According to a recent study by independent research firm Edelman Berland, 53 million Americans -- more than one in three workers -- are freelancers.
Let’s put that in perspective: Fifty-three million people is more than the combined population of the 25 smallest states. And, collectively, those 53 million people contribute more than $715 billion to the national economy. While many of those freelancers hold a full-time job and simply contract after hours, nearly half of them are full-time independent contractors who don’t have a traditional salaried job at all. Freelancing is their job.
In my field, software and hardware engineering, we use a lot of temporary, contract or freelance workers for a variety of applications, and that feels like a more common practice now than it used to be. As with many other professions, from attorneys to graphic designers to writers, technology has made it easier to both work remotely and work for a number of different clients.
Because our company has variable needs, we maintain a network of skilled engineers, with varying specialties, with whom we have worked in the past. We trust these professionals (and they trust us). So we are able to quickly bring in people known to us, from a number of specialty areas, without the hassle of a recruiting search or even delays caused by legal paperwork. As a result, we’re nimble across a wide range of expertise areas.
In comparison, a corporate engineering department, regardless of size, can’t keep every skill available, so even at large companies finding talent for a new project is often a “start-from-scratch” proposition.
I want to generalize away from engineering and ask, What does this trend mean for entrepreneurs across many fields? I’m convinced that the use of freelancers can lead to greater flexibility, with fewer traditional limitations. And that in turn can be a source of great competitive advantage for small companies because larger companies often face impediments to using temporary or freelance talent.
My guess is that larger companies have paperwork and procedures that must be followed, while we frequently and successfully engage a freelancer with not much more than a handshake.
From a small company’s perspective, the freelance economy offers the ability to:
- Quickly take on complex projects, by bringing together a team comprised of both in-house and freelance experts.
- Flexibly and nimbly respond to new opportunities even if all the required expertise isn’t living under one roof.
- Easily scale for changing budgets and project requirements -- both up and down -- as business needs dictate.
- Have a network of experts who can work together across a number of projects. On more than one occasion, a freelancer with whom we have a relationship has brought us into a project that was too big to handle alone, and that has generated more work for everyone involved.
I’m convinced that freelancing is a great deal for the freelancer, too. Freelancers have greater freedom to focus on what they like to do best, and to control their schedules. In addition, a full-time job typically involves working on a narrow spectrum of tasks. In contrast, freelancing allows engineers with a particular expertise -- likely one they are good at and enjoy doing -- to bring that skill to a variety of clients.
In the process, the freelance engineer has a greater breadth of work while gaining flexibility and more time off, or conversely earning more income during crunch times.
Finally, let me clarify what I said above about large companies struggling with freelancers Sure, corporations use freelancers, but generally in these environments the freelancers aren’t seen as a trusted part of the team. Although it’s somewhat self-serving of me to say so, from a large company’s perspective, an outsourced firm (as opposed to individuals with 1099s) removes many of the issues surrounding the employee vs. independent contractor question.
Sometimes even a “short-term” engineering project can take months or more to complete, and such time lines can run afoul of human resources policies at large companies. Contracting with an agency or a small engineering firm allows you to have a relationship that won’t violate HR or IRS rules, while still allowing your internal team the flexibility required to complete the project.
Also, if you bring in an individual freelancer and that person doesn’t work out, it’s often harder for a larger corporation to get rid of the non-performer. Again, using an outsourced firm allows you to solve this problem quickly and places the burden of doing so on the outsourced firm, not you or your internal resources.
Overall, the rise of freelance labor in the engineering community is allowing everyone -- from corporations to small companies like ours to the coders themselves -- to work on more projects, provide more nimble solutions and bring better and more exciting products to market faster than ever before.