The Secrets to Scaling a Public Company with a 75% Freelancer Workforce with Upwork CEO Hayden Brown

So I think in this very moment, it can really feel like we are at the end of something, or at least we really want to be at the end of something. We want to be at the end of this pandemic, for sure. And yet I feel in this very moment that we are actually at the beginning of something. We are at the beginning of changing the rules of business and changing what this next generation of workers will experience inside of companies. There's been this massive change in how workers experience work over the last year. Plus, as so many folks have been working from home and have actually reported that they would rather quit their jobs than be called back into traditional offices. And so you have this opportunity in your companies to actually rewrite what the rules of work look like as you're building the next generation of companies. And I want to talk to you today about what that can really look like and how you can shape this next generation of work and actually make your companies go so much further than what I think you're currently dreaming of right now. We are at the beginning of this tectonic shift in work. And in the last 20 years, if you think about how the Internet spawned a generation of businesses that really have been transformational in so many ways, and think about what this next 20 years of businesses will look like, how many of you think that the next 20 years will have actually more change than the last 20 years? Anyone? Are you the only one? I certainly think that the pace of change is accelerating and that the new businesses coming out with things like artificial intelligence, cryptocurrency, decentralization, these technologies promise even more disruptive change than what we saw in the in the last 20 years. And while the specifics of these changes are certainly up for grabs and the things that you and your companies are building will be part of this change, one thing we do know is that the rate of change is accelerating. And in an environment where the rate of change is accelerating, the key thing will be for you and your companies to be able to adapt and constantly build companies that are adapting to an environment of increasing change. And as that's happening, the key is how do you build a company that is constantly capable of adapting? What does that really need to look like? And I would posit to you that the key for this is getting the team all the time that is a team that can adapt and building a company that has a team that can constantly adapt. Because as a business leader, you know that a key for you is always about having that right team, right? You know that for you, success is having that team. And yet, how do you build a team that can adapt? How do you build a team that can flex? How do you build a team that constantly needs to change? That is going to be a huge, huge differentiator for you and your company over the next five, 10, 20 years. And so, as you enter this new reality where change is the constant and you have to build a team that can constantly change and frankly, build a constantly changing team, what does that need to look like? So I want to talk to you a little bit about what that can look like in a time when I think we've been focused in the last year plus on this conversation around where the work is happening. But really the critical differentiator for you is going to be about who is doing the work, because that's what's going to set you and your business apart in a time of constant change and adaptation. So let's dive into this. Why is who much more important than where? I'll tell you three reasons. Why. Who is more important than where? Number one, the war for talent has never been more fierce. How many of you are hiring right now? That is almost everyone in this audience. I don't know any business leader that I talk to today who is not hiring. And yet it is more difficult than ever before. And I would suggest to you, the reason it's more difficult is because most business leaders are actually looking in the wrong places and they're looking for the wrong types of people. And we'll dive into that. Number two, I think a lot of people are hoping that they're going to wake up on January 1st and say, oh yes, the great resignation. That was a thing of 2021 and now I'm in 2022 and it's in the past. Well, I have bad news for you. The great Resignation is a permanent state. That is my belief. In 2020, we saw 20 million Americans join the freelance workforce. This year, we did a survey and 10 million more Americans are thinking about leaving full time work and joining the employee, the freelance workforce again, just because of the flexibility it affords them. So the Great Resignation is not even just about employees going from company to company. It's actually about people leaving the full time employee workforce altogether and joining the freelance workforce. Because people are looking for so much more flexibility and control over when, where and with whom they work. So there's a lot happening with employee tenure shortening and the workforce just changing dramatically. And the third reason is around newer generations in the workforce. They are looking for fundamentally different things. They know that this is not about a career where maybe they have a few long term employers and then they get a gold watch in retirement. Generation Z and the younger generations know that they are building a career that looks very different in terms of with whom and how and the skills that they are really empowered to build and how they're going to craft a career that looks very different with things like the passion economy, the creator economy and things like that at the forefront of how they build their careers. So if you want to attract younger workers into your company, you need to be looking for those workers in different places. So the best companies that are really thinking about and understanding these trends have shifted their hiring functions from one around talent acquisition and this idea that they can own and control workers to really understanding they have to have talent access