How Generative AI is Changing Recruitment
Tony Buffum, VP of HR Client Strategy at Upwork, discusses how generative AI is changing the recruitment landscape and the shift from talent acquisition to talent access. He highlights the benefits of using freelance marketplaces for accessing high-quality talent quickly and efficiently. Discover why embracing technology and being adaptable in talent strategies are crucial for modern organizations.
In today's episode of the HR Leaders Podcast, we welcome Tony Buffum, VP of HR Client Strategy at Upwork.
Tony discusses the evolving talent landscape, exploring how generative AI and freelance talent are reshaping traditional workforce strategies.
He dives into how companies can leverage the flexibility of freelance talent to stay agile and competitive in a rapidly changing economy.
🎓 In this episode, Tony discusses:
The shift from talent acquisition to talent access and why it matters for modern organizations.
How generative AI is transforming the recruiting process and changing the type of talent companies seek.
The benefits of using freelance marketplaces like Upwork for accessing high-quality talent quickly and efficiently.
The misconceptions around freelancers and how they are debunked by the current trends in the talent marketplace.
Elevate your recruiting efficiency with AI
Ethical practices, DE&I and curiosity drive our AI advances at Greenhouse. AI can enhance the recruitment process by increasing efficiency, reducing bias and making the candidate experience more transparent.
Sometimes the best candidate is hiding in your blind spot, but what if instead of missing out on them, AI could zero in on their potential?
Dive into this blog to learn the practical ways AI can work with your recruiting team to automate mundane tasks, create compelling job descriptions, manage interviews and ultimately uncover hidden talent, while ensuring your hiring process remains fair and inclusive.
Tony Buffum 0:00
A lot of the Gen AI technology is leaning into the recruiting process, because we know how valuable important is to try and find really good talent, and how burdensome and how many hours and how much work goes into that process. So you can start to tackle that. You can really start to change you know, how that process works, and get, you know, hopefully a great ROI on that process. But I also think Gen AI changes the type of talent that companies are looking for. Yeah, I'm sure you've heard the saying, it's not AI that's going to take your job, it's someone using AI that's going to take your job. And that very much if your talent isn't getting comfortable using generative AI, finding ways to create their own productivity, then they're gonna struggle. Tony.
Chris Rainey 0:53
Welcome to the show. How are you?
Tony Buffum 0:54
Oh, great. How are you, Chris, I'm
Chris Rainey 0:57
good. I'm good. I can see all your accolades behind you, but you blurred them all out, I don't know, but it's a humble brag. But then you blurred them so it's like, oh, now we don't know. It's a cool conversation, star, I suppose we'll get into that, because that was something was cool, and our first time we ever met was your background and how that led you on a journey to where we are now, which I thought was really, really, really cool. So before we jump in, tell everyone a little bit more about yourself personally and your journey to where we are now.
Tony Buffum 1:30
Yeah, my journey started with one of those accolades in college. I studied industrial labor relations, and I went into it not quite knowing what I was going to do, but of course, quickly, it introduced me to human resources, and it did my first internship for IBM, and then another one and several more for Texas Instruments, and I fell in love with it. I felt like this, this is something I really get and I can do. And when I graduated, I went to work for GE in their HR leadership program, which is pretty storied. I had to move a few times, and had a bunch of different experiences, but absolutely loved it. Stayed there with their lighting business. I did union relations roles, non union HR, manufacturing roles, I did, you know, kind of headquarters roles for their sensing business for a while, a little while, and supporting like their technology and engineering function, so a pretty wide variety of experiences. And then after a couple years, I got recruited and went to the Stanley works. At the time, my first global HR manager role for a small part of the business is about $100 million and and we grew that business, and that quickly expanded. Moved included the move included, you know, focusing on Mac tools, which has a great Harvard Business Review case study about what a mess that was in before our leadership team was able to get in and and drive some change. But my career continued to grow with Stanley all the way through leading HR for their global security business, about 10,000 people globally, about just under $2 billion but I left to go be a chro at a public company for the CEO, who's someone I worked for, and hired me in that first job at Stanley. We worked together most of my time there, and I was his CHRO for, you know, just under two years, and absolutely loved it, but it was in that role, and the last role at Stanley and security, where I discovered and worked with Upwork and really champion bringing up work into both organizations. So when I left that last HR role, I really as much as I pursued other HR opportunities, I couldn't shake how much I really wanted to stay in this space of helping people think about their talent strategies and and tapping into freelance talent the way I had. And so I reached out to Alport and said, Is there something I could do for you? And we came up with my current job, which is, we call it VP of HR client strategy, but it's really my job to try and attract and evangelize to HR clients how they can leverage this platform to to shake things up and embrace all the changes that are happening in the marketplace. Love
Chris Rainey 4:15
that man, by the way. Well, way to start your career. IBM, GE, I mean, I mean, the reason I say I don't just cause a little logos, but then we're very well renowned for the development programs, right? Everyone kind of knows, knows about so what an incredible opportunity coming in, right, to have that exposure as well. Yeah, amazing, amazing. I think it'd be great to tell everyone a little bit more about Upwork. We, you know, we talk about the gig economy a lot on the show. I use Upwork as a small business, and it's but it's not just for small organizations. And that's also a misconception. I think this out there to talk a bit more about that, and also why in your previous job, you decided to go the route of looking. An organization like Upwork.
