment. And so take the opportunity to test out things that might work for your team and get feedback and then move on from there.

The other one is I say pick your poison and be really clear about that with your team. I mean, the worst place to be is this awkward middle of like well you know, we're kind of going to do this but not that and people get confused if you don't really take a stand on what you're solving for and why and where you're trying to be on remote or in person or a hybrid model or whatever. And I think to be honest, the easiest place to be is kind of one end of the spectrum or the other like in person, or hey, we're really remote and then we do things, which by the way, doesn't mean we don't get together sometimes I think there's a misnomer of remote work means we never see each other. I think the hybrid part of like it's some days and it's these two days and we're policing in the office and counting your hours, I think probably the worst place to end up because there's a low trust factor and I think that you can have a lot of challenging consequences to it. But regardless of where you are, pick a spot and be really clear about what your spot is and why. And then I would say experiment to learn if it's not working. You can change and try the next iteration of treatment.

McGirt: You have amazing origin story yourself. Tell us about how you grew up.

Brown: Oh my. I really have this kind of crazy career that they both were in the international development space. We ended up living in Nepal for nine years. Both have been a huge inspiration to me. My mom was running this really groundbreaking program, which was around women's literacy and microfinancing in Nepal. And I think when I saw through my parents and their work, it's really kind of set up framework for my own career was that it's so worthwhile to spend your career kind of in service of others and trying to have a bigger impact on the world. And so seeing that and seeing that through their work, and also falling in love with this idea of the world is this truly beautiful place with talented people everywhere, but truly they don't all have the opportunities that those of us have led me on this path, where eventually I fell in love with tech and I went to work in the tech space, but then I found this company, it was called oDesk at the time now it's called Upwork. That was basically during this amazing thing with technology around bringing work to people. So I think I got really lucky in that seamless inspiration from my parents around what their work was and then finding a business that was doing something with technology. That was also hugely inspiring to me in terms of the impact it could have on the world.

McGirt: We have a lightning round of questions that we're asking all our guests this year, but before I get to that I want to circle back to where we started, which was purpose because it's clear talking to you that you have a strong sense of the transformational aspect of work and dignified work and well paid work and equitable treatment in the talent marketplace. And that's something that sits closely to you for your own sense of purpose. I'm curious if you have advice for other CEOs or other senior leaders as they're struggling with how to embed not just their own sense of purpose in the world, but a broader sense of purpose into the work that they're doing. Spend a lot of time talking about stakeholders instead of shareholders here. And even though it is a rich conversation, in many ways, it's a new conversation. How do you recommend your peers in other industries and companies to begin to think through how to create purpose and equity in the work?

Brown: That's a big question, Ellen. I think in my mind, I have this image of companies today as being glass houses. We're really so transparent, and everything we do inside of our company, we have to assume the world can see at some point visible in some way. So I think all of us as leaders can lead our companies regardless of whether our mission sits squarely on a purpose or something that may seem a little bit more commercial, we can think about how we lead with real progress in integrity and I think that can be true for all of us, regardless. And there's so many opportunities to lead with that in terms of purpose. I would go to opportunities in terms of who's at the table, how I'm making decisions, and how's that showing up for our team.

McGirt: I have one more quick question before we go to the lightning round. We've had Dr. [Melanie] Harrington on...I just love her. She's been a guest on many Fortune conference events, as well. And she's given us some insight into her own research and the work that she's done within your company to to help you understand what inclusion really is and to share that information about insight throughout your own network. I'm curious if you could update us on that work. And also, if tapping the freelance marketplace is a legitimate strategy for companies who are looking to boost their inclusion numbers but have a legitimate relationship with underrepresented professionals in their ecosystem. Is this a good way forward?

Brown: It absolutely is, Ellen. I think the way forward, you know, there has to be a dual strategy where internally with your employee team, having a good strategy that is real that is measurable that shows up the way your other business strategies do is so important. I'm sure that's been a big part of the conversation with Dr. [inaudible]. She's just so phenomenal. But the second part of your question, bringing in diverse team members through your freelance population can be such a wow factor for also completely changing the conversation, bringing in new perspectives. You know, there's so much value to that as well. If you're also doing it in a way that is truly bringing them to have a seat at the table. And as we were talking about earlier, these aren't people who you are throwing the work over the wall to and just not giving them context. But if they're really brought into the organization and given the mandate and the authority to act and operate, I think they can add tremendous value just the way you would want to you can really unlock something there. So I think it can be hugely beneficial. But like all things you know, you have to really approach it with the intention and the design to get out of it what you're intending to.

McGirt: No, that makes perfect sense. Okay, here's the lightning round. As promised. We've been asking all our guests because season two just give us quick top of mind responses to three key things that's on everybody's mind. The first thing is what's top of mind for you when you think about COVID?

Brown: You know, I told my team this morning, if you get sick, you got to take the time off work to recover. I think we've kind of normalized this idea two plus years into this pandemic ofust work through it. There's a sense of a lot of employees feeling like oh, I've got to stay on spot calls because there should be a little cold that I get for a few days. I can say from personal experience that's not necessarily the case. You know, it can really take people down. So top of mind for me is we're still in this pandemic people need to have the time the space to stress, recover and stay healthy. Hopefully they don't get it but if they do, we still need to really make the allowances for them to recover and get back.

McGirt: I think you're absolutely right. Top of mind for you when you think about the economy.

Brown:I think it's going to be bumpy. But I think in every challenge there's a silver lining and there are opportunities and I think I'm al ways focused on the glass half full. So I'm excited for what our business is going to be building and how we're going to be supported by customers over the next year [hard ot hear[. Hopefully, we arrived through it as an entire society and it's not too bad, but I'm really focused on supporting everybody.

McGirt:  Finally, type of mind for you as you think about your development as a leader.

Brown:Always growing and always learning. I think there's so much more every day and I'm always looking for that next inspiration and lesson which I get from so many other leaders and elementary unfortunately so I'm always looking for growth in brand.

McGirt:Thank you so very much for being here.

Brown:Thank you so much for having me.

Murray: Leadership Next is edited by Nicole Vergalla, written by Alan Murray, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producers are Mason Cohn and Megan Arnold. Leadership Next is a production of Fortune Media. Leadership Next episodes are produced by Fortune's editorial team.

The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.

This story was originally featured on Fortune.com