and that they need to access these workers in a lot of different places and in different ways than older companies have been doing. So let's talk more about that. There are a lot of companies that have woken up to this idea of talent access. Everyone from Microsoft to Airbnb to our own company at upwork. And I want to dive into how we ourselves have built our team with 75% freelancers at the core of our business, doing everything across our company. So let's talk about talent access and what that really looks like as a different way of dealing with talent and really making talent part of our strategy versus talent acquisition. So when I joined Upwork, I joined the company 10 years ago. We were a little startup in Redwood City. I think we had somewhere between 50 and 75 employees. We had at least that many freelancers on our team at that time as well, distributed globally. And today, fast forward, we're a public company. We have about 2,000 team members. 75% of those team members are freelancers. They are distributed around the world. Our team is in 86 countries globally. And we have intentionally designed everything around our people, processes everything around how we operate to really incorporate employees and freelancers working together in an integrated fashion on hybrid teams. And that has paid huge, huge dividends for us in terms of agility, scalability, diversity, creativity across the board. So I want to tell you more about how we've done that and how you can do it too. First of all, we have had to get past some huge misconceptions that exist today about the freelance workforce and have existed for so many years. How many of you have heard some form or any of these misconceptions? I'm sure many of you have heard some of these things like freelancers aren't reliable. Like they're going to be here today and gone tomorrow. Or there's no way I can build a highly culturally competent company if I have freelancers in many of these roles or freelancers aren't really serious about their work, they're gig workers, things like that. I can tell you as someone who's been working and building teams for over 10 years with freelancers, these things are absolutely not true and yet these perceptions exist. So let me tell you a little bit about what is actually the truth instead of these misconceptions that exist and absolutely drive me nuts that they still do. So this is a little bit about our CX team customer experience. So there's this myth that freelancers can't do high culture work or can't do really integrated work inside of a company. Well, here's our CX team. It's 95% freelancers and yet our attrition rate on the team is less than 5%. I think most CX teams have usually turnover about 30% per year. This is an unbelievable stat if you think that freelancers actually are going to be here today, gone tomorrow, or can't be highly acculturated in your business. And we have seen that the freelancers on our team are highly attuned. They are geographically distributed, so they're in the places where our customers are speaking the languages that our customers speak. They are highly empathetic to our customers and really are so passionate about our business and our product that it just pays huge dividends for us. Including our csat score of 91 and the NPS score that we have, which is really an industry leading score. I think most staffing firms have an NPS score that they brag about being like 8 or 10. So they deliver tremendous results for us and are incredibly passionate about what they're doing. They also are rated and reviewed after every contract upwork. Freelancers are so they're super motivated to show up and do their best work every day. And that raises the bar for everyone on the team, including the employees. And many of them have worked with us for as long or longer than most of the corporate employees and similarly situated roles. So tremendous results from our CX team. All right, so you might say, Hayden, sure it can work in cx, but what about something like building your core product that can't work? You can't have freelancers doing product engineering work, can you? Well, I ran our product team for four and a half years and I can tell you that absolutely you can have freelancers in critical roles in product engineering. In fact, we have more than 350 freelancers doing remote development for us on our core mobile app, our web apps. And this has been a huge part of how we scaled our business over many, many years. And these folks are incredibly skilled and talented. There are highly skilled freelancers who have advanced math, data science, computer science degrees in places like Russia, Ukraine, Canada, all across the US Outside of Silicon Valley? Yes, outside of Silicon Valley. Highly skilled developers that we have tapped into to build this team and do incredible things. When I became the CEO of our company in January of last year, I had a very audacious goal for us to go from being a single product company to having four products. And it was our remote development team that included so many of these freelance developers that really rallied and said, all right, we're going to do it. And within 12 months of setting that goal, we had launched three new product lines, really scaling that effort through freelancers on our platform that we had brought in for that effort. So tremendous results. And I can say that it wasn't just the scaling of the work that came in through our freelance teams. It was also the creativity. So it was a freelancer from our site who had said, hey, wait a minute, I've got an idea for how we can add a specific feature that actually ended up driving a bunch of conversion through one of these new products. And it was a freelancer on our team who actually did the demo of one of these new products in front of the whole company that really led to this zoom standing ovation. Zoom standing ovation is like lots of people on mute, clapping and doing emojis and the chat stream. But it was these freelance contributors who really are just part of our integrated team doing incredible work for us every single day. So you might say, okay, product interesting. Engineering, interesting. CX