Tony Buffum 5:01
Yeah, first of all, Upwork is the world's largest freelance marketplace, so we connect talent with people that need to get work done, both individuals like ourselves. I use it personally, and I've used it personally in the past, but also enterprises and try to attract them to using this as an arm or a lever within their, you know, workforce ecosystem. Last year, talent on our platform made almost $4 billion so a lot of money moves through this platform and enables this different way of working. And that's, frankly, part of what got me interested back when I was at Stanley, you know, we, I needed a different solution for meeting my internal client needs to get talent in the door. And our traditional staffing process just took too long, and not just, you know, for a kind of a quick turn. When we think of gig, we tend to think of short term projects, something that someone almost do overnight. But we needed high quality talent to get in the door working on projects so that we can meet our product development and delivery launch milestones, and we just struggled to tap into that, especially looking just around where we're relocated. So finally, exploring what Upwork had offer. At first it seemed like something was just for, like, tech companies, yeah, and that's why I felt like, well, this large manufacturing company we've been around forever, this isn't for us. But the reality was, the deeper I dug one, I knew that peers of mine, General Electric Procter and Gamble Samsung, we're already clients, and I thought, well, if they're doing it, why are we doing this? What do I have to learn about this to figure out how to incorporate it into our strategy? And the more I learned, the more I recognize there's really high quality talent that once we've integrated the system, we could bring on in days, not weeks and months. And my teams and our our function functions would benefit greatly, not to mention our own HR function, tapping into not just HR resources, but tech resources that would help us improve our own systems, our own capabilities, automate some things that would give us such great benefit for our function, which we weren't doing. We weren't really getting down that, that digital transformation path, and once we started pulling on the string of, Wow, what can we do with the freelancer? We found out there's a lot more that we could accomplish. Yeah,
Chris Rainey 7:36
it gives you that also, you mentioned it earlier, though, but speed right? The ability to absolutely, you know, recruiting someone could take months. It does take months, typically, but especially in a small organization like ours, we need to make that change immediately. You know, I mentioned you during our discovery call, we had an issue of our website. Within hours, I had someone on Upwork fix it. You know, I was and I was like, wow, didn't we that? Like, kind of just one of those aha moments. So I was like, wow, that actually, I don't need a full time IT director to be able to do that right? And it kept the business moving. And we've kind of used that word multiple times, and this is now, I'm not being paid, by the way, by the way, well, I just use it, use the platform quite often as well, but in organizations, many people I speak to, they don't, oh, that's not for us. But I think, given what you've just shared, I think it's important for people to reconsider that, especially in times of disruption and change. Absolutely, we could just talk a bit more about that and why that's important.
Tony Buffum 8:39
Yeah, I mean, you're exactly right. What I look at last year in particular, 2023 and really and still now in 2024 a lot of companies are really apprehensive about the economic markets. Last year, they anticipated basically a freeze or decline in GDP, so therefore there'd be less spending. And of course, with interest rates going up, just expected that unemployment would jump and and jobs would slow down. So in anticipating a slower economy, all in fairness, due to the Fed increasing, you know, the federal funds rate in the fastest pace ever. Of course, those are typical results that they'd expect to see, but, um, but in reality, this recession everybody thought was going to come never materialized. And in fact, GDP grew. Jobs were added above expectations just about every month, and the unemployment rate stuck around its fifth year low, roughly around four, 4% or lower the entire year, and it's still all those same things have continued to be true through 2024 for the most part. So that's a different economy than we can rely on analysts to predict and therefore batten down the hatches and just press pause and wait and see. Companies need to be more agile. Yeah, and they need to be able to flex to when things are are materializing better than they expected. They need to be able to flex down when or if that you know that negative economy starts to show up, and they need to be able to do it very quickly, not just because of the economy, but new technologies, like we saw with the rapid adoption of chat GPT. All of a sudden, everybody's like, here's this new technology. It promises productivity. Let's, let's, let's use it right away. But you don't know what you're looking for. We need a prompt. All
Chris Rainey 10:35
of a sudden, the most popular jobs out in the world was prompt engineer absolutely and no one had one. Had. People don't even know what they want to write prompts for. That's how is that going to help you find the productivity you need? So
Tony Buffum 10:47
what to me, you don't want to go out. If I were still at Stanley or Fleer, I wouldn't want to go out and hire a full time prompt engineer just because it's the new hot thing. But I've done that in the past, yeah, around big data, or I'm trying to think the now I'm blanking on the technology that, like weaves all the trends just
Chris Rainey 11:11
in overall digital transformation, just in general, like the amount of highest companies we're making, left, right and center, just The full end to end spectrum of the digital without
Tony Buffum 11:22
a real understanding of how this is going to serve your strategy, just knowing, okay, this is important. We need this expertise now. And really, how great is that expertise? You know, when this, when things are that new, that's constantly learning as well. So to me, when things are uncertain, being able to tap into talent, just like using your example, like within hours, and have them working on something with their expertise within hours, and get you leveraging that for your business, learning from that and then adapting. Maybe you learn that instead of a prompt engineer, what you really need is someone to resources to train your large language model for custom GPT. Those are things that you start to discover with experience, not with just putting all your resources in one basket out of the gate. And that's what freelancers give you. Is that that adaptability, the ability to flex up and down and respond to whether it's economic markets or changing, you know, talent market conditions, it allows companies to be a lot more agile.
