This article was published on August 31, 2017

Why today’s freelance developers have gig economy on their side

Why today’s freelance developers have gig economy on their side
Andrei Tiburca
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Andrei Tiburca


Andrei is an avid marketer and content creator. You can connect with him on Twitter(@AndreiTiburca) or read his articles on www.webdesignled Andrei is an avid marketer and content creator. You can connect with him on Twitter(@AndreiTiburca) or read his articles on where he's an editor.

The U.S. economy is estimated to grow at between 2.5 to 3 percent this year, and it’s positively affecting the gig economy and its nearly 54 million freelancers who are telecommuting from home and co-working spaces across the country. The impact is huge because by 2020, at least 40 percent of American laborers will be gig workers, according to a 2010 study by Intuit.

The transition from W-2 to 1099 may seem like a blow to those who’ve spent a lifetime working as a salaried employee, but it’s actually creating business opportunities for top professionals, especially for those in the tech space. Seattle, Phoenix, Silicon Valley, Austin and Houston are among the top cities where software engineers make the most money after cost-of-living adjustments. And top developers are increasingly turning towards the flexibility and other perks that freelancing now provides.

“Global companies shouldn’t confine themselves to local talent. Top IT professionals are increasingly providing their services remotely as independent contractors,” says Weiting Liu, CEO of CodementorX, a freelance platform for hiring the top 2 percent of web and mobile developers. “Freelancers offer three benefits: talent, cost-efficiency and flexibility.”

Here’s how IT professionals are benefiting from a growing gig economy

  1. Higher demand means that large companies are offering perks and benefits that have historically gone towards traditional employees. For example, Uber is giving signing bonuses, fuel card programs and phone-plan discounts to its 1099 contractors, while some businesses are going a step further by giving partial insurance coverage.
  2. Freelancing serves as a risk management strategy for those negatively affected by the Great Recession. Multiple clients provide a diversified income stream, and it enables freelance developers to avoid placing all their eggs in one basket — by working for a lone employer who can cut them loose at any time. Not only is it a hedge against layoffs, but freelancing also lets gig workers choose who to work for. For example, you can climb the payscale ladder by only selecting the best-paying projects, or you can kick back and choose more convenient assignments (and perhaps delegate the task to a virtual assistant). 1099 workers are much more creative in deciding their fate.
  3. When working remotely, freelance developers can focus on delivering a high-quality work product, which is all that matters. That means avoiding the toxicity of office politics and peer rivalry that are all too common in cutthroat Silicon Valley. And it is possible to telecommute from your dream location (such as a beachfront condo) and get paid via PayPal.
  4. Freelancers often move away from the “employee mindset” and transition to becoming small business owners. Moreover, solopreneurs can take advantage of the U.S. tax code by writing off business costs such as phone charges, internet bill, home office and travel expenses. And yes, business use often overlap with personal use.
  5. Most independent contractors were once salaried employees, many of whom got laid off during the Great Recession, which often led to demoralization. But receiving a pink slip is not a dead end — because the gig economy is actually opening the door to lucrative opportunities for people who provide in-demand services. Freelancing can be a stepping stone to forming and growing your own agency or firm. And through crowdfunding, solopreneurs now have more ability to scale their operation and fund their passion.

Job boards that cater to 1099 contractors who possess domain expertise, such as programmers and accountants, are attracting more top talent. That reflects a trend in the hiring marketplace to match specialists with large companies that have the corresponding budgets and expectations. In the U.S., freelance developers earn $70 per hour — among the highest in the world — which is on par with Switzerland and Australia. But a freelancer’s take-home pay can be higher, compared to a W-2 employee who possess similar skills, because of tax write-offs and deductions.

“Part of the corporate world is moving away from traditional employment,” says Liu who earned a master’s degree in engineering from Stanford. “But while a flexible arrangement works for both client and freelancer, people want the assurance that they’re working with great talent. That’s why I think niche hiring platforms that filter candidates offer an advantage — because they can gain a business’s trust.”


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