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What Is Upwork, and Is It Legit for Freelancers?

Upwork takes the hassle out of finding and pitching potential clients, but freelancers need to stand out and deliver to succeed.

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What is Upwork?

Upwork is a marketplace for freelancers in fields like writing, graphic design, web development, marketing and many other categories of online work. The site helps professionals find projects, communicate with clients and get paid.

Is Upwork a legit way to make money?

If you’re a new freelancer, or just beginning an online side hustle , you can rack up valuable experience without always having to pitch clients cold on Upwork. That makes it legit. But the site is full of new workers who are willing to take work for a lower rate, which can impact your earning potential. That means, as it does with any online business or side hustle, it’ll likely take time, dedication and skill to earn big.

Overall, Upwork makes it easier to look for jobs and make money , but think carefully about which gigs you want to apply for.

How to get Upwork jobs

Joining Upwork is a straightforward process, but once you’re in, you’ll need to sell yourself.

Setup up a robust profile

Your profile serves the same purpose as a general résumé for prospective employers. You can’t get work without one, and that’s where you’ll start when you sign up.

Profile essentials include:

A title that spotlights your skills.

Your headshot.

A profile write-up about yourself.

Your hourly rate.

Relevant skills.

Service categories.

Standing out is the name of the game in such a vast marketplace of freelancers. Put some thought into your profile title and overview to give prospective clients a good sense of what you can offer. Enhance your profile with examples of your work in the portfolio section.

Upwork will typically approve your profile within 48 hours, assuming the information is verifiable and accurate. Then you can get working.

Contact potential clients with “Connects”

Upwork offers two membership plans for freelancers: Basic and Plus.

Freelancer Basic is the default free plan. The Basic plan comes with 10 free "Connects" each month, the platform’s internal tokens, which are used to contact clients. You can also pay $0.15 for additional Connects, which are sold in bundles or custom amounts.

Search for jobs on the site, and use your Connects to submit proposals. Proposals include an introductory letter, your desired fee and answers to questions the client included in the posting. You can also send examples of any work you think would be relevant.

Freelancer Plus is the paid plan for those going all in on Upwork freelancing. This plan is $20 a month and gets you 90 Connects per month, plus 10 more free from Upwork, along with a few other perks that might appeal to more dedicated freelancers.

If someone reaches out to you, you don’t have to use any Connects. The more robust your profile looks, the more likely you are to receive job offers from potential clients.

Win a gig and get to work

To get hired, clients will send you a contract to initiate the project. You’ll work with your client, keeping them informed through the platform as you complete the work. Once the work delivered is approved, you’ll be paid by direct deposit, PayPal or one of the other available payment methods.

How much of your fee goes to Upwork?

Upwork takes a 10% cut of your earnings, so you’ll want to factor that into your pricing strategy. The 10% service fee applies to both hourly rate and fixed-price earnings.

If you charge a $100 hourly rate, you’ll earn $90 per hour after the Upwork fee.

If you charge $500 for a fixed-rate project, you’ll earn $450 after the fee.  

Hourly projects

All hourly projects are logged in your Work Diary, which is built into Upwork’s desktop app. With this function on, the app tracks your time in 10-minute billing cycles and records keystrokes, scrolling and clicks. It also takes a screenshot periodically. You can turn the Work Diary’s time tracker on and off at any time, and add work time manually if you have permission from the client.

Upwork bills your client for hours worked on a weekly billing cycle.

Fixed-price projects

Payment for fixed-price projects is more straightforward. The person or company contracting you has to set aside a certain amount of money when you make the agreement. The employer must also set milestones, which are concrete deliverables on the way to the finished job. You’re paid with some or all of the deposit once you hit these checkpoints, and the remainder is paid once everything is complete.

How to do well on Upwork

Like with any client-service business, you’ll want to communicate effectively, deliver work products on time and meet or exceed client standards. Upwork measures your overall performance using a Job Success Score, which is a percentage that ranges from 0-100% displayed on your profile. The score takes into account a variety of factors, such as public and private feedback, contract delivery and customer relationships. TLDR: Do great work, deliver it on time and be pleasant to work with.

Is Upwork the right freelance marketplace for you?

If you’re a freelancer and want access to an open market of clients, it’s probably worth giving Upwork a look. It’s also worth checking similar freelance marketplaces like Freelancer and Fiverr while you’re at it.

That said, the competition and utter vastness of a site like Upwork could discourage some. It’s an interesting option, but not the only way to go about freelance work . If you’re motivated and resourceful enough to find and contact potential clients on your own outside of Upwork, you may be able to secure steady opportunities that don’t require a 10% cut.

On a similar note...

25 Ways to Make Money Online, Offline and at Home

Work from home jobs are in demand and often pay more, surveys for money: what you might earn, what to watch out for.

7 Expert Tips to Win Upwork Jobs Without Experience

R.J. Weiss, CFP®

• Updated July 09, 2024

Getting your first job on Upwork, or even your first few jobs, is hard. 

So much so, in fact, that many freelancers end up quitting after sending in a few applications without a response. 

I get it. I was there too. It’s frustrating. 

Upwork was one of my first big side hustle successes. I was able to go from beginner to earning over $100+ an hour designing landing pages.

But it didn’t happen overnight.

On the flip side, as someone who has spent over $80,000 hiring freelancers on the site, I’ve also seen my fair share of mistakes when it comes to proposals. 

Since many of these hires still work with me today, helping to produce the content here at The Ways To Wealth, we put our minds together to come up with seven expert Upwork tips to help ensure your success. 