Chris Rainey 12:23
Yeah, you've already spoken a little bit, but you mentioned in our last conversation, talent access versus talent acquisition. Could you talk a bit more about that?
Tony Buffum 12:32
Yeah, I think, um, talent acquisition, just like, like mergers and acquisitions, the idea that you're, you're buying this resource and you own it, and everything that they develop design and dream like that's that, to me, is a bygone mentality, because even if you hire folks full time, their average tenure is floating at or below four years. So they're not spending 40 years in a company like my dad did when he worked for Xerox for forever. Instead, they're moving around, and it's becoming much more accepted to move around and change the company you work for and change jobs in less than two years. So is that is that's becoming more the norm. Acquisition is already kind of a myth, but, but aside from that, access is more this idea that you're you're tapping in, you're borrowing these resources. And the story that I feel like really defines this difference in thinking is, is once I was having this roundtable book with a bunch of CHROs, and I'm talking about Upwork and the way I've used it in the past, and, of course, you know, making recommendations about it. And one of the CHROs said, Listen Tony. You know, this platform sounds super interesting, but I'm more worried about my full time talent that's already on your platform as well.
Chris Rainey 13:52
Yeah, why have you got side hustles already like using it? Yeah,
Tony Buffum 13:57
they very well could and but I think breaking down that comment is what defines that difference. So first, you know, my kind of flipping reaction was that that sounds like a you problem. Because really, let's think about why they would be on my our platform at the same time they're working for you. They want to make more money. You know, they don't feel like they get paid enough in your job. So they need to extend themselves somewhere else they want to do something. They want to give themselves a security net, a safety net, in case they don't have much job security. They're worried about the next layoff that's going to come in the quarter, or maybe they're just doing something that's a passion that they don't get to, you know, leverage or utilize in their day to day job with you, either way, one, as long as they're hitting all their performance goals, delivering the outcomes, and they're successful, what you want, what right do you have over there, whatever time they have. And that's, that's the real point. It's well, the thinking that I think is behind that, the motivation behind that comment is, if this, these employees have any extra time. I should be why am I not getting it? Yeah, I've acquired them. I'm entitled to first right of refusal on any bonus or free time that they have to advance what we're doing. But talent doesn't think that way anymore. And I know you know this talent, it thinks, doesn't think so much, part time, full time. They think my time, and how do they want to monetize their time or not, but it belongs to them. So if they have free time, it's up to them, if they're going to give it back to their company and and try to leverage that to maybe move up or or just help out, or if they're going to go on a platform and and make some extra money on the side, I think that's more the mentality of talent these days.
