Call it what you will -- the "open talent economy," "freelancing," the
"gig economy," "contracting" -- working for yourself is having a moment,
particularly in high tech.
Once upon a time, IT pros went freelance only when driven there by
circumstances like a bad economy, a layoff or an overabundance of their
particular skill set. Or they turned to consulting in the sunset of
their careers, tired of cubicle farms and long commutes. Now,
millennials, who this year became the largest proportion of the labor force, are leading the charge to change the tech industry's perception of self-employment.
It's common knowledge that the cohort of workers 35 and under prefer a
flexible, DIY workstyle, using their personal mobile devices to
communicate and work from anywhere at any time. What's not so commonly
known, however, is that some millennials -- some say it's a growing
number -- are eschewing traditional employment altogether to work as
independents.
"A large number of millennials are choosing a different path in terms of
what they want in their professional life," says Alisia Genzler,
executive vice president at Randstad Technologies,
a high-tech talent and solutions company. "We are seeing more and more
of them choose freelancing and contract work over traditional jobs, more
so than in previous generations."
Millennials came of age and graduated from college during the Great
Recession, many saddled with debt and unable to find a job. While some
eventually made their way into the corporate workforce, others stayed
independent, either by choice or by circumstance. "We now have a
generation of workers who never had full-time jobs," says Can Erbil, an
economics professor at Boston College
who studies the labor market. "That is not the exception but more the
norm for them." What's more, millennials grew up in an educational
environment that stressed project-oriented work, he adds, so short-term
sprints are a natural cadence for them.
The recession also taught millennials that a traditional job and
long-term loyalty to an employer don't necessarily mean security. "A lot
of them look at their parents who had jobs with one company for a long
time, only to be laid off, so [millennials] want to keep their options
open," says John Reed, senior executive director at Robert Half Technology.
And benefits are increasingly becoming decoupled from employers -- with
the Affordable Care Act guaranteeing individual access to health
insurance, workers don't have to be on a payroll to be covered. In fact,
according to an article in Money magazine, only 31% of college
graduates last year received employer-provided health insurance,
compared to 53% in 2000.
High tech is gig-friendly
Millennials may be blazing the path, but freelancing is an option that
can work for employees at any age, proponents argue. A 2014 study
found that 53 million U.S. workers were freelancing to some extent --
that's 34% of the workforce. Millennials were the largest group of
survey respondents who said they were freelancing, at 38%, according to
the report, which was commissioned by Freelancers Union and
Elance-oDesk, the freelance marketplace platform now called Upwork. But 32% of those over 35 likewise indicated they were working independently.
Daniel Masata, senior vice president at staffing and recruitment firm Adecco Engineering & Technology,
says he's seeing the trend across all age groups. Baby Boomers, for
example, might freelance to keep their hand in or supplement retirement
income. Gen-Xers may have been laid off during the last recession and
either had difficulty getting rehired or just decided to go independent.
Ten years ago, 75% of candidates for technology jobs were seeking
full-time employment, Masata estimates. Today, it's only about 50%.
The high-tech industry is particularly well-suited to the gig economy.
The software development cycle, for example, has become well-defined and
compartmentalized, making it easier to farm out, says Andrew
Liakopoulos, principal within the human capital practice at Deloitte Consulting and an expert on what Deloitte calls the "open talent economy."
In fact, IT is one of the first markets where Deloitte noticed the
freelancing trend. "The millennials were the ones who, after being
forced into [freelancing], actually have used what was happening in the
macro environment to their advantage," says Liakopoulos. "And IT was the
first occupation where we saw them doing it."
To discover what impact the gig economy might have on tech employees of any age, Computerworld
sought out millennials who are working independently. Some are
freelancing indefinitely, some are using freelancing as a stepping stone
to a better job, and some of them say they are committed to contract
work for their entire careers. Although freelancing has its downsides,
specifically the risk of not finding enough good-paying work and the
lack of benefits like paid time off and company-subsidized healthcare,
all say their experience as independent workers offers many advantages.
Read on to hear their stories and determine whether gig work might be right for you.
Rejecting perfectly good jobs (at Microsoft!)
Erik Kennedy joined Microsoft as a program manager straight out of school after graduating in 2010 from Olin College of Engineering
with a bachelor's in electrical and computer engineering. But at age
25, after three years with the company, he decided to strike out on his
own.
UI/UX programmer Erik Kennedy says he makes money at about the same rate
as when he worked at Microsoft, but as a freelancer, he's able to take
significant time off for travel.
Although Microsoft was a good employer, Kennedy says, he felt stifled by
the atmosphere of a large company. He wanted to pick his own projects.
"Hypothetically, my boss's boss's boss's boss's boss could make a
decision that could affect what I did on a day-to-day basis," he
explains. "I wanted a little more freedom and was willing to take a
little more risk."
The inherent insecurity of freelancing means that it's not suitable for
everyone, says Kennedy. "You kind of 'lose your job' every two to six
months" as projects turn over, he says. "If you can handle that, then
it's a great deal."