Here’s what you can expect :

• Why exactly getting that first job is so difficult.
• The secret that freelancers use to land their first job when they don’t yet have feedback.
• Seven expert tips for getting high-quality, highly-paid jobs on Upwork as a beginner.
• The top 10 mistakes to avoid on Upwork.

Note : In addition to these tips, we published a companion guide that goes into detail about how to get your first job on Upwork .

Let’s get started…

Table of Contents

Why Getting Your First Upwork Job Is Hard

For the time being, put yourself in the shoes of the individual who is creating an Upwork job post. 

First things first : you’re trying to find someone you can count on to deliver the results you want. 

The job post has 20+ applicants — sometimes 40, 50 or even more! 

How are you going to sort through and make a decision about which freelancer is best? 

On Upwork, most jobs are chosen based on feedback. 

If a potential freelancer has good feedback — which is a combination of Job Success Score and written feedback clients have shared on the freelancer’s profile — you’ll consider them for the job.

In other words, you’ll take a look at their profile, read their proposal, and maybe start a conversation. 

But if they don’t have much feedback — or worse yet, if they have some negative feedback — those things are unlikely to happen.

This is where most beginning freelancers stop and ask (often in frustration):

So how do I get a job without positive feedback on my profile, when I’m competing with dozens of others who have great profiles?

Here’s the answer…

How the Upwork Feedback System Works

First, know that feedback on Upwork is a combination of two things:

#1. Your Job Success Score .

This is a metric Upwork created to measure client satisfaction.

After you complete a job on Upwork, the client is taken through a series of questions. They’re asked to grade you on a scale of 1-10.

These scores, along with some other technical factors (like whether the job was delivered on time) determine how successful the project was.

These ratings do not appear on your profile, but are rolled into your Job Success Score (which shows up when you apply for a job).

#2. Written Feedback

In addition to leaving a rating, clients are also asked to leave a comment on how well the project went. These ratings appear on your profile. 

Here’s an example from a past job of mine :

You’re probably wondering why we’re focusing on feedback when you don’t have any. 

It’s important because you need to understand the buyer’s mindset. A buyer wants to hire a person they trust, and the shortcut to hiring someone they feel they can trust is reviewing the freelancer’s feedback. 

So here’s the big secret to getting hired for your first job: You need to establish this type of trust in other ways outside of Upwork.

7 Upwork Tips for Beginners 

It’s all about trust. The more a client trusts you, the more likely you are to secure the job. 

Here’s how to establish that trust outside of Upwork’s Job Success Score and feedback system. 

#1. Complete Your Profile (and Make it Awesome)

When you have no feedback, your Upwork profile is the primary thing prospective clients will use to evaluate your fitness for the job.

When creating your profile, assume your client is making a split-second decision with regard to wanting to learn more about you. If you don’t make your profile stand out, they’re on to the next one — and quickly. 

Again, looking at things from the client’s perspective, their first impression of you occurs in the “Review Proposals” tab. 

Here’s what this looks like from the client’s side:

The client sees your profile picture, your name, title, location, Job Success Score and a snippet of your cover letter. 

While we’ll discuss the cover letter (i.e., the proposal) later, there are two important things to note here:

#1. Your profile photo .

Act like you’re applying for a job with a Fortune 500 company. What would their immediate impression be based on your photo?

This doesn’t mean it has to be boring. As an example, if you’re looking for creative work (such as freelance graphic design jobs ), your professional photo would be different than someone looking for accounting work. 

Does your current profile photo pass the Fortune 500 test?

#2. Your title .

This is one of the most underutilized customizations you can make to your profile. Ideally, your title should let your client know why you’re perfect for the job. 

A good title starts with picking a good niche . 

Most of my success on Upwork was when I offered conversion rate optimization services on the Unbounce design platform. 

While what I did was web design, when I wrote my title, my goal was to let the client know I was a perfect fit for their job:

What you want to avoid is branding yourself as a generalist. Because there is so much competition, generalists typically don’t get hired on Upwork.  

Pro Tip : Because there are so many applications, assume your client is skimming through freelancers. What can you say in the title to quickly let them know you’re perfect for the job?

#2. Look for a Small Project and Bid Low

With my first job on Upwork, I made $50 for what was close to 10 hours of work on a copywriting project. 

It’s not ideal to work for less than you’re worth. But it’s a necessary evil when starting out on Upwork — at least if you want to get up and running as quickly as possible. 

Pro Tip : My strategy was to bid well below the client’s budget and ask them to test me out vs. the experienced copywriter they had previously hired. They liked what I did better, and that was all I needed to build some momentum and get started as a copywriter . If you’re confident in your abilities, asking a client to hire you along with a more experienced Upwork freelancer can help you land that first job. This strategy doesn’t work in every industry, but can be used more often than not. 

For your first job, don’t put much stock into your hourly rate. Instead, think long-term. 

Have the mindset that it’s not your first job where you’re going to get paid what you’re worth, but the third, fourth, fifth and so on.

At the beginning, the goal is just to get established; to build that feedback profile we discussed earlier so that you have a better chance to win more jobs.

That also means that when starting out, your focus should be on shorter-term projects on Upwork.  

This benefits you because you’ll be able to earn feedback quicker. 

Also, the client is more likely to test out someone new on a short-term project vs. a long-term one. 

This is a better strategy than bidding low on a bigger project, for two reasons: 

• You limit the amount of work you have to do for a low rate. 
• Clients won’t want to hire a questionable candidate for an important project, even if the price is low.

Related reading : Fiverr vs. Upwork for Beginning Freelancers

#3. Look for Clients Who Leave Quality Feedback

It’s a fact that some clients on Upwork are, let’s say, “pickier” than others. 

