With the growth in the popularity of gig economies increasing numbers of CTOs, CEOs, and HR managers are asking what the future might look like. Is it more efficient to replace employees in-house by freelancers? Should you instead try to supplement your team by hiring external talent?
One thing is for certain. the gig economy increasing in strength each year. From 1997 to the present it has seen an average of 2.6 percent growth per year. In comparison, the regular payroll increased by just 0.8 percent per year over the same time frame.
This is more than three times the rate of growth of the regular job! Also, take into consideration that 47 percent of millennials prefer working in a freelance manner. In this scenario it is expected that freelancers will comprise an overwhelming portion of US economy in 2027.
This trend is inevitable. The most effective option is to set up your business in the best way to benefit from it.
What Does This Mean for the hiring of engineers
The main advantage that engineers have over other professionals in freelance work is that programming work is able to be performed via remote access. Additionally, remote supervision of code work is feasible. So, hiring engineers contributes one of the major advantages in working in the gig economy.
We’ll go over the advantages of employing freelancers. We’ll also discuss the benefits of employing in-house workers. We’ll then go over a deeper analysis of what’s most likely to transpire. We’ll then provide advice for positioning your company to get the most benefit the potential impact of this change.
Let’s get started!
Benefits of Replacing Employees in-House By Freelancers
The replacement of employees in-house with freelancers provides the following benefits:
Gain access to an international talent pool
Specialization has increased
Rapider turnaround (faster output and recruitment)
Lower costs
The main benefit of hiring freelancers is the ability to get talent from all over the world. You don’t need limit yourself to the area around you.
Because many freelancers are experts in a particular field it is also possible to look for what you are looking for. For instance, if you’re trying to integrate innovative technology into your stack, for instance, Vue.js You can locate the most skilled expert in this field. Also, a very specific, unique project that requires Alexa abilities as well as the latest Machine Learning will benefit from freelance talents.
Additionally, freelancers manage their own business. This means that they’ll work more quickly than regular employees who receives the same pay each month. Actually, studies show that freelancers tend to be more focused than regular employees.
If you’re looking for an engineer for a couple of months or so, an independent programmer is typically the best option when it comes to hiring. With freelancers, there is no need to go through the complicated hiring procedure.
Also, you don’t need to think about other benefits you need to offer to regular employees. Also, severance pay isn’t an issue and you’ll likely pay less taxes to pay. So, reducing the administrative burden of hiring will make the process easier and faster.
Additionally Freelance engineers are likely to be more affordable over the long term. It is possible to save as much as 50% of the cost by using freelance engineers.
Benefits of Employing In-House Employees
The primary benefits are:
Direct supervision
Loyalty to the company
Maintenance work that is ongoing
Employees in-house are easier to manage directly. If your project requires the creation of your own sophisticated software design, then an in-house engineer would be a suitable option. In these cases it is possible to outsource just the non-core elements.
You can, however, monitor freelancers from a distance. There are many sources control options that an employer has access to. This includes the likes of GitHub, GitLab, and Bitbucket.
Additionally supervision can be performed by using different tools for managing projects. We’ve already discussed the top tools for managing projects you can utilize!
Another aspect, which the engineer Thomas Jost shared, is freelancers are more likely to perform better, while employees are more concerned about the interests of their employers. Since freelancers run their own companies the performance of their businesses is crucial in securing employment. They’re more likely to take on the work required to provide quality work because a guaranteed income will not be waiting for them at time the month is over.
However employees are likely to feel more connected to the actual performance of your company. This may result in greater commitment to your business.
Finally, “perpetual” projects that require ongoing work benefit from the in-house staff. Since they are familiar with the software’s architecture and how it developed so that it is simpler to manage.
The Middle Way The Middle Way: Benefits of Remote Teams
Instead of making the decision of either replacing or enhancing in-house teams, there’s another option. This involves the creation or hiring of remote teams. This allows you to reap all the benefits of both alternatives.
In addition you will also enjoy extra advantages. The additional benefits are:
24-hour work-cycle
Improved productivity
Lower costs
A major benefit is the huge productivity boost you can get when you can work 24 hours a day. This is right, with a well-organized remote team spread across various times zones, operating round all hours of the day is feasible.
The research supports the notion employees who work remotely are less productive, and stress-free. This allows you to complete projects more quickly.
In addition you will also enjoy lower expenses. Finding talented freelancers to join your team is a great alternative in light of the latest developments.
What’s most likely to happen?
One thing is for certain. When the global economy shifts to freelancing many of your competitors will be seeking to make use of this. The savings in cost as well as other advantages of employing freelancers will be crucial aspects.
We’ll be seeing more employers adapting and seeking at ways to enhance their effectiveness. For development, this will lead to less in-house engineers and more freelancers as well as remote teams.
Be aware this: the gig economy at its infancy. Many people believe that we’re in the beginning of what could be the modern Industrial Revolution.
Keep in mind that at each major moment in the history of economics the most successful players in the marketplace are those who accept changes. If you’d like to stay at the topof your game, you need to carefully evaluate what options you have for your coming years.
