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

Author

Emma

Professional Development Specialist

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? You’re not alone. 

The  freelancing 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
• Freelancer 
• Salary under an umbrella company 

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

What Is A software engineering company?

A software engineering company (also known as an IT consulting company),  helps clients with tech advice and handles big web and IT projects. Their clients range from large corporations like Véolia, L’Oréal, EDF, and Orange, to  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  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 appealing  with the rise of  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: 

​​In a recent LinkedIn article, Victor Sonde shares his predictions for 2025 in software development; 

“More developers are turning to freelance and contract work, which offers higher earning potential, better work-life balance, and the ability to pick and choose clients.” 

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.

Umbrella or management company: 

Working under an umbrella company or management company like Hightekers, offers the best of both worlds. You benefit from the independence of an  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 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  consultants and independent tech pros.

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

• 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.

Choosing the best status for your IT career?

When making your decision, think about what you value most – is it freedom, stability, or something in between? If you’re looking for the sweet spot between autonomy and security, Hightekers offers the best of both worlds.

With guaranteed pay, no admin stress, premium perks, and real career-boosting partnerships, our cutting-edge model is built for ambitious consultants who want more. 

Wherever you want to work, however you want to grow – with Hightekers, you can make it happen.

Simplify your freelance journey with Hightekers

Author

Emma

Professional Development Specialist

A seasoned career development specialist based in Bristol, where she helps international professionals manage the complexities of establishing their independent careers in the UK. With over a decade of experience in talent management and professional mobility, she leads initiatives to support freelancers and independent consultants across various high-skilled sectors. When she's not advising professionals on their career journeys, you might find Emma exploring Bristol's street art scene or cheering on her beloved Bristol City FC!