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In a decision that will affect independent workers around the world, the giant freelance platform Upwork is making it more costly for freelancers to bid on projects.
The new system is designed to narrow the field of freelancers going after a job to those who are the best fit. Because of the added cost, freelancers who may have been bidding for free for certain jobs that weren’t a perfect match will have to give extra thought to whether it makes sense to pay to submit a proposal going forward. “We spent a lot of time with users of all types to design a program that optimizes for our most professional freelancers,” says Hayden Brown, chief marketing and product officer at Upwork.
One common complaint about freelance platforms is that there can be a“race to the bottom,” where large numbers of freelancers compete for jobs and the ultra-low bids some make to win a job end up reducing the ability of everyone on a platform to earn a living wage. Well-compensated freelancers are often reluctant to join platforms because it can be hard to get the rates they would earn from clients found through other means, like referrals.
To bid on projects on the platform, freelancers must use what are called “Connects.” Starting in May, freelancers will need to use one to six Connects, priced at 15 cents a connect, to submit a proposal for a job they are interested in. The number of Connects will be calculated on the project’s value. No Connects will be free. Freelancers will have to buy them in bundles of 10 or more.
Currently, the cost of Connects varies based on the plan the freelancers have signed up for, but some Connects are free for freelancers new to the platform. After they use up their Connects, they have to pay 15 cents to buy each one.
Upwork says that for a small job paying $49 or less, due in two days or less, one or two Connects will be needed. For medium-sized jobs, paying $50 to $599 and with a deadline of less than a week, three or four Connects will be needed. And for longer-term jobs, paying $600 and up and taking place over a period longer than a week, five or six Connects will be needed. Freelancers who are invited to submit a proposal will not have to use Connects.
As part of the change, Upwork is raising the price of its “Freelancer Plan,” which offers 70 Connects, from $10 a month to $14.99 a month. Agencies, which pay $20 a month for a plan targeted to them, will no longer get Connects as part of their plan but will be able to buy them. Freelancers with existing Connects will be able to roll over up to 140 of them.
“We concluded the adjustment would be really successful in having our best freelancers stand out and have their proposals reviewed by our clients,” said Brown.
Upwork says the proposal will also help clients by providing proposals better targeted to them, so they don’t have to go through a large number that are not suitable for a project.
“A client would see fewer proposals but they would be higher quality proposals,” says Brown.
The new system, introduced to the Upwork community yesterday, will be rolled out gradually, between this month and June, says Brown.
Danny Margulies, a freelance copywriter in Omaha, Nebraska, who has used the platform to find work since 2012 and now hires contractors on the site, saw the change as positive and was not concerned about the added cost of bidding.
“It’s a relatively small amount of money,” he says. With the lifetime value of some of his clients $80,000 or more, the cost of Connects pales in comparison, he finds.
In hiring other freelancers on the platform, Margulies looks forward to getting better-targeted proposals under the change. “I posted a job a few weeks ago,” he says. “I’m still going through the proposals. I got dozens and dozens of proposals.”
Had he not gotten so many, he says, “I probably would have hired someone much more quickly.”
Not everyone was happy about the change. On Twitter, many freelancers have vented about the added cost of doing business.
“So @Upwork has been my only source of income for the past 3 years. I’ve had to gnash my teeth at their exorbitant fees but I stayed. Now they want us to pay to apply for jobs too and have the gall to tell us ‘it’s good for you’?? Guess I’ve learned my lesson. #freelancers,” tweeted one freelancer, whose profile identifies her as a writer and virtual reality enthusiast, based in South Africa.
A Pennsylvania-based travel, food and lifestyle editor, tweeted, “Bad news for both freelancers and clients. Freelancers just getting their start will be deterred and clients will suffer higher costs as freelancers raise rates to cover more Upwork fees.”
April 4, 2019 at 09:13AM
Forbes – Entrepreneurs