What should you do to remain competitive?
To increase your team’s efficiency, consider including more freelancers in your team, or setting up an online team. Freelance engineers can be great for developing specialized tasks as well as general maintenance tasks.
Furthermore If you happen to be a startup trying to put an MVP available for sale then freelancers are an excellent option. There’s no reason to invest venture capital to employ internal programmers if you do not require these people.
If you’re a bigger company when you work with remote teams and freelancers will drastically cut down the cost of your operations. In other words, you’ll decrease overhead, the time you spend conducting interviews, and eliminate lengthy payroll costs.
If you’re looking to get started, you must study the basics of establishing and maintaining teams that span the world. In addition, it’s beneficial to know how to collaborate with remote engineers from companies that have successfully done this. In addition, knowing the most common misconceptions regarding hiring remote engineers can help you save a significant amount of time and cost.
There’s a third aspect. The search for a reliable freelancer is crucial. If you select the wrong engineer to work for you there could be issues with your work. The engineer might not be able to communicate effectively and they could be difficult to manage or may have issues with the language. If this happens the freelancer could disappear in mid-air of the work!
Working with reputable freelancers will assist you in minimizing or avoiding these risks, regardless of whether they are a referrer or you are using platforms for engineers who freelance.
In the second case you could be able to access a variety of talent and abilities and also the capability to offer a price range that’s appropriate for you regardless of the company you work with. Additionally, certain platforms guarantee you that the employees they hire are the best experts in their area and will never fail to meet your expectations.
4 Things to Consider When Choosing Between Freelance and In-House Engineers
Let’s consider a hypothetical scenario to determine the difference whether freelance engineers are in-house or freelance:
You’re the CEO of an established business and getting the benefits of your work. Your team is currently working on a brand new feature that can increase the growth of your business.
You’ve got an excellent second idea for a feature however you’re not sure whether your engineering department in-house has the resources to develop it. If you hold off but you don’t know, your chance cost might be too high when you’re not able to keep pace with the speed of business.
What do you do?
Don’t worry, we’re here to guide you through the advantages and disadvantages outsourcing your next venture. From quality to expertise and time to cash Here are the advantages and disadvantages of outsourcing over in-house engineers.
1. Expertise
The first thing to consider is Does your team are able to develop the new feature? You’re thinking that they’ve created the first feature therefore they could create the second one.
We’re here to help you.
Imagine that you’re an email outreach software SaaS which is currently expanding your service to include the capability of lead generation. To do this, you may require an engineer who is proficient in databases or Python who you might not have in your team.
If the knowledge needed to create your top-performing product do not carry into the second aspect, i.e., the languages you chose to use will add technical debt, aren’t efficient and the engineer(s) who helped develop the first product has long since gone Should you continue to push your team in-house to develop another feature?
In-House Engineers
If you’re not a rush to get your second feature created, it may not be a bad idea to think about doing it in-house. However, you should consider your team’s expertise and the importance you place on your team’s efforts and their time.
If the second project’s fundamental technology is a significant deviation from your current dev team’s expertise, it might require team members to take a while to be up to speed on the new technology.
The time spent learning the latest technology may cause a loss of time for your development team. In addition the time they’re investing in studying the latest technology will mean less time spent on maintaining or adding new features to your existing product.
It’s certainly possible to bring in-house staff to create features #2 The question is whether it’s worthwhile with regard to time or money when they don’t already have the necessary know-how.
Outsourced Engineers
If you’re looking to develop Feature #2, outsourcing could be an ideal option in the event that you have access experts in engineering. If you have the option of hiring team members that are already familiar with the necessary technologies needed to make Feature #2 happen, that will not only cut the development time and resources, but also comes with other benefits.
If, for instance, you choose to hire an engineer through an online platform that offers freelancers the language you require they don’t need to spend time learning the language — they already have the skills.
Since the engineer is familiar with the language you require, after you have provided them with the wireframe or the specifications the engineer will be able to start working, and the development team can develop your product.
Additionally, a seasoned freelance engineer who has completed an extensive vetting process usually offers additional knowledge that can benefit you.
Your engineer freelance can design using scalability with an eye on scalability issues, which can help to avoid debt from technical sources, and will be able to advise you on possible pitfalls based on their knowledge and experience. If you’re not a technical director or your CTO is working for a short period of time they can help you with the technical aspects of feature #2.
Although this might seem like a small issue right at the moment however, in the event that Feature #2 is as successful as your primary products, you’ll happy you hired a seasoned engineer to assist you in avoiding possible issues on your way to growing.
2. Quality
It is obvious that you would like Feature #2 to be a top-quality product that provides customers with the best experience, is simple to maintain, and extremely adaptable. But how can you control the quality both for in-house as well as outsourcing development? Which choice offers you an more efficient method of ensuring that your business’s highest long-term and short-term goals are being fulfilled?
In-House Software Engineers
Most of the time the coding standards are more effectively monitored through an internal team. If you have your own team, you’ll be able to set the standards and make sure that they’re being adhered to by regularly checking in with your CTO, your engineering manager, or team directly.
