By: Jon Younger
Many individual marketplaces publish reports on the state of freelancing, and these are often quite good. Any serious student of freelancing reviews the most recent annual of Freelancing in America, a major survey by Upwork, or the MBO Partners State of Independence report. Freelance Informer provides a running commentary on UK freelancing that’s also very interesting.
Large marketplaces firms like Malt, Catalant, and Toptal have also produced excellent blog channels and comprehensive reports about freelancing in their areas of interest. And the big firms – MBB as they are known, and the large audit and consulting firms – often include freelancing as an interest area in their research. Even the HR trade organization, SHRM, shows an interest in freelancing.
But there apparently has been no primary source offering objective, regular, third-party data on the forward-looking sentiment of the freelance community; what leaders, investors, and ecosystem partners are thinking and concerned about. It is a large miss for a global professional community that delivers trillions to global GDP and supports large numbers of generally well-educated and ambitious professionals.
Well, finally that gap has been filled by the tech start-up and enterprise advisory firm, The Human Cloud[1]. Human Cloud offered Forbes a first peek inside the results of the first findings of their “Lighthouse Quarterly Trend Tracker”:
1. Freelance leaders see 2024 as a net growth year for freelancing generally. Over 83% were either highly or moderately bullish about the short-term future of freelancing, and an additional 21% were neutral. Only about 6% were pessimistic in their performance expectations for the next 12 months.
2. Freelance leaders are “moderately” satisfied with the performance of their platform or marketplace this year. Over 55% were either highly satisfied (14%) or moderately satisfied (41%). 27% were neutral, and remaining participants (18%) were disappointed. Despite a challenging third quarter, 2023 is being judged as a modest success.
3. Client relationships were seen as the key driver of performance in 2023, and an important strength of most marketplaces, with 56% of leaders describing it as the highest impact driver. Freelance talent quality (44%), brand positioning (43%), and the alignment of sales, marketing, and product (41%) were also identified as key. Interestingly, pricing (22%), funding (17%), and tech (9%) were seen as secondary factors in determining this year’s performance.
4. Freelance leaders believe they have growing strength in attracting, servicing, and retaining clients. This helps explain the increased attention to branding, and confidence in the alignment of sales, marketing, and product. 73% of participants were either highly or moderately confident in the effectiveness of their sales delivery system, while 21% were neutral. Few (<5%) were actively critical.
5. Most marketplaces are focusing their growth efforts on enterprise clients. 57% of participants cited an increasing focus on building relationships with large corporate or enterprise companies, while 37% cited a greater emphasis on SMB (small and medium sized companies). 11% were targeting startups, and 5% were emphasizing non-profit and government organizations. 18% were non-specific.
6. Surprisingly, few platforms are seeking funding in the next 12 months. Only 12% of participants described funding as a significant goal over the next year. By contrast, almost 65% expressed no interest in raising additional investment in 2024.
7. Freelance leaders report that platforms are prepared for the possibility of recession in 2024. A total of 50% of participants described their business as very or moderately well prepared for a downturn. And another 41% were neutral. Only 9% thought they would have a moderately or severely difficult time.
8. Governments were generally seen as unhelpful to the freelance economy. Most participants saw government policy and regulation as unhelpful or neutral, but rarely positive. A bright spot was the Middle East, where Saudi Arabia and other countries are promoting freelancing. But 54% said their government was either very or moderately antagonistic, and another 34% was neutral.
9. Freelance leaders are quite optimistic about the longer term growth of the freelance economy. Despite only moderate encouragement in 2023, a full 61% of participants described themselves a very confident about the growth of freelancers, and an additional 21% were moderately encouraged.
The importance of a regular trend tracker like the Human Cloud Lighthouse is obvious. The global freelance contribution to GDP exceeds one trillion dollars in the US alone. Over 60 million professionals described themselves as freelancers this year in the US alone. Research by Emergent Research for MBO Partners shows that the number of fulltime freelancers in the US grew by 90% between 2020 and 2023, and part-time freelancing grew by over 130%. Over 80% of large corporates plan to increase their utilization of freelancing.
Moreover, we see strong evidence of freelance participation growing in Latin America, Africa, Central and Eastern Asia, and SE Asia. North America, the EU and UK, and Australia are already active centers of the freelance revolution. The largest dozen freelance marketplaces all have north of one million freelancers on their platform. The largest, Freelancer.com, boasts a population of 59,000,000, slightly larger than the population of Saudi Arabia.
How will a trend tracker benefit the freelance revolution? Looking at JD Powers and its impact on the auto industry, a Fortune article quoted JD Powers himself, “Before the ’60s, nobody (in the auto industry) really cared what the consumer thought. We made the term “customer satisfaction” part of the vernacular of business today.”
A recent article at Influencer Marketing Hub reviewed what they described as the top 25 sentiment analysis tools like Brandwatch Consumer Intelligence. It’s time for freelancing to be similarly supported.
Over time, Human Cloud thinks its data will help freelance entrepreneurs make more confident decisions about when and how to grow their business, seek funding, and improve how they are positioned in the market. Investors and lenders may also benefit from the sentiment of industry leaders. Human Cloud promises to continue to improve the tracker, thereby increasing its utility. But participating freelance leaders judged the trend tracker a useful add. Therefore, Matt Mottola, CEO of Human Cloud and a contributor to Forbes gets the last word:
“Our industry is growing, fueled by the impact of Covid and accelerated by technology, a continuing need for talent, and an increased openness to remotely performed work. But there’s no reliable source for regular, comparable, data on how industry leaders see the market over the near and medium term. We’re excited to bring together a global panel of freelance leaders and ecosystem partners to share their views on the direction and key trends of the global freelance revolution.”
