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Ask HN: Do you think recession and layoffs will benefit freelancers?

6 points by psyfi ↗ HN
Hi

I'm wondering if there are any researches/observations/expectations of hikes in freelancer services demand as some companies are short on budget and started laying off.

As layoffs leave some half-baked projects/tasks half-baked, and as freelancing has recent market growth, and minimal commitment hence less restrictions in terms of budgets.

8 comments

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sharemywin
I would think those are the first budgets to go.
psyfi
Can you elaborate?
charwalker
Reducing costs via layoffs may come with budget for temp/contractors but most medium/large companies put that toward staffing services that manage skill checks/etc. and supply capable people for specific tasks or projects. My company does this already and hardly has solo freelancers.

At the same time, those contractors can run 1.5-2x the hourly rates for existing staff so they are pushing to hire/promote to full time roles vs bridging a position that has yet to be filled, someone who left unexpectedly, etc.

More or less, the budget for filling gaps at medium/large companies likely will go to staffing agencies and not freelancers. Small companies likely will see an increase in demand for one off projects but it would still be a matter of funding those projects in the face of poor economic outlook.

Another thing to consider is that there will be an influx of quality talent though with a learning curve to stage their own freelance business. Companies may return to axed staff for assistance with systems or projects the ex-staff understand, even at a premium vs full time hourly rates. The increase in supply may flatten or reduce income for unestablished freelancers or limit growth for those with contacts.

sharemywin
I would also add alot of companies use a contractor/employee mix and the easiest thing to do is not renew contracts. if your a freelancer with specialized knowledge than that's a different story.
groffee
Freelancing is mostly a race to the bottom when you're 'competing' with people in countries with much lower cost of living.

If anything laying people off will flood the freelancer market and push prices further down. Very happy to be wrong though.

You need to distinguish yourself with quality and to network so you have clients/friends who always come to you first.

brtkdotse
Step 1 is not calling yourself a freelancer. That word is tainted by the likes of Upwork and Fiverr. It conjurs an image of someone who's desperate for work.

You're a contractor. Specialize, both in industry and technology. Especially nicheing down on a "boring" industry can give you work until you retire. Experienced devs with domain knowledge will always be sought after.

ironlake
I've worked as a contractor at a large corporation when they were having layoffs. It's mostly luck. From an accounting standpoint, cutting contractors does not have the same impact as cutting full time employees, especially for publicly traded companies. Analysts want to see reduced headcount. But keeping a bunch of contractors when employees are getting axed makes everyone uncomfortable. In the end, it's mostly luck and out of your control.
smarri
In my experience, it's the opposite, contractors are the easiest option for companies to cut to reduce cost and headcount, unless the person is in a key/vital role. They tend to be more expensive than permanent staff, and have shorter notice periods.