In other words, not every client will be a pleasure to work for. 

Plus, not every client understands just how important feedback is for freelancers; they may see it as their responsibility to nitpick and point out the pros and cons of working with a given freelancer, when in fact the industry standard is to leave a five-star review unless there was a serious problem.

Fortunately, there’s an easy way to tell which clients are worth submitting a proposal to: just look at the feedback they’ve left for others.

Remember, your goal at the beginning is to earn positive feedback fast. So, look for a client that consistently rates the freelancers they work with five stars. 

These clients are not only more likely to give you five-star feedback, but they’re also more likely to be very clear on what they want from you. In turn, you can deliver the exact results they’re looking for. 

On the other hand, if you see that a client consistently leaves mixed reviews, you might want to avoid those projects. Chances are they’re difficult to satisfy, and getting negative feedback on your first few projects can significantly derail your Upwork career.

#4. Use Your Cover Letter to Start a Conversation With the Client

Your cover letter — and specifically, the first 3-4 lines of your cover letter — is another chance to make a great first impression on the client. 

Looking at our example from above, an excerpt from your cover letter is included in the proposal screen:

The first goal is to make it known that you’re not just submitting a templated proposal . 

Your proposal should be clear and concise, directly address the client’s needs, and offer a concrete next step. 

Here are a couple of tactics that can help you accomplish this:

• Address them by their name. Do some research on who is hiring. Click on the prospective client’s profile. If their name isn’t on their profile, and instead you see a business name, you can often find the client’s name when checking out the feedback other freelancers have given.
• Start strong. As the first few lines of your applications will appear on the application screen, make sure your application immediately explains why you’re right for the job. One simple way to do this is talk about your experience outside of Upwork. For example: Hi John! I’m new to Upwork but I have five years of experience in XYZ .

Most importantly, what you’re trying to accomplish with your proposal is to start a conversation. 

Asking a client to hire you based on your proposal alone is often a giant leap. So, don’t just submit it and pray they get back to you. Instead, make it easy by starting a conversation. 

The best way to do this is by asking a question . 

For best results, ask a question that displays your understanding of the work. 

For example, if it’s a freelance writing gig, you can say something like:

“I’ve long admired what this [example site] is doing in your niche. Is this the type of content you’re looking for, or would something like [example site’s content] be more in line with your goals for this project?”

Pro Tip: The strategy I used to land my first long-term, highly-paid gig ($2,000+ for writing an e-mail series) with less than five successful jobs on my profile was creating a quick video for a prospective client. (I listed it on YouTube, as a private video that only people with a link could view.) It was around a two-minute video, recorded via webcam. I introduced myself to the client, and let them know why I was right for the job. The client was looking for a specific type of e-mail funnel, and it just so happened that I had recently finished reading a book on that particular method. So, I was there in the video holding the physical copy of the book, explaining why I was the best person for the job.

#5. Offer a Detailed Plan of Action

A great way to build trust in your proposal isn’t just telling your client you can do the job. 

Instead, offer them a detailed explanation of how you will go about accomplishing your work. 

Using freelance writing as an example, discuss how you would go about researching the topic, how you come up with different subheaders, and how you get expert sources.

Similarly, when I was doing landing page design, I’d talk about how I’d go about doing the research for the text and conversion process. 

Use this as your chance to build more trust. Let the client see that you understand what it takes to deliver quality work.

#6. Show Them a Sample That’s Relevant

I’ve hired a fair amount of freelance writers on Upwork. 

The easiest hires are the ones that share a portfolio sample that’s highly relevant to the type of work I’m looking for. 

In other words, if I’m hiring writers for this blog, I want to see examples of financial writing, not some random college paper on a different topic. 

In fact, here’s a good rule of thumb when it comes to what to put in your proposal: Send the prospective client one relevant sample (or two samples at the most) of your work that’s closely related to what they’re looking for.

As a freelance designer on Upwork, I always included one landing page in my proposal that was as close as possible to what the client was looking for — often asking them, “ Am I correct that this is the type of landing page you’re seeking? ”

This was also a great form of social proof, as the prospective client saw I had previously worked with XYZ Company .

Now, let’s say you’re brand new to your niche and you don’t yet have a sample of client work. 

In this case, create a sample and even let your potential client know that this wasn’t paid work, but that you took the initiative to create it to display your skill in this space. 

For example, if you’re a freelance writer, write at least one sample piece that you can send to clients. This is where it helps to have a niche, so the same sample can be used in all your proposals. 

#7. Satisfy Your Client at All Costs

It’s really hard to overcome a bad piece of feedback early in your Upwork career. If your first feedback is less than five stars, you may never land another client. 

In addition to working for less than you’re worth, you need to make sure you’re putting everything you have into delivering a top-notch product. 

So, don’t just deliver your work on-time — deliver amazing work that will “wow” your client.

If an Upwork client asks for revisions or re-work, just do it: the cost of getting a negative review will be much higher than the cost of the time spent in revision.

Even consider giving something a little extra that they didn’t expect. 

As an example, say you’re a graphic designer; you could offer two or three choices for your client, in multiple file formats, even if they only paid for one. 

If you’re a freelance writer, one idea would be to run your work through an on-page SEO checklist, making comments in the article showing where you optimized it. 

Do something unexpected that shows you went a little above and beyond. 

Top 9 Mistakes New Freelancers Make When Applying for UpWork Jobs

We’ve talked about what to do, so next let’s talk about what not to do. 

From my experience hiring freelancers on the platform, here’s what’s going to quickly get your Upwork proposal dismissed. 