Chris Rainey 15:38
Do you think that hybrid work and remote work has accelerated that
Tony Buffum 15:44
absolutely, because it's one of the, you know, one of the myths, I think, around freelancers is that if they're remote, you can't really trust what they're doing. You don't know if they're if they're working as hard as you think they should be on your work. And that's that really got accelerated with the pandemic, when everybody's forced in that situation, and we see employers pulling employees back. A lot of that is this challenge with trust. If we can't see them, how do we know that they're doing what they should be doing? You know they're they're off doing laundry or picking up their kids, and instead of thinking, hey, that's great, like, if they're doing all that anyway. But to your question, you know the forcing everybody in a remote work, I think force more hiring managers and leaders to recognize it's not all bad. Yeah, there's lots of people can work very productively and very efficiently when they're working remotely. And this is talent that you can trust, and it gave them a lot more comfortability with collaboration tools, we saw investment in collaboration tech, of course, skyrocket. So there, there's became a lot more comfort, comfort in instead of just having conference calls where the people that aren't in the in the room don't really get a chance to speak. Now, everybody's always on Zoom calls, and it's annoying as it sometimes can be when you really don't want to be on the camera, I think that everybody's gotten a lot more comfortable with it, which means they've also gotten more comfortable with working with people in different time zones, in different cities. As long as they're behind a camera and behind a computer, it feels a lot more natural than it did five years ago. What do
Chris Rainey 17:21
you say to people? Because one of the I'm gonna talk about some, one of my concerns, honestly, when I went down this rabbit hole of, how do I find the right person? How do I know they're good? Because you spend time going through Upwork, and is my experience. I'm looking at different you know, obviously you do your search what you're looking for. You get a list of people. You can view their profiles. You can Bruce that that was, for me, did probably the biggest barrier, like, how do I choose the right person? What are your thoughts on that? Because I'm sure that's a big Well,
Tony Buffum 17:51
there's a lot of ways how well, of course, you know the effort you put into building your post, in defining what you're looking for, really defining success and what skills are going to be required to deliver that success, so that anybody looking for your job can do their best job to try to match what you're looking for. That's certainly that's one way to start. And of course, now Upwork has Gen AI tools that help you do that. Help you translate this into what's going to be most effective to accomplish what you're trying to find, our Gen AI also helps you filter and match the talent. But I'd say even beyond that, marketplaces, and there's hundreds Now, part of what makes them successful is how transparent they are. There's such transparency and tech in general has brought so much transparency to the way we we try and resource for talent. Think of how much more transparent the labor market is when we've got LinkedIn and everybody's got their resume posted online, 24/7 that didn't really exist before. So now recruiters can go out and they can find people, search for people proactively that may are likely not even looking for work, and find talent that they want rather than you go before that. And the only way you're finding talents not looking for work is usually through an executive recruiting or an agency that's calling people and that they maybe is in somehow in their Rolodex, you couldn't just fish and find people that might fit your profile that didn't already apply, yeah, so think of that transparency to the traditional staffing process. It's on steroids when you get to freelance marketplaces, because you see how much work someone's done, you see their five star rating on the project and all the elements of their project which you have to do to complete the project as a hiring manager, who
Chris Rainey 19:43
never get that on a TV, right? Like a traditional, traditional recruiting you never get to see, oh, that's these are, like the last 10 project they've done. You can view them. You can see the comments from the company they work with. Like that is just such a game changer.
Tony Buffum 19:57
You can see how many jobs, how many jobs we've done, how. Money, they've made all of that. What I like to say, this is a reputation based economy. So if you build a good reputation, you're going to earn more work. Admittedly, that can be the hard part is just getting started building a reputation, if you're new. But once that ball, that snowball, starts rolling, it expands. And, you know, there's plenty of folks in the platform that make millions of dollars so but part of that, and part of the speed that we talked about before is because it's so transparent. When someone bids on your job, you see all that information, you feel a lot more confident that if they've had all this success, they're gonna have success with you as well.
Chris Rainey 20:34
Yeah, you mentioned AI. Obviously, everyone's integrating that. How was the rise of AI, of Gen AI, impacting the way leaders think about hiring now,
Tony Buffum 20:43
yeah, I think, well, there's a lot of ways one they're thinking about the technology they use to find talent, and whether it's the AI resources on our platform, or whether it's off the shelf AI recruiting tools and assessment tools. I mean, I go to all the HR technology conferences, including HR tech coming up in just a couple of weeks, and they always have great, interesting new technology. And a lot of the Gen AI technology is leaning into the recruiting process, because we know how valuable important is to try to find really good talent and how burdensome and how many hours and work goes into that process. So you can start to tackle that. You can really start to change, you know, how that process works, and get, you know, hopefully a great ROI on that process. But I also think Gen AI changes the type of talent that companies are looking for. You know, I'm sure you've heard the saying, it's not AI that's going to take your job. It's someone using AI that's going to take your job. And that very much. If your talent isn't getting comfortable using generative AI finding ways to create their own productivity, then they're going to struggle. And it's, it's, it's a tough reality right now this gap within the productivity promise upward to this really interesting research that shows that about 91% of leaders expect to get productivity and enhancements out of AI, while 77% of employees think it's added more work to their jobs. So there's this massive disconnect where what they're looking for is people that are using AI making themselves more efficient, but what they're finding is employees going, I can't figure this out. I don't know how I'm supposed to use it. I don't, you know, I'm struggling with getting this training and I got a job to do, and the fact of matter is freelancers, because, again, it's this reputation based economy that in success with other clients, delivering what they're looking for that allows you to be successful. They use and learn Gen AI tools at a much higher clip. It's almost two to one compared to employees and especially Gen Z does the same thing they use Gen Z talent uses AI a lot more than their full time other generational counterparts. So employers are looking for talent that they know is going to bring this to the table. Because, like we talked about the beginning conversation, they don't necessarily know how they want to use it, but they know they want to be getting the productivity promise of it. Yeah,
Chris Rainey 23:18
it's something I talk about my team all the time. I'm using generative AI all day, every day, even, you know, even before our show, I use AI to look at the notes that your team sent over, and I asked it to organize it in a specific way that I've written a prompt that whenever someone sends me to show notes or the questions for our show, I've already have this pre existing prompt that changes the format to exactly how I like to have it. I just throw it in there. It does, it does its thing. It comes out with my bullet points and my questions. It also recommends, actually, a title for the show. It recommends potential clips from different questions I'm about to ask you right now, and because I wrote that prompt right then it's just like, every, every day, like, that's hours of work that I would spend manually doing some of those tasks. If that makes sense. I think
Tony Buffum 24:08
people love to hear that kind of story too. They just don't know how like to get from. I don't use it to now I can have a custom GPT. Yes, it's built just for me that does what I, you know, a task that I do every day that takes like, 50, 70% of that task and allows me to focus on the real value, not the consumption part, which is the the most work, but that's the that's the promise, and that's even if you don't know how to build it into your your, you know, staffing system at your Enterprise, or, you know, use it to create a internal facing, you know, chat bot. You could use it just for this and get great productivity. But it's closing the gap. And it's closing the gap with, ideally, that's why we exist, I think, is to provide experts that can dip in, do this for you, and dip back out until you need them again, rather than for. Feeling like the only way to have this is if you hire someone full time.
