This table contains figures on the net turnover in the labor market for the narrow care and welfare sectors; this is an aggregate of all sectors in the care and welfare sector, excluding childcare. The figures are broken down by AZW branches, country, part of the country, province and RegioPlus labor market regions. The percentages shown are a three-year average, using the last Friday before Christmas as the reference date for each year. The calculations relate to employees' main jobs. The municipality of residence of the employee is used to determine the region. Figures on net turnover in the labor market for the care and welfare sectors are broadly not included in this table (for a reference to these figures, see section 3). If the sectors in care and welfare are narrow, this means that childcare is not presented because childcare is not considered to be part of the broad care and welfare labor market. As a result, the figures on net turnover in the care and welfare labor market broadly relate to a different population than the figures on care and welfare narrowly. Figures on different populations are not published in the same table. The figures on the labor market in care and welfare are presented in their own table. This table was developed in the context of the Labor Market, Care and Welfare (AZW) research programme. For more trends and developments in the field of the healthcare and welfare labor market, see azwstatline.cbs.nl (see section 3). Data available from: 2010/2012 three-year averages to 2016/2018 three-year averages. Status of the figures: The figures in this table are provisional. The data on 2010/2012 three-year averages up to and including 2016/2018 three-year averages are provisional. Since this table has been discontinued, the data is no longer finalized. Changes as of 28 May 2020: None, this table has been discontinued and has been replaced by the table 'Net turnover on the labor market; AZW (narrow), region' (see section 3). When will new numbers come out? Not applicable anymore.

Understanding who supports income redistribution and when is at the core of political economy literature. Nevertheless, even though social stratification literature understands skill specificity as a key element of social class, there are contradictory views on the role it plays in shaping political preferences. I elaborate a framework that provides an understanding of these contradictions. I argue that the effects of occupation-specific skills (OSS) on redistribution preferences is moderated by the occupational context, being more negative the tighter the occupational labor market is. I propose two mechanisms related to labor market prospects to explain this relationship: occupational expected wages and risk exposure.Using data from the European Social Survey, the International Social Survey Programme and flexible interactive effects models, I show the relevance of this new approach. This analysis contributes to a more nuanced understanding of the heterogeneity of middle-class political attitudes.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

This table contains figures on the characteristics of mobility within, to and from the labour market care and welfare narrow; this is an aggregation of all branches in care and welfare excluding childcare. The reference date of the figures is the last day of each quarter, with the exception of the 4th quarter. In the 4th quarter, the last Friday before Christmas is taken as the reference date. To determine the type of mobility, the population in a quarter is compared with the population in the same quarter one year earlier. If the employee was not working in care and well-being on one of the two reference dates and was on the other, there is mobility. As a result, employees who do not work in care and well-being every month, such as employees with a flexible employment relationship or employees with a zero-hour contract, are more often classified as mobile. The figures are classified according to the Standard Business Classification 2008 (SBI 2008) of Statistics Netherlands and broken down by ASBL branches, country, district, province, RegioPlus labour market regions and various types of mobility for both inflow and outflow. The calculations relate to the main jobs of employees. The region was determined on the basis of the employee's municipality of residence. The main activity (SBI code) of the company in which an employee works was used to determine the ASBL branches. This may not be the only activity a company undertakes. For the main activity ‘Other social advice, community houses and welfare cooperation bodies’ (SBI code: 88999) the collective agreement under which the employee is employed is also taken into account. Employees covered by collective labour agreements codes 0004 to 0300 or under collective labour agreements codes 0302 to 8102 are classified under branch ‘Other Care and Welfare’. Employees covered by another collective labour agreement code are classified under ‘Social Work (Other)’. A complete overview of all CLA codes can be found under Section 3. This table presents figures on labour market flows for the narrow care and welfare sectors. This means that figures on labour market flows for the care and welfare sectors are broadly excluded (for a reference to these figures see Section 3). The narrow labour market for care and welfare means that the childcare sector is not included. As a result, the figures on labour market flows of care and well-being relate narrowly to a different population than figures on care and well-being broadly. Figures on different populations are not published in the same table. The figures on the labour market in care and welfare are presented in a separate table. This table was developed as part of the Labour Market Care and Welfare (AZW) research programme. For more trends and developments in the labour market in care and welfare, see azwstatline.cbs.nl (see section 3).

