oConomy
May 21, 2009 by Tamara Rice

Recently oDesk’s own Henry Walker delved deeply into our wealth of rate trend data and discovered good news for American freelance software developers. America’s automobile industry may be flailing, but “Made in the USA” is not a dying dream in the software world.

U.S. Software Development Growth by Country
It seems that while the UK and Bolivia have seen a dramatic decrease in the hourly fees software developers are able to charge, in the United States—despite the recession—software developers are now charging an average of 35% more than they did in 2008.

This phenomenon flies in the face of Softera Director Mikko Kontio’s predictions on IBM.com last September, when he stated that the future of software development was essentially going to involve a buyer’s demand for faster turnaround and lower cost.

Even earlier last year, in July of 2008, software developer Roy Lawson suggested on his PolkVoice blog that smaller, more skilled software development teams were a better bet in bad economic times. Thus, it could be that companies are simply willing to pay more for skills, as long as they are getting the work done by fewer individuals. In the long run, perhaps this is a savings for the buyer, despite the marked pay raise for the freelancer.

The exact reasons for the incredible rate increase in the face of America’s much-beleaguered economy may remain a mystery. However, it’s good news for those with software skills. As for the less tech-savvy freelancers among us, it’s a sign of hope. Doom and gloom predictions of meager future paychecks don’t always turn out to be true.

Tamara Rice

Freelance Writer and Editor

Tamara Rice is one of several freelance writers on the oDesk Blog team. She joined the oDesk marketplace in 2009, after more than six years on staff at an award-winning national magazine.

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    Thanks for sharing this. Good Analysis on Freelancers.

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  • http://www.surgeforward.com Surge

    This surprises me as there has been such a desire to outsource overseas. Now there are more companies that realize there is an astounding cultural difference, and the software coming back is not matching the desired outcome. This is a good thing!!!

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  • http://www.suyati.com Suyati

    Great analysis indeed! Freelance software jobs include programming and development using skills such as PHP, MySQL, Java, and XHTML. Which I think can be done in home itself. As pay scales are better many software developers who lost their jobs are more interested to take up the some freelancing jobs.

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  • http://www.qxdesigns.net Jeff

    As they always say: Choose quality over quantity. It could also be because of bad turn outs with off-shoring software development to other countries, which would cause the average hourly rate to sky rocket, since workers in foreign countries charge peanuts at the expense of quality.

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  • Chris

    It’s really a good sign.It is also nice to see Ukraine and Pakistani rate going up.I have found really good quality work with Pakistani and Brazilian work.
    Also after the shocking number of Scams of Indian companies It is appearing that companies are loosing faith on them

  • Tamara

    Keep in mind that these are all freelancers and consultants, they aren’t on staff. I’m not sure how the wages have fared for software developers who are not independent consultants. That wasn’t the focus of Henry’s research.

    It’s interesting and provocative because it doesn’t make sense for anyone to be making more money in a recession, but there are reasons for these things sometimes.

    Perhaps it’s that high-paid employee software developers were laid off in the past few months, moved into freelancing, and are now demanding better pay than the freelance developers of last year. Just a theory–I have no facts to back it up.

  • Chris

    I think it depends on how they calculated compensation. Was this full benefits? or was this just salary?

    One thought is a person making 50k with full benefits (healthcare, pension,etc) is a bigger liability for a company than a a consultant making 60k-70k. So you fire your 50k employees, and up the pay of your consultants so they dont leave (they’ll also need to retain enough consultants to train new hires or become new hires when things get better)?

  • quasipeak

    I’m not buying it; where I’ve worked, they typically get rid of the higher-paid workers first.

  • Steve

    Um, the reason for this is pretty obvious, only highly paid consultants are still on staff. Everyone else got canned.

    Fire all the cheap labor and of course “average wages” will go up.

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