Chris Rainey 25:02
Yeah, for me, I just kind of use it in a way I look at it is anything that doesn't require my experience or expertise, I replace. So like to free me up to have more valuable conversations, spend more time with my team. So just removing, like, I sat down and wrote down like, just, you know what, all of the things I'm spending my time on, and where, what are the areas that are actually adding the most value, and everything else, I can just replace that with processes, and most of them are powered by generative AI to be able to do that. So it's almost me and Shane looked at the other day my co founder. It's almost like having three extra employees. We looked at it. Typically companies would hire. So for example, a copywriter, we don't need that, right? You know? So social media marketing, it kind of helps the team. The two members of the team we have now, they would typically have to have two dedicated people for some of the work that it does around our social media and marketing activities, sales in terms of outreach to different clients, yeah? Like, it just like, it's a whole team that I've got, basically, but it does take time to set up and, you know, and it's not, I'm a tech savvy person. I But not everyone's like that. I get it as well. So there is the education piece. But again, that's where something like Upwork, where you could reach out to someone to help you do that. Rather than hiring someone a prompt engineer, you can experiment with that and figure out, actually, what do I actually need? Oh, I don't really need a full time prompt engineer to help me set all, set all of this up, if that makes sense. Yeah,
Tony Buffum 26:33
or, or, I'm not quite sure what a prompt engineer does, but I've heard I need it. I can hire someone for a day, yeah, to train me and my team, help us, show us what some prompts are, work with us, and then that's just a day. You're not that's not a huge investment. You're not hiring a consulting company. So even if it's just for education, I've had people stop at our booth at EXPO shows and say, you know, I I use Upwork personally, just to train myself on new technologies, because I can essentially rent an expert. Yeah, and I think that's, I think that's brilliant. It's not just to deliver outcomes. It could be to deliver training. But there's also off the shelf solutions, you know, like I advise a couple companies. One company I advise, it's called culture OS, and they make a generative AI software that will automate the entire survey process that you do for your for your team, internally, and that includes, you know, sending out the survey, doing all the analytics, analytics benchmarking and making recommendations any HR person that's done this whole annual or monthly or whatever rhythm that you have knows it's a lot of work, and what you really just want are the outputs about how employees feel. But they take it a step further, and they have a voice activated chat bot that can call that can schedule and call your employees to follow up and have a dialog about the survey responses to get their deeper sentiments and give you better give better data, and it's anonymous. They're not talking to an individual. They're talking to a bot. It's actually a very comfortable conversation, which is one of the amazing things about the newest versions of these these technologies. But further it, it can have other conversations, like you could schedule these, this bot to have a question, a conversation with you that's like, more like a one on one, or to ask questions about your company's benefits or policies or whatever you might need, even, uh even, you know, compensation conversation. So I just that blows my mind. It's still very early days. You know, they're always looking for companies to beta test with. But what I think is really interesting is you don't have to know how you want to use it to be able to experiment with it. Totally off the self, self solution, off the shelf solution. Say that three times fast and great productivity, yeah, and learn a lot. They have great data and analytics and benchmarking, and just experiment with things like that, in addition to experimenting on your own. Frankly, I think companies need to be doing both.
Chris Rainey 29:15
Yeah, what we didn't cover this. I want to make sure what, what are the main objections that typically companies you get that they maybe perceive as barriers to using service light at work, but is, you know, maybe, you know,
Tony Buffum 29:28
the first is just, we just don't do it that way, like, I can't believe how much I hear, you know, we're just a really traditional company, which I feel like is a euphemism for saying we're old school and we don't like to change. And I always cringe when people say, Why are you admitting that this is your opportunity in person to champion the change that your organization needs? Not go you know what? I think we're better off just doing things we the way we've always done, that people like this and. Number one, what's that they're
Chris Rainey 30:01
comfortable with? What they know, right?