Data available from: First quarter 2010

Status of figures: All figures are provisional. As long as the figures are provisional, there may be minimal differences. Both inflow and outflow are divided into different categories. The categorisation shall follow a hierarchy. An employee is always classified into only one category. In the case of inflows, the following order of precedence shall be maintained: returnees, side-entrancers and then others. In the case of outflows, the following order of precedence shall be maintained: outflow to a job in another sector outside AZW, benefit, self-employment, pension and others. For outflows to benefits and outflows to self-employed and information becomes available with delay. In that case, employees are first classified into the currently known categories. In a later update, employees are reclassified into the categories and the figures are adjusted.

Changes as of 21 May 2024: The table is supplemented by figures for Q4 2023. Previous figures have been revised as a result of the use of new, more recent sources. In a number of branches, series fluctuate due to administrative changes in the underlying source data.

When will there be new figures? This table is supplemented every quarter with new figures.

Unemployment Rate in the United States remained unchanged at 4.20 percent in May. This dataset provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

This table contains figures on the inflow and outflow of employees in the care and welfare sector narrow; this is an aggregate of all sectors in the care and welfare sector, excluding childcare. The reference date of the figures is the last day of each quarter, with the exception of the 4th quarter. In the 4th quarter, the last Friday before Christmas is taken as the reference date. To determine inflow or outflow, the population in a quarter is compared with the population in the same quarter one year earlier. If the employee was not working in care and welfare on one of the two reference dates and was on the other, there is mobility. As a result, employees who do not work every month in care and welfare, such as employees with a flexible employment relationship or employees with a zero-hour contract, are more often regarded as mobile. The figures are classified according to the Standard Industrial Classification 2008 (SBI 2008) of Statistics Netherlands. The calculations relate to employees' main jobs. This table presents figures about flows on the labor market for the small care and welfare sectors. This means that figures on flows on the labor market for the care and welfare sectors are broadly not included (for a reference to these figures, see section 3). The narrow labor market for care and welfare means that the childcare sector is not included. As a result, the figures on flows in the care and welfare labor market narrowly relate to a different population than figures on care and welfare broadly. Figures on different populations are not published in the same table. The figures on the labor market in care and welfare are presented in their own table. This table was developed in the context of the Labor Market, Care and Welfare (AZW) research programme. For more trends and developments in the field of the healthcare and welfare labor market, see azwstatline.cbs.nl (see section 3). Data available from Q1 2010 to Q4 2019 Status of the figures: All figures are provisional. Since this table has been discontinued, the data is no longer finalized. Changes as of August 27, 2020: None, the table has been discontinued. The table has been followed by the table 'Employee mobility; AZW (narrow), inflow, outflow, balance, region' (see section 3). When will new numbers come out? Not applicable anymore.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

In the first quarter of 2025, approximately 220,000 job resignations took place in the United Kingdom, compared with 271,000 in the previous quarter. The number of resignations in Q2 2022 was the highest number taking place in a single quarter during this provided time period, reaching 446,000. In most years, there is a noticeable trend of resignations peaking in the fourth quarter of the year and being at their lowest in the first quarter. There is also a significant fall in people resigning from their jobs after the 2008 financial crisis and after the COVID-19 pandemic in 2020. The Great Resignation The high number of resignations that took place after COVID-19 hit also occurred in the United States. Throughout 2022, approximately 50 million American workers quit their jobs in a trend dubbed 'The Great Resignation' In both the UK and U.S. the trend corresponded with a very tight labor market. After emerging from the initial COVID-19 lockdowns, UK unemployment declined from 2021 onwards, falling to a low of just 3.6 percent in August 2022. There were also numerous job vacancies, which peaked in May 2024 at 1.3 million, though by the end of 2024, both indicators have returned to more typical levels. Labor market concerns for 2025 One of the main concerns of the UK government regarding the labor market is economic inactivity, in particular the reason for this inactivity, Since the COVID-19 pandemic, the number of people on long-term sick-leave, has increased substantially. At the start of 2020, there were approximately 2.12 million people economically inactive for this reason, with this increasing to almost 2.84 million by the end of 2023, with this declining only slightly to 2.77 million by the end of 2024. It is unclear if there is one overriding factor driving this surge, with possible causes including the prevalence of Long COVID, or the ongoing NHS crisis.

