A New Surge in Demand for Freelance Techies…

It’s been a year since Alex Rolek moved to San Diego, CA to become a freelance HTML5 and Javascript developer. In that time, the 28-year-old has grossed close to $100,000 taking contract work creating mobile applications for companies large and small — from start-ups to Fortune 50 enterprises.

“Everyone I know in technology has an unbelievable amount of work,” Rolek said. The money is good, he said, but the flexible hours are better. “I’ll be up to two in the morning working on a project, and I can spend half of the next day surfing or sitting on the beach,” he said.

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The job market for freelance technologists is booming. Total U.S. business and government spending on IT goods and services is expected to grow to $876 billion in 2012, up 8.8% from 2011 and a 16.2% increase over 2010 levels, according to a report by Forrester Research. As companies increase spending on technology, some of the work is filtering down to freelance programmers and developers hired on a temporary basis to build Web and mobile applications.

But the freelance market is also changing. With the recent tech boom, top-notch technologists who don’t want the strictures of a nine-to-five job are being lured back to full-time gigs at companies that offer flexible work schedules and the freedom to work on projects of their choice.

Meanwhile, lower-skilled freelancers are having some of their work outsourced to developing countries where wages can be as much as a third to a half lower.

Moving Away

It’s not all long lunches and naps for freelancers. Each hired gun has to become their own business, responsible for bookkeeping, paying taxes, attracting new clients and keeping existing ones happy.

“People become workaholics,” said Rolek, who often works 15-hour days when things are busy.

Rolek uses Elance, an online platform that connects freelancers with contract work and keeps payment money in an escrow account that can be doled out in increments as a project is completed. About half of the most demanded skills on Elance are technical, including programming, quality assurance, interactive design and database administration, said Ved Sinha, the company’s vice president of interactive marketing. Freelancers specializing in IT took home 59% of the $34.3 million earned by Elance freelancers in the second quarter of this year. ODesk, another popular freelance platform, said that 60% of its job postings are for IT and technology workers.

One reason high-end developers with a good reputation can make so much money is that there are so few of them — especially those with Ruby on Rails and HTML5 expertise. And there are even fewer now that many freelancers are giving up the solitary life to go work for start-ups or established companies like Google that offer much of the same freedom and flexibility that freelancing does, but more stability and a potentially bigger reward.

“There are people who moved away from freelancing in the last year who are going to smaller organizations and taking significant equity packages,” said Jeff Winter, founder of San Francisco recruiting firm GravityPeople. “They know if they apply their Ruby skills in the start-up realm, they’ll most likely get acquired by Facebook or Zynga and make their cash in a big chunk.”

Even Rolek, who values being able to move on from one project to the next before he gets bored, is settling down, albeit by starting his own business. He’s teaming up with a systems engineer and designer to start their own agency called Tiny Factory.

Feather in the Cap

While working freelance or part-time can be a hindrance when looking for a full-time position in other fields, it can actually help in technology.

“We love freelance workers,” said Tammer Saleh, director of engineering at Engine Yard, a San Francisco cloud-platform provider, where about one-third of its 100 employees were hired from the freelance world. Freelancers are almost always highly technical and have worked on a wide variety of technical challenges, which gives them very good judgment and problem solving capabilities, Saleh said.

Freelance developers are also a recruiting target for full-time hires at Chicago’s 37signals, a project-management software-maker for small businesses.

“Our last few programmer hires were people who were contractors or freelance for a while, and they switched over to us because they wanted the stability,” said co-founder Jason Fried. “It’s a freelance feel, but you have the security of knowing where your paycheck is going to come from.”

Fried said the company offers many of the same perks and benefits of working as a freelancer. Of the company’s 28 employees, half work locally and half work in other cities around the world; employees have the choice of working remotely or from the office. They can also set their own hours, and choose the projects they want to work on.

Outsourcing

For many programming jobs, companies are looking abroad to find the cheapest freelance labor.

Over the past few months, ThriveSmart, a San Francisco agency that builds internal applications for Apple, has moved from using a U.S.-based Web development agency to foreign freelancers.

ThriveSmart uses freelancers in Argentina to do mobile work for the iPhone and Android platforms, and a Czech Republic firm for its CSS and HTML5 work, said the company’s Chairman, Matt Moore. For the same quality of work, a Web development firm would charge $50 to $75 an hour; whereas overseas freelancers generally top out at $15 per hour for CSS and HTML work and $35 per hour for mobile work, Moore said.

Moore said he outsources simple work that most skilled American developers don’t want to do, like connecting a “click” button to the code that executes the command.

But even for higher-skilled jobs requiring a Ruby on Rails or Javascript engineer, there are bargains to be had overseas, though they can be difficult to find. Such engineers in the U.S. cost about $120 an hour; but in China, a similarly skilled engineer costs $20 an hour, said Tom Hallaran, managing director of technology at IB5k, a Web application and software agency that is working on a project to simplify constituent e-mail for the U.S. Congress. However, finding highly skilled Chinese freelancers with a good command of the English language is difficult. Hallaran said he leveraged a previous business relationship in China to find the freelancer he works with there.

There can be a quality trade-off with hiring freelancers from overseas, Hallaran said, and a very strong technical head is needed to manage foreign work to make the cost trade-off worth it.

But with the tech sector thriving, there appears to be enough work to go around between Americans and overseas freelancers. “The industry is growing,” said Moore of ThriveSmart. “There’s going to be more high-level work here, and more low-level work everywhere.”

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About GREGinSD

A Generation X|Y'er that resides in beautiful San Diego, Ca.
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