There’s lots to unpack looking ahead to the freelance revolution in 2023. Let’s get to it.
2023 is a growth year for many freelancers. When hiring pauses, the work continues. Fiverr found 78% of companies will rely on freelancing in 2023 rather than add staff. Post-pandemic remote policies make it easier to integrate freelancers. Critical talent gaps make it necessary. Q3 2022 was tough for marketplaces – uncertainty ignited financial markets – but strong growth is expected in 2023. Freelancing growth is lumpy; the rising tide won’t lift all boats. However, the freelance revolution is ahead of schedule.
More fulltime freelancers. According to MBO Partners, fulltime US freelancing grew 59%, raising the total (21.6m) to one-third of freelancing total! Fulltime growth is huge. Part-timers are problematic for big corporates; 80% of Danish Jelber’s corporate requests specify fulltimers. More fulltimers encourage more enterprises to engage freelancing at scale. Freelancing is supply challenged, not demand challenged.
What about size. The race to build mega talent marketplaces is apparently slowing. Freelancer.com at 58m is in the lead and larger than many countries. But maintaining large platforms is expensive, few platforms are designed to capture network effects, size boasts are often overstated, and typically fewer than 20% of platform members win work through their platform. Harvard’s Michael Porter reminds us there are two basic business strategies: low cost or differentiation. Bigger for bigger’s sake isn’t better.
Freelancer first. More marketplaces are prioritizing the success of freelancers through investments in freelancer intelligence, client intelligence, and operational intelligence. Examples: Uncompany.com exemplifies operational intelligence, methodically reducing friction points for creatives and clients; Gigged.ai uses automation to simplify project scoping and budgeting. In freelancer intelligence: Toptal.com and Wethos.co offer data-based guidance on pricing; Talmix.com and Onemansupport.com provides access to industry databases; AdevaIT.com schedules monthly “fireside chats” on technical topics; Torc.dev gives Fitbit-like productivity metrics to developers; Beentheredonethat.co shares its strategy methodology with their freelancers. For client intelligence: Catalant has a strong client onboarding process; Uplink.tech offers client’s tips in working with freelancers; Howdy.com regularly reviews progress with key clients of their freelance Latam developers.
Helping first year freelancers ‘start out strong’. 33% of US workers say freelancing is the less risky option. Nevertheless, it’s a challenging transition for many. Only 44% of newbies felt fairly paid, and only 38% thought work deliverables and timelines were realistic. Veteran freelancers are more positive. Education, coaching, and early work with freelance vets makes the transition easier. FreelancerClub.net recently launched ‘Rise, Freelancer’ offering basic education. 10Xmanagement recommends starting with a side-gig.
Consolidation, expansion and specialization. Malt.com acquired Comatch.com. Ollo.is joined Bpool.co. WorkGenius.com merged with JBC.com. Some marketplaces merge, others expand: Norwegian Folq.no is opening in Sweden; Mash is expanding across SE Asia; YunoJuno.com, Worksome.com, and Inex.one are growing sturdy US bases. Specialty marketplaces are succeeding: Lifescihub.com in pharma; Dweet.com in fashion; Fintalent.io in M&A; Cadre in event planning; AceUp.com in executive coaching; artmavens.io in fine arts.
More focus on teams. Proteams.com is growing as companies in Denmark and elsewhere bring on all-freelance teams when internal talent is lacking. German Vicoland.com, French Weem.work, UK’s Itarmi.com, Dutch HelloMaaS.com, Spanish Outvise.com, and US and Romania based Upstackhq.com all curate freelance teams. FLASH, a team-based NPD methodology created by Stanford Engineering is encouraging greater freelance interest and opportunity.
Is your superpower in-demand? Is your expertise in-demand? If so, you will work more regularly, enjoy greater choice, and receive better pay. According to TechRepublic, year-on-year growth is greatest for web programming (43%), web design (31%) and social media marketing (25%). WEF expects revolutionary changes coming in biology, AI, programming, clean technologies, new materials, IoT, and cybersecurity.
Everyone is more on edge. Half of adults experience excessive stress. Stress produces 37% of work-related illnesses and greater absences. Managing stress is particularly tough for freelancers who lack an employer safety net. Manchester Prof Cary Cooper sees freelancing as a stress generator: working remotely, financial pressures, irregular hours, client pressures, and difficulty switching off. G2i.co is ahead of the curve in making developer health a priority.
Will company-owned talent platforms disrupt the disrupters? More companies are creating proprietary freelance platforms. The hope: direct and cheaper access to top talent. The problem: It’s not their core business. Identifying, attracting, and retaining top talent is demanding. Freelancers complain proprietary platforms are often uninspired job boards. But companies are persevering. Gigged.ai, Bubty.com, and Whitelancer.io are among companies offering prop platforms. Emergent Research found proprietary talent platform use doubled this year and expect growth to continue. One interesting case: Bain’s “Engine Two” offers SMB clients access to Bain alumni at lower cost.