We study supply and demand shocks in a disaggregated model with multiple sectors, multiple factors, input-output linkages, downward nominal wage rigidities, credit-constraints, and a zero lower bound. We use the model to understand how the Covid-19 crisis, an omnibus supply and demand shock, affects output, unemployment, and inflation, and leads to the coexistence of tight and slack labor markets. We show that negative sectoral supply shocks are stagflationary, whereas negative demand shocks are deflationary, even though both can cause Keynesian unemployment. Furthermore,complementarities in production amplify Keynesian spillovers from supply shocks but mitigate them for demand shocks. This means that complementarities reduce the effectiveness of aggregate demand stimulus. In a stylized quantitative model of the US, we find supply and demand shocks each explain about half the reduction in real GDP from February to May, 2020. Although there was as much as 6% Keynesian unemployment, this was concentrated incertain markets. Hence, aggregate demand stimulus is one quarter as effective as in a typical recession where all labor markets are slack.

With the collapse of the U.S. housing market and the subsequent financial crisis on Wall Street in 2007 and 2008, economies across the globe began to enter into deep recessions. What had started out as a crisis centered on the United States quickly became global in nature, as it became apparent that not only had the economies of other advanced countries (grouped together as the G7) become intimately tied to the U.S. financial system, but that many of them had experienced housing and asset price bubbles similar to that in the U.S.. The United Kingdom had experienced a huge inflation of housing prices since the 1990s, while Eurozone members (such as Germany, France and Italy) had financial sectors which had become involved in reckless lending to economies on the periphery of the EU, such as Greece, Ireland and Portugal. Other countries, such as Japan, were hit heavily due their export-led growth models which suffered from the decline in international trade. Unemployment during the Great Recession As business and consumer confidence crashed, credit markets froze, and international trade contracted, the unemployment rate in the most advanced economies shot up. While four to five percent is generally considered to be a healthy unemployment rate, nearing full employment in the economy (when any remaining unemployment is not related to a lack of consumer demand), many of these countries experienced rates at least double that, with unemployment in the United States peaking at almost 10 percent in 2010. In large countries, unemployment rates of this level meant millions or tens of millions of people being out of work, which led to political pressures to stimulate economies and create jobs. By 2012, many of these countries were seeing declining unemployment rates, however, in France and Italy rates of joblessness continued to increase as the Euro crisis took hold. These countries suffered from having a monetary policy which was too tight for their economies (due to the ECB controlling interest rates) and fiscal policy which was constrained by EU debt rules. Left with the option of deregulating their labor markets and pursuing austerity policies, their unemployment rates remained over 10 percent well into the 2010s. Differences in labor markets The differences in unemployment rates at the peak of the crisis (2009-2010) reflect not only the differences in how economies were affected by the downturn, but also the differing labor market institutions and programs in the various countries. Countries with more 'liberalized' labor markets, such as the United States and United Kingdom experienced sharp jumps in their unemployment rate due to the ease at which employers can lay off workers in these countries. When the crisis subsided in these countries, however, their unemployment rates quickly began to drop below those of the other countries, due to their more dynamic labor markets which make it easier to hire workers when the economy is doing well. On the other hand, countries with more 'coordinated' labor market institutions, such as Germany and Japan, experiences lower rates of unemployment during the crisis, as programs such as short-time work, job sharing, and wage restraint agreements were used to keep workers in their jobs. While these countries are less likely to experience spikes in unemployment during crises, the highly regulated nature of their labor markets mean that they are slower to add jobs during periods of economic prosperity.

Approximately 14.2 percent of people aged 16 to 24 were unemployed in the United Kingdom in the first quarter of 2025, the highest of any age group in that month. During this time period, older age groups have had much lower unemployment rates than younger ones, who have consistently had the highest unemployment rate. For almost all the age groups, the peak in the unemployment rate was recorded in 2011 when almost a quarter of young working age people were unemployed. Young adults in the labor market In the provided time period, youth unemployment was at its lowest rate in the third quarter of 2022, when it was 10.3 percent. Since then, there has been a noticeable uptick in youth unemployment, which was 14.8 percent towards the end of 2024. A more long-term trend among this age group is the increase in economic inactivity, with 40.8 percent of 16 to 24-year-old's not in work or actively looking for work in 2024. Although students or people in training account for a high share of this economic inactivity, there has also been a rise in the proportion of young adults who are not in education, employment or training (NEET), which reached a ten-year-high of 13.2 percent in late 2024. Unemployment up from low baseline in late 2024 In 2022, the UK labor market, had very low levels of unemployment along with a record number of job vacancies. Throughout 2023 and 2024, this very tight labor market began to loosen, although is still quite low by historic standards. One indicator that has stood out since the COVID-19 pandemic, however, has been the number of people economically inactive due to being on long-term sick leave, which reached 2.82 million in the first quarter of 2024, and has been the main reason for economic inactivity in the UK since late 2021.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

