Comment by hajile
Comment by hajile 3 days ago
If salaries were based on value added, a lot of software dev salaries would be orders of magnitude higher.
Comment by hajile 3 days ago
If salaries were based on value added, a lot of software dev salaries would be orders of magnitude higher.
I started out freelancing.
You have to spend large amounts of time finding clients and being a salesman as you sell yourself and your services to them.
Once you do that, you have to prove that you're the person you promised. Unfortunately, most clients reaching out to freelancers are very....difficult.
After you've done the job, you have to be your own accountant and billing department. I should mention here that collecting from a lot of clients is often a frustrating endeavor and you will almost certainly be scammed at least once (at which point you have to do the math on handing most of your profits over to a lawyer and risking getting a bad reputation as a legal risk).
Because you're contracting, you are on the hook for higher taxes than normal to cover stuff like social security. Unless you are getting bottom-dollar insurance (the stuff with a $10,000+ deductible where you still get bankrupted if your medical bills are bad), you are probably paying tens of thousands in health insurance.
Want holidays, vacation, or just a day off? That means you are missing a paycheck (at least missing a bunch of billable hours) and may have upset clients. If you need to make $100,000 at a corporate job, then you'll need to charge at least $150,000. If you want to work a normal 2,000hr/yr, then you are going to have to sell your client on $75/hr while they're seeing $25/hr or less from some overseas "talent".
Also don't forget that lots of the highest-paying jobs aren't open to freelancers. Even if you contract, you'll be going through an agency charging big money then giving you a tiny fraction of what they take in.
After I got married and had kids, I was busy enough without running a business. I want to spend time with my kids while they are still kids. I may make less as a FTE, but I work a lot fewer hours and have way less work stress.
As you're describing, your salary is also based on what a company adds to you in terms of value.
I accept the pay I'm offered not because it is based on the value I add, but because I know I'm getting screwed over and have no real recourse. Businesses have all the power whether you are trying to negotiate your FTE salary or a short-term 1099 contract.
If US programmers were to organize into a union and add some level of credentialism to keep out the fake programmers with no skills, I'm fairly convinced that you would see salaries increase dramatically.
Instead, because there's no unified representation, you get Microsoft laying off 9,000 people then (allegedly) trying to apply for over 14,000 H1B visas to suppress wages even further knowing there's nobody able to speak out against it.
It’s uncommon in the US because freelancing means having to source your own - usually both expensive and crappy - healthcare.
It used to be incredibly common in the UK - half the decent devs in London were contractors making 2-3x what permanent employees made. It’s now uncommon because the government nerfed it with IR35 rules.
Probably something along the lines of "if you only have 1 customer you're an employee"…
It's illegal in most of EU but several countries do not check. So I know PWC in italy hires external contractors but tells them to be in the office at 9 and so on… just a scam to not pay sick leave, parental leave, vacations and pension basically.
Devs are often either not good business people and/or don't want to be. Freelancing, in any industry, involves a lot more than just doing the actual job.
Also, as others have already mentioned, salaried with is much more stable.
At least these are my primary reasons, and those of some others I've spoken to on the matter.
Also a lot of value add comes from corporations which produce things of complexity greater than the sum of their constituent parts.
If you already have a platform in use by the entire world, that matter of scale makes it much easier to find value adds more than a sole proprietor could ever dream of.
It's for these reasons I'm wary of talking about "value add" only being from the developers directly implementing a feature. Without support, IT, security, Product, HR, etc, I could not deliver that value add.
Nobody pays for Firefox, so I’m not sure how you would determine value added. Development could also stop today and most of us would never notice the absence of upgrades.
You could probably calculate it based on how much ad revenue one can gain by having your own default search engine be the default in Firefox.
At least, that's probably how Google determined value added when deciding if it's worth the return when they funded (read: paid for development at) the Mozilla Corporation.
Hmm if this is true why is it so rare that software devs quit their jobs and make more money freelancing or starting their own companies?