Freelancing and employment both have their pros and cons, and it can be difficult to choose the right path for your career, or to understand if it’s time to make the switch.
Freelancing can be a great opportunity for individuals who want to work on their own schedule and be their own boss. However, it’s not that simple, and below I go into more detail about the pros and cons of each type of employment, speaking as a freelancer myself.
Pros & Cons Of Freelancing
Pros Of Freelancing
One of the biggest advantages of freelancing is the flexibility it offers. You can work from anywhere (if you’re a digital freelancer that is) and you can choose your own work hours, which can allow you to balance your personal and professional life more effectively.
With the rise of technology and the internet, it’s easier than ever to work remotely and collaborate with clients without being physically present. This makes freelancing a very flexible form of employment.
2. Increased Earning Potential
Freelancers often have a higher earning potential than employees. As an independent contractor, you can set your own rates and negotiate higher pay for your skills and time. Moreover, you can take on multiple projects simultaneously, increasing your overall income, rather than being stuck working one single job.
However, clearly your earnings will depend on many different factors, and I’ll discuss them more soon.
3. Diverse Workload
Freelancers have the chance to work on a wide range of projects, which can keep your work interesting and challenging. You have more control over the type of work you choose, and you can take on projects that align with your passions and interests.
4. Ability To Build Your Brand
As a freelancer, you have the opportunity to build your personal brand and promote your services. You can create a portfolio of past projects and showcase your expertise in your field, which can attract new clients and increase your visibility. This isn’t typically something you consider with traditional employment.
As a freelancer, you are your own boss (to an extent). You have the freedom to make decisions about the kind of work you take on, the clients you work with, and how much you charge. This autonomy can be empowering and give you more control over your career path.
However, you’ll still have to answer to clients, so you’re not fully in control. This could be seen as a disadvantage of freelancing, but what are some other cons to consider?
Cons Of Freelancing
1. Income Instability
Freelance income can be unpredictable and subject to fluctuations. There may be times when you have multiple projects and other times when you have none at all. Additionally, it can be hard to track your income and manage your finances as a freelancer as a result of having lots of different projects on the go at one time.
Your income will depend on your own abilities of course, but also how well you market yourself and how you can deal with clients. Hard work doesn’t always pay off when you’re freelancing, and so perseverance is absolutely key if you want to be successful.
2. Lack Of Benefits
Freelancers typically do not receive benefits such as health insurance, paid time off, or retirement plans. You are responsible for providing these benefits for yourself, and clearly whether you’re able to cover these things will also depend on your income levels.
Freelancing requires self-discipline and motivation to maintain productivity and stay on top of deadlines. You must be able to manage your time effectively and avoid distractions in order to succeed.
4. Limited Social Interaction
Freelancers often work alone, which can lead to feelings of loneliness and isolation. It’s important to maintain a social network and stay connected with other professionals in your field, but sometimes this just isn’t possible for some freelancing industries.
5. Responsibility For Your Own Growth
As a freelancer, you are responsible for your own growth and development. You must stay up to date with industry trends, develop new skills, and market your services effectively to stay competitive. This can be a challenging and time-consuming process, and you won’t get any formal job training that you don’t pay for yourself.
Pros & Cons Of A Full-Time Job
Pros Of A Full-Time Job
1. Steady Income
One of the biggest advantages of a full-time job over freelancing is the steady income it provides. With a full-time job, you have a regular paycheck, which makes it easier to plan your finances and budget accordingly. Unlike freelancing where the income can be unpredictable, with a full-time job, you know exactly what you’re going to earn, which provides a sense of stability and security.
Full-time employees are entitled to benefits such as health insurance, paid time off, and retirement plans. These benefits provide a safety net for employees, making it easier to manage their personal and professional lives. Full-time employees may also have access to other benefits such as training programs and career development opportunities, which can help them to advance their careers at the expense of the employer.
3. More Social Interaction
Full-time jobs offer more opportunities for social interaction than freelancing. Employees have colleagues to interact with, which creates a sense of community within the workplace. This can be important for maintaining motivation and productivity, as well as reducing feelings of loneliness and isolation.
Not all freelancers will work totally alone, and some freelancers may even work within larger companies as a contractor. However, this won’t be the case for many and arguably most freelancers, so it’s important to consider if you’re thinking about making the leap to self-employment.
4. Professional Development
Full-time jobs provide more opportunities for professional development than freelancing. Employers often invest in their employees by providing training programs or opportunities to learn new skills. These opportunities can help employees to advance their careers and become more valuable to their employer.
