Is Upwork Legitimate? An Analysis
Business
Upwork strictly follows a facilitator model of the Human Cloud Framework. It connects clients, based on their listed job descriptions, to well-detailed profiles of freelancers who are potentially a good fit for the job. The businesses can see the freelancers’ past experiences, ratings and work samples in high quality through advanced technology used on the app and the website. I believe that instead of bringing on more freelancers and contingent staff onto the platform, Upwork should direct focus on offering more managed services to Fortune 500 companies which tend to spend more per job booking and repeat job posts.
Upwork already has a high volume of freelancers seeking to join the platform to find work. It has in place a screening process wherein of every 10,000 freelancers who apply, only 200 make the cut. This separates Upwork from its competitor Freelancer.com who lets everyone sign up on the website. Hence, while Freelancer.com has 20 million registered users compared to Upwork’s 12 million; it has an average transaction size of only $164 compared to Upwork’s of $2000. Furthermore, the screening process Upwork follows reflects its value proposition; of providing an efficient experience to its clients wherein they connect with only the ideal freelancers; rather than a larger quantity of them. In addition, Upwork does not have a shortage of people signing up to find work on the website. Creating more managed services for clients would allow for more efficiency in the process.
Upwork has perfected supplier transparency in the hiring process!
However, there is scope to improve it in the project completion process. Project management tools are integral to the facilitator model; since they make workflows more transparent to the clients and allow them to manage virtual workforces with more ease. This can result in two things, existing clients delegating more work via Upwork; as well as Upwork being able to attract and retain more Fortune 500 companies; through the promise of sophisticated technology to monitor remote work. Currently, it only has about 30% of Fortune 500 companies outsourcing work on its platform. This market remains largely untapped with potential to generate great revenues for Upwork. Also, when more jobs are listed on the platform; this will also lead to more freelancers being attracted to the platform and hence; the screening process will recruit higher quality freelancers.
Alternatively, if Upwork seeks to recruit more contingent staffing on to the website, it is likely that only the supply of freelancers will increase and the number of job postings will not match this increase.
This will lead to many freelancers not finding employment and being dissatisfied with the platform, perhaps even leaving it to join competitor platforms. It is important to manage a balance between the supply and demand of jobs.
Moreover, if Upwork invests in developing its project management tools; it is possible that fewer Fortune 500 companies will choose to pay an opt-out fee; and complete the projects via Upwork itself due to the ease and convenience of it. This will lead to minimal loss of revenue for Upwork.
In conclusion, I believe that Upwork’s motto is to continue curating a marketplace; that has a balance between the supply of freelancers and the number of available jobs. Since the Fortune 500 companies are Upwork’s most profitable clients; it is important to retain them and attract more of them. Furthermore, this is achievable through making managing a virtual workforce easy, convenient and transparent; essential to the facilitator model framework. Hence, lastly, Upwork should develop its project management tools.
Is Upwork Legitimate?
