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Inside Upwork’s Hidden Economy: The Pay-to-Play System and What It Means for Clients and Freelancers

This whole experiment started as a simple exploration of how Upwork freelancers use AI to write proposals and then send them en masse to multiple jobs.

Or at least, that was the plan.

In the end, though, it took an unexpected turn, leading me down a rabbit hole and exposing hidden complexities within Upwork’s hiring ecosystem that most clients never see.

What I uncovered sheds light on why so many clients actually struggle to connect with quality freelancers. Sure, AI-driven pitches and templated responses are one challenge, but there’s so much more happening beneath the surface.

I stumbled into a whole web of pay-to-play practices, along with a strange economy where freelancers use internal virtual currency to boost their visibility to clients.

Upwork looks to have become a competitive, costly ecosystem that doesn’t just impact freelancers – it also affects the quality of hires for clients, often in ways they aren’t even aware of.

👇 This is Part 2 of a two-part series exploring the world of Upwork. In Part 1, I shared our direct experience posting jobs and experimenting with different tactics to filter out generic pitches and AI proposals. Now, in Part 2, I’ll break down the hidden economics of Upwork, what they mean for clients and freelancers alike, and how you can navigate this competitive landscape to find the right talent for your needs.


Upwork: a master “cat and mouse” game

As I dug into Upwork’s hiring ecosystem (much of which I covered in Part 1 of this mini-series), it became clear that the platform operates like a high-stakes game, one that requires both freelancers and clients to adapt constantly.

But here’s the twist: neither freelancers nor clients are truly “winning” this game. Upwork itself is the cat, setting up obstacles, rules, and a whole economy around how landing a job is done, while we’re all the mice, trying to outsmart the system in our own ways.

Freelancers face a pay-to-play system that I’m about to describe. Meanwhile, clients are often left with an inbox full of templated proposals and low-quality pitches, making it difficult to find real talent among the noise.

This setup probably benefits Upwork more than anyone else, putting the platform in a unique position to make money off both parties without having to worry too much about the individual one-to-one experiences people have. This dynamic is at the heart of Upwork’s hidden economy.

In the next section, I’ll break down what I learned about navigating this landscape, and offer some practical tips on how to find truly engaged freelancers on Upwork.

🙏 Before I go any further, though, I want to take a moment to acknowledge any freelancer who feels trapped by Upwork’s economy, pushed into this cycle just to stay visible. When I set out with my initial experiment, I didn’t fully understand the pressures the platform puts on freelancers and how it likely pushes people into strategies they might not otherwise choose. After learning more about Upwork’s structure, I feel a genuine empathy for everyone navigating this landscape, and I realize that simply spotlighting any questionable pitching methods doesn’t capture the whole story.


Let me introduce you to the world of Upwork Connects

What are those?

Connects are Upwork’s internal pay-to-win currency, a system that freelancers must navigate to get their proposals in front of clients.

Wait, a what?! 🤯

Here’s the gist of how it works:

If you’re a freelancer on Upwork and want to send a proposal for any job, you “pay” for that privilege using your Connects, with the “cost” of each proposal fluctuating based on the popularity of the job and other algorithmic factors allegedly.

Let’s say you find a job that seems like a great fit, and you’re ready to pitch. Upwork displays a “leaderboard” for each job, letting you know how many Connects you’ll need to spend to position yourself at the top.

The leaderboard might look something like this:

Source 1

In this example, you’d need to spend at least 51 Connects to get your proposal ranked #1 for that job.

For high-demand positions, the required Connects can be even higher:

Source 2

So how do freelancers get Connects?

I’m glad you’ve asked!

Simple – they buy them.

👉 Right now, 1 Connect costs $0.15 (before tax).

So if a job requires 34 Connects to submit a proposal, that pitch alone costs the freelancer $5.10. Here’s the kicker: many jobs on Upwork are low-budget, sometimes paying only $5. That means freelancers can end up spending more on Connects than they would actually earn from the gig, even if they’re successful in winning it.

And what does this investment of Connects guarantee?

You’ve guessed it – nothing, really.

All it does is ensure that the proposal makes it onto a long list that the client sees, competing against often dozens of others. Here’s what that list of proposals looks like from a client’s perspective:

(Well, okay, freelancers may receive 10 Connects at no extra cost each month – is what the official doc at Upwork says. Though, as you’ve seen, 10 Connects doesn’t get you too far.)


