With the rise of the gig economy, more CEOs, CTOs, and hiring managers are wondering what the\u00a0future will be like. Will it be more efficient to replace in-house employees with freelancers? Or should you merely seek to complement your in-house team with external talent?<\/p>\n\n\n\n
One thing is certain. The gig economy is only getting stronger every year. From 1997 to today, it has averaged a\u00a02.6% per annum growth<\/a>. Comparatively, regular payroll employment grew at a meager 0.8% per annum in the same time period.<\/p>\n\n\n\n This represents\u00a0more than three times the growth rate<\/a> of regular employment! Similarly, consider that\u00a047% of millennials<\/a> prefer working independently. At this rate, freelancers will represent the majority of the US economy by 2027.<\/p>\n\n\n\n This trend seems to be unavoidable. The best thing you can do is position your business to best take advantage of it.<\/p>\n\n\n\n Looking for top talent fast? See how <\/em>Arc<\/a> can help you:<\/em><\/p>\n\n\n\n \u26a1\ufe0f Find developers, designers, marketers, and more Hire top talent with Arc risk-free \u2192<\/strong><\/a><\/p>\n\n\n\n The big advantage of developers over other professionals when it comes to freelancing is that coding work can be done remotely. In addition, remote supervision of coding work is also easily doable. Therefore, hiring developers<\/a> plays to the biggest advantages of the gig economy.<\/p>\n\n\n\n We\u2019ll quickly go over the benefits of hiring freelancers. We\u2019ll also cover the advantages of in-house employees. Then, we\u2019ll take a more in-depth look at what\u2019s likely to happen. Thereafter, we’ll provide guidance on positioning your business to make the most out of these changes.<\/p>\n\n\n\n Let\u2019s get to it!<\/p>\n\n\n\n Replacing in-house employees with freelancers has the following main advantages:<\/p>\n\n\n\n A big benefit when hiring freelancers is that you can\u00a0access talent anywhere in the world. You don’t have to limit yourself to your nearby geographical area.<\/p>\n\n\n\n Since many freelancers specialize in a niche, you can also look for exactly what you need. For example, if you’re looking to implement new technology on your stack, such as Vue.js, you can find the best specialist in this technology. Likewise, a really niche, one-off project requiring Alexa skills or advanced Machine Learning will benefit from freelance talent.<\/p>\n\n\n\n In addition, freelancers effectively run their own businesses. For you, this means that they’ll work faster than a regular employee who gets the same paycheck every month. In fact, research shows that freelancers are usually\u00a0more motivated than regular employees.<\/p>\n\n\n\n And if you just need a developer for a few months, then an independent programmer is usually the best choice in terms of hiring. In fact, with freelancers, you don’t have to go through a complex hiring process. <\/p>\n\n\n\n Nor do you have to worry about any other benefits you have to provide for regular employees. Severance pay is also not an issue, and there are likely fewer taxes<\/a>. Therefore, cutting down the bureaucracy around hiring makes the entire process faster and more straightforward.<\/p>\n\n\n\n Lastly, freelance developers tend to be cheaper even in the long run. You can\u00a0save up to 50% on costs\u00a0by working with freelance developers<\/a>. For a breakdown of the costs of hiring freelance developers, refer to\u00a0this post<\/a>.<\/p>\n\n\n\n Read More<\/strong>: Freelance Payment Terms: Fixed Cost vs Hourly vs Retainer Payments<\/a><\/p>\n\n\n\n The main advantages are:<\/p>\n\n\n\n In-house employees are easier to supervise directly. If your project involves your own advanced software architecture, then an in-house developer is a good choice. In such cases, you might prefer to only outsource the not-so-core components.<\/p>\n\n\n\n However, you can also supervise freelancers remotely. There are lots of source control options that an employer can have access to. These include the likes of GitHub, GitLab, and Bitbucket.<\/p>\n\n\n\n In addition, supervision can be done through different project management tools. We have already covered\u00a0the best project management tools<\/a>\u00a0that you could use!<\/p>\n\n\n\n Another difference, as developer\u00a0Thomas Jost shared, is that freelancers tend to work harder, but employees tend to care more about the company\u2019s interests. Since freelancers own their own businesses, their performance is key to securing future work. They’re more willing to do what it takes to deliver quality since a fixed income isn’t awaiting them at the end of the month.<\/p>\n\n\n\n On the other hand, employees will tend to identify more with the direct success of your business. This can mean greater loyalty to your business.