This dataset is associated with the dynamic report titled Number of recipients of labour market subsidy partly financed by municipalities and benefit expenditure, which is part of the Kelasto statistical database. The data are aggregated at the municipality level. The municipality providing funding is the unemployed person?s home municipality as of the payment date of the labour market subsidy, and the regional classification corresponds to the situation as of the month in which the costs are invoiced. Annual data are available starting from 2006, and monthly and cumulative data from 2015.

Starting from 2014, the municipality data are based on the situation in the month in which the costs are invoiced, i.e., the month following payment, which means that December payments in dissolved municipalities are included in the data for the successor municipality.

The classification (TYOMARKKINATUKIPAIVA_LUOKKA) used to indicate the final cumulative total for days on labour market subsidy during unemployment can receive the following values: 'Total', '300-499', '500-999' ja '1000'. A single person may have belonged to several classes in a given month, but data on recipient totals and benefit expenditures are derived from the dataset only once per month when the value ?Total? is used to narrow down the analysis.

The dataset only includes labour market subsidies for which municipalities have contributed funding. Labour market subsidies paid during participation in employment-promoting services or subsidies entirely funded by the state are not included. In 2006-2014 the municipalities financed 50% of the labour market subsidies paid during unemployment to recipients who had been paid labour market subsidy for at least 500 days of unemployment. At the beginning of 2015 the municipal funding was extended to cover recipients who have been paid labour market subsidy for at least 300 days of unemployment: For those who received labour market subsidy for 300 - 999 days, the municipality funding share is 50%, and for those having received it for 1,000 days or more, 70%.

A single person may have received labour market subsidy payments from several municipalities during a given month or year. This means that recipient totals for the whole country should not be derived from this dataset but from the corresponding dataset for the whole country.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

Summary

Upwork (UWPK) is a leading online talent marketplace. The business experienced explosive growth over the course of the COVID-19 pandemic, but in 2023 began a pivot to profitability that has quickly and significantly improved the company’s margins. Concerns about the long-term impacts of artificial intelligence have pressured valuation and created an attractive entry point for a business that has the potential to double adjusted EBITDA by 2028.

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Business Description

UPWK operates a leading marketplace that connects companies with global talent. The company primarily facilitates offshoring of work in categories including software development, design, and writing; nearly ~70% of gross services value (“GSV”) enabled through the platform in fiscal 2023 originated from US clients, while just ~26% of GSV was completed by US-based talent (source: 2023 10-K). A typical UPWK project might span several days to a few weeks—larger than project or catalog-based marketplaces like Fiverr and 99Designs, but shorter than mandates given to traditional staffing firms. It’s our understanding that around half of UPWK traffic arrives at the site organically.

Like many marketplace models, UPWK generates fees from both client job posters (5-10% take rate, or higher for large enterprise) and talent (10% flat take rate), which together conspired to facilitate a ~17% average marketplace take rate as a percentage of GSV over the last 12 months (source: company website and quarterly filings for the LTM period ending Sept 30, 2024).

UPWK’s long tail of customers are small, but loyal. Based on 3Q24 LTM revenue, GSV, and client count disclosures in company filings and presentations, we estimate that the average disclosed marketplace client completes just ~$4,400 of marketplace GSV and generates just under ~$800 worth of revenue for UPWK. Importantly, despite the project-based nature of UPWK marketplace work, client spend has proven quite sticky from year to year, particularly for client cohorts who signed up before the pandemic.

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Client Spend by Annual Client Cohort

Source: UPWK 2023 10-K

UPWK’s Recent History

UPWK experienced explosive growth over the course of the COVID-19 pandemic, facilitated by both tight labor market conditions and increasing talent interest in remote work options. Marketplace GSV rose more than 20% in 2020 and over 40% in 2021, supported by both new clients and an increase in spend per client (source: UPWK quarterly filings). More recently, however spending on the UPWK platform has stalled as labor market conditions have loosened and undoubtedly some categories—eg. design-related work—have been impacted by increasingly proficient artificial intelligence (“AI”) models.

