The Rise of Freelance Developers: Hiring in the Modern Age

Startups need a lean staff to get their organizations off the ground. How do they manage it? Many hire freelance developers.

But startups aren’t only businesses that invest in contractors. Google, Microsoft, and Meta are just a few of the global giants that turn to freelancers. In the U.S. alone, there are nearly 181,000 freelance software developers.

There are numerous advantages to hiring freelance developers, beginning with lower costs and commitment. Contractors can also work on discrete projects rather than long-term commitments. And they often prove instrumental in helping launch new businesses. 

History of the Gig Economy

Today, gig work makes up approximately 12% of the global workforce, according to The World Bank. But it wasn’t always the phenomenon it is today.

Origins of Freelancing

The term freelance first emerged in the early 19th century, according to Merriam-Webster. The earliest evidence appeared in Sir Walter Scott’s Ivanhoe, where a feudal lord uses the term to describe his paid army:

“I offered Richard the service of my Free Lances, and he refused them—I will lead them to Hull, seize on shipping, and embark for Flanders; thanks to the bustling times, a man of action will always find employment.”

But there are earlier instances of freelancers throughout history, well before Ivanhoe. Hired soldiers were common in the Middle Ages, Latin records show. In ancient Egypt, there is evidence of scribes, stonemasons, architects, and other professionals bringing their specialized expertise to various projects. Famed artists like Michelangelo typically worked on specific projects, too. 

In fact, working on a project-by-project basis was fairly common until the Industrial Revolution, when many workers transitioned to full-time manufacturing jobs.

The Twentieth Century

Gig work all but disappeared in the aftermath of the Great Depression, when individuals relied on the stability of full-time jobs and the benefits they offered. However, by the mid-1900s, freelancing was relatively common in some fields, including writing, music, film, and graphic design.

In 1973, Jack Nilles introduced the concept of remote work. Using the terms “telecommuting” and “teleworking,” the director of interdisciplinary research at the University of Southern California presented the idea as a means of coping with skyrocketing oil prices. 

“If 10 percent of those who commute to work each weekday were to start working at home two days each week, this would reduce the volume of such travel by 4 percent,” wrote Frank Schiff, Vice President and Chief Economist of the Committee for Economic Development, in the Washington Post, 1979.

While freelancing is not synonymous with telecommuting, this represents an important milestone in the freelance and gig economy landscape, where a worker is not tied down to a single office.

The Internet and the Gig Economy

The advent of the internet made hiring freelancers more commonplace. Not only did it mean that remote work was more feasible, but it also opened up new career paths and roles—particularly digitally dependent ones.

When the 2008 financial crisis hit, traditional, full-time roles became less easy to come by. With little alternative, many people sought out freelance roles.

This period saw a significant increase in the number of individuals seeking flexible, freelance, and part-time work. The crisis highlighted the need for alternative employment models, further accelerating the growth of the gig economy.

Former New Yorker editor Tina Brown coined the term “gig economy” in 2009, describing how workers in the knowledge economy were relying on “a bunch of free-floating projects, consultancies, and part-time bits and pieces while they transacted in a digital marketplace.”

The so-called gig economy has surged since that time. It’s particularly well-suited to certain roles, and software developer is chief among them. Programming is the top-paying freelance job, and Stack Overflow’s 2024 Developer Survey found that 16.4% of respondents described themselves as an independent contractor, freelancer, or self-employed.

Benefits of Hiring Freelance Developers

Greater Flexibility

Both developers and employers enjoy greater flexibility when working with freelancers. It’s much easier to scale projects and extend (or reduce) contracts as needed. Employers also have access to a much larger talent pool—the world is their oyster.

Many businesses hire freelance developers to tap into their specialized skill sets. Freelancers with niche skills can work on discrete projects. For instance, perhaps you need an AI engineer for a specific app or a UX designer to redesign your website.

In some cases, there may even be the option of converting freelancers to full-time hires if the employer and employee are both amenable to it.

Lower Costs

Cost-effectiveness is another main reason why employers may prefer to hire freelance developers. With freelancers, employers don’t need to invest in expensive overhead costs, such as workspaces, equipment, full-time salaries, or benefits.

Hiring timelines tend to be reduced, too. These shorter timelines usually mean lower costs. Employers typically expend fewer resources and can fill positions faster.

Engaged Developers

Freelancing keeps things interesting for developers. Invested developers produce more innovative and high-quality work. 

“Younger generations, such as Gen Z, are increasingly rejecting the predictability and stability of traditional career paths in search of more varied and interesting options,” said Brendan Moffett, Director of the University’s Centre for Contemporary Hospitality and Tourism, University of Derby.

Diverse Perspectives

Freelancers have often worked for many different clients and offer diverse perspectives. By offering fresh insights, they can help your company innovate more effectively. They’ll also be able to see problems and concepts through an outside lens and suggest new ways of doing things.

Tips for Hiring Freelance Developers

1. Outline Requirements and Expectations

Start by solidifying your project scope and requirements. Make a list of the must-have skills, as well as the “nice-to-have” skills. Outline processes, roles, responsibilities, and expectations from the get-go. 

Do your due diligence to find the right fit. Hiring a freelance developer over a full-timer doesn’t mean you can cut corners. 

2. Understand Compliance Laws

Since you may be hiring internationally, you will need to research global laws and those local to every area of operation. Consider using an employer of record (EOR)—they can manage the employment of freelancers and ensure compliance, while you take care of the people management.

3. Establish a Relationship

Remember that freelance developers have multiple clients, not just you. Stay in communication, but don’t ring up their phone at all hours or expect them to be on-call like a full-time employee. 

At the same time, build a relationship. A successful freelancer-client relationship can last for years—if you make an effort to nurture it.

4. Vet Carefully

As with any hire, freelancers require careful vetting. Using a trusted platform to find freelance developers will give you peace of mind. For example, at Terminal, we will do the vetting for you and let you interview potential matches directly.

The Future of Freelance Development

By 2027, 86.5 million people are projected to be freelancing in the U.S. That will make up 50.9% of the total U.S. workforce.

This is an opportunity for businesses to capitalize on great talent. And with new technologies and advancements on the horizon, there will surely be even more roles for freelancers. For example, we’re seeing more niche AI specialties that are well-suited to contract positions.

While freelance and contract work is unlikely to completely replace full-time roles anytime soon, we are seeing the gig economy grow and more and more workers of all ages take advantage of the flexibility and engagement the style of work brings.