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2020 Future Workforce Report

This report, conducted by an independent research firm and commissioned by Upwork, uses data from two surveys of U.S. hiring managers: one fielded in November 2019 prior to the COVID-19 crisis, and the other fielded during the crisis in April 2020. The surveys polled a combined 1,500 U.S. hiring managers to provide a holistic picture of workforce trends impacting business organizations. Find out how companies are building for the future.

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2020 Future Workforce Report

  1. 1. © 2020 ClearlyRated® All Rights Reserved. 2020 Future Workforce Report
  2. 2. Table of contents Topic Page Study Objectives 3 Research Methodology 4 Key Findings 5 COVID-19 is disrupting the workforce 10 Companies are adapting to a new remote reality 14 Companies are dissatisfied with staffing firms 19 Independent talent adoption is accelerating 24 Companies are struggling to reskill 30 Profile of respondents 35 2
  3. 3. Study objectives Upwork has commissioned ClearlyRated, an independent research firm, to conduct a study on hiring managers in the U.S. workforce with the following objectives: ● Understand the impacts of COVID-19 on the workforce landscape ● Examine how companies view traditional staffing solutions ● Explore how companies are leveraging a flexible workforce / independent talent ● Discover how organizations are thinking about reskilling their workforce This deck is organized in sections to detail results on each objective. 3
  4. 4. Research methodology 4 ● The report uses data from two surveys conducted by independent research firm ClearlyRated. ● The first surveyed more than 1,000 U.S. workforce hiring decision makers through a third-party, independent online sample between October 31, 2019 - November 13, 2019. ● The second surveyed more than 500 U.S. workforce hiring decision makers through a third-party, independent online sample between April 22, 2020 - April 28, 2020. ● Overall margin of error of ±4.1% at 95% confidence level.
  5. 5. Key findings 5 COVID-19 is disrupting the workforce • Almost half (45 percent) of organizations have frozen hiring, and 39 percent have seen or expect layoffs due to COVID-19. • Only 10 percent of organizations increased hiring in response to the crisis. • On average, organizations expect only 53 percent of laid off employees to be hired back.
  6. 6. Key findings 6 Companies are adapting to a new remote reality • More than half of the U.S. workforce is currently working from home. • 56 percent of hiring managers feel the shift to remote work has gone better than expected, while one-in-ten feel it’s gone worse than expected. • No commute, reduction of non-essential meetings, and less distractions in the office were cited as the greatest perceived benefits of working remotely. • As a result of their experiences during COVID-19, 62 percent of hiring managers say their workforce will be more remote going forward.
  7. 7. Key findings Companies are dissatisfied with staffing firms • Staffing firms account for just over half (53 percent) of a hiring manager’s external talent budget. • Yet, the majority (61 percent) of hiring managers aren’t fully satisfied with their staffing firms. • Cost, quality and time-to-fill were ranked as the biggest pain points of working with staffing firms. 7
  8. 8. Key findings Independent talent adoption is accelerating • Despite the impact of COVID-19, 72 percent of hiring managers are continuing or increasing their usage of independent professionals and nearly half (47 percent) are more likely to engage independent talent in the future due to the crisis. • Companies are increasingly using independent professionals for more strategic work. Over half (57 percent) of hiring managers engage independent professionals for ongoing strategic work across multiple projects. • A majority (59 percent) of hiring managers agree that organizations not currently adopting a flexible workforce as part of their hiring strategy risk falling behind. 8
  9. 9. Key findings Companies are struggling to reskill • The vast majority (81 percent) of hiring managers agree that it’s important for an organization to reskill/train its workforce, yet only 1 in 4 fully believes their company invests enough in reskilling. • Only a third (29 percent) of hiring managers fully feel their teams have the skills needed to support business needs in the next 3-5 years. • 3 in 4 are not fully convinced that retraining current employees is more efficient than engaging independent professionals to gain business-critical skills. • Over half (61 percent) of hiring managers agree bringing in outside skills from independent professionals helps keep current full-time employees up to date with their skills. 9
  10. 10. COVID-19 is disrupting the workforce 2020 Future Workforce Report