Even more problems

This system shapes a challenging landscape for freelancers and is one of the many factors making landing gigs for small freelancers really difficult:


The “pay-to-play” pressure

The obvious consequence is that since each job application carries a literal cost, small and independent freelancers are forced to be highly selective about where they pitch, doing so only after thoroughly vetting the client’s profile.

Independent freelancers look for signs that a client is worth pitching to: completed past projects, positive reviews, and, perhaps most importantly, the client’s hire rate. The hire rate – the percentage of jobs a client actually fills – can make or break a job post’s appeal. If the hire rate is low, many experienced freelancers will skip the opportunity altogether, judging that it’s unlikely to result in a real project.

Freelancers are pretty open on Reddit that they do exactly that:

Source 3

The smaller a freelancer is, the less they can afford to gamble on pitches that might not pan out, as even one poorly chosen application can mean a financial loss without any return.

In contrast, bigger players and agencies, with deeper resources, can afford to adopt a different approach. They have the financial bandwidth to spread proposals across numerous jobs and are able to apply at scale.

Their strategy banks on sheer volume: even if only a fraction of their pitches land, they’ll still come out ahead financially. This ability to cast a wide net means larger players often end up dominating the pitch landscape, outcompeting smaller freelancers not because of superior skill or fit but simply due to their capacity to “pay-to-play” at a higher rate.

This dynamic contributes to a competitive imbalance on Upwork, creating a hiring ecosystem that’s weighted against the small, independent freelancer.

If you’re seeing mostly low-quality pitches on your jobs, this could be why. Genuine freelancers who bring real expertise may have already decided that your job isn’t worth the Connects.

Speaking of agencies:


Agency profiles posing as freelancers

The “pay-to-play” structure isn’t the only way larger players leverage Upwork’s ecosystem to their advantage. Agencies, often operating under profiles that look like solo freelancers, bring a unique set of challenges to the platform. These agency profiles are set up to appear as dedicated individuals but often operate as full teams under one name. This setup allows them to apply to more jobs than a genuine solo freelancer ever could, using their collective resources to pitch and bid on numerous projects.

The result? You might get a proposal on your job listing that looks perfect – polished, insightful, and exactly on point. But then, when you start talking to the person behind the profile, you realize something’s off – it’s the exact thing that happened to our team member. You realize that they’re completely disconnected from what they (supposedly) wrote in the pitch. This is the agency model in action: one person pitching, another person doing the work.

And this isn’t just speculation. Other Upwork users have raised similar concerns. Here’s one example:

Source 4

Agencies posing as solo freelancers are likely taking up a substantial portion of the Upwork market, competing directly with individual freelancers while maintaining the appearance of a personal, one-on-one service.

For clients, this setup can be misleading. You might believe you’re hiring an individual who will provide a personalized, hands-on experience, only to find that your project has been handed off within a team. This can lead to miscommunication, inconsistencies in quality, and a final result that doesn’t match the expectations set by the original pitch.


Scams and security concerns for freelancers

The issues created by the Connects system and agency competition are made worse by an ongoing wave of scams targeting freelancers.

Freelancers – especially those new to Upwork or other similar platforms – are often lured in by seemingly legitimate clients who turn out to be anything but.

Those scams come in a variety of forms: clients requesting that freelancers chat off-platform via apps like Telegram (or rather, “tel, e. Gram” – how they actually spell it to avoid Upwork’s detection), offering to pay with checks or gift cards, or requiring freelancers to invest upfront in cryptocurrency or other purchases as a “job requirement.”

The pressure to land jobs sometimes leaves freelancers vulnerable, as they feel compelled to respond to as many postings as possible, risking engagement with fraudulent clients.

The problem is widespread enough that there’s even a whole guide on Upwork subreddit titled “Is this a scam?” pinned to the top of the page.

Something you might be thinking now, “If a freelancer sends a proposal on a job that turns out to be a scam, do they get their Connects back?”

I think you know the answer by now.

Of course – not.

While Connects may ensure a freelancer’s proposal is delivered, they offer no guarantee of the client’s legitimacy.


It’s not just “pay-to-play,” it’s “pay-to-win”

Calling Upwork’s Connects system “pay-to-play” doesn’t fully capture what’s going on – it’s really more like “pay-to-win.”

