The Rise of Freelance Developers: Pandemic Aftermath

The freelance market is growing every year, and this trend is observed all over the world. Performers choose the remote work to focus on the project and not be distracted by the office routine. For companies, especially startups, it is convenient to work with freelancers because they are more flexible and affordable than in-house teams.

Today’s freelance market

Today, there are around 58 million freelance professionals in the U.S. They contribute over $1.4 trillion to the country’s economy. To date, 70% of small and medium-sized businesses in the U.S. had employed freelancers at least once. Large companies also switch to hiring freelancers. This market is expected to grow to 84 million by the year 2027. This is going to make freelancers the majority workforce.

Pandemic impact

The COVID-19 pandemic has hit the labor market around the world. In May 2020, the unemployment rate reached a record high in many countries. In the United States, 14.7% of the population was unemployed while in India, the unemployment rate rose to 27.1%. As a result, millions of people on the planet are thinking about a new way of making money.

The lockdown induced by the Covid-19 pandemic also has made business owners realize the limitations of a physical workspace. There is a steady rise expected in the number of businesses moving their business online and employing freelancers in the process.

This trend is majorly supported by employees as well. In fact, 54% of employed adults want to continue working remotely after the pandemics, reports Pew Research. Half of these respondents claim they want to work 100% remotely while the rest want to be able to flexibly combine both WFH and office arrangements. The study also shows that the majority of employees found the work-from-home arrangement acceptable, and 64% of them reported that they had no problem with staying motivated and on top of their game while working from the comfort of their home.

It hasn’t always been like this. The numbers have significantly grown. For instance, before the pandemics, only around 7 million Americans worked remotely. Covid19 outbreak has drastically changed this: in 2021, at least 1 in 4 employed adults are working from home. 

Not given a choice to work remotely at their current company, these employees will seek an opportunity to become freelancers. 

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Why do employees and companies choose freelance?

Employees value the opportunity to plan their workday, save time and money on transportation, work without being tied to a specific city or country, and juggle several jobs simultaneously.

In the meantime, the pandemic made companies across the world adopt immediate safety measures. This has resulted in many companies implementing work-from-home policies and has led businesses to look for ways to reduce operating costs. Hiring freelancers was one of the answers.

Still, it was not a trend change, but its acceleration: even before the pandemic, businesses were slowly switching to hiring freelancers. In such a way they could rent smaller offices, while their employees felt motivated being able to plan their own time.

Freelancing benefits for employees

Employees highlight several main benefits of freelancing:

• Freedom. You can work while being on a trip, in any city, in any country. The only thing necessary is a good internet connection.
• Flexible schedule. You can work at night, you can work during the day. Also, you can rest or work whenever you want.
• There is no salary ceiling. Your earnings depend only on you, on your knowledge, and your sales and negotiation skills.
• Being your own boss. You decide which projects to take. No one is forcing you to do what you do not want to do.
• Work without intermediaries. Not always, but more often than not, you work directly with the client.

Freelancing benefits for employers

Research by Lemon.io shows that the clients name three main reasons for hiring freelancers:

• Freelancers are more affordable than in-house developers (25%)
• They are more flexible (25%)
• And they offer a wider variety of available skills (20%)

Another popular reason to turn to freelancers is working with an already distributed team which makes onboarding a freelancer much easier.

Freelancing challenges for employees

The main challenge for a freelancer is a lack of employment security. This includes:

• No stability. You don’t have a stable salary. One month you can earn a specific amount, in a month you would get half as much, and three times as much in two months.
• No vacation or sick leave.

Freelance work is often stressful. According to a survey by the British ipse association, the need to constantly search for new orders (53%) and irregular earnings (50%) have the strongest negative impact on the mental health of a freelancer. One of the main advantages, work from anywhere, also has a dark side: up to 84% of freelancers work from home and sometimes feel isolated.

Another problem is dumping. Due to a large number of freelancers (in fact, competitors), specialists sometimes have to lower prices for their services just to get an order.

