Freelancers Will Reshape the Market in 2023
The way work has been done has changed so much over the last few years. We’ve seen remote work become normal, people choose meaning over money, and independent talent take hold as a mainstay in the market.
As we cruise into 2023, those trends will only continue as market forces push us into the work of the future. As usual, independent workers are at the forefront of this revolution, not just redefining work for themselves but also contributing to the economy's resilience more broadly.
The beginning of the year has seen the continuation of layoffs in the tech sector, leading to a vast pool of highly skilled talent entering the marketplace. Layoffs are never easy, especially when they are caused by firms that grew unchecked for years without planning for the possibility of a market downturn.
But are we in a market downturn?
Even while people are being laid off in record numbers, unemployment is still at a record 50-year low. While some sectors are contracting, others continue to expand and still have trouble finding the right people to help them grow. The big question is whether this new influx of available talent will help fill that gap or if those workers will choose to take time off, move to a new sector, or become independent workers.
Waiting for the Recession
As inflation continues to kick our collective asses and interest rates hold us hostage, there are constant rumblings about the coming recession. This is one of the reasons some companies are downsizing or implementing hiring freezes – everyone is preparing for the worst, which so far hasn’t happened.
I’m a big believer in being prepared for the worst, but the constant fear-mongering around a recession adds to the economic uncertainty we all face. People, companies, and states should always be prepared for economic downturns instead of scrambling to “be prepared” at the last minute. Independent workers are in a better position than most to weather a recession with multiple income streams and more nimble business models that can adapt on the fly to changing market conditions.
Free Agency Wins the Day
Companies are leveraging independent talent to build more resilient businesses amid this uncertainty. A recent Upwork study found that 79% of companies agree that working with independent talent enables their business to be more innovative. 84% of hiring managers who work with freelancers say they are confident in their company’s ability to respond to disruption, compared to 69% of those who do not use freelancers.
Hiring freezes don’t mean the work stops, and the independent workforce is rising to the challenge. The number of independent workers has risen sharply over the last year as workers define what matters for them and create work that meets those criteria. Data from Upwork shows that 39% of the US workforce performed freelance work in 2022, and data from MBO partners indicates that the number of independent workers has increased by 26% from 2021 to 2022. This huge increase in freelancers is being met with a market that is ready to incorporate independent workers more intentionally into traditional companies.
A New Generation of Talent
As Gen Zers continue to enter the workforce in large numbers, they are changing the way work is done. Gen Z is the most diverse generation yet, which is a huge asset for an economy that needs to continue to adapt to our changing world. The trick will be getting the entrenched leadership in existing companies to recognize the advantages of diversity and create workplaces that welcome new talent and divergent thinking.
Gen Z is also the most entrepreneurial generation yet, with a majority saying they want to start their own companies. They are also redefining the traditional path to work, with record numbers saying they’ll delay or skip college for a more direct path. Entrepreneurship is a great way to buck conventional standards and qualifications by proving worth in the marketplace, not with a resume and diploma.
These are trends that the market has been bending toward already, and the presence of fresh, young talent will only serve to increase the pace at which we adjust to a new way of working.
A Robot Took My Job
The other hot topic this year is the increased presence of AI in the workplace. Whether you are writing your next novel with ChatGPT or swearing off AI in all areas of your life, the truth is that we will all have to figure out how to adapt to this new reality in the workplace. AI platforms can feel especially threatening for freelancers as companies look for low-cost solutions for creative work. As with all innovations, we will need to think carefully about the pros, cons, and ethics of AI while simultaneously rethinking our business models to leverage it.
All of these trends point to the rise of independent work as a means for individuals to design better work contexts and for companies to adjust to shifting market demands. No one has a crystal ball to tell us what work will be like by the end of 2023, but it seems clear that independent workers will play a crucial role in what’s to come.