<\/p>\n\n\n\n And finally, \u201cperpetual\u201d projects that require continuous work benefit from in-house employees. Because they know the software architecture and how it evolved, it becomes simpler to manage.<\/p>\n\n\n\n Read More<\/strong>: 5 Tips on How to Treat Freelance Developers Like In-House Employees<\/a><\/p>\n\n\n\n Instead of the binary choice of replacing or complementing in-house teams, there is a third alternative. This lies in creating or hiring remote teams. It allows you to gain most of the benefits of both options.<\/p>\n\n\n\n At the same time, you also gain additional benefits. These additional main advantages are:<\/p>\n\n\n\n One significant advantage is the tremendous productivity boost you get from being able to work 24\/7. That’s right, with a well-structured remote team across different time zones, working around the clock is possible.<\/p>\n\n\n\n And research backs up the idea that\u00a0remote workers are more productive and less stressed. This helps ensure that you deliver projects faster.<\/p>\n\n\n\n Aside from that, you also have reduced costs. So, finding awesome freelancers to integrate with your existing team is a fantastic option in light of recent trends.<\/p>\n\n\n\n You can also try <\/em>Arc<\/a>, your<\/em> shortcut to the world’s best remote talent:<\/em><\/p>\n\n\n\n \u26a1\ufe0f Access 450,000 top developers, designers, and marketers <\/a>Try Arc and hire top talent now \u2192<\/strong><\/a><\/p>\n\n\n\n One thing is clear. As the global economy shifts more towards freelancing, more of your rivals will be looking to take advantage of this. The cost savings and other benefits of hiring freelancers will become significant considerations.<\/p>\n\n\n\n We will be seeing more employers adjusting and looking to improve the efficiency of their operations. In terms of development, this will translate to fewer in-house developers and more freelancers and remote teams.<\/p>\n\n\n\n Keep in mind that the gig economy is still in its infancy. Many think that we are at the early stages of the equivalent of\u00a0a new Industrial Revolution<\/a>.<\/p>\n\n\n\n Remember that at every major turning point in economic history, the players that thrive in the market are those who embrace change. So if you want to remain at the top, you should carefully consider your options for the future.<\/p>\n\n\n\n Read More<\/strong>: What a Freelance Developer Contract Should Include (w\/ Templates)<\/a><\/p>\n\n\n\n In an effort to boost your team’s productivity, consider integrating more freelancers within your team, or try building a remote team. Freelance developers are great for specialized development work and general non-maintenance tasks.<\/p>\n\n\n\n Moreover, if you happen to be a startup looking to get an MVP out on the market, freelancers are a great choice. There’s no reason to pay venture capital to\u00a0hire in-house programmers\u00a0when you may not need them.<\/p>\n\n\n\n As a larger business, by working with freelancers and\/or remote teams, you’ll drastically reduce your costs. In short, you will reduce overhead, hours spent interviewing, and avoid long-term payroll expenses.<\/p>\n\n\n\n If you want to get started, be sure to read about\u00a0building and maintaining teams spread around the globe. Concurrently, it’s also incredibly useful to\u00a0learn about collaborating with remote developers\u00a0from companies who have already done it. And finally, understanding the\u00a0top misconceptions about hiring remote developers<\/a>\u00a0could save you a lot of time and money.<\/p>\n\n\n\n And one more thing. Looking for quality freelancers is very important. If you pick the wrong freelance developer, you may encounter difficulties in your project. The freelancer may not communicate well, they may be difficult to control, or there may be language barriers. In the worst-case scenario, they may even go missing in the middle of the project!<\/p>\n\n\n\n Working with reliable freelancers can help you reduce or avoid these risks, whether the freelancer is a referral, or if you use\u00a0freelance developer platforms<\/a>.<\/p>\n\n\n\n For the latter, you may have access to diverse talent and skills as well as the ability to propose a price range that is suitable for you depending on the platform you go with. More importantly, some platforms ensure that their freelancers are top experts in their field and will not let you down.<\/p>\n\n\n\n Read More<\/strong>: Toptal vs Upwork, Fiverr, Arc: Where to Find Great Freelance Developers?<\/a><\/p>\n\n\n\n Let’s use a fictional scenario to help us determine between freelance vs in-house developers:<\/p>\n\n\n\n You\u2019re a CEO from an established company enjoying the fruits of your labor. Your team is working on a new feature to further accelerate your company’s growth.