The area in which Kennedy specializes -- UI/UX (user interface, user
experience) -- is in high demand, which lessens his risk. Based in the
Seattle area, Kennedy works mostly for startups and nonprofits, with a
few name-brand technology companies like Amazon in the mix for variety.
So far, two and a half years in, Kennedy's been happy with his decision.
"I make money at about the same rate [as I did at Microsoft], but I've
taken off more time for travel since becoming a freelancer," he says. He
even got married last year, after which he and his bride travelled the
world for eight months. "It's such a millennial thing to do, and we
would have never been able to do that if I had a full-time job," says
Kennedy.
Paying off the mortgage -- in your 30s
Steven Boyd, 33, went freelance in 2011 after working as a developer in a series of full-time jobs. At one employer he learned SketchFlow, a part of Microsoft's Visual Studio, and now specializes in it. "At first I was scared" to go independent, Boyd admits. "I felt that I needed that stability you get from a full-time permanent position." But then he realized that security was an illusion. One startup where he worked couldn't make its payroll one month. He was tired of being assigned projects, rather than choosing his own, and felt underappreciated.
Today, he picks his own projects and clients (which range from large
corporations to startups and nonprofits), works when he wants to and by
his estimation is financially secure. In fact, he makes much more money
than he did at his previous positions, which topped out at $110,000 a
year. "And I had to really negotiate hard for that." In 2013, he made
close to $250,000, but "worked way too much," he says. In 2014, he
scaled back to working 30 hours a week and still earned $180,000.
He's paid off the mortgage on the family home in the Denver area, bought
several rental properties and started a scholarship fund at his alma
mater, Colorado State University, to encourage minority students to
pursue computer science. "To be able to amass that sort of money in such
a short period of time would be nearly impossible as a full-time
employee," he notes.
He doesn't miss the benefits; his wife works full-time and so provides
health insurance for him and their four-year-old son. Nor does he miss
paid vacations -- saying he never took them anyway -- but relishes
having the flexibility to take big chunks of time off when life requires
it. Recently, for example, Boyd took a hiatus to care for his son for
three months while their babysitter recovered from surgery.
Both Kennedy and Boyd recommend working a few years at a traditional job
before trying freelancing. "I couldn't see someone coming straight out
of school and being successfully independent," says Boyd. "It takes a
while to learn how to deal with people and different types of
scenarios." By working a traditional job first, Kennedy says, he built
up a good network that he could tap for business when he went solo.
Keeping skills sharp
Independent work can be as valuable to long-term career growth as a technical degree, says Katy Tynan, author of the book Free Agent: The Independent Professional's Roadmap to Self-Employment Success.
That's because freelancers are typically required to pick up new skills
quickly, says Tynan, who worked in IT for 15 years. Staying at a
traditional IT job for years can cause employees to lose relevance, she
says. "Things tend to stay the same within an organization; you don't
have to rapidly learn new things."
In many enterprise shops, "You have to jump through all sorts of hoops
just to learn a new technology," says Ron Pastore, 35, who made the
switch to freelancing two years ago. "You end up molded into what they
need you to be, and then if they don't need you anymore, you're out
there in the market with limited skills," he says.
Software engineer Ron Pastore works primarily with startups -- for a
reduced rate plus equity. "Going back to traditional employment would be
my worst-case scenario," he says.
Pastore has no college degree, but excelled in programming at an early
age. He worked as a software engineer in various full-time positions for
10 years, but ultimately wanted more flexibility and felt limited by
traditional employment, he says.
Married with two children, the Rockland, N.Y.-based Pastore says he is
more secure financially today than before, because he's not depending on
one source of income. He estimates he makes 15% to 20% more today than
he did at corporate jobs, "though this is not an apples-to-apples
comparison," he says. "I work mainly with startups, at a reduced rate
plus equity." He also works many fewer hours than he did as an employee
and says he has no trouble finding clients.
Pastore hopes he'll never hold a corporate full-time job again. "Going
back to traditional employment would be my worst-case scenario," he
says. For his part, Kennedy says he is not averse to going back to a
full-time job, but for now freelancing makes sense for him.
The job you want, not the job that's offered
Whether they stay in freelancing or not, younger programmers are showing
just how confident they are in their ability to fashion the career they
want, not the one that's offered by corporations. If the job doesn't
suit, they have no problem walking away from it. Boyd, for example, says
he recently rebuffed the advances of a recruiter for Microsoft. The job
sounded attractive, "and I probably would've taken it if it wasn't so
much travel," he says. "I like this flexibility of being independent."
With the proportion of millennials in the workforce continuing to grow
(some forecasts say they will make up 75% within the next decade), this
is likely to be a permanent change in the labor market. "As you look
where this is heading, there's no turning back," says Deloitte's
Liakopoulos. A substantial proportion of younger workers do not want to
become part of the old economy, he says. "They don't want to be tethered
to an organization. They want to continue being entrepreneurial. And
they [plan] to use freelancing to create the flexibility they want in
their lives."
Harbert is a Washington, D.C.-based writer specializing in technology, business and public policy.
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