Tony Buffum 30:03
They are. So you know, a former colleague of mine used to always say, our our biggest competition isn't the other marketplaces, it's the status quo. Just getting organizations to embrace doing something a bit differently that's going to open up tremendous ROI and great value, like speed to talent. But beyond that, it's, I think there's a lot of just myths about freelancers. A lot of people still think, when they when they think of freelance, they think, Oh, this is someone that just can't find a real job. So they're this is their gig work, until they get, you know, full time offer, or they think it's low quality, low skill, or they feel like they can't trust, you know, freelance talent the way they can trust their full time employees, yeah, all of which are just myths. They're, they're, you know, it's, it's the challenge of thinking outside the box related to full time employees and traditional employees, that people think, well, these other options must be worse, because we don't do it. Yeah? And frankly, that's how I thought before I started engaging, yeah. So I'm the same way, but that's also how I know those are myths, and you can overcome them by just having positive experiences and thinking through this not just as a band aid, but as a part of your workforce planning strategy, this opens up so many doors, and when that light bulb went off for me, I got so excited about being the one to champion this change in my company, and that passion continued, because I really saw this as a true opportunity to bring value to the company in a lot of different ways, because there's cost savings involved. There's, you know, the ability to stretch and experiment with new products and and access talent in totally different ways and just work a lot faster and get so much more done with less. Frankly, I just, you know, I was, I was passionate about that. And I think when they when that fix for clients, they start to get it. But then the next big, real dilemma is the change management piece. Even if you get it, how am I can convince all these other leaders who I know don't get in, they're gonna, they're gonna have the same reaction I did. So that's where I think, you know, there's a lot of challenge in trying to find, you know how to drive that process the right way so you can be successful show the ROI and expand into other teams or functions. After you've you've kind of kicked this off and piloted internally.
Chris Rainey 32:34
Yeah, so this is, like, any kind of transformation program or like, it's like a culture it's a culture change. It's getting people uncomfortable and moving away from the what they know, what they've known for their whole entire careers, right as well. One of the things that I found, which to your point, that was really interesting, is some of the most talented people I know are the ones that are going freelance because they know their value and they recognize their value now in the marketplace. And they said, Actually, I want the freedom to be able to work when I want, how I want, and who with like, with whom I want, yeah, as well. And I'm coming across absolutely exceptional talent. And I was speaking to my friend recently, and I told him how much we're paying for one of the freelancers. And he was like, that's pretty expensive. I was like, this is was like, this is how this is how expensive it is to have them as a full time employee, and it's Oh. And I was like, I couldn't even afford. I actually couldn't even afford to have this individual as a full time employee, but I could afford to hire them for a week. Does that make sense? And a value I extracted from that conversation and that work in a week, I could never have afforded as a small business to hire that person. And my friend was like, Aha, like an aha moment. And as I was trying to explain to Shane and the team, I was like, we're getting access to some of the best talent in the world that we actually can't afford if we were paying paying a traditional salary, if that makes sense, and trying to compete with some of the bigger companies out there. And then I was like, it was like a light bulb. Moment that I was like, wow, I can access some incredible people here and work with them for a couple of days, but really maximize those few days and extract as much value as possible to help us shortcut our path to success as well. So I'm seeing the opposite now. I'm seeing some of my friends, family members. Some of those successful people I've worked with are growing freelance because they want that flexibility, and they want to be able to choose their time hours and who they want to work with.
Tony Buffum 34:29
Yeah, we talked a bit about AI earlier in the fact that generally, generationally, Gen Z uses it a lot more than the other generations. We know organizations want to tap into that talent they want. They want that AI comfortable, you know, talent to bring into their organizations and help them achieve this, this productivity promise. But our research through the upper Research Institute shows that 53% of Gen Z is already freelancing at least 40 hours. Week really, instead of a traditional job. Wow. So if you want to tap into that talent, to your point, if you want to tap into that talent, and you're only looking for them with full time roles, you're missing out on half the population. Because I think especially the really high quality, really in demand talent, they're choosing, just like you said, to do this already, and that data supports it, so organizations that you know are limiting themselves will continue to see for not just that reason also, you know, workforce participation continues to decline. It has been for 30 years, but there see the pool of talent that they're fishing in the pond of town. It's shrinking every year. It's getting harder and harder. If that's all you're fishing in, you're in danger of starving at some point. But there's another pond that's increasing. We see freelancers growing to be 50% of the US economy by 2027 2028 so that's just around the corner if they're not fishing in this expanding pond, not only they missing out an in demand, you know, all even niche talent, but they're missing out on where the talent is going. And it's kind of like the Wayne Gretzky, you know, quote, skate to where the puck is going and organizations aren't. They're skating to where it used to be. So this is their opportunity. I think the other thing that's salient in what you said is, when people freelance, they they can really build their expertise in a specific area, because they'll do this for multiple different companies. So while they do that fractionally for you, they're doing it fractionally for others, they're able to do it so much more optimized and efficiently and on that fractional basis than they would as a full time employee that has a lot of other, you know, neighbor responsibilities and a lot of other politics and things that they have to learn and deal with. Instead, they can get really, really sharp in just a few areas, and then they can be an expert. And even though they're charging you more, what you're getting out of it has a much bigger value, because they can get it done so much better, faster and smarter. One of the
