Get a full-time job at a company, or go it alone as a freelancer? That’s a question many developers are faced with, and there are a lot of nuances to consider, with money often a driving factor in the ultimate decision. Our most recent Salary Survey might be able to help you decide what’s best for you.
With 40 percent of developers open to changing jobs in 2017, we also find that 63 percent of them are looking for more money. Only 54 percent of all developers surveyed are happy with their current salary. Similarly, 67 percent of developers are confident they’ll find new jobs if they leave or are let go.
Those new jobs may not be lucrative enough, though. When we examine major metro areas, most tech pros report earning less than in 2017. Some 14 of the top 20 metro areas reported lower salaries this year versus last; even Silicon Valley trends slightly down.
The most junior developers are taking the hit, too. First-year developers are earning 5.8 percent less versus last year’s survey statistics. It’s not until you have six years of experience as a developer that salaries start to trend upward, and even then it’s slight: 0.8 percent more than last year.
Average starting salary for developers with less than one year of experience is $47,383. The average U.S. salary for tech workers is $92,081, which includes both consultants and full-time employees. The hourly rates for contractors are fairly steady; though 2017 saw contractor salary dip, it was slight: only 0.2 percent. Contractors tell Dice they command $69.05 per hour, on average.
If they are able to find full-time work (i.e., 40 hours per week), contractors gross roughly $143,000 annually. No single-line average on our Salary Survey hit that number; the most senior developers with 15-plus years of experience earn an average of $111,620. The most lucrative job by title, management, earned respondents an average of $136,934.
Contract, or Take a Job?
Contractors tell Dice they earn $114,473 on average. Based on the hourly rate of $69.05, that’s about 32 hours per week. Even at full-time (40 hours per week), contractors are only working about 41 weeks each year.
But there’s more to consider than salary. If you’re independent, it may be smarter to set up an LLC or incorporate rather than have a company pay you directly as an individual. Contractors are a business unto themselves, meaning you have to navigate taxes, track expenses and healthcare, and miss out on potential perks at a proper company (like paid vacations). If you bring on employees or sub-contract work, the issues compound.
On the bright side, you can work from anywhere (and many expenses related to your job are tax deductible). You’re also free to take time off as needed – you just won’t be paid for it. Those who are social or otherwise prefer a team environment may find contract work maddeningly isolated.
Freelancers and contractors have to consider how much work is available. While there are plenty of companies acting as conduits for freelancers, you’ve still got to take work as it comes. Independent contractors must also consider low-cost competition from overseas, where the hourly rate is demonstrably cheaper (yes, the work reflects that, but naive or cheap companies don’t care). The upside? Freelancers can turn down work that doesn’t interest them, or choose not to work with companies they may know as difficult.
While $69.05 is the average, freelancers are also free (no pun intended) to set their own hourly rate. As the blog Digital Leaves cautions, it’s not always a matter of undercutting the competition. A good piece of advice? “Choose an hourly rate that will allow you to have a good balance between your work and your personal life. It’s ok to work hard in your projects, and having to work occasionally overnight or during the weekend to finish a project in time. However, the fee you ask for your services should allow you to live a healthy, happy life.”
Work-life balance often slips by without mention, but is critical regardless of which path you choose. “Burning out” is real, and can happen on both ends of the spectrum; you can work too hard for your employer, or take on too much work as a contractor. We’re all different. Some may prefer 60-hour work weeks for an employer and plenty of time off, while others might be happiest with 32 hours and no real vacation to speak of.
Luckily, you can traverse these paths with ease. If you’re not making enough at a job you like (or it doesn’t excite you), picking up some freelance work may be enticing. If the drain of managing your own business is wearing on you, there are plenty of jobs on Dice you’re probably suited for.