Upwork Chief Economist, Adam Ozimek, joins Yahoo Finance to discuss how the pandemic is continuing to shape the economy with the latest jobs report miss and how remote work could lead to changes in hiring practices.
Video Transcript
SEANA SMITH: Let’s get back to the jobs report, 235,000 jobs added to the economy in August. It was a huge disappointment. And this comes at a time when employees are doing all they can to entrap– employers, excuse me– are doing all they can to attract workers, saying that the environment is so competitive. Let’s take a look at what this potentially means for gig workers and some of the trends that we’re seeing there.
And for that, we want to bring in Adam Ozimek, he’s the chief economist at Upwork, which is an online hiring platform. And Adam, I guess, what’s your initial take on this jobs report, 235,000 jobs added, well below what the Street was looking for. Is this consistent with some of the trends that you’re seeing at Upwork?
ADAM OZIMEK: So I think that this month was definitely a disappointment, and it really reflects that in a lot of ways, the economy is the pandemic, the pandemic is the economy. And until we get people vaccinated enough so that the pandemic really mitigates a lot more, it still has the power to slow things down, and that’s what it did. It slowed down the recovery this month.
I do think that the freelance economy has been relatively robust. We’ve seen self-employed workers in the BLS survey are well above where they were pre-pandemic. So there are more people self-employed than there have been in over a decade.
BRIAN SOZZI: Adam, we are seeing a lot of focus, or at least, I am in the early going off of this report, on the ongoing talent shortage. What’s your advice to business leaders that are trying to find talent but they can’t get that talent to sign on the dotted line?
ADAM OZIMEK: Well, one of the interesting things that’s really changed over the pandemic is everyone has become a lot more comfortable with remote work. And I think what managers and business owners need to realize is that when you can hire remotely, that really unlocks a lot of talent for you across the country and across the world. That’s something we’ve been doing it Upwork for 20 years, is helping connect businesses with talented people wherever they’re located. And I think that people are going to find that they’re really going to face those talent strains a lot more severely if they limit themselves to who happens to be living in their local labor market. And they really have to lean into remote work and find workers wherever they are.
SEANA SMITH: Adam, you mentioned the gig economy. And I know the note that you sent over, you’re saying that the gig economy represents about 36% of the entire workforce. I guess my question to you is, what do you think that’s going to look like in a year or two years from now when we see more and more workers looking for that flexibility and wanting to have more control over their day-to-day schedules?
ADAM OZIMEK: Well, it’s important to know that about a third of the workforce participates in the freelance economy to some extent but the share that are doing full-time freelancing is less than that. Freelancing really provides people an opportunity to work in a wide variety of ways. And a lot of people do it on an occasional basis. So it’s something to make some extra income throughout the year, something to work on some skills they’re trying to learn. And then for others, it is a full-time job. And so I think what we’re going to see is the percent of people who are doing it on a full-time basis is going to go up.
What we’re seeing in survey data is that workers who want to stay remote but their employers aren’t going to let them, a lot of them are considering freelancing. And I think what’s happening is people are getting a taste of you know, flexibility that comes with working remote. And the freelance economy has always been more remote and also provides more of that flexibility. So I think people are going to continue to look at this way of working.
BRIAN SOZZI: How do you think that shift to freelancing, Adam, impacts or will impact big companies?
ADAM OZIMEK: You know, big companies are part of the story as well. A lot of small businesses and very small businesses find freelancing extremely useful because they sort of have fractional job, do you need someone to do a marketing project, you need some, you know, some customer service, you need short-term programming needs. And they don’t have a need for a full-time worker. So you do have a lot of small businesses and very small businesses who this is just a crucial part of how they work. It allows them to focus on sort of their core competency.
For larger businesses, I think what you see is a lot of embrace of freelancing when they are needing to scale up or scale down quickly when they have highly variable needs. So big startups are you know, a huge part of the story here as well. When you’re trying to start a new company and you don’t want to be constrained by your local labor market and you need to grow quickly, online freelancing is a really powerful tool for them.
SEANA SMITH: Adam Ozimek, chief economist at Upwork. Thanks so much for joining us today.
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