<\/p>\n\n\n\n You have a brilliant second feature idea, but you\u2019re not sure whether your in-house engineering team has the manpower to build it. If you wait, however, your opportunity cost may be too high if you can’t keep up with the fast pace of the business world.<\/p>\n\n\n\n So what do you do?<\/p>\n\n\n\n Fret not \u2014 we\u2019re here to walk you through the benefits and drawbacks of outsourcing your next idea. From expertise to quality, from time to money, here are the pros and cons of\u00a0outsourcing versus in-house developers.<\/p>\n\n\n\n The first question is: does your team have the ability to build your new feature? You\u2019re thinking, well, they built the first one, so of course, they can build the second.<\/p>\n\n\n\n Hear of us out though.<\/p>\n\n\n\n Imagine if you’re an email outreach tool SaaS that is now expanding your product to have a lead generation feature. For that, you might need to have a developer well versed in databases or Python who you may not already have on your team.<\/p>\n\n\n\n If the skills required to build your flagship product don\u2019t carry over well to the second feature, i.e., the languages you used would increase technical debt, are less efficient, or the engineer(s) that helped build the first project is long gone, should you continue pushing your in-house team to build Feature #2?<\/p>\n\n\n\n If you\u2019re not in a hurry to have your second feature built, it would not be a terrible idea to consider doing so in-house. That being said, consider your team\u2019s specialization and how much you value your dev team\u2019s time and resources.<\/p>\n\n\n\n If the second project\u2019s underlying technologies are a big departure from your existing dev team\u2019s skills, it may take team members a while to get up to speed on the new material.<\/p>\n\n\n\n Taking time to learn the new technology might be a time sink for your dev team. Not only that, the time they\u2019re spending learning the new technology means less time spent maintaining or adding features to your core product.<\/p>\n\n\n\n While it\u2019s certainly feasible to have your in-house team build Feature #2, the question is whether it\u2019s worth it in terms of time and resources if they don\u2019t already have that expertise.<\/p>\n\n\n\n When it comes to Feature #2, outsourcing could be a better idea if you have access\u00a0to expert developers. If you can hire team members who already know the relevant technologies to make Feature #2 happen, that not only cuts down on development time and resources but can come with additional benefits.<\/p>\n\n\n\n For example, if you hire a developer from a\u00a0freelance platform site\u00a0for the language you need, he or she doesn\u2019t need additional time to learn it \u2014 they\u2019re already an expert.<\/p>\n\n\n\n Because the developer is already well-versed in the language you need, once you give them the wireframe or specs, he or she can get to work and your dev team can work on your existing product.<\/p>\n\n\n\n In addition, an experienced freelance developer that has passed a stringent vetting process often has other value-added expertise that will benefit you.<\/p>\n\n\n\n Your freelance developer can build with scalability issues in mind, which helps you avoid technical debt, and can advise you on potential pitfalls because of their experience and expertise. If you’re a non-technical founder or your CTO is only there on a part-time basis, he or she can also advise you on the more technical aspects of Feature #2.<\/p>\n\n\n\n While this may not seem like a big deal now, if Feature #2 is as successful as your core product, you\u2019ll be glad you chose an experienced developer to help you sidestep potential problems on your way to growth.<\/p>\n\n\n\n <\/a>Winner: Outsourced Developer<\/strong><\/p>\n\n\n\n Read More<\/strong>: Are Personal User Manuals Useful for Managing Remote Teams?<\/a><\/p>\n\n\n\n It goes without saying, of course, that you want Feature #2 to be a high-quality product that gives customers a great experience, is easy to maintain, and is highly scalable. However, how do you best control for quality for both in-house and outsourced development? Which option gives you an easier way to ensure your company\u2019s best long-term and short-term interests are being met?<\/p>\n\n\n\n For the most part, coding standards can be better controlled when working with an in-house team. With your own team, you can set the standards and ensure that they\u2019re being followed relatively easily by checking in with your CTO, engineering manager, or your team directly.<\/p>\n\n\n\n This way, you can make sure that best practices are being adhered to in the development process and won\u2019t end up with technical debt or a bigger problem later on down the line.<\/p>\n\n\n\n For non-technical founders who like being more hands-off, having a CTO and an in-house team build your Feature #2 means that you can assign the task and have relative peace of mind to focus on other aspects of your business.