  11. 11. COVID-19 has a significant impact on the labor market 11 45% 39% Almost half of organizations have frozen hiring in response to the COVID-19 crisis Many hiring managers have seen, or expect layoffs at their organizations. Q2.1. What changes in hiring has your organization already seen in response to the COVID-19 outbreak? Q2.3. Has your organization laid off or furloughed any employees in response to the COVID-19 outbreak? Q2.4. Do you expect any employees at your organization to be laid off or furloughed in the next 3 months?
  12. 12. Hiring is at a standstill, yet companies are continuing to engage independent talent 12 Only 10% of organizations increased hiring in response to the COVID-19 crisis. While only 2% of hiring managers said their organizations plan to cut all independent talent in the next 3 months. Q2.1. What changes in hiring has your organization already seen in response to the COVID-19 outbreak? Q2.7. How do you anticipate the use of independent talent (ie. freelancers, ICs, contractors, consultants) at your organization will be impacted in the next 3 months?
  13. 13. Teams anticipate running at half capacity 13 On average, hiring managers expect only half of laid off employees to be hired back. 53% Q2.6. What percentage of laid off employees do you expect will be hired back when business returns to normalcy?
  14. 14. Companies are adapting to a new remote reality 2020 Future Workforce Report
  15. 15. More than half of the U.S. workforce is remote 15Q2.10. As a result of COVID-19, what percentage of your workforce is currently working remotely?
  16. 16. Working remotely has exceeded a majority of hiring managers expectations 16Q2.11. How has having remote workers within your organization functioned during the crisis, compared to your expectations?
  17. 17. The benefits of remote work include no commute, fewer meetings, and less office distractions 17 32% of hiring managers have found that productivity has increased. Q2.12. What, if anything, about remote work at your organization has worked well?
  18. 18. Hiring managers anticipate teams will be more remote in the future 18 The expected growth rate of full-time remote work over the next five years has doubled, from 30%to 65% Q2.14. As a result of COVID-19, my organization's workforce will be _________.
  19. 19. Companies are dissatisfied with staffing firms 2020 Future Workforce Report
  20. 20. Most hiring managers aren’t fully satisfied with staffing firms, yet they account for over half of the external budget 20 Q4.6. How much would you estimate your team spends annually on all of your outside talent providers? Q4.7. How much would you estimate your team spends annually with staffing firms? Q4.3. How satisfied are you with your current staffing firm(s)? 53% Staffing firm users spend over half of their overall talent provider budget on staffing firms. 61% Of hiring managers are not fully satisfied with their staffing firms
  21. 21. Hiring managers cite cost, quality, and speed as top pain points with staffing firms 21 Q4.4. In your opinion, what are the biggest pain points when engaging with staffing firms? (Please rank your top 3 by selecting "1" for the top pain point, "2" for the second, and "3" for the third.)
  22. 22. Hiring managers are turning to independent talent to get projects done faster 22Q4.5. For which of the below reasons would you consider engaging a freelancer/independent worker vs. a staffing firm? Prefer to engage independent talentPrefer to engage a staffing firm Companies are 63% more likely to engage an independent professional vs. a temporary employee to get projects done faster
  23. 23. 23 Q4.11. Does your team currently utilize an online talent solution to engage independent professionals? Q4.13. Would you consider utilizing an online talent solution to engage independent talent? Hiring managers are exploring online talent solutions 45% of hiring managers are currently using online talent solutions such as Upwork and... 51% of hiring managers not using online talent solutions would consider them
  24. 24. Independent talent adoption is accelerating 2020 Future Workforce Report
  25. 25. COVID-19 is accelerating the use of independent talent 25 73% Nearly three quarters of hiring managers are continuing or increasing their usage of independent professionals. 47% Nearly half of hiring managers are more likely to engage independent talent in the future due to the COVID-19 crisis. Q2.7. How do you anticipate the use of independent talent (ie. freelancers, ICs, contractors, consultants) at your organization will be impacted in the next 3 months? Q2.9. As a result of COVID-19, I am ________ to engage independent talent in the future.
  26. 26. Independent professionals are most commonly being hired for writing, creative, web and software development roles 26Q3.4. For the roles you plan on filling in 2020, what types of workers will you be looking for? Skill % Hiring Independent Talent % Hiring Full-Time Employees Writing Creative/design Web, mobile, software dev Marketing IT, networking, database admin Engineering Legal Data entry/admin support Sales Accounting/finance Product management Operations/customer support HR
  27. 27. Majority of hiring managers don’t have concerns engaging independent talent 27Q3.9. Do you have any concerns engaging freelancers/independent talent? 61% of teams that don’t have plans to hire independent talent have no concerns with engaging them
