The rise of tech freelancers

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ByClub Freelance

Published27 February 2020at12:49, updated on05 March 2020at15:42

The rise of tech freelancers cover

Not that long ago, freelancing was a somewhat mysterious concept reserved for a few lucky ones and the creative types. Nowadays, independent workers make up a significant part of the workforce, and their numbers are growing exponentially. This is especially true in IT, where skill shortages and the constant need for IT professionals across all industries provide the perfect conditions for a freelance lifestyle.   

We take a look at the factors propelling (and hindering) this transformation.  

A new office environment

This rise in freelancing is in large part due to the generational shift in the workplace.

By the end of 2020, millennials will have caught up with Generation X, with each making up 35% of the world’s labour. At the same time, those born after 1997 (Gen Z) will have established a solid foothold in the workplace with 25% of the total.

A recent survey of more than 7,000 freelancers in over 150 countries revealed that a staggering 70% of independent workers are under the age of 35. Those younger than 25 represent 21% of the total.   

This new workforce configuration is introducing important changes, from corporate culture to salary expectations or how teams operate. Considering that, by 2025, millennials will represent three-quarters of all employees and many of them will be in managerial positions, these new standards will have a big impact on recruitment moving forward. Concepts like flexible schedules, hypermobility and freelancing are becoming more ubiquitous and sought after.

A freelance-friendly scene

Albeit often accompanied by controversy, the emergence of the so-called gig economy has too contributed to the normalisation of the freelance life. While some tout the benefits of this labour model, such as greater flexibility or financial freedom, others consider it a source of precarious employment. Whereas that could be argued when it comes to very specific sectors, the reality is that tech freelancers generally enjoy an advantageous position in comparison to their in-house counterparts.

Yes. Independent workers must deal with limited social protections, fluctuating activity and internal red tape. However, the average daily rate of tech freelancers fluctuates between €350 and €800 – well above the average rate of salaried employees in most countries. They also express a 4-out-of-5 satisfaction with their lifestyle.

Programming and IT make up 29% of the global freelance workforce, sharing the top three with web and graphic design. The fit between IT and a freelance lifestyle is clear. A highly coveted skillset that is relevant to almost all industries gives IT professionals the flexibility and bargaining power required to go independent. IT contractors are also among the best-paid freelancers.

A new regulatory landscape

But freelancing faces some roadblocks too. All around the world, new regulations on temporary employment are being put in place in an effort to avoid precariousness and reduce the disparity between permanent and short-term positions. Nonetheless, some of these well-meaning measures can end up doing more damage than good.

A good example of this problem is the UK’s IR35. Set to kick in on April of this year, this piece of legislation plans to increase employment tax costs for those companies who consider a contractor as an employee in all but name. Although the law is intended to discourage companies from abusing temporary contracts for tax-saving purposes, what it could mean in practice is that companies would steer clear of contractors altogether.

Both the freelance community and businesses are pressing for the legislation to be re-examined.  

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By Club Freelance

Club Freelance

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