Freelancers who can afford to buy more Connects, either through premium project bids or by consistently pitching for high-profile jobs, enjoy greater visibility in search results and client recommendations. This effectively means that those with more resources gain an edge over freelancers who might have superior skills but lack the funds to invest heavily in Connects. If you’re low on budget, tough luck, I guess. 🤷‍♂️

This system has led to a marketplace where visibility doesn’t necessarily reflect talent, expertise, or quality.

Skilled freelancers, especially those who specialize in niche areas and prefer targeted pitching over mass applications, end up at a real disadvantage. Their proposals are often buried beneath those of freelancers who can afford to buy their way to the top, limiting their chances of connecting with clients who might actually value their expertise.


Recent layoffs and the uncertain future of support

Adding to these challenges, Upwork recently announced a significant reduction in its workforce, laying off 21% of its employees despite reporting strong revenue growth. This decision raises serious concerns about Upwork’s ability to maintain quality support for both freelancers and clients. With fewer staff members to address issues like scam prevention, customer support, and account management, users may find it even harder to navigate the platform safely and effectively.

Take, for example, the experience of one freelancer who shared their story after nearly eight years on Upwork.

This individual’s account was suspended after they suggested setting up a virtual meeting with a potential client. Knowing Upwork’s strict rules against off-platform interaction, the freelancer explicitly stated that they were only willing to meet on Upwork’s video service unless a contract was in place, keeping everything fully compliant with Upwork’s terms. Nevertheless, they received an email shortly afterward informing them that their account was permanently blocked for “attempting to interact with a client outside of Upwork.” They eventually got their account restored, but only after multiple appeals.

This is a huge post, best see it yourself.

The comments on that thread reveal a troubling pattern: many freelancers wonder if reporting client violations can backfire and lead to their own accounts getting in trouble. This sense of intimidation points to a significant weakness in Upwork’s system – freelancers hesitate to advocate for their own safety if there’s even a small risk of account penalties.

With fewer support staff after recent layoffs, users may find themselves even more isolated, facing a limited path to resolve disputes or unfair account actions.

All these structural issues contribute to an ecosystem that often works against independent freelancers and creates challenges for clients seeking quality as well. With every proposal carrying a cost, visibility tied to spending, and agencies posing as freelancers, the platform has become a high-stakes environment.


Final thoughts on Upwork’s hidden dynamics

After diving into how things work at Upwork, I’ve come to see just how complicated – and sometimes discouraging – the platform can be for both freelancers and clients. Behind every job post and proposal lies a system that often feels stacked against the very people it’s supposed to serve.

For freelancers, trying to succeed on Upwork means constantly paying for visibility, juggling Connects, and competing with agencies that can afford to flood the platform with applications. It’s not just about talent anymore; it’s about having the resources to “play the game” at scale.

For clients, the experience isn’t any easier. I know how frustrating it is to post a job with the hope of finding skilled, motivated talent, only to be met with generic, templated proposals or low-quality pitches (again, see Part 1).

The reality is that Upwork has created an ecosystem that prioritizes volume over quality. But I also still think that understanding these dynamics can actually help both freelancers and clients make smarter moves within the system. Once you know the rules of the game, you can start to work around them.

For freelancers, this might mean being more selective (or changing your job board), focusing on jobs that feel like a genuine fit. For clients, it means being aware of the pressures freelancers face.

Let me know what you think. What has been your experience with the platform? Have you managed to build valuable, long-term professional connections there?

  1. https://www.reddit.com/r/Upwork/comments/1g4847w/for_real_for_a_5_job/ ↩︎
  2. https://www.reddit.com/r/Upwork/comments/1ge6u4s/_/ ↩︎
  3. https://www.reddit.com/r/Upwork/comments/1fv2z17/clients_who_post_jobs_but_never_hire/ ↩︎
  4. https://www.reddit.com/r/Upwork/comments/1eucue9/has_anyone_else_noticed_an_increase_in_suspicious/ ↩︎
Karol K

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Mark
Mark
December 4, 2024 6:33 pm

I deleted my accounts at UpWork and similar freelance platforms soon after joining them after deciding they were a waste of energy going up against freelancers from foreign countries who can still turn a profit by bidding significantly lower than reasonable western rates.

Paul Wayne
Paul Wayne
December 4, 2024 4:26 pm

Excellent insight into the Upwork game. Are other platforms similar in this strategy? Such as Fivver?