<\/p>\n\n\n\n Quality code comes from quality developers. For more access to both, outsourcing to a freelance platform might be the way to go.<\/p>\n\n\n\n Outsourcing gives you a larger talent pool beyond just the local market to draw from, and you can add a freelance developer to your existing team who can speed up the build process while still maintaining quality and coding standards.<\/p>\n\n\n\n Indeed, while there\u2019s often debate on in-house versus outsourcing development, there\u2019s no reason why you can\u2019t have your cake and eat it too. You could have your existing team build the parts they know and supplement their efforts with experienced freelance developers to ensure quality.<\/p>\n\n\n\n While adding freelance developer labor to your team can help save you development time and resources without sacrificing quality, it does require that someone on your team spend time\u00a0onboarding the new developer<\/a>.<\/p>\n\n\n\n Although your freelance developer is an expert, he or she may not be completely familiar with your particular SOPs. Thus, until you know they\u2019ve adjusted accordingly, you may have to spend just a little more time making sure everything is on the up and up.<\/p>\n\n\n\n Winner: Draw<\/strong><\/p>\n\n\n\n Read More<\/strong>: Triplebyte vs Arc: Why Arc is One of the Best Triplebyte Alternatives<\/a><\/p>\n\n\n\n Time is money, especially in the tech world. The sooner Feature #2 launches, the sooner you can make money from it. In addition, the faster you can release your feature, the chances of someone else cornering the market with a similar feature or product decreases. Thus, it\u2019s in your best interest to get your product out there.<\/p>\n\n\n\n However, your launch depends on how fast your team can build it. Whether it\u2019s your in-house team or an outsourced team, the clock is ticking on your idea. Which team can get the product out there faster and test it on the market?<\/p>\n\n\n\n For one, communication is much quicker with an in-house team because it\u2019s much easier to find someone when they\u2019re working in the same building as you.<\/p>\n\n\n\n This cuts down on communication downtime considerably. Often, projects get delayed when people go AWOL or are slow to respond. Working together means that this is less likely to happen.<\/p>\n\n\n\n However, while there\u2019s less communication lag when you\u2019re in the same place, if you\u2019re busy with your core product and you chose to go with an in-house team for Feature #2, your dev team still has to split their time working on different projects.<\/p>\n\n\n\n Also, your in-house team may not be as enthusiastic about Feature #2 as they are about the core product, which could result in feet dragging and delays.<\/p>\n\n\n\n These factors might increase the time to deliverables due to either lack of interest or simply because your developers need to prioritize and cannot dedicate themselves exclusively to Feature #2.<\/p>\n\n\n\n Although it\u2019s easier for you to push for progress and updates in person, you\u2019ll still have to wait for your dev team to have time to work on your new idea.<\/p>\n\n\n\n When you hire a freelance developer,\u00a0particularly if you pay them on retainer<\/a>, you have a specialist who dedicates time exclusively to your project for X amount of hours.<\/p>\n\n\n\n Knowing that an expert is exclusively working on Feature #2 can allow you to focus your existing resources better with your dev team.<\/p>\n\n\n\n This new setup means that you don\u2019t need to expect your in-house team to get Y amount of work done on a separate project, which could downgrade the priority of their existing projects because you have a dedicated person or team to work on this in the background.<\/p>\n\n\n\n Keep in mind that there may be delays in terms of communications, particularly if your freelance developer is a world away. That being said, the delay can be minimized with clear expectations, guidelines, and dates for deliverables. While it\u2019s never fun waiting for someone to get back to you, the inconvenience can be mitigated.<\/p>\n\n\n\n Even if you may not be able to reach your freelance developer immediately, if you expect asynchronous communication, you can\u00a0prepare for it by holding scrums, leaving detailed instructions, or preparing a detailed shared backlog.<\/p>\n\n\n\n Indeed, one advantage of asynchronous work is that by the time you\u2019ve arrived at work, a core component might already be done while you were sleeping.<\/p>\n\n\n\n Winner: Draw<\/strong><\/p>\n\n\n\n Read More<\/strong>: Developer Retention: How to Keep Your Software Developers Happy<\/a><\/p>\n\n\n\n Money is, of course, one important factor to keep in mind, so we saved the best for last. If you have a limited runway, are bootstrapped, or just have a tight budget, the decision of in-house versus outsourced development can be more complicated.