Chris Rainey 37:02
things I've noticed as well, they also bring different insights and perspectives from those organizations and lived experiences that they wouldn't get, whether it's in industry experience from different industries that they're bringing in as new perspectives or cultural experiences working with people across different cultures, cultures and geographies as well. So you're also benefiting from that as well. Amount of times I've had people I'm working with say, Actually, I did this for a client, maybe you should think about how they've done X, and I'm like, Oh, okay. Oh, interesting. I would never, you wouldn't really typically get that, okay, yeah, we should experiment with that. They're seeing success. So I'm kind of indirectly benefiting, if that makes sense, from
Tony Buffum 37:45
Yeah, you get, you get diversity in kind of that traditional sense, and we think about it at least in the US. So you can work with people from all different backgrounds and different countries, etc, but you get the diversity of thought, yes, people working in different industries, but that does tap into a fear that we I get asked a special time well, like, how do we make sure they don't ever work for a competitor? Well, because, like, if I expose them to my IP or the way my business operates, and it is going to go work for a competitor and tell them all my secrets, freelancers don't want to do that. I feel like you know this idea that it's they just want to take your secrets and sell them on the market, one that's not great for their reputation. And this is a reputation based marketplace. If that ever got back, it'd be a huge hindrance to their their freelance careers. But they really, they do want to share best practices, and they usually sign NDAs when they're working for large enterprises so they can say, Hey, I've worked for a client, and here's some experience that we've had, and this worked well, and this was a challenge. You get the benefit of that, but it doesn't mean that they're turning around and showing you what this other company does and how and why. Yeah, so I think that's that's another myth that companies need to overcome, and I think it's also a myth that they feel like their full time employees couldn't do a lot of the same things that they're afraid of of, you know, freelance talent doing, but it's a hurdle that they have to get over. Remember,
Chris Rainey 39:10
again, that was one of the misconceptions about remote work before the pandemic, right? The you know, I'll give you an example. My work, work for my wife, worked for a finance company for 10 years and had this really old, outdated system where, if she did actually have to work from home one day just to log in through this really complicated service and login and you had, like, a timer to make sure you're working, was it timed out? And they're like, oh, we can't do this because we're finance and we can't externally, you can't externally access all these things, etc, within a month of everyone going, you know, of lockdown, they had built a brand new system, rolled it out to 20,000 people. So it wasn't that you couldn't do it, it was just because you didn't want to, because you had it was change and it was and it was uncomfortable as well. I had another company who. Just before lockdown? Well, I was talking to the corona and we were like, Hey, there, we've got this five year project we're working on to move our customer service call centers remotely, and we're going to do it over five years. Pandemic hits. They did in a week. They had a five and we were both laughing on the call about it, like, a week later, I was like, you have a five year friend that you remember? She was like, Chris, I know, because all of a sudden that red tape disappeared, right? Or and it was even real red tape. Like it wasn't even real, right? It was just people's the uncertainty and discomfort that people had to overcome, and you had this five year plan to do it, and did it in a week. So that stuff amaze that amazes me. That's
Tony Buffum 40:42
another thing we run into all the time, is again, it's, it's, well, we've always done it this way. So even as companies are exporting using freelancer, say, All right, we have to background check every single freelance. Because we background check all of our employees, or every employee in our company uses our company hardware, we can't do a virtual device, or we can't do a firewall, or because that's this is what we do for everybody else. And I think, to your point, companies that when they get far enough into the process, their leadership's bought in, they go. We don't need to do that, but maybe we need to do that for some freelancers, but we don't need to do that for someone building a PowerPoint, or we don't need to do that for these type of projects. Or if they have this type of access, they don't have access our employer customer information. There's there's ways to solve for that. But when I'm talking to prospects, they're thinking, How do I apply all of these other traditional ways of working to now this new group, and what I always want to tell them is, you don't, you build new rules, and that's part of the change management process. And all of a sudden it starts to feel like work, and they're like, I don't, I don't know if I want to. I don't want to commit to all of this. And it's, to me, it's their loss.