The potential for AI to obviate the need to send work to lower cost, more flexible jurisdictions is the bear case for UPWK shares, and we believe, the primary motivator for the company’s depressed multiple relative to potential earnings power. We note that software development/IT, writing & translation, and design & creative rank among the most posted jobs on the UPWK talent marketplace, and much of the work in these areas has the potential to be greatly aided or displaced by AI-powered tools (source: company website). At the same time, AI has had seemingly little negative impact to date: flagship AI model ChatGPT was released more than two years ago, and based on the company’s client cohort disclosure, as shown above, we think recent weakness has primarily emanated from a moderation in spend amongst the very large cohorts that joined UPWK during the pandemic when labor availability was exceptionally tight. It does not seem evident that AI/ChatGPT are having a material impact on UPWK’s business. Going forward, we think secular growth in offshoring in durable verticals (eg. finance, marketing) and growth in AI-proficient experts could help to offset declines in more exposed verticals like translation, driving a potentially more stable top line than the stock is discounting.

While a reacceleration in GSV growth would be helpful to our thesis, we do not expect a return to the halcyon days of double-digit growth. We think for the stock to work, UPWK’s marketplace simply needs to remain vibrant and around today’s size as the company executes against a profitability agenda.

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Closing the loop on marketplace revenue, we note that take marketplace take rates were stable in the ~13% context for years before a talent-side pricing change in 2023 (source: 2023 10-K). Going forward, we expect more limited improvement in take rates from more recent ~18% levels (source: 3Q24 investor presentation), but see potential upside over the intermediate-to-long term from efforts like advertising and subscriptions (which UPWK includes in take rate).

UPWK GSV

Source: UPWK quarterly and annual filings

UPWK Active Clients and GSV per Client

Source: UPWK quarterly and annual filings

Separate and apart from the talent marketplace, we note that UPWK generates a relatively small share of sales from enterprise relationships with additional features, as well as outcome-based managed services.

UPWK’s Strategic Pivot to Profitability

Like many high-growth companies, UPWK scaled investments in R&D, product, and sales during this exciting period. As growth slowed, however, we think the core talent marketplace’s underlying margin potential was obfuscated by the trappings of pandemic-era excitement. Recent headcount reductions support this view, and management clearly believes in UPWK’s margin potential, as evidenced by their 35% adj. EBITDA margin target (source: UPWK 3Q24 earnings call).

UPWK Adj. EBITDA Margin (%)

Source: UPWK quarterly and annual filings

Summarizing the Investment Thesis

To summarize, with shares hovering around $16 or ~9.5x EBITDA, we think investors are overly distracted by AI risks that haven’t discernibly materialized in top-line growth to date, and are therefore missing a potential doubling of adj. EBITDA by 2028 as the company executes against its margin self-help story. Assuming modest top-line growth and margins scaling to 35%+, adj. EBITDA could surpass $300MM by 2028 for a business with a current enterprise value of just $1.9Bn. We believe management is both incentivized to pursue this transition, and, as evidenced by results over the last two years, highly capable of doing so.

Risks

• AI: Many UPWK projects are for writing, design, coding, or other work that could be displaced in whole or part by AI-powered tools
• Competition: UPWK competes with both project-based sites like 99Designs/Fiverr, as well as more traditional staffing firms
• Employment markets: During softening job markets, employers typically first reduce spend on contract or project-based work before right-sizing their full-time labor force