New sources of income. Marketplaces generally offer only a small percentage of freelancers regular work. Smart marketplaces are supporting “adjacent revenue opportunities. Contra.com hires their freelancers when platform needs arise. Catalant offers independent consultants interim management and expert network opportunities. So does Expertpowerhouse.com. Other initiatives: subscription newsletters, online classes, paid speaking opportunities, advisory roles, and coaching. Freelancer interest in crypto is, however, dropping. At one point, 36% of professionals sought payment in cryptocurrency. Now, not so much .
Freelance-lite employees. 45% of US employees have a side-gig. They offer often unappreciated value to employers. They’ve developed competence and confidence by running their own show. They’ve also learned they can “take that job and shove it” and be OK, as did millions during the “great resignation.” Smart managers support reasonable, non-competing, side-gigs. Wharton’s Adam Grant thinks employee side-gigs are a great career developer. As well, it broadens appreciation and support for freelancing.
IBO platforms coming on strong. Independent business owner platforms like Honeybook.com, Wethos.co and Collective.com are attracting more freelancers. These platforms serve B2C solopreneurs – therapists, fitness instructors, and accountants – providing tools, services, and an active community. High-income freelancers working directly with clients (versus through freelance marketplaces) are increasingly interested as are creatives. Networking is a big benefit: CEO Oz Alon notes that Honeybook.com, for example, organizes hundreds of member meetups monthly. They just announced 100k subscribers.
Freelance marketplaces are organizing regionally. Spanish freelance marketplaces joined forces this year, led by Outvise.com, to grow the market. UK entrepreneur Albert Azis-Clauson created The Association for the Future of Work with colleagues from many UK based marketplaces and IPSE support. Regional marketplace leaders, including Freelancer.com and Andela.com are collaborating in Latam, and the Mideast led by Khibraty.com. Africa is next. As US Ben Franklin told leaders of the American Revolution: “We’d best hang together, or we’ll certainly hang separately.”
The ecosystem is growing. Three concerns pause would-be fulltime freelancers: income volatility, loss of benefits, and fear of loneliness. But the support ecosystem is maturing. More banks are partnering with marketplaces to offer income smoothing. Other providers are offering group benefits in insurance, investments, major purchases, and even travel. Co-working spaces are expanding and broadening services. Online freelancer education by innovators like Underpinned.com and Freelancebusiness.eu is increasingly available. CTW offers a “town square” that brings together freelance entrepreneurs, investors, and academics for regular exchange and updates. Meanwhile, CTW parent, Open-Assembly, helps enterprise companies like UST.com adapt to the future of work, providing workforce strategy guidance, project management and, increasingly, freelance resources for key projects.
Experiments in community. Not many freelance marketplaces are good at building communities. Eryn Peters, who built Toptal.com’s community and advises startups, says building an active, engaged, community is hard, takes time, investment, resources, and the sustained CEO sponsorship. New experiments in community design are afoot: Ireland’s Indielist.ie emphasizes social as well as professional meetups of its community. Dutch Fring.work operates a more open community where talents connect directly with innovative companies. UK’s Hoxby.com leads with a philosophy of work-life balance called “workstyle.” German 9am.works incorporates freelancers from multiple German marketplaces in their talent cloud while sister company CodeControl.io manages its own community of freelancers.
Professionalizing the revolution. Freelancing will continue to professionalize, abandoning more of its counter-cultural beginnings. Companies need to trust freelancers’ skills are representing accurately, and trust talent marketplaces to operate professionally. A helpful early step: CTW “Trusted Platform Partner Award,” providing client feedback on their experience through an automated, well-validated, survey of 13 questions. Benefits: clients get trusted guidance on selecting the right marketplace, trusted platforms get the recognition they deserve in building their brand, and freelancers benefit from being part of awarded marketplaces. CTW’s goal: 100 plus participating marketplaces by end of 2023.
AOR/EOR is a big deal. Post-pandemic compliance enforcement is ramping up; global companies Deel, People 2.0 and CXC Global, and newer startups like Mybasepay.com ensure freelancers are classified correctly, background-checked, and the right contracts are in place. Compliance is a legal minefield: requirements vary by country, state, and even municipalities. Its growing, of course, and AoR/EoR is an ease outsource decision. Expect more competition, increasing investor interest, and a technology facelift.
Tick Tock TikTok. Strained US-China relations hit TikTok and could affect freelancers and creators relying on the platform. The problem: TikTok ties to China’s ByteDance. Congress and State legislatures is inclined to limit TikTok to “protect American data security.” Other freelance-impacting consequences: closing Chinese access to new tech, and US supply chains shifting to near- or friend-shoring. Freelancing works best when borders are open.
Funding is tougher but available. The big publicly traded marketplaces are all under pressure in the equity markets. VC funding has dropped by a record 33%, and there is less appetite to immediately add funding to an industry that has been better at spending money than making money. But, less available isn’t mean the vault is closed. Crunchbase noted: “Global Series A funding peaked in 2021, when more than $90 billion was invested in over 5,000 companies. Series A funding this year is down with about $70 billion going to roughly 4,000 companies.” Word on the street: Funding remains available to unique concepts, proven successes, and committed investments. Nevertheless, more marketplaces find they can bootstrap their way to success.
Viva la revolution!