Chris Rainey 41:54
Yeah, well, they're going to keep fishing in the pond, and we're all going to keep fishing in the ocean. That's right. So let them do that. More talent for us is anything that we have missed, we haven't covered. Do you think
Tony Buffum 42:09
we covered a lot? Yeah, listen, I just, I couldn't be more passionate about this space, which is growing rapidly. You know, when I first started looking at Upwork, we did an RFP. I think there might be 40 or 50 marketplaces that were doing something similar in by, you know, estimates that I've seen, it's closer to 800 plus now, with just 100 marketplaces coming on board now, or just this year. So I think it's there's the proof is in the pudding, like, there's a reason there's this rapid growth. There's a reason more people are choosing as a career, and why young talent is choosing this at a majority now, because that's where the market is moving. That's that's the new revolution within the talent marketplace. And I just, I really want HR leaders to see that, to champion it like we talked about the discovery call, because if they're not, they'll be replaced by their marketing and technology counterparts that do. And we see more and more CPOs being folks that come from other functions where they've embraced technology, they've embraced new ways of working, and they've leveraged their influence and their internal political capital to drive the change, and then they've been recognized for understanding the need for these new people solutions. And the organization doesn't reach deeper into the people pool, a people management and function for their next leaders. They reach across the functions to find those that do. That's why I want to bring this to HR, because I want them to be the champions of the the entire holistic people strategy, and make sure that includes all types of talent that can come to work for their organization. Dude,
Chris Rainey 43:50
like, we need to do a whole podcast series on this era, but I love what you're doing. As I said, when you, when you, when your team reached out, I was like, I am a customer so and it's helped grow up more business. And it's something I when I speak to see it rose on day to day basis, I realized that many of them really are not utilizing this as well. So hopefully this helped everyone listening. One question really randomly popped into my head, do you integrate with companies current internal talent marketplaces,
Tony Buffum 44:24
is that that's a good question. Not, not really, not with their internal physically, they're building their internal talent place, using their using another off the shelf. Saw, yeah,
Chris Rainey 44:33
but I'm like, do you connect with any of those? That would be incredible if you could have, like, the power of your insert your own. Every company I'm speaking to now, they're building an internal data marketplace and then adding on what you offer. We've just
Tony Buffum 44:49
started integrating with VMs, so we integrate with several binley Flex track. I'm gonna, I'm gonna, I'm gonna miss. Some. There's several that we D line is another one, yeah, that we that we're integrating with now we're doing our first pilots with. That's something we haven't done in forever. So at least the systems where we're internal folks go to find talent we do integrate with. And I think to your point, when companies build their internal marketplaces. The hardest thing is to do that skills mapping and maintain that inventory. And we've done like we try to work within skills based design for decades. You know, myself in HR, different the different companies I've worked in, I've worked on a few different skills mapping programs. And those always, by the time they're done, they're no longer relevant. Yeah, but I really believe technology is going to get us a quantum leap forward, and skills in skills based or design, because Gen AI is going to be able to do the mapping for us identify and that's going to help internal marketplaces. It's going to help hiring managers when they're trying to find talent just to get something done, when they when they let go of jobs, and they embrace skills for how they source getting work done, and the technology directs in straight to that talent, and it's current, it's up to date. That's going to be a big gap that's that's bridged, that's going to help organizations embrace this, and sales base is getting a lot of momentum, and I think things like micro credentials, universal credentials, certifications, are going to continue to grow rapidly, because this is technology is going to enable that to be a lot easier than it's ever been before. Yeah, you're
Chris Rainey 46:38
right. Like in the past, it was such a heavy lift to your point, by the time you've done it, you're already out of date and behind. But the ability for AI to do skills inference and skills mapping and at scale globally, because every different come every if you ask different departments, they'll have different definitions, right? So it just becomes super complicated to be able to move, and all of a sudden now you've got like 400 skills in Yeah, you
Tony Buffum 47:09
don't have a system to kind of bring it together and in people, I think it's I love that companies have internal marketplaces, because it shows that they're embracing this idea that the talent that you need isn't necessarily just on your team. To me, that's a first step, like if you can embrace that internally, go the next step and embrace it externally, and use that same talent fractionality mentality and get even more done and map even more skills. So I hope organizations keep moving that direction. I believe they will,
Chris Rainey 47:40
yeah, dude, we could talk forever at some point. This is great. Yeah, before I let you go, where can people connect with you personally, if they want to reach out and say hi and learn more, and then, where can they learn more about Upwork? Yeah,
Tony Buffum 47:53
I'd love it if they reached out to me on LinkedIn. I think it's a great way to connect. You know, try to try to share some additional thought leadership and things like where I'm going. I go to a lot of conferences and events. You can meet up learn more, and I always love to share more about what we're doing. But they can also, of course, to learn more about Upwork. Go to upworks website, you know, just upwork.com they can learn more about the marketplace itself, and they can also learn about the enterprise solution, what's different about that, and what that can bring to their company. And they can also go to upworks Research Institute, which will share a lot more of the data, the surveys, analysis and information, some of what which I've shared today, and can they can stay on top of the kind of things that we're publishing. Amazing.
Chris Rainey 48:39
So I will definitely link the some of the research you referenced in the chat for everyone, so it'll make it easier for everyone. But apart from that, it was a pleasure chatting, and I look forward to doing it again soon.
Tony Buffum 48:52
Absolutely. Chris, it was great. Thank you so much for having me. I really enjoyed this.
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Larry Emond, Senior Partner at Modern Executive Solutions.