The global market for talent platforms contracted for the first time in 2023 after double-digit growth from 2019 to 2022, according to a new report by SIA.

Gross spend fell 5% globally to $16.0 billion, according to SIA’s latest Talent Platform Update by Brian Wallins, research director, talent acquisition technology, and Kevin Chen, research analysts.

One large contributor to the decline was the healthcare segment, where talent platform gross spend fell by 23% in 2023. Excluding healthcare, global B2B talent platform market gross spend would have fallen only 3%.

The contraction should be short lived as talent platform revenue is forecast to return to growth in 2025.

“While AI appears to be a headwind on demand for certain pockets of freelance work and a tailwind for others, where AI will ultimately make its greatest impact are the compelling new AI use cases platforms are deploying on both sides of the marketplace,” Wallins said. “New capabilities are being integrated into nearly every workflow, transforming the way hiring organizations access talent and making platform workers increasingly productive.”

Wallins’ and Chen’s report also noted that the Americas accounts for 56% of worldwide B2B talent platform gross spend volume despite only 12% of talent platform workers residing in the region. Asia Pacific is home to 66% of the globe’s talent platform workforce, led by India at 22% and Bangladesh at 16%.

Examples of talent platforms include Upwork, Fiverr and Toptal.

SIA’s lexicon defines talent platforms as “a model that enables specific hirers and freelance workers to enter into, complete and transact work arrangements through a website or other digital platform such as a smartphone. It is essentially (more or less) recruiter-less staffing with the entirety of the transaction, including remuneration, facilitated online via a two-sided marketplace of workers and hirers. Unlike staffing, the talent platform takes no responsibility for the tax or social insurance obligations of the workers.”

The Talent Platform Update 2024 report includes a full discussion of talent platform trends, including a ranking of the largest.