The rise of online work platforms has created new opportunities for software developers around the globe to work in a wide range of engagements with employers. Many software developers have chosen to freelance on platforms like Upwork, Fiverr etc. Still, a crop of platforms offers a more reliable yet flexible form of online income, which are platforms aimed towards contractors. But what are the differences between freelancing and contracting, and which suits you? This article will explore the differences between freelance and contractor for software developers.
Choosing between working as a freelance software developer and contractor can be challenging. When making the right choice, it's essential to understand the pros and cons of each option. We'll provide an in-depth look at the advantages and disadvantages of working as a freelance software developer vs a contractor so that you can make an informed decision based on your needs and circumstances.
Freelancers typically work on a project-by-project basis and work with multiple clients simultaneously without a long-term commitment to a single employer or client using online platforms such as Fiver, Upwork etc.
When it comes to contractors, companies hire contractors to work on a specific job over some time. Unlike freelancers, contractors only work for one client at a time for the set amount of time defined by the employer. Some popular platforms, such as Turing, Toptal and Liquid, provide companies with developers working as contractors.
Freelancing vs Contracting for Software Developers: Which Is Better For You?
Becoming a freelancer or a contractor can grant you control over your career, as you can decide which clients to work with and which projects to take on. Understanding the similarities and differences between freelancing and contracting can help you determine the best option for your circumstances, whether you are an autonomous professional who wishes to alter your career trajectory or an employer looking to enhance your workforce.
To truly understand the difference between freelancers and contractors, you should look into the pros and cons below to know what you are in for and which option is the right fit.
Pros of Freelancing
Flexible Schedule and Project Selection
Freelance work allows you to choose which projects to work on and when. This level of flexibility is ideal for those who like the optionality of picking and choosing the work they want to do. They also have the option of working on multiple clients at the same time, depending on their workload.
Work from Anywhere
You can work from anywhere as a freelancer, which can be a massive advantage for those who prefer to work remotely or travel frequently.
Exposure to a Variety of Clients and Industries
Freelancing can expose you to various clients and industries, which can help you broaden your skills and experience. Working with multiple clients helps them explore what skills they need to polish and which area they want to specialise in.
Potential for Higher, Earnings
Freelancers have the potential to earn more money than contractors, as they can charge higher rates for their work. They get paid per project and are not restricted to working for one client.
Cons of Freelancing
Constant Client Acquisition
As a freelancer, you need to frequently find and secure new clients, which can be a time-consuming process and a source of stress.
As you work independently and sell your skills, you are always looking for clients and thinking of landing more projects. The process can be pretty gruelling and overwhelming for a beginner starting to work as a freelancer.
Managing your finances
Freelancers manage their finances, including taxes, invoices, and payments, which can be challenging for those not experienced in financial management.
Limited Professional Development Structure
Freelancers cannot access the same professional development opportunities available to company employees or contractors, limiting their potential for career growth. Due to the flexibility provided by freelancing and as they work independently, it often comes as a disadvantage when it comes to structuring their schedule and balancing work and home life.
Lack of income security
Freelancers may experience substantial fluctuations in their income. In addition, they may not have job security beyond their current projects, which can be a great source of stress for those who prefer stability.
Pros of Contracting
Guaranteed Income with a set schedule
Contractors have a schedule and are guaranteed a regular income, providing stability and security unavailable to most freelancers. So when a contractor is hired for a job for a period of time, they are guaranteed to get paid until the contract timeline ends.
Flexibility
Contract work provides more flexibility regarding when and where you work. As a contractor, you have more control over which project you want to work on. You can work remotely, which can be a significant advantage for individuals who prefer to work from home or travel frequently. With a specific time frame of any contract, such as three months, six months etc., you can take a break after any contract and start again whenever you want.
Opportunity for Industry-Specific Experience
Contract work can provide valuable experience in a specific industry, which can be helpful for career advancement. As contractors work with established companies, they work with professionals and people from their field, allowing them access to the industry without being employed by one. They get to explore different projects and get an insight into how different organisations work, which can lead to immense growth in their skills and career.
Accountability
Contractors are given direction and focus from their employer, which can help them to stay on task and be productive. As a contractor, you must work on a project according to the employee's instructions, and they convey the specific outcome they want. It helps you focus on the project and meet the employee’s deliverables.
Higher pay
Contract work usually pays more than traditional employment, as contractors are typically paid a higher hourly rate or project fee to compensate for the lack of other permanent employee benefits. As contractors aren’t paid the additional benefits of a regular employee, therefore, their fee is much higher of a regular employee.
Home/Work-Life Balance
Having control over your life can significantly improve your well-being. As a contractor, you will have that autonomy. You can use your higher income to take time off during school holidays to spend with your children or pursue a hobby like sailing.
Conversely, if you prefer to work year-round, you can choose to do so. Ultimately, the choice is yours as a contractor.
Training
With contracting, you can select which skills you want to improve and what activity you wish to undertake. This way, you can tailor your professional development to your interests and requirements. Many contractors report higher job satisfaction and financial returns when in charge of their skills development.
Cons of Contracting
Limited Control Over Work and Clients
Contractors may have limited control over their work and clients, which can disadvantage those who want more control.
Limited Flexibility in Schedule
Contractors may not have as many flexible schedules as freelancers as they need to set working hours according to their employee’s timelines and deliver their projects in a limited time. It can be stressful to some people, but it may be an advantage for those working well under a schedule.
Downtime
As a contractor, it's important to note that you only get paid for your work, which means downtime between contracts can result in lost income. However, you can reduce your time between projects by developing your contracting abilities and continuously improving your technical expertise.
Responsibility
When you work as a contractor, you no longer have a safety net provided as an employee. Your employer won't provide sick pay or benefits like life insurance, medical insurance etc. You must take responsibility for your physical and financial well-being in these areas.
In conclusion, when deciding between freelancing and contracting as a software developer, it is crucial to weigh the pros and cons of each option carefully. Freelance work offers greater autonomy, diverse work experience, and lower overhead, but it can also be unpredictable, isolating, and lacking in job security and benefits.
On the other hand, contracting offers more excellent stability, benefits, and a more predictable income. Still, it may require a more significant investment in equipment and workspace and may not provide the same control over one's schedule and work. If you want to work as a contractor, we offer an amazing platform for all software developers, and you can start immediately! Check our Applied as a Developer page to begin working.
Ultimately, the decision between freelance and contractor will depend on individual preferences, goals, and lifestyle. Some may prefer the freedom and flexibility of freelance work, while others may prioritise the stability and benefits of contracting. If you want to work as a contractor for clients in the UK, you should work with Liquid, as it provides top-tier clients and the perfect opportunity to further your career.