  28. 28. Most managers are engaging independent professionals for larger, more strategic projects 28 Q3.12. How would you describe how your department typically engages freelancers? Q3.13. For how long, on average, would you estimate your department engages with a typical freelancer? Independent talent engagement Overall Enterprise Non- enterprise Prefer to engage independent talent in a one-time gig, single project 43% 40% 47% Prefer ongoing independent talent engagements for large, strategic projects 57% 60% 53% Average length of independent talent engagement 4.1 months 4.7 months 3.3 months 57% of hiring managers engage independent professionals for ongoing strategic partnerships across multiple projects
  29. 29. Majority agree those who don’t adopt a flexible workforce risk falling behind 29Q3.19. Please rate your agreement with the following statements. 59% of hiring managers agree that organizations not currently adopting a flexible workforce risk falling behind 47% of hiring managers think that independent professionals are generally at the top of their field
  30. 30. Companies are struggling to reskill 2020 Future Workforce Report
  31. 31. Hiring managers see skill set as most vital to success, yet many struggle to re-skill their own employees 31Q3.20. Which of the following do you think are most predictive of candidate success in a role? 73% of hiring managers do not fully agree employees have the training and skills needed to support business initiatives
  32. 32. Hiring managers agree re-skilling is important; only 1 in 4 fully believes their company invests enough in re-skilling 32Q5.3. Please rate your agreement with the following statements. Agreement with the following statements regarding re-skilling: “It is important for an organization to reskill/train its employees.” “Current employees at my organization have the training and skills needed to support business initiatives.” “Re-training current employees to gain the skills the business needs is more efficient than hiring independent professionals with the needed skills.” “My team has the skills to support business needs in 3-5 years” “My organization invests enough in reskilling and training programs for its employees.” “Bringing in outside skills from independent professionals helps keep current full-time employees up-to-date with their own skills.”
  33. 33. Managers are worried about their teams’ skills in the future; believe independent professionals can help 33Q5.3. Please rate your agreement with the following statements. 71% of hiring managers do not fully believe their teams have the skills needed to support business needs in the next 3-5 years and... 74% are not fully convinced that retraining employees is more efficient than engaging independent professionals 61% agree bringing in outside skills from independent professionals keeps current employees up-to-date with skills so...
  34. 34. Independent professionals are increasingly being used to address skills gaps 34Q5.2. How are you currently filling skills gaps within your organization? Nearly a third 28% of hiring managers leverage independent professionals to fill skills gaps within their organizations 49% of hiring managers cite access to skilled talent as a top reason for engaging independent professionals
  35. 35. Profile of respondents 2020 Future Workforce
  36. 36. 36 Q1.1. Which of the following best represents your company’s total revenue for calendar year 2019? Q1.2. Which of the following best represents your company’s size? Profile of respondents First and second round demographics combined Note: This information was not gathered on the second survey. Only first round data is shown.
  37. 37. 37 Q1.3. What best describes your role in the company? Q1.4. Which of the following best describes your organization’s primary industry? Q1.5. Which of the following functional areas do you currently work in? Profile of respondents First and second round demographics combined Note: only top industries shown
  38. 38. 38 Q2.1. What is your current age? Q2.3. Which of the following best describes your gender? Q2.4. Which of the following best describes the highest level of education you’ve had the opportunity to complete? Profile of respondents First and second round demographics combined Male 48% Female 52% Gen Z 6% Millennial 39% Gen X 35% Baby Boomer 19% Master’s Degree or Higher 34% High School 8% 2 Year Degree 13% Bachelor’s Degree 45%
  39. 39. © 2019 ClearlyRated® All Rights Reserved.

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This report, conducted by an independent research firm and commissioned by Upwork, uses data from two surveys of U.S. hiring managers: one fielded in November 2019 prior to the COVID-19 crisis, and the other fielded during the crisis in April 2020. The surveys polled a combined 1,500 U.S. hiring managers to provide a holistic picture of workforce trends impacting business organizations. Find out how companies are building for the future.

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