<\/p>\n\n\n\n You want the best work, done in a small amount of time, and at an affordable price. Can your team give you this since you\u2019re already paying them or do you need to\u00a0dig deeper into your pockets?<\/p>\n\n\n\n One argument for having your in-house team build Feature #2 is that you\u2019re already paying your dev team to do work for you, so in theory, having them build your second project doesn\u2019t \u201ccost\u201d you extra, since their labor is already accounted for in your budget.<\/p>\n\n\n\n However, if your team is already very small, you may need to hire more people to help with Feature #2. The dev team may be shorthanded from maintaining and building your core product and might require reinforcements, which costs money.<\/p>\n\n\n\n Depending on your idea for your second product, you may need designers, product managers, and other labor to bring Feature #2 to life, which also costs money. In addition, it wouldn\u2019t be cost-effective to create a whole new position for a feature that may or may not take off.<\/p>\n\n\n\n Thus, while on the surface it may seem like having your existing team build a project is free, that\u2019s only true if you have a big enough team. Otherwise, the additional labor may be even more expensive than outsourcing if you need to pay for benefits for new hires.<\/p>\n\n\n\n If you outsource Feature #2, however, you can get an experienced developer at a more affordable cost, depending on where you source your talent from. In fact, depending on where your developer of choice is located, you can get\u00a0a very good bang for your buck.<\/p>\n\n\n\n Indeed, with a freelance developer, you can hire someone for as long as you need and only when you need the extra help. With a freelance developer, you don\u2019t need to pay the standard benefits that would be required for long-term employees who might be underemployed after the project is completed.<\/p>\n\n\n\n <\/a>Winner: Outsource<\/strong><\/p>\n\n\n\n Read More<\/strong>: Good vs Great Developers: How to Tell the Difference & Hire the Best<\/a><\/p>\n\n\n\n To quickly summarize, the freelance economy is growing larger than ever. In order to remain competitive, your business can take advantage of its benefits, whether it’s hiring freelancers, building a completely distributed team, or a mix of both.<\/p>\n\n\n\n Freelancers and remote teams will continue doing more and more development work. To take advantage of this, be sure to consider hiring quality freelance developers wherever possible to take care of your development needs.<\/p>\n\n\n\n Once you’re ready for specific tips for hiring great freelance developers, we’ve previously covered searching for\u00a0React developers<\/a>,\u00a0finding great front-end developers<\/a>,\u00a0locating Java developers<\/a>, and more.<\/p>\n\n\n\n Do you have any questions about the role freelance developers can have for the future of your business? Let us know in the comments section below!<\/p>\n\n\n\n You can also try <\/em>Arc<\/a>, your<\/em> shortcut to the world’s best remote talent:<\/em><\/p>\n\n\n\n \u26a1\ufe0f Access 450,000 top developers, designers, and marketers <\/a>Try Arc and hire top talent now \u2192<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Are freelancer developers a replacement for in-house developers and software engineering teams? Here are the negatives and advantages of both.<\/p>\n","protected":false},"author":4,"featured_media":1153,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hiring"],"yoast_head":"\n
\u26a1\ufe0f Freelance or full-time remote + fully vetted<\/em>
\u26a1\ufe0f Save up to 80% with global hires<\/em><\/p>\n\n\n\n<\/a>How This Affects Developer Hiring<\/h2>\n\n\n\n
Advantages of Replacing In-House Employees With Freelancers<\/h2>\n\n\n\n
<\/a>Advantages of Keeping In-House Employees<\/h2>\n\n\n\n
<\/a>The Middle Way: Advantages of Remote Teams<\/h2>\n\n\n\n
\u26a1\ufe0f Vetted and ready to interview<\/em>
\u26a1\ufe0f Freelance or full-time<\/em><\/p>\n\n\n\nWhat\u2019s Likely To Happen?<\/h2>\n\n\n\n
What Should You Do to Remain Competitive?<\/h2>\n\n\n\n
4 Considerations to Choose Between Freelance vs In-House Developers<\/h2>\n\n\n\n
1. Expertise<\/h3>\n\n\n\n
In-House Developers<\/h4>\n\n\n\n
Outsourced Developers<\/h4>\n\n\n\n
2. Quality<\/h3>\n\n\n\n
In-House Software Developers<\/h4>\n\n\n\n
Freelance Software Developers<\/h4>\n\n\n\n
3. Time<\/h3>\n\n\n\n
In-House Team of Developers<\/h4>\n\n\n\n
Freelance Software Engineers<\/h4>\n\n\n\n
4. Money<\/h3>\n\n\n\n
In-House Software Engineer<\/h4>\n\n\n\n
Freelancing Software Engineer<\/h4>\n\n\n\n
Wrapping Up: In-House Devs vs Freelance Devs<\/h2>\n\n\n\n
\u26a1\ufe0f Vetted and ready to interview<\/em>
\u26a1\ufe0f Freelance or full-time<\/em><\/p>\n\n\n\n