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February 7, 2022

Can online freelancers help IT departments survive the ‘great resignation’?

Many software developers are turning to gig platforms for work. This could provide a short-term solution to the digital talent squeeze.

By Afiq Fitri

The so-called ‘great resignation’ – a reported uptick in staff turnover following the pandemic – has hit IT departments as hard as any other. Nine out of ten tech leaders surveyed in November last year agreed that the pandemic has prompted their staff to reassess their life priorities, making retention harder.

Some tech workers are turning to online ‘gig’ platforms for freelance work. One such platform, Worksome, says that 14% of its recent joiners had left full-time jobs in tech as part of the ‘great resignation’. 

Should employers follow suit, and use such platforms to access tech talent? Online freelance platforms have both pros and cons for workers and employers alike, but with the nature of work in flux – especially in technology-related fields – they may prove to be a useful source of agility, at least in the short term.

Increasing supply and demand for online labour

A growing number of businesses are using freelance platforms such as Fiverr and Upwork to source labour. According to data from the Oxford Internet Institute’s Online Labour Index, which tracks the number of registered workers and projects from 351 freelancer platforms around the world, the number of jobs posted on these platforms daily has grown by around 60% since 2017. The daily average number of new projects posted is currently at its highest since November 2020.

Much of the work being sourced from these platforms is tech-related, the index reveals. The latest data shows that 38.5% of projects listed on gig work platforms so far relate to software development, making it by far the largest category. 

There is little data to explain why the volume of work sourced from gig platforms is increasing, says Fabian Stephany, a researcher at the Oxford Internet Institute. One possible explanation is that jobs are being fragmented into smaller tasks that can be more easily outsourced to a gig platform. “The only reason I could imagine an increase in gig work would be that the demand becomes more fragmented, with smaller chunks of the same volume of demand being sold on these online labour markets, so that is perhaps why the market demand for tech work is growing right now.”

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Meanwhile, the supply of software developers on these platforms has also grown significantly, albeit unevenly across different geographies.

India, traditionally the largest market for technology skills, boasts the largest share of the global freelance software developer population, with 34%. Many Indian developers have signed up to sites including TopCoder following the pandemic, Saurabh Gupta, president of research and advisory services at analyst company HFS Research, told Tech Monitor last year. 

By contrast, most European countries contribute less than 1% to the global population of freelance software developers, with no noticeable change in growth in the past four years.

The UK is one of the exceptions, alongside Russia, Ukraine and Serbia. The global share of freelance developers based in the UK has grown from 1.34% in 2018 to 3.03% last month, according to the index. Based on estimates of the global online freelancer population, this implies there are around four million freelance software developers located in the UK. While this figure only represents the number of UK-based developers registered on freelancer platforms, it signals a large and growing talent pool available for work.

Are freelancers the key to tackling the great resignation in tech?

If the great resignation continues to squeeze employers' access to technology talent, more might consider using gig platforms.

Mathias Linnemann, co-founder of Worksome, argues that traditional approaches to recruitment, in which employers seek to hire and retain full-time staff, are "outdated" and ill-equipped to the realities of the post-pandemic labour market. “Ownership thinking belongs in the past,” he says. “It's about access thinking now.”  

Although most companies are still wary of relying too heavily on freelancers, he says, some are “rapidly transitioning from a more traditional workforce focused on permanent employees into a hybrid and contingent workforce”. This gives them a “competitive advantage by having fast access to talent," he says.

But freelance work is not without its drawbacks for both businesses and employees. While it can be cheaper for organisations to outsource certain roles on an on-demand basis, there can be risks to the quality of projects. On-demand workers may also be juggling several different jobs

For workers, the inherent precarity of freelance work brings about a whole host of issues, from involuntary overtime to delayed payments without any form of redress. Only 42% of respondents to the Worksome survey said they received their payment on time in previous jobs.

Meanwhile, gig work platforms such as Uber and Deliveroo have been associated with 'algorithmic management', in which the allocation and assessment of work is automated. Critics argue that current forms of algorithmic management lead to overwork and dehumanise workers.

In Europe, stronger legal protections for freelancers are in the works. In December, the European Commission published a proposal that, if passed, would classify freelancers as employees if certain criteria are met. This would provide freelancers with the same level of protection as traditional full-time employees in most cases. Last year, the UK's Supreme Court ruled that Uber's drivers are 'workers', meaning they have some employment protections, if not all those afforded to full-time employees.

In the wake of the pandemic, even the very near future of work is difficult to predict. Employees are reassessing their career objectives at a time when automation is changing how work is delivered. Whatever its viability as a long-term strategy might be, using online freelance platforms may help tech leaders respond to the coming turbulence in the short term.

Homepage image by SeventyFour/iStock

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