This survey was conducted as part of an evaluation of the Robert Wood Johnson Foundation's Health Care for the Uninsured Program (HCUP), a program whose primary focus was the development and marketing of affordable health insurance products for small businesses. The survey investigated the number and types of small businesses that offered and did not offer insurance, the number and types of employees of small businesses who received and did not receive insurance, and whether the employers and employees participating in HCUP were different from those with other types of insurance or from those with no insurance. In addition, the survey was designed to test several hypotheses: whether employers facing an inelastic demand for their product or a tight labor market would be more likely to offer health insurance to their employees, and whether higher wages substitute for health insurance for certain groups of highly skilled or unionized workers. Firm-level data collected by the survey include number of permanent and temporary employees, employee turnover, fringe benefits offered to full- and part-time employees (e.g., paid vacation, paid sick leave, long-term disability insurance, life insurance, retirement plan, group health insurance), type of business, number of years owner had owned the company, age and legal form of the company, and gross revenue. Extensive information on health insurance was obtained from firms offering this benefit: total monthly premium paid for health insurance, percent of premium paid by the company, reasons that influenced the decision to provide health insurance, whether a Health Maintenance Organization (HMO) insurance plan was offered, whether a deductible or co-payment was required for hospital inpatient services, and whether hospital room and board, physician office visits, maternity care, prescription drugs, inpatient mental health treatment, or substance abuse treatment were covered. These firms were also queried about recent changes in the number of health plan enrollees, deductibles, co-insurance rates, benefits offered, employer premium share, recent changes in health insurance carriers and reasons for changing, and recent increases in premiums and their effects on the firm's prices, profits, wages, and number of employees. Companies not offering health insurance were asked why they did not offer this benefit and were queried about factors that might influence them to offer a health plan. Individual-level data on employees include sex, age, marital status, length of employment, number of hours worked during the last week, salary or wage, health plan participation, amount of health premium paid by the employee, and whether the employee had health coverage from another source.

The Swedish income panel was originally set up in the beginning of the 90s to make studies of how immigrants assimilate in the Swedish labour market possible. It consists of large samples of foreign-born and Swedish-born persons. Income information from registers is added for nearly 40 years. In addition income information relating to spouses is also available as well as for a subset of mothers and fathers. This makes it possible to construct measures of household income based on a relatively narrow definition. However, starting in 1998 there is also more information making it possible to include children over 18 and their incomes in the family. By matching with some different additional registers information has been added for people who have been unemployed or involved in labour market programmes during the 90s, on causes of deaths for people who have deceased since 1978 and on recent arrived immigrants from various origins. It has turned out that the data-base is quite useful for analysing research-questions other than originally motivating construction of the panel. The panel has been used for cross country comparisons of immigrants in the labour market and to analyse income mobility for different breakdowns of the population, and analyses the development in cohort income. There have been analyses of social assistance receipt among immigrants as well as studies of intergeneration mobility of income, the labour market situation of young immigrants and the second generation of immigrants. On-going work includes evaluation of labour market training programmes and studies of early retirement among immigrants. Planned work includes studies of the economic transition from child to adulthood during the 80s and 90s as well as studies of how frequent immigrant children are subject to measures under the Social Service Act and the Care of Youth Persons Act. The potentials of the Swedish Income Panel can be understood if one compares it with better known income-panels in other countries. For example SWIP covers more years and has a larger sample than the German Socio-Economic Panel (GSOEP). On the other hand, the fact that information is obtained from registers only makes this Swedish panel less rich in variables. There are striking parallels between the Gothenburg Income Panel and the labour market panel at the Centre for Labour Market and Social Research in Aarhus for the Danish population.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.

Revenue in the Temporary Employment Agency industry is anticipated to drop at a compound annual rate of 4% in the five years through 2024 to €236.5 billion. The COVID-19 outbreak meant key employers of temporary workers in the hospitality and tourist sector shut their doors, and companies froze hiring due to economic uncertainty - a sizeable blow to revenue in the three years through 2022. Workers on temporary contracts represented a significant chuck of employment losses in all quarters of 2020. According to Eurostat data, temporary employment declined across Europe in the four years from 2017 to 2020, dipping from 13.8% to 11.9%. Since COVID-19 has slowed, companies have resumed hiring as confidence levels have been restored and vacancy levels have soared. An increasingly tight labour market encourages employers to rely on temporary employment placement agencies to fight in an increasingly competitive market. Several countries rank highly in terms of temporary workers with a large short-term job market. In 2022, the Netherlands and Spain have more than 15% of employed people under temporary contracts, according to Eurostat. Industry revenue is expected to shrink by 1.6% in 2024. Revenue is expected to grow at an annual rate of 4.5% in the five years through 2029 to €295.4 billion. With the labour market is likely to remain tight in many countries due to skill mismatches, employers will keep turning to placement agencies for their databases to track and identify the right candidates. Companies will lean on temporary hires as the economic outlook remains unclear and inflation keeps squeezing budgets. The automation of more routine jobs will be a threat to some long-standing temporary jobs. Across Europe, countries that traditionally rely on a strong network of short-term workers are implanting policies that may disrupt or expand services. Spain has already introduced reforms that are taking effect to increase permanent positions and remove temporary contracts, while Italy is expanding its voucher scheme to encourage temporary hires.