• Neglecting your Upwork profile. A professional photo, a unique title and a quality professional description are table stakes to land a job on Upwork. 
• Bidding too high. It’s OK to underbid a project when you’re new. Look at Upwork as a long-term game — you need a few jobs under your belt before you’ll be competitive for better gigs.
• Only skimming the job description. Read the entire job description. It sounds obvious but many don’t bother to do it. 
• Writing a novel-length proposal . I’ve seen 500-word proposals, which (in most situations) is absurd. No potential client will read this much text. Keep it concise and focus on starting a conversation. 
• Rushing through the “additional questions.” When you submit a proposal, these questions appear below the cover letter. But when a client reviews your proposal, they actually come before the cover letter. As such, your answers to these are the client’s first impression of you. But many people rush through them, thinking they’re ancillary to the cover letter.
• Not sending relevant work samples in your job proposal. Sharing samples of your work is a great way to establish trust. So make it easy for your client to see your work by sharing an example in your application, and make sure you specifically discuss how it connects to the job they’re hiring for (i.e., don’t just attach it).
• Sending too many work samples. Send the client one, or at the most two, very relevant work samples you hand-picked for them. A client doesn’t want to review dozens of samples. Just send in your best and most relevant. 
• Not offering a delivery timeline. Say specifically when you can deliver the project — don’t leave it up for the client to suggest a timeline. This makes it much easier for the client to say “yes.”
• Submitting proposals with grammar mistakes and typos. Read through your job proposal out loud before hitting send. Clients are looking for attention to details, and the easiest way to display the opposite is with grammar mistakes.

Frequently Asked Questions About Getting Started on Upwork

100%. It’s the largest freelance marketplace in existence today, with many Fortune 500 companies that hire on the platform. 

Yes. Only work with an Upwork client who is “payment verified” (you’ll see a notice when this is the case) and, if it’s an hourly contract, consider using Upwork’s (admittedly intrusive) time tracker. It will take a periodic snapshot of your screen (to show that you’re actually working). Using this feature qualifies you for Upwork’s payment protection program.

It pays shockingly well when you have some feedback. Personally, I was able to raise my rate to over $150 an hour within a year for a skill I had only learned months before. 

Absolutely. Many people, including people who work for The Ways To Wealth, make a full-time living ($40K+ per year) freelancing just on Upwork. 

Upwork offers a number of payment options, including ACH transfer (bank deposit), wire transfer, PayPal, Payoneer and M-Pesa (which is only available in Kenya). The payment timeline can be a little bit confusing at first. You can read the details about how you get paid here . In general, it takes 1-2 weeks after completing hourly work before you have access to your earnings.

Check out Upwork’s list of top 100 jobs to see the most popular types of freelancing roles hired for on the site. 

Launched in 2021, the Upwork Project Catalog is a marketplace for limited-scope, fixed price gigs that freelancers post and clients can purchase on demand. It works the opposite of the normal Upwork project flow: freelancers set the scope of the project and define a price, and then wait for clients to come to them (as opposed to searching for jobs and submitting a proposal).

Upwork Tips: Summary 

On The Ways To Wealth, we often talk about how making money is a skill that anyone who practices can learn over time — and therefore, increase their income. 

You’ll be glad to know that Upwork is one of the best environments for learning how to make money that exists today. 

As an Upwork freelancer you can:

• Test different approaches to landing a job, looking for what works and what doesn’t.
• Find out which of your skills has value in the marketplace today — and, just as important, which skills you need to acquire to make more money in the future. 
• Take on projects that stretch your current skills and abilities.

It’s this fast-paced, real-world experience that’s going to allow you to not only become better at making money, but also have the bank account to prove it. 

If you’re looking for more reading material, check out these new freelancer resources we’ve put together: 

• How to get your first job on Upwork
• How to apply for writing jobs on Upwork

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Donald J. Trump, the Republican presidential nominee, has floated the idea of a 10 percent tariff on all U.S. imports, a plan that economists say could badly damage trade.

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Upwork freelancers who have earned $1 million share 5 tips for starting your business

• Freelancing allows people to channel their talent into a job that fits their schedule.
• Insider spoke with four freelancers who have earned seven figures in payments on Upwork.
• They shared their tips for using the platform, setting rates, and building client relationships.

Throughout the pandemic, many Americans have quit their jobs to become their own bosses . This rise in solopreneurs and freelancers is, in part, due to a newfound ease of access to entrepreneurship — in many cases, all you need to start a business is a website and Internet connection.

Sixty million Americans, or  39% of the workforce , freelanced this year, up 3% from 2021, according to a study by work-for-hire site Upwork. 

As a freelancer , you can channel your talents and experience into a job that fits your schedule. Plus, it allows you to work from anywhere in the world — the software-automation freelancer Ryan Clark  has worked remotely in Hawaii, Italy, and Brazil. 

"The best time to start a business was yesterday," he told Insider. "Which means the next best time to start a business would be today."

Clark used Upwork to build his business, Mr. SharePoint , and has earned more than $1 million in payments on the platform since 2017, which Insider verified with documentation. 

Insider spoke with him and three other freelancers who have earned seven figures in payments on Upwork. They shared their tips for using the platform, including how to determine your rates and build client relationships.

1. Low rates will help you land jobs when you're starting out

When you create a profile on Upwork, you're starting from scratch. Regardless of your skills and work experience, clients typically book freelancers' services based on the projects and reviews listed on their page.

To have a competitive edge, all four freelancers started their rates below the average for their services, knowing that it was the best way to initially get jobs on the platform.

