A brief analysis of actual UpWork earnings for software developers
TL;DR; The sooner you give up, the more you earn elsewhere.
In case you don't know what UpWork is, it is a leading freelance marketplace. They are a publicly listed company with $338M revenue in 2020. Anyone can post a job there, and most professionals can offer their services at the cost of 20% of their earnings. The platform provides no vetting for employers and minimal vetting for freelancers leaving it to the feedback system to weed out bad players. It is one of the better ones out there.
I used to hire on UpWork for our startup. It was an easy way to get things done on a shoestring budget. The results were a mixed bag. Most of the work was either a complete throw-away or prototype-level quality.
We got what we paid for, but there were a few outliers.
High-quality freelancers are outliers
Despite considering bids only from freelancers with excellent feedback and 90%+ Job Success Score our hit rate was about 1 in 10 for "acceptable" and 1 in 20 for "great". We were lucky to hire some really good freelancers from remote (to us) places like Moldova, Macedonia and Turkey. They were up and coming, had reasonable rates and appreciated the constant stream of work we were sending them.
Paying more doesn't get you more quality
There seemed to be a pretty low ceiling on the quality of the workforce there. Assuming that our job ads were well-written, simply offering more money didn't bring better quality bids. None of the higher-cost freelancers we tried ended up on our regulars list.
Freelancer's lifetime value
I recently got in touch with 11 out of 13 UpWork freelancers we hired on a regular basis. To my surprise, none of them was still using UpWork or any other freelance marketplace. Only 3 continued with casual contract work mostly through referrals from past clients.
They all had a different story to tell, but the common theme was that the jobs on UpWork were hard to get, many employers had no idea what they were doing and the pay was below the market rate.
So how much do freelancers make before they move off the platform?
I looked at the total earnings of 100 freelancers in search results for Rust.
Assuming you don't give up before landing that very first job, the chances are:
- 1/3 quits before earning $1,000
- 1/4 quits before earning $10,000
- 1/3 quits before reaching $100,000
- the rest stays for a long haul and makes UpWork a significant source of their income
High-earner list
It's not all doom and gloom. You can make a decent living in some categories.
9 out of 100 freelancers in my search for a Rust engineer had over $100k of total earnings.
$1,000,000 club - do you want to be a member?
Evgeniy T. from Catalonia tops our list with $1M+ of lifetime earnings. We don't know exactly how much he earned, but let's assume it is a million.
Earning one million dollars sounds very inspirational. Who doesn't want to be a millionaire! Let's break it down:
- $1,000,000 / 18,076 hrs worked = $55 per hour
- period over 10 years (started in 2011)
- $117k per year if adjusted for inflation and UpWork fees
If we disregard the intangible values such as freedom this type of work brings,
$117k per year for someone with 10 years of full-stack experience is a rather low figure in today's world.
The same high-earners list doesn't look as impressive on an annual basis, except maybe entry #3:
- $185,288 / 5 years
- $210,023 / 12 years
- $277,418 / 2 years
- $281,584 / 12 years
- $295,363 / 6 years
- $425,345 / 11 years
- $673,153 / 12 years
- $921,241 / 9 years
- $1,000,000 / 10 years
In the end, UpWork is no better or worse than any other career path. It does a good job of putting you in front of employers. If you are good and want to be poached, you most likely will be, despite what the Terms and Conditions say.
Hey, are you open to offers of better employment or more contract work?
I am building a software engineer search engine for devs like you and me to be discovered by employers looking for our skills. It is a community-first and fully open-source project that takes no commission or charges placement fees. Head to https://stackmuncher.com/about/developers/ and let interesting and well-paid work find you
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