Freelancing challenges for employers

In the Lemon.io survey, the companies named the top four reasons why they have never hired freelancers before:

• Not sure they can afford to hire a freelancer (18%)
• They doubt the professional skills of freelancers (14%)
• They are concerned about their intellectual property (14%)
• Alternatively, they prefer working with people who are in the same office (12%)

As we can see, the gaps in percentages between answers to this question are not large. This means, there wasn’t just one factor prevailing over others.

On the other hand, reasons like the language barrier or unsuitable time zones turned out to be the least of their concerns.

“It’s actually freelancer reliability that concerns me — when they take on too much or a project spikes they become unreliable. It’s also difficult for us to assess their technical ability” — says one of the employers surveyed by Lemon.io.

Freelancing in IT

The IT industry is among the leaders in hiring freelancers and it pays them the most. Moreover, in 2020, 12 out of the top 20 in-demand skills for freelancers were related to development. Most often, the developer’s job does not require his physical presence in the office. This means that they can work equally effectively from anywhere in the world. For the businesses, it is also better not to rent huge offices, but let their developing teams work from home. This is especially important for startups that do not always have sufficient funds.

According to Lemon.io’s survey, 83% of American companies hire freelance developers. Most of the businesses that hire freelancers prefer to hire more experienced middle and senior developers. While only 24% also work with junior devs and even fewer businesses hire architects (21%).

Freelancers vs. in-house teams

Companies have to choose between hiring freelancers or building their own in-house development team. To help them make that choice, here are some numbers from a Lemon.io study.

According to the survey, most often the respondents completely or partly agree on these statements:

• 80% consider freelancers more affordable than in-house developers. In fact, the hour rate of a freelancer might be higher, but the company doesn’t have to pay for training or onboarding. Freelancers don’t need sick pay, medical benefits, etc. Indirect costs might be almost equal to the salary itself.
• 69% think that freelancers propose a wider range of skills than in-house teams. You cannot have a specialist for each little task in your team, while you can always hire a freelancer for a short project.
• 68% are sure that freelancers are easier to manage compared to in-house teams. You wouldn’t have to invest your time and energy overlooking their every move, because they are interested in doing the project well and getting paid.

Among other concerns is security. Thus, respondents tend to believe that in-house teams are more trustworthy than freelancers:

• 52% worry that freelancers are hard to rely on. Freelancer is usually a one-person team, so any unforeseeable circumstances might make this team unavailable to a client.
• 48% afraid that freelancers are more likely to miss deadlines than in-house teams. In fact, sometimes freelancers do accept unrealistic deadlines to get a project. This issue is easily solved by transparent negotiation.

Future of freelancing

Freelancing is the future, and the further we go, the more clearly this trend is visible. More and more companies would outsource some of their business processes. According to research, 90% of Americans are open to the idea of freelance work. Younger generations are even more likely to take up freelancing.

The reasons that could make companies start hiring freelancers, according to Lemon.io’s survey:

• Positive feedback from someone I trust 41%
• I couldn’t afford a full-time developer 12%
• I couldn’t find a full-time developer 8%

Where to find a reliable freelancer

The trend of freelancing is here and businesses have to start adapting to it. Their chance is to benefit from secure platforms such as Lemon.io which help to organize freelancer-client cooperation.

According to Lemon.io’s survey, people who stated they were the happiest about working with freelancers were those who hired developers from vetted freelance platforms. 77% of respondents stated that they had a positive experience from hiring freelancers through vetted platforms, and only 2% of them had a negative experience.

Generic freelance platforms also got mostly positive reviews with 72% of positive answers. However, the share of negative experience answers was higher – 7% and the overall happiness was even lower than for those who hired freelancers based on referrals.

Lemon.io has recently conducted in-depth research on the most popular freelance platforms – and you can learn more about their advantages and disadvantages in our comprehensive guide.

Those who hired freelancers through social networks reported having the worst experiences.

“My main concern is about quality. Will I be getting the great quality that works how I need it to? I don’t know where to find freelancers that I can be assured are of great quality (for example, I stay far, far away from Fiverr, because everything you get on there is subpar, and it amounts to wasted time and money)” — says one of the employers surveyed by Lemon.io.