Interesting. What about marketing? Well, there were 10 months in 2019 when I was also our CMO and we have had marketing contributors from the freelance community for years on upwork who do incredible, incredible stuff. There are tons of Hollywood producers, ad agency folks, creatives who have actually said, hey, I don't want to be working for a big company. I want to be out on my own. And they are on the upwork platform and working for companies like us, doing incredible work. And so we also see that in the data, professional freelancers actually do more to upskill themselves constantly than captive employees do. That's just a fact. So if you're looking for people who are really sharp on their skills, who are current, look to the freelancer community because these people are always staying up to date. And plus they're usually working with multiple clients. So they're seeing what's hot in the market, what are other people doing, they're bringing those ideas fresh into your company. And we see this ourselves. Last year we set the goal of rebranding and changing a bunch of our marketing assets, doing a big launch. We did this in about half the time, changing 900 assets in our company. So much faster than we would have been able to do with just an in house team. Because we were able to scale this effort with freelance talent. And even though we have employees on this team, we brought in a creative director, a project managers, motion and graphic people from the freelance community to basically burst this effort and get it out the door so much faster than if we had just been relying on FTEs. So the freelancers forced us to think bigger, stretch our aspirations and then actually give us a lot more throughput as well to get efforts like this out the door. So what I can tell you, when you aren't burdened with thinking about how am I gonna get this done? I have this huge thing like this rebrand effort and I don't even know how to get it done quickly. What? When suddenly that is not your barrier. And you know, I can get it done, I can do it fast, I can do it twice as fast as my competitors. Suddenly this opens up for you a new way of thinking about what's possible for your business. And that is truly the unlock. So it's not just about having access to this talent, it's about suddenly having access to the imagination and the dreams that you can achieve for your business. Because how is no longer your constraint. You can do more, you can go faster, you can dream bigger. And that is, I think, the superpower that you get from really tapping into the power of the freelance economy for yourselves. I see this all the time. And I want to give you a little bit more in terms of the tactics that you can use to really unleash for your business. So let's talk about the playbook first. It starts with a set of mindsets and beliefs. We know that, number one, you cannot be restricted by geography because the talent is everywhere, it's not just in your backyard. Number two, the team you need to build to really unleash is not going to be homogeneous. It's going to be diverse. It's going to be diverse in every aspect, location, background, nationality, all of it. Number three, you need to know that the independent talent you bring in should not be marginalized. It can't just be doing a bit of work on the edges. You can put people into core roles doing really meaty things for you and your business. Just like you have experts advising you on, you know, your health and your well being, like your doctor, your plumber, whatever, like those experts are in your life, you can put those experts into play in your business. So five mindsets, beliefs and activities that you can put into place in your business to really unleash on this. So first move your mindset from this idea of it's only people in my region to I will tap into anyone anywhere who has exactly the skills I need and those people are usually not going to be in your region. You may have been doing this during the pandemic, but the thing to believe is now commit to this as not a pandemic related activity. Commit to this idea that you will find anyone everywhere post pandemic going forward because this is how you really unleash again for your business to getting the talent you need. Regardless of location. You can start small. If this seems scary, start with a project that is needing outside advisors or needing some external eyes. It might be something like you have a learning and development effort or you want to design a new onboarding process. Get some freelancers in to do that. We've done that ourselves. And then these people can be people you go back to again and again and have a long term relationship with. Or maybe you're opening a new office or doing some extra recruiting again. I saw all of you are basically recruiting right now. When we opened our Chicago office to build out a sales team of employees, we actually brought in and quadrupled the size of our recruiting team with full full scale sourcers, administrators, et cetera. Basically burst the capacity of our recruiting team for a period of time using freelance sourcers and assistants and then basically brought that team size back down as needed. So you can do efforts like that that really give you capacity when you need it through the freelance team. All right, the second thing, if you are thinking today about your onboarding process as only specific to employees on your team, expand your aperture. Because if you're using freelancers programmatically, you need to onboard them too. And it doesn't need to be six months of onboarding. Because the good news is unlike your employees who might only be onboarded fully and delivering ROI for you after three to six months, your freelancers you can onboard in a few hours and they're delivering ROI for you in a few hours, which is amazing because they are very Fast and very equipped to do that. But you need to give them the context around your business, around your nomenclature, around your culture, so that they can be part of the team and adding value very quickly. So expand your thought process around how you onboard all of your team members, including your freelancers, so that they too can