Software Engineering Company, Umbrella Company, Or Freelancer? A Definitive Guide

Are you an IT consultant, specialising in web development or another digital field?Do you wonder what the  best job status is for your career? This is perfectly normal.

The work landscape and IT sector is changing rapidly and relationships with Software Engineering Companies are no longer as binary as they used to be. 

 Today, you have the choice between several statuses: 

• Salaried employee

• IT Freelancer 

• Portage Salary under an umbrella company 

The question is how do you navigate these choices?

In this article, we will explore the different statuses and look at the pros and cons of each one – allowing you to make an informed decision about the best route for your IT career. 

Let’s dig in. 

What Is A Software Engineering Company?

Before we delve into the status options, let’s quickly go over what a software engineering company is.

Also known as an IT consulting company, these businesses help clients with tech advice and handle big web and IT projects. Their clients range from large corporations like Véolia, L’Oréal, EDF, and Orange, to promising start-ups and small to medium-sized enterprises (SMEs).

The opportunities in these companies are mostly in the IT and digital fields.

They include but are not limited to:

–   Web developers

–   Web security consultants

–   Data analysts

–   Blockchain engineers

–   Digital marketing specialists

–   UX/UI designers

–   SaaS consultants

–   Infrastructure administrators

Software engineering companies hire IT experts like you to fill these roles, placing you with their client to tackle a set project. Assignments can last from a few days to several months or even years. 

Some of the top software engineering companies in the UK are Deloitte, IBM, and Accenture.

Working for A Software Engineering Company: Employee, Freelancer, Or Working Under An Umbrella Company?

Joining an IT consulting company provides a prime opportunity to work on large projects with big teams and gain valuable experience, whether as an independent IT consultant or from within the company.

It’s also an opportunity to work on different projects in various industries, adding variety and versatility to your career.

There are several ways to work for an IT consulting firm or service company, each with its own pros and cons.

Let’s look at the major differences between the options:

Salaried employee: 

As a salaried employee, you are directly employed by the IT consulting company. This is the most traditional option, although it’s becoming less popular with the rise of IT freelancing and umbrella companies. 

It is a straightforward choice that lets you acquire skills as an employee and work with large companies as an external consultant. You have the security of a full-time contract, which means you don’t need to find your own freelance clients.

Benefits:

• You get paid even between assignments.
• You benefit from the National Insurance scheme (NIS) and other employee benefits

Disadvantages:

• You have little to no control over which assignments you get.
• You must navigate the hierarchical structure of both the client organisation and your employer.
• You have less autonomy.
• Generally, the salary is lower compared to that of a self-employed IT consultant.

IT freelancer: 

As an IT freelancer, you remain self-employed and provide your expert services directly to an IT consulting company on a project basis.

Benefits:

• Setting your own rates which can mean higher pay for the same amount of work.
• Freedom to choose your assignments.
• More control over your professional life.
• Minimal hierarchy: you act as a service provider.

Disadvantages:

• You need to create your own limited company.
• Responsible for all administrative and legal matters.
• Must manage your own accounting or hire an accountant, reducing the time you can focus on your expertise.
• Not paid between assignments.
• Must arrange for private health insurance, supplementary pension, etc.

Portage (umbrella or management company): 

Portage, or working under an umbrella company or management company like Hightekers, offers the best of both worlds. You benefit from the independence of an IT freelancer and job security of a salaried employee.

This option means you become an employee of the umbrella company, who handles all administrative tasks like invoicing and payment. 

You still choose your clients, projects, and work hours without being under any company hierarchy. 

Benefits:

• Better compensation than traditional employment
• Full independence in choosing your projects
• No administrative or accounting hassles
• Permanent contract benefits (health insurance, unemployment)
• Access to perks like company cars or nursery places (offered by some umbrella companies)
• Hightekers even offers a partnership option for additional performance-based income

Disadvantages:

• You are not paid between assignments

What Is A Premium Umbrella Service for IT Consultants Working for A Software Engineering Company?

There’s no doubt, working under an umbrella company allows IT freelancers to enjoy the benefits of both independent and full-time employment.

To take this one step further Hightekers has revolutionised the model with our management company or ‘premium umbrella services’.  

Our services are specifically designed to support self-employed IT consultants and independent tech pros.

Here’s how partnering with a management company like Hightekers can enhance your freelance IT career:

• Guaranteed Salary: Hightekers ensures you get your payment at the end of the month, thanks to our strong relationships with numerous software engineering companies.
• Better Rates: Hightekers helps freelancers negotiate competitive daily rates that reflect your expertise.
• Partnership Status: Become a partner in the company. You can refer other independent IT consultants and earn additional compensation based on the company’s success.
• Community Access: Join a powerful network of IT freelancers in the UK and internationally.
• High-End Services: Enjoy perks such as long-term vehicle rentals, savings products, and childcare services.
• Global Presence: With offices in Paris, London, Brussels, Madrid, Geneva, and Milan, you can easily become an IT freelancer abroad with local contracts to simplify your move.

Join the movement and become part of the Hightekers community today