Conclusion

Like any other trend, freelancing will get more and more rules to make it more reliable and predictable. There will be fewer “wild” freelancers, and companies will choose vetted platforms. Those platforms will solve all typical problems of freelancing, making the cooperation beneficial for all sides.

Need some more info? Enjoy our FAQ!

• What problems have freelance developers encountered as a result of the pandemic?

  The COVID-19 pandemic has had a significant impact on the freelance industry, and freelance developers have faced several challenges as a result:
  Decreased demand: Many businesses have reduced their budgets or put projects on hold due to the economic uncertainty caused by the pandemic, which has led to a decrease in demand for freelance developers.
  Competition for work: The increased unemployment rate has led to more people turning to freelance work, which has increased competition for available projects.
  Remote work challenges: Many freelancers have had to adjust to working remotely as a result of COVID-19, which can be challenging for those who are not used to it.
  Health and safety concerns: The pandemic has raised concerns about health and safety, particularly for freelancers who may not have access to the same protections as full-time employees.
  Financial insecurity: The uncertainty caused by the pandemic has led to financial insecurity for many freelancers, as they may not have the same level of job security as full-time employees.
  Overall, the COVID-19 pandemic has presented many challenges for freelance developers, including decreased demand, increased competition, and remote work challenges. Freelancers need to be proactive in addressing these challenges and finding ways to adapt to the changing market.
  

• What perspectives for freelancers beyond COVID-19?

  It is difficult to predict exactly what the future will hold for freelancers beyond the COVID-19 pandemic, as it will depend on various factors, such as the state of the economy, the demand for certain skills, and the adoption of remote work. However, there are a few trends that may impact the future of freelancing:
  Increased demand for remote work: The COVID-19 pandemic has accelerated the trend toward remote work, and more companies will likely continue to embrace this model. This may create more opportunities for freelancers who can work remotely.
  Changes in the job market: The pandemic has significantly impacted the job market, and there may be long-term changes in how businesses hire and work with freelancers.
  Greater focus on skills: As the job market evolves, there will likely be a greater focus on specific skills and expertise, and freelancers who can offer in-demand skills may have an advantage.
  Growth of the gig economy: The gig economy, which includes freelance work, has been growing in recent years and is likely to continue to grow in the future. This could create more opportunities for freelancers.

• How do I start freelancing?

  Starting out as a freelancer can be a challenging but rewarding experience. Here are a few steps you can take to get started:
  Identify your skills and expertise: Think about the skills and experiences you have that are relevant to freelancing, and consider what type of work you want to do.
  Develop a portfolio: A portfolio is a great way to showcase your skills and experience to potential clients. Start building a portfolio by collecting examples of your work, including projects you have completed for school, previous jobs, or personal projects.
  Set up a website: A professional website is a good way to establish your brand and give potential clients a place to learn more about your services and see examples of your work.
  Determine your rates: Decide on the rates you will charge for your services, considering your experience, the demand for your skills, and the going rates in your market.
  Find clients: There are several ways to find clients as freelancers, including networking, marketing your services, and using freelance job platforms.
  Build a professional network: Connect with other professionals in your field and consider joining relevant professional organizations to expand your network and find new opportunities.
  Overall, starting out as a freelancer requires some planning and effort. Still, you can establish a successful freelance career by developing your skills, building a strong online presence, and actively seeking out clients.
  

• How can freelance developers overcome the challenges?

  There are several steps freelance developers can take to overcome the challenges presented by the COVID-19 pandemic:
  Diversify your skills: Consider expanding your skillset to increase marketability and make yourself more attractive to potential clients.
  Network and market yourself: Network with other professionals and actively market your skills to potential clients to increase your visibility and find new opportunities.
  Build a strong online presence: Use social media and other platforms to showcase your skills and attract new clients.
  Be flexible: Consider taking on projects outside your normal scope of work or working with new clients to increase your chances of finding work.
  Stay up-to-date with industry trends: Keep up-to-date with the latest technologies and trends in your field to ensure that you offer the skills in demand.
  Seek out support: Don’t be afraid to seek support from resources such as professional organizations or online communities to help you navigate the challenges of the pandemic.