CEO Speaks: The Gig Economy in 2023: Trends and Opportunities

The gig economy, which refers to the use of digital platforms to connect freelancers with short-term or project-based work, has been growing rapidly in recent years. According to Statista, the projected gross volume of the gig economy is expected to reach 455.2 billion U.S. dollars in 20231, up from 204 billion in 20182. This growth is driven by various factors, such as technological advancement, changing workforce preferences, and evolving business needs.

In this article, we will explore some of the key trends and opportunities that are shaping the gig economy in 2023.

1. Worker classification changes

One of the major challenges facing the gig economy is the legal and regulatory uncertainty around the status of gig workers. Are they independent contractors or employees? This question has implications for tax, labor, and social security laws, as well as for the rights and benefits of gig workers.

In 2023, we can expect to see more efforts from governments and courts to clarify and enforce worker classification rules. For instance, in the United States, the Biden administration has proposed to adopt a stricter test for determining who is an independent contractor under federal law3. This could potentially affect millions of gig workers who currently enjoy flexibility and autonomy over their work.

On the other hand, some countries and regions have introduced or are considering introducing new legal categories or frameworks to accommodate the gig economy. For example, in India, a draft code on social security has proposed to recognize gig workers as a distinct class of workers who are entitled to certain benefits such as health insurance and maternity leave4. Similarly, in Europe, some countries have adopted or are exploring the concept of “dependent self-employed” or “economically dependent workers” who are entitled to some protections while retaining their independence.

2. Better pay and benefits

Another challenge facing the gig economy is the low and variable income that many gig workers earn. According to a report by TeamStage, 63% of gig workers say they struggle to make ends meet2. Moreover, gig workers often lack access to social security, health insurance, retirement plans, paid leave, and other benefits that traditional employees enjoy.

In 2023, we can expect to see more demand and supply for better pay and benefits for gig workers. On the demand side, gig workers are becoming more aware of their rights and value, and are organizing themselves to advocate for fairer treatment and compensation. For example, in 2022, thousands of food delivery riders across Europe went on strike to protest against low wages and poor working conditions.

On the supply side, businesses are facing more competition and pressure to attract and retain skilled and reliable gig workers. As a result, some platforms and employers are offering higher rates, bonuses, incentives, or even equity to their gig workers. For example, Uber has launched a program called Uber Pro that rewards drivers with perks such as cash back on gas, discounts on car maintenance, and tuition coverage for online courses2. Some platforms are also partnering with third-party providers to offer benefits such as health insurance, retirement plans, or financial services to their gig workers.?

3. More platform-based work

The gig economy is not only expanding in terms of size but also in terms of scope. More and more types of work are being performed through online platforms that match freelancers with clients. These platforms range from generalist ones that offer various services such as Upwork or Fiverr, to specialized ones that focus on specific sectors such as Toptal for software developers or Axiom for lawyers.

In 2023, we can expect to see more platform-based work across different skill levels and industries. According to a report by Boston Consulting Group (BCG), India alone has 15 million gig workers staffed in projects across IT, HR and designing sectors in 20214. This number is anticipated to rise by over 24 million in the near-medium term and to 90 million in the long term.

Platform-based work offers several advantages for both freelancers and clients. For freelancers, it provides access to a large and diverse pool of opportunities, as well as flexibility and autonomy over their work. For clients, it provides access to a large and diverse pool of talent, as well as speed and efficiency in finding and hiring freelancers.

4. More opportunities for high-skilled talent

The gig economy is not only for low-skilled or medium-skilled workers. In fact, there is a growing demand and supply for high-skilled gig workers who can offer specialized expertise and knowledge in various fields such as IT, HR, design, law, finance, and more.

In 2023, we can expect to see more opportunities for high-skilled talent in the gig economy. According to a report by BCG, India alone has 15 million gig workers staffed in projects across IT, HR and designing sectors in 20211. This number is anticipated to rise by over 24 million in the near-medium term and to 90 million in the long term.

High-skilled gig workers can benefit from higher income potential, greater flexibility, and more career development opportunities. For example, a report by Picked.ai found that the average hourly rate for high-skilled freelancers in the US was $28.4 in 20202, compared to $19.8 for the overall workforce3. Moreover, high-skilled gig workers can choose their own projects and clients, set their own schedules, and learn new skills and technologies.

For clients, hiring high-skilled gig workers can provide access to a large and diverse pool of talent, as well as cost savings, speed, and efficiency. For example, a report by The Modest Wallet found that hiring a freelance graphic designer can save up to 40% compared to hiring a full-time employee. Moreover, hiring high-skilled gig workers can help clients overcome talent shortages, scale up or down quickly, and tap into niche expertise.

Conclusion

In 2023, the online gig work landscape will continue to evolve and expand, offering a plethora of freelance jobs online. Clients will have access to a vast pool of expert gig talent through the best freelancing sites, making it easier to hire skilled freelancers for their projects. At Gigleji, gig workers' jobs will also continue to thrive, providing opportunities for individuals to earn income and develop their skills. Despite the benefits, there are still some challenges associated with the gig economy such as legal uncertainties and lack of benefits. It is crucial for all stakeholders to stay informed of the latest trends and issues to succeed in this ever-changing sector. Ultimately, the gig economy is not only a way of work but also a way of life.

Arun Misra, CEO