5. Work-Life Balance
While full-time employees may have less flexibility than freelancers when it comes to choosing their work hours, many companies are now recognizing the importance of a good work-life balance. Employers are offering more flexible work arrangements, such as remote work or flexible hours, which can help employees to balance their personal and professional lives.
Plus, the steady paycheck means you typically don’t need to do any work outside of your regular hours, except the odd bit of overtime (clearly this isn’t true of all jobs). Freelancers will typically work longer hours, at least in the beginning, and a lot of the ‘work’ is done for free. This includes things like learning new skills, marketing and promotional efforts, and perhaps building their website or cold-emailing clients.
Cons Of A Full-Time Job
1. Limited Autonomy
Full-time employees have less autonomy than freelancers when it comes to choosing the projects they work on or how they work. In many cases, they have to follow a set schedule and work on projects assigned to them by their employer.
2. Limited Earning Potential
As an employee, your earning potential is limited by the salary or hourly rate set by your employer. Unlike freelancers who can set their own rates and negotiate higher pay for their skills or experience, full-time employees may be limited in how much they can earn, at least until they work their way up the ranks in the company.
3. Less Flexibility
Full-time employees usually have less flexibility than freelancers when it comes to choosing their work hours or location. They may be required to work in a specific location or follow a set schedule, which can limit their ability to balance their personal and professional lives.
4. Limited Diverse Workload
Unlike freelancers who often have the opportunity to work on a range of projects, full-time employees may be limited to the projects assigned to them by their employer. This can make the work less interesting or challenging, and it can limit the opportunity to expand your skills or knowledge. However, this will be very suited to many people who prefer more guidance and direct instruction.
5. Limited Independence
While full-time employees do often enjoy the stability and security of a regular paycheck, they also have less independence than freelancers when it comes to making decisions about their work. They may be required to follow specific policies or procedures set by their employer and have less control over the direction of their work.
Clearly everyone needs to play by some rules, but employers typically must work within tighter constraints than freelancers.
Freelancing vs Employee: Which Is Easier?
The answer to this question depends on the individual and their personal circumstances. Freelancing can be more financially rewarding in the long-term, but it is often more difficult to find consistent clients and maintain a steady workload.
It also requires more self-discipline and determination than a full-time job, as freelancers are solely responsible for finding new clients, setting their own rates and working hours, tracking income and expenses, and various other tasks that don’t directly yield more income.
For those who need stability and security, a full-time job may be easier in the short term. Employees have access to benefits such as health insurance and retirement plans that provide financial protection should they become ill or unemployed.
Employees also enjoy the sense of community that comes with having colleagues to interact with on a daily basis, and they can rely on their employer to provide consistent work and income. However, having a job isn’t necessarily easy, and some might find the consistency and lack of flexibility more difficult to deal with in the long run.
Who Might Find Freelancing Easier?
Freelancing may be easier for individuals who are self-motivated, organized, and passionate about their work. Freelancers have more control over the types of projects they take on, the rates they charge, and the hours they work. They also don’t need to worry about office politics or having to meet specific deadlines set by their employer.
For those who thrive in a flexible environment and enjoy the challenge of finding and managing new clients, freelancing may provide a better fit.
Freelancers also have more freedom when it comes to setting their own schedule and making decisions about how they want to work. This can make it an ideal option for creative professionals such as writers and artists who often need uninterrupted blocks of time to focus on their craft.
Who Might Find Freelancing Harder?
Freelancing can be more difficult for those who need a more structured environment and prefer to follow established rules and procedures. Freelancers are solely responsible for their own income, finding new clients, staying organized with finances, taxes, and invoices, all of which can be (understandably) overwhelming for some people.
Freelancers often have less job security than full-time employees, as they may not have consistent work or steady income each month. This could make it harder for those who value the stability of a regular paycheck over the freedom of self-employment.
Who Might Be Better Suited To Employment?
People who prefer the structure, stability, and security of a full-time job may be better suited to an employment role. Employees can rely on their employer for consistent work and income, as well as access to benefits such as health insurance and retirement plans.
Additionally, employees have colleagues with whom they can collaborate, receive feedback or advice from, or just take a break from the solitude of self-employment. For those who need guidance or motivation to help them stay productive in their work, full-time employment may provide a better fit.
Freelancing vs Employee: Which Pays More?
The answer to this question largely depends