be delivering results because they know your organization, they know what's important, your priorities, anything critical around what's going on in the business context, and then they can turn around and use that to add a lot of value. So our investments around onboarding freelancers and employees in a similar fashion has really paid off for us. And even in examples like our customer support team, one of the reasons why they have that low attrition rate is because we've onboarded them really well up front. They add a ton of value, they're very integrated, and then that pays huge dividends. Number three, happy hours. You know that in person, events do not translate really well virtually and oops. Oh, sorry. Meetings for everything. You cannot have meetings for everything in a distributed team setting. So you need to move from this idea that everything's going to happen like it did in person to just doing it on Zoom. We know that from the pandemic. But what we've really seen is committing to this practice of, of asynchronous work deeply from the tooling, Google Docs, Miro Loom, all of that is really important and really embracing that first and foremost is huge. Secondarily, having the practices and the rituals in your company around, how do you treat freelancers in those settings and how do you include them in those types of business contexts, including the tooling? So our IT team is equipped to give freelancers access to tools and make sure that they're onboarded into those tools. On Upwork, we have a partnership with Citrix. Citrix can easily give freelancers a virtual desktop solution. All of that works really well so that freelancers again have the access to the tools and everything that they need to be successful. And additionally, when freelancers are in meetings and in all of these contexts, you can do so much with your distributed team to just take a few minutes at the beginning to set the context and to make sure you're checking in with people as well. On how's your day, how's your kid doing, what's going on in the background there, using those touch points that are in person to build those personal connections, and then shifting so much more of the work to be asynchronous, documented in JIRA and other tools as much as possible. So you have a few hours a day which are for that critical think time we use for our development teams. 8am to 11am Pacific. That's the time for Agile standups, face to face meetings and then the rest of this stuff can happen flowing through a 24 hour cycle where people are doing a lot of communication and connection that way. So there's just a lot you can do with those being really strategic about what really needs to happen in person, what can happen elsewhere, and then be very mindful that then people can flex their schedules, work on their own time around things like that. I think also as we move towards the future of work, getting better and better, all the tools that you're probably building, we will just make virtual meetings so much better than in person. Like a lot of this stuff you do need in person for sometimes, but virtual meetings are just going to get better and better in the future and I'm really excited about what that's going to look like. All right, happy hours versus some of the in person team building stuff. I think a lot of companies had this idea before the pandemic that their culture was like kombucha on tap and posters on the walls. And I think we've hopefully all learned that culture is so much more than that. It's like the decisions we're making every day and it's what gets rewarded and punished in our businesses. It's all of these deeper things about how we show up and this is where we can set so many standards for, okay, what really needs to be happening in person. We have a practice where our virtual teams do get together once every year or so for a two week Agile meetup where the team is in Czechoslovakia or Mexico City or somewhere and they do have team building in person the rest of the year they're working virtually and that is enough. Some of those thoughtful face to face meetings are enough to carry them through the year. We also have practices where people do fun things virtually. They do yoga classes, cooking classes, meditation. Freelancers are all included in those things. So we intentionally build that community with them. And this year as we've gotten people really, you know, tired from all of the hard work they've been doing, we've been doing charge up days, which is a day off for the company or two days off for the whole company, we pay the freelancers to also take that time off. So including them in that community of you're part of the team, you take time off too has been really important so that everybody is part of charging up, taking time off doing yoga, you know, whatever it is, it's again, it's a single community breaking down those barriers so that it's not like employees over here, freelancers over here. We do these things together as a community. And that, that goes a long way. All right? This is a big one because I think it benefits again, not just your freelancers, but also your full team. We have to get over this idea of FaceTime that has to be nail in the coffin, dead. Because everyone in your company is so much more empowered when you're judging them on are they building impact? Nobody wants to be judged on FaceTime. Nobody wants to think, do I have to suck up to the boss today? Do I have to sit at my desk just to look like I'm doing work? And we've seen that when you are bringing freelancers into your team, they're judged on their impact, they're paid on their outputs. So bringing freelancers into your organization forces you to really focus on, am I clear on what am I trying to get out of this project? Am I really clear on the goals here? Because if I'm not clear, I gotta start there before I hire this person, start down this path, put money into this budget. So by forcing yourself to bring freelancers in, it's forcing you to really get clear on what am I trying to achieve. Because if I can't articulate that, I gotta start with that problem. So bringing freelancers in forces that clarity and has forced us to really