"On Upwork, you're competing with people from all across the world," Clark said. "One of the ways you can get a client to hire you is just to lower your rate."

While Jamie Hollander , a copywriter, had 17 years of experience in marketing, she started charging between $10 and $15 an hour to build up her clientele.

Related stories

"You're not committing to staying at that rate forever," she said.

2. But don't keep your rates low for long

Once you complete several jobs and have plenty of five-star reviews, you can raise your rates. As they increased their prices, all four freelancers found that top-tier companies were more willing to work with them because they equated higher prices to higher-quality work. 

Courtney Allen , a presentation designer, started on Upwork in 2014 with an hourly rate of $27 and now works for $150 an hour. In her experience, raising her prices got her more gigs.

"My rate gave them more confidence in my expertise and the value that I bring," she said. 

When he started freelancing in 2017, Evan Fisher , a pitch-deck creator, charged $300 for a project. Now, he doesn't accept jobs for less than $15,000.

"You are able to accelerate yourself so enormously fast," he said. "Even people that I have spoken with four or six months ago, that price is no longer the price today."

3. Specializing makes you stand out as an expert

When Fisher started freelancing, he took nearly any job he could, including crafting business plans, financial models, Excel tasks, and PowerPoint presentations. When he noticed a lot of entrepreneurs needed help telling their founding stories to raise capital, he narrowed his focus to pitch decks.

Having a specialty can also establish you as an expert in your field. Allen found the same was true in her industry: As a graphic designer, she focused on presentation design for corporate leaders and keynote speakers. 

"There are tens of thousands of graphic designers, but presentation design was a much smaller subset," she said. "I know of other people who have narrowed their focus down further into just working with dental clients or within the film industry."

4. Sometimes an hourly rate is better than a fixed rate

While some freelancers take fixed-rate jobs, many work on an hourly basis. Clark found this was the best way to maximize his time and profits for his line of work, which often involves being on call to fix clients' issues with the software as they come up. 

"Some clients try to squeeze as much value out of you as possible within that fixed-fee project," he said. "It's good for the client, but it's not necessarily good for me." 

If a client isn't sold on the hourly rate, Clark will offer them a fixed hourly rate. He gives them a range of the total hours it will take him to complete a project, so they know what to expect for the total, while giving Clark some flexibility. 

5. Remember, success takes time

Building a successful freelance career takes time. Allen started on Upwork in 2014, while Fisher and Clark started in 2017. 

Hollander, the earliest to join the platform, started freelancing part time in 2012 until she quit her corporate job in 2020. Even with 17 years of experience in marketing, she said it took her three years to hit six figures in total earnings.

"If you're committed, you can find work, even if you don't have years and years of experience," she said. "But it's finding where you belong that I think is super important."

An earlier version of this story appeared on June 10, 2022.

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A CEO’s Guide To Succession Planning

Plus: Conversations With Leaders At RHR International And Cornerstone About How To Know When It’s Time For An Exit And Choosing Your Successors

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This is the published version of Forbes’ CEO newsletter, which offers the latest news for today's and tomorrow's business leaders and decision makers. Click here to get it delivered to your inbox every week.

At last week’s Democratic National Convention, President Joe Biden did something that was personally difficult and monumentous: He passed the baton to Vice President Kamala Harris .

Biden’s age seemed to be the most significant factor that ultimately led him to step away from this year’s presidential race. When Biden was inaugurated in 2021, the 78-year-old became the oldest U.S. president. And the cognitive slowdown often associated with people as they grow older was on full display at the debate in June against the former president and Republican nominee, Donald Trump. After weeks of stiff pressure, he ended his campaign and endorsed Harris.

Regardless of how you feel about the turn of events, succession planning is inevitable—whether you’re in charge of a country or a business. There is a time when every executive needs to step back and let the next person in line (or a new hire) take over .

The reasons vary : Some may be getting too old to be an effective leader, or they may work at a company with a mandatory retirement age. Some may have better opportunities elsewhere, while others find they’re no longer suited for the time’s economic, competitive or regulatory circumstances. There are also personal situations, such as family commitments or conflicts with board members.

Each business leader needs to think about their succession—some say it should even be part of your priorities from day one. This special edition of Forbes CEO zooms in on the issue of succession planning , looking at what both leaders and businesses need to do to consider and prepare the next generation.

With the right forethought, training and planning, the handoff can go smoothly to a capable leader who can carry on your legacy.

STATISTICALLY SPEAKING

More executives are having shorter tenures . According to a 2023 analysis from organizational consulting firm Korn Ferry, 11% of new CEOs leave their positions within the first year. A third leave by the end of their third year. The annual turnover rate for all CEOs, according to 2023 statistics from BoardEx, is at 13.2%, a three percentage point increase over the previous year.

BoardEx said last year’s numbers may be inflated, considering many CEOs stayed longer than they might have planned as companies navigated through the shutdowns, supply chain difficulties, inflation and wild swings in consumer behavior that surrounded the Covid-19 pandemic. The number still feels high, though the CEO turnover rate is the smallest out of all C-suite positions, according to BoardEx. Looking at Fortune 1000 companies, between 2018 and 2022, 11.8% of CEOs left their jobs—much fewer than the 16% of CFOs, 18.9% of CHROs, 21.2% of CMOs and 27.3% of COOs.

Still, most CEOs are sticking around a bit longer than three years . Research from Spencer Stuart found the average S&P 1500 CEO’s tenure was 8.9 years. The vast majority of CEO departures—86%—were for non-acrimonious reasons of retirement or leaving for another opportunity.

TIMING IS EVERYTHING

RHR International CEO Jessica Bigazzi Foster.