This way, you’ll be able to ensure that the standards are implemented in the development process , and not result in technical debt or a larger problem in the future.
For founders that are not technical and prefer less involvement having a CTO as well as an internal team can help you. feature #2 allows you to assign the job and enjoy the peace of mind to be able to focus in other areas within your company.
Freelance Software Engineers
Quality code is created by skilled engineers. To gain access to both outsourcing to a freelance platform could be the best option.
Outsourcing can provide you with a greater selection of people beyond the local market Additionally, you can include a freelance engineer on your team that can accelerate the building process while maintaining high-quality and coding standards.
In fact, even though there’s a lot of disagreement on outsourcing versus in-house development There’s no reason to think that you shouldn’t be able to have your cake and have it as well. You can have your current team design the components they’re familiar with, and augment their efforts with skilled freelance engineers to ensure high-quality.
Although adding a freelance engineer to your team could to save time and money without losing quality, it will necessitate that a member of your team be present during the onboarding process of an engineer who is new to the team.
While your engineer on the freelance is an expert, they might not be fully acquainted of your specific SOPs. So, until you are certain the changes have been made and you’re able to take a little longer ensuring everything is up and up.
Head on over to slashdev.io to hire freelance software engineers.
3. Time
The value of time is in the money particularly in the technology world. The faster Feature #2 launches, the more quickly you can earn revenue from it. Additionally, the quicker you are able to release your product, the chance of someone else monopolizing the market with the same product or feature diminishes. It’s therefore important to put your product to the market.
But your launch will depend on the speed at which your team is able to construct it. It doesn’t matter if it’s your own internal team or an outsourced team it’s time to start working for your concept. Which team is able to make the product available quicker and get it tested in the marketplace?
House Team of Engineers
Communication is more efficient with an in-house staff because it’s easier to locate people when they’re in the same place as you.
This reduces time spent on communication. Many times, projects are delayed because people are AWOL or fail to respond. When you work together, this will be less likely.
But, while there’s more communication speed when you’re on the same page If you’re busy with your primary product and opt to have an in-house team to work on Feature #2, your dev team will still have to divide their time between different projects.
Additionally, your internal team may not be excited about the feature #2 in the same way they’re about the primary product and this could lead to delays and feet being dragged.
These elements could increase the time required to deliverables due to a the lack of interest or because your engineers must prioritize and are not able to devote them to only Feature #2.
While it’s much easier to advocate for updates and progress on the spot, it’s a bit more difficult to do so in person. You need to wait for your development team to be able to develop your innovative idea.
Freelance Software Engineers
If you employ an engineer on a contract basis, especially when you pay them via retainer, you get someone who commits their time entirely to your task for X number of hours.
Being aware that an expert is only focused on Feature #2 can allow you to allocate your existing resources better on your development team.
This setup will mean that you won’t have to ask your internal team to complete X amount of work completed on a separate project which could lower the priority of their current projects due to the fact that there is a dedicated person or team working on this task in the background.
Remember that delays could occur in the form of communication particularly when your engineer freelance is far away. But delays is minimized by having specific expectations, guidelines, and deadlines for deliverables. Although it’s not enjoyable waiting for someone else to respond but the hassle can be minimized.
Even though you might not be able contact your engineer on the spot in the event of an asynchronous exchange then you can prepare yourself with scrums. You can do this by providing precise instructions, or by preparing the backlog of shared tasks.
One benefit of working synchronously is that, by the time you arrive at work, one of the main components could have been completed even when you were asleep.
4. Money
Money is of course an important aspect to consider and we have saved the most important for the last. If you’re on a tight runway, are in a bootstrap or have a small budget, the choice of outsourcing development to an in-house team could be more complex.
You’re looking for the top job, completed in a short amount of time and at a reasonable cost. Does your team offer this, as you already pay them, or do you have to go deeper into your pocket?
In-House Software Engineer
One reason for having your in-house team create the feature #2 is that you already pay your team of developers to do the work for you, therefore in the theory of things, having them create the second feature won’t “cost” you more as their time and effort is already included within your spending plan.
If the team you have is small, you might need to recruit more staff to help you with feature #2. The team working on development could be unable to maintain and building your product, and may require reinforcements, which cost money.
Based on the idea you have for your next product you may require designers or product managers as well as other workers in order to help bring Feature #2 to life, that can also cost money. Furthermore, it would not be economically feasible to develop an entirely new role for a product that may or might not be successful.
So, even though on the surface it appears that having your current team work on an initiative is free however, this is only true in the case of a large enough team. If not, the additional effort might be more expensive as outsourcing is required if you are forced to cover benefits for new employees.
Engineer in Freelancing Software
If you decide to outsource Feature #2, however, you’ll be able to find a skilled engineer at a less expensive cost, based on where you get your talent. Actually, based on where the engineer of your preference is located you could get a great value for your money.
Indeed, with a free engineer, you can employ an engineer for whatever time you want but only when you require additional assistance. When you hire a freelance engineer, you do not have to pay the usual benefits that are necessary for employees with a long-term contract who may be unemployed once the project has been completed.