get good at understanding for every effort. Like what are we trying to achieve? If we can articulate that first, then we need to pause and not just start putting bodies against the effort, which I think a lot of companies do. Once you get good at that, you basically are getting everyone in the company to be more empowered because they want to be measured based on am I performing the goals, am I getting the achievements there? And that really makes our workplaces more equitable because then we're again, we're not going to fall into traps where we're inadvertently promoting bias or rewarding people who look good at their jobs and may not be actually adding the value that we are looking for. So most of you have seen this pyramid before, Maslow's hierarchy of needs, this idea that there are kind of five elements of the hierarchy where we need to have our needs met at the bottom first before we can move up the pyramid towards realizing self actualization and really achieving our full potential. So it's a familiar triangle and I'm introducing it today because I actually want to talk about this idea of meeting the organization's hierarchy of needs. But first, maybe some of you have seen this version from this year, the 2021 version of somehow they missed the hand sanitizer. I feel like that should have been somewhere down the bottom. I'm. But no, there's a version of this that I wanted to share, which I think is important for thinking about your organization's hierarchy of needs. Like, what are those? And this is a version that I think is how a lot of companies think about deploying freelancers for their teams. They think, okay, I'm gonna start with freelancers down here at the bottom with transactional work first. I've got some holes. Maybe Sally's going on maternity leave, or I've got this effort where I know I can just put some freelancers to work as a stopgap or to fill in some issues where I've got some things that need to be rescued. They get that done and then they think, wow, that worked really well. I'm now going to go to the next level and think about, maybe I can build my CX organization strategically using freelance talent, or I can put a pod in place to help my FP and a team every quarter when they have a spike in needs, and that's going to be something that's more of an ongoing need, and that's kind of a strategic usage of freelance talent. Then they go to the next level and. And they start to think, wow, now I'm realizing that there's this world of talent that can kind of meet my needs at any moment. And that means I don't have to have any barriers to what's possible. And that's when they reach this nirvana of fulfilling their fullest dreams and their biggest aspirations. Because how is no longer a constraint, as I mentioned earlier. And I think this is where you all can start to realize your full potential for your companies by removing that barrier of how and actually getting to that full organizational actualization for yourselves and your companies, which is my dream for all of you. I wanted to share this quote from Kevin Scott, who is one of our beloved customers, a friend of mine, and someone who has really embraced that. He's the head of technology at PGA of America, and he's basically said it is this profound moment when you realize anything is possible because there's a freelancer anywhere who can basically make that happen for you. So I wanted to land at the end on a couple takeaways. So, first of all, we have been in this moment of crisis, and if you imagine that ski Slope image I shared at the beginning. We are at the dawning of this new era of reimagining work. So I think the next five years will be months of absolutely tectonic change for how workers work. Workers are wrestling for control over their work schedules, around the boundaries between their work and their lives. And you're going to have seen this. I'm sure you're already seeing this with the people you're hiring with your own teams. And you as leaders, really have this chance to define new norms in your work and what that looks like. So don't waste this opportunity to really reimagine. It's not time to fall back into the traps of 2019 and before this is a moment to forge new tracks in the snow and to really reimagine what's possible. Secondly, I do think you already know as leaders that who you have on your teams is the difference maker. You experience that every day. So thinking through how do you lean into that and tap into the talent that is anywhere in the world for you and your teams and create that flex for your organization so that you have the agility to really move where you need to move for your business in the next few years, which will continue to be times of incredible disruption and transformation. That's going to be a huge differentiator. Third one, I tried to do some myth busting for you in terms of maybe some of the things that are out there in terms of freelancers being gig workers not being here today, gone tomorrow, because they're not. These are highly skilled professionals that I think can play across many, many different dimensions of your business if you give them that opportunity and do some of the things that are in context, setting on onboarding, et cetera. Fourth, I think your entire company will be better and stronger if you focus on really building the muscle for measuring teams on productivity and outputs, not just on FaceTime. And some of the things that I think have become so habitualized even we don't even realize it sometimes, but are probably not serving you and your teams as leaders. And then finally, if you think about that organizational hierarchy of needs, once you really embrace this idea that there is nothing you and your team cannot do because there's always someone out there who can do that work for you, Suddenly you can dream bigger for your companies, and that is profoundly powerful. And I invite you to lean into really that opportunity for yourselves and your companies because that is transformational. I see that all the time for us and for our customers. And I hope you can take advantage of that. Shift in mindset and that huge opportunity for your business. So thank you so much.