How do executives know when it’s time to go? The question can be a tricky one to figure out. I talked with Jessica Bigazzi Foster, CEO of leadership consulting firm RHR International, to discuss how to figure it out. This conversation has been edited for length, clarity and continuity.

Who generally decides that it’s time for an executive to step down?

Bigazzi Foster: It’s more the leader driving that timeline than the board. Their own energy and sense of timeline of how long you can do this job. It’s stressful. It’s all-consuming. For many leaders, there comes a point at which their enthusiasm, energy and engagement start to wane, and they can feel that it’s time to move to that next chapter.

Where it gets really hard, for many CEOs, is retirement. You’re dealing with two issues at the same time: Should I leave this role, and am I ready to move to that next chapter? And sometimes that ends up in conversations around their limitations and mortality.

With public companies, ultimately, it’s the board’s responsibility—the board chair, the comp committee, specifically—to play a role in timing and sequencing. But when a board and a CEO have a good relationship, it tends to be a collaborative effort: an ongoing conversation and a give-and-take around the right timing. I’ve seen boards encourage CEOs to stay when they’re doing well, the results are good, and the board has a lot of confidence in the leader. And then I’ve seen them encourage and talk about a potential transition when it feels like it’s time.

It’s a lot more challenging in private companies because the same governance isn’t in place, and the ownership structure gives that person a lot of opportunity to make their own choices. Sometimes we see very publicly that those tenures can go on longer than is ideal for the company.

How does what's going on in the company internally—as well as what's going on in the economy as a whole and the industry they're in—come into play for the timing of a transition?

We see really big differences in different industries. Companies that move rapidly and are evolving and facing new demands, the type of leaders they will need in the future are changing at that same rate. For example, a high-growth company might see one kind of leader that’s good at building in the initial phases of growth, where it’s all about product. When it comes to the phase where it’s much more about scale, a different kind of leader might be best. Sometimes that’s done gracefully by creating dual CEOs, or CEO and president, that divides up the roles.

As a company moves rapidly through phases of change and growth, that path to new leaders is sometimes accelerated. In places where [there are] lower margins, stable businesses and less competitive spaces, we can see more stability in the leader. Their timelines can look much longer because the same CEO can continue to be successful for a longer period of time.

What kind of succession planning do most companies have? How often does the executive who is leaving play a role?

From day one, a new CEO typically realizes that one of their responsibilities is to start preparing for their successor. And in the early days, that might just be getting to understand the talent one and two levels below. What are people’s ambitions? Who might we have internally? Where do they see gaps that suggest a strategic external hire that could potentially be a successor down the road? Sometimes five, six, seven years in advance, we’ll see leaders really engaged in their own succession.

That can be intimidating. It can be scary to work your way out of a job over several years. But those who can keep their ego in check and focus on the good of the whole realize it’s one of the things that they have to do on an ongoing basis.

And most boards will force the issue. If it’s not happening, they’ll bring it up. They’ll expect to see it at least once in an annual talent review or board conversation, if not more frequently.

WHO SHOULD IT BE?

Cornerstone CEO Himanshu Palsule.

Internal successors are sometimes preferred since they start with a high degree of familiarity with the company, the industry and current initiatives. When looking at your organization, who are the right people to start grooming to become next in line for leadership? I discussed this with Himanshu Palsule, CEO of workforce agility platform Cornerstone. This conversation has been edited for length, clarity and continuity.

What should an executive look for when thinking about succession planning?

Palsule: The first aspect is planning and identification, an important phase. If either me, as the CEO, one of my executives or one of their people were to move on, what planning is required to fill that job? And then identifying the internal and external incumbents. We use a concept: ‘ready now,’ ‘ready in a year, and ‘ready in three years.’ If I were to step down and identify a set of candidates internally, I want to understand their readiness scale, given the uncertainty of when this event could occur. The 'ready now' are usually hard to find, but they're someone who you can automatically slot in.

The important part for the up-and-comer that will be ready in a few months or years is identifying the set of skills that they're missing. Is it tribal knowledge? Is it cultural? Is it international experience? Is it subject matter expertise? Once you know the gap, the effort is to continually close it by re-skilling these people.

How can executives and people in the workforce for longer pass along some of the knowledge and skills they have gleaned over the years to people who may be up and coming?

The first step is the humility to accept that you need to start preparing someone to take your job, and often do even a better job than you did. Once you’ve accepted that, it is carving out time to understand what is essential for those individuals to know.

I encourage people that I consider future successors to shadow me. That is by giving them opportunities to sit in conversations that they may have yet to be privy to, taking time to discuss issues that may today be outside their functional remit, and then making every effort on an ongoing basis to pull these people along. Whether they get selected or not, from their career perspective, they understand things like board dynamics, capital management and customer and business interactions. It is important to create a culture where continuous learning exists at all levels and people are encouraged to be curious.

Then, on the other side, the individuals need to be personally curious and carve time out. I’m always thrilled when people at all levels stop me in the halls and ask me questions: ‘Hey, you just had this customer interaction. Can you tell me what you learned?’ Or: ‘You have a board meeting coming up, how do you prepare?’ Taking time to distill that knowledge makes for good succession.

You never have time to do that. Most people when they plan this, they’re not in the mode of exiting. They’re in the thick of things. But if you want the business or function you’ve worked on building to continue, finding that time and identifying the people is essential.

Five generations are actively working in the U.S. President Biden is among the oldest. Has his decision to step back inspired some of his age-peers to start thinking that it could be time for them to do the same?

I hope so. Every executive, including myself, is always conscious about the value you create, which is a factor of your experience and a function of your cognitive abilities to be at your best. With the help of modern science and working virtually and remotely, work spans have increased, and more and more CEOs tend to stay for a very long time.

But we all will come to a point where we must decide: Is this best for me and the organization? Having the courage to have that conversation is important. Often, people who stay on don’t want the power. They actually believe that what I do is irreplaceable—and in many cases, that may be right.

Having trusted people by your side creates an environment in your leadership team where someone can tap you on the shoulder and remind you of the things that have changed, or point out fatigue and stress levels driven by being constantly socially on at all times. You may have the will but not the ability and the stamina.

I am not sure whether President Biden’s decision directly or indirectly sparked people to think about it, but I am sure when people look at that, they ask themselves, ‘If this were you, what would you do?’ At least now we are having that conversation, which may not have been as comfortable to have in the past.

FACTS + COMMENTS

Earlier this month, when Starbucks announced the appointment of Chipotle head Brian Niccol as its new CEO —replacing its unpopular chief executive Laxman Narasimhan—the coffee chain had its best day ever on the stock market .

24%: One-day increase of Starbucks stock

17: Months Narasimhan was Starbucks CEO

It ‘recognizes the critical human element it takes to lead a culture and values driven enterprise’: What Starbucks founder Howard Schultz said Niccol’s track record at Chipotle does

Victoria’s Secret announced it’s getting a new CEO earlier this month. Which company did the lingerie and lifestyle brand’s new head lead?

B. Dick’s Sporting Goods

C. Savage X Fenty

D. Bath & Body Works

See if you got the answer right here .

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• 1,768 reviews
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• Product Information

Upwork Pricing Overview

Upwork at a glance.

From simple projects and proposals, to customization and worker classification, Upwork offers solutions for businesses of every size and ambition.

Each option includes access to Upwork's large pool of top-quality freelancers.

Upwork pricing & plans

*3% payment processing and administration fee on all payments to freelancers. **10% service fee on all payments to freelancers. Includes payment processing and administration fees.

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Upwork Pricing Reviews

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Upwork allows our team to easily find professional designers, editors and copy writers for projects that we need quick turn around time on. Rather than sifting through resumes or seeking out individual people online, Upwork makes it easy to search for what you need, set up projects for professionals to apply for and review their work in a time-saving and effective way. We have been using Upwork for several years now and have worked with data entry specialists, video editors, copy writers and more. Upwork makes the process of finding a digital creator to work with an easy one. Review collected by and hosted on G2.com.

Once you find a professional you have to make sure to turn off applications to make sure that you don't continue to receive email notifications about inquiries. It's not so much a downside as it is an extra step to take but it is worth the trade off in finding someone you can work with. Review collected by and hosted on G2.com.

Upwork is one of the easiest marketplaces for finding professional creators and with the ability to set up a project where professionals can apply keeps the process simple and organized for finding contractors to work with. Review collected by and hosted on G2.com.

Because of Upwork, we are able to create a higher number of blog posts and have copy for ads as well as graphics to use for social media and Google ads at scale. Working with several professionals allows us to prioritize the marketing tasks over the content creation tasks and the people we work with offer an affordable rate. Review collected by and hosted on G2.com.

It used to be a really good platform. But I can't say anything good at this moment. Review collected by and hosted on G2.com.

They are greedy and require conencts for everything. They either can't control spam job or they are funding spammers. Review collected by and hosted on G2.com.

It used to connect me with good clients. But now, it is full of spam jobs where you spend credits and get nothing.

Years ago, it was really a good platform. They used to charge 20% of fee but it was a pretty good options. But then they introduced connects. And then don't know which big brain full of greed took over and they started charging connects.

They can't even control spam jobs. I saw a post or $5 requiring 12 connects to apply, and the hiring rate of client was 55%. That means alone that client caused freelancers to lose thousands of dollars.

They don't really care about freelancers at all. Review collected by and hosted on G2.com.

Explore More

The Upwork Business Model – How Does Upwork Make Money?

Executive Summary:

Upwork is an online marketplace that matches freelancers with businesses that seek on-demand work. The company facilitates jobs in the field of accounting, data science, web development, customer support, and many more.

Upwork makes money by charging service fees to contractors, via subscriptions, as well as by allowing freelancers to pay for additional client connections. The company operates on a marketplace business model.

Upwork is the result of a merger between Elance and oDesk that took place in December 2013. The company officially rebranded into Upwork two years later. In 2018, Upwork went public on the Nasdaq stock exchange, raising $187 million in the process.

How Upwork Works

Upwork (formerly Elance-oDesk) is an online marketplace where freelancers can offer various services to private consumers and businesses around the world. Customers can seek help in almost any work-related category, including industries such as:

• Web Development & Software Engineering
• Data Analytics

… and many more. As a freelancer, you upload a profile that includes information such as employment history, skills, education, certifications, a description of yourself as well as the hourly rate charged. Upwork furthermore populates additional data points such as hours worked on the platform as well as the freelancer’s rating from previous jobs.

On the client side, businesses can post a job and name the specific roles and skills they seek. Candidates can then either apply directly or are handpicked by Upwork’s matching algorithms. Upwork will then forward a list of potentially suitable freelancers to the job poster.

Selected candidates will then be invited to make a bid for the job in question. Furthermore, companies can schedule a chat with potential hires to ask specific questions and determine who’s the best fit.

Once a project is started, both businesses and freelancers will gain access to a workplace environment provided by Upwork. Over there, both parties can send and receive files, share feedback in real-time, or use Upwork’s mobile app to manage projects.

As with any online marketplace, Upwork will take care of the whole payment process. That not only means the facilitation of payments, but also features that include invoicing and reporting.

A Short History Of Upwork

The creation of Upwork is a result of the merger between Elance (founded in 1999) and oDesk (founded in 2003) that was announced on December 18, 2013.

At the time of the merger, oDesk had over a million businesses and five million freelancers registered on its platform. They helped to contribute more than $1 billion in transaction volume for the year of 2013.

Elance, on the other end, counted over 800,000 registered businesses and three million freelancers. Furthermore, the company was active in 170+ countries across the globe. Over 1.3 million jobs in categories such as software engineering, design, data science, marketing, were published every year on the Elance platform.

The goal of the merger was to become the indefinite market leader and thereby decrease market shares of freelance.com, their biggest competitor at the time. At first, the two companies continued to operate independently under their separate brands.

Then, on May 5, 2015, the two companies announced what has been heavily speculated soon after its merger: that the two companies will become one and operate under a new brand named Upwork.

To really push the new brand right from the get-go, Upwork made sure to also release a new mobile application, quicker processing of the website, new search algorithms, and a real-time chat service.

The change was announced by Stephane Kasriel, who became the company’s new CEO (and remained so until December 2019 when he was replaced by Hayden Brown ).

The newly founded company continued to grow under the reigns of their new CEO. This culminated in the firm’s IPO in October 2018.

2020, in particular, became one of the most important years for the company. Due to the coronavirus pandemic, which led to massive layoffs as well as a shift to remote work, more and more people shifted to becoming contractors.

As a result, both its revenue and stock price soared to new all-time highs. That shift was led by its new CEO Hayden Brown who replaced the previous chief executive Stephane Kasriel.

The headwind also prompted the company to undergo a severe rebrand in May 2021. On top of that, Upwork significantly beefed up its marketing spend to take advantage of the new remote work trend.

Today, the company counts millions of active businesses and freelancers on its platform while operating offices in Chicago, San Francisco, and Santa Clara. On the platform, some freelancers were even able to build businesses that generate millions in revenue, showing the power marketplaces can have when achieving a sufficient scale.

How Does Upwork Make Money?

Upwork makes money by charging service fees to contractors, via subscriptions, as well as by allowing freelancers to pay for additional client connections.

The business model of Upwork is running an online marketplace. That means that the platform needs to ensure a sufficient amount of freelancer supply and match that with the existing demand for talent.

Moreover, Upwork enhances the experience for both clients and contractors by providing them with additional tools such as payroll services or allowing clients to utilize Upwork talent recruiters.

Those additional services ultimately not only increase trust among participants but make the platform more sticky. As a result, both clients and contractors are less incentivized to work together off platform.

So without further ado, let’s take a closer look at each of Upwork’s revenue streams.

Service Fees

As the operator of the marketplace, Upwork charges a percentage fee for every successful transaction it facilitates. More precisely, contractors are being charged a 20, 10, or 5 percent fee depending on the amount they have billed with a client.

To keep supply (i.e. clients and amounts of jobs posted) high, joining the platform and posting a job is free of charge. This ensures that marketplace liquidity, which is the efficiency with which a platform matches buyers and sellers, remains high.

The decreasing fee structure also motivates contractors to stay on. After all, paying 5 percent is very close to the fees that a contractor would pay with traditional payment processors.

Furthermore, since Upwork is also responsible for handling payments, a payment processing and administration fee of 3 percent is applied for every transaction, which is paid by the client.

Upwork, furthermore, provides payroll services to clients, allowing them to hire freelancers as full-time employees. The fee structure is slightly adjusted for those types of engagements.

Subscriptions

Client memberships are subscription plans tailored at the businesses that post jobs on the platform. Upwork claims that these plans allow businesses to hire better candidates at a faster rate.

Next to the Basic plan, which is free of charge and offers features such as verified freelancer work histories or built-in collaboration tools, clients can opt into two premium subscriptions: Upwork Plus and Upwork Business .

The Plus plan comes in at $49.99 per month while the Business subscription costs a total of $849 every month.

Premium features include things such as:

• Dedicated account managers that help with the hiring process
• Project tracking and collaboration tools
• Consolidated billing
• Advanced reporting features

 .. and many others. On top of the subscription charge, Upwork furthermore includes a 3 percent payment processing fee and a 10 percent service fee for Business plan members.

Apart from charging a subscription fee to businesses, Upwork also has a dedicated plan for freelancers dubbed Freelancer Plus .

Freelancer Plus, which costs $14.99 per month, offers a variety of benefits such as being able to keep an active profile during inactive periods, insights into other bids, a customized profile URL, or more Connects.

Contractors that are not on a subscription plan therefore only have a limited amount of times they can bid on a job. If they want to apply for more jobs, they have to purchase so-called Connects, which cost $0.15 each.

Upwork Funding, Valuation & Revenue

According to Crunchbase , Upwork has raised a total of $168 million in 12 rounds of venture capital funding. Most of the money has been injected prior to the merger in 2013.

In 2018, Upwork was able to go public at a valuation of $1.5 billion , raising another $187 million in the process. Upwork is currently valued at around $3 billion.

For the fiscal year 2021, Upwork recorded revenues of $503 million, up 35 percent from the year prior. Gross Services Volume (GSV) grew by 41 percent year-over-year to reach $3.5 billion.

Viktor Hendelmann

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.

About productmint

productmint.com provides tailored content on all things business and tech. The site arose from my fascination with how modern-day businesses utilize technology and product-led thinking to become dominant players in their industry.

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Last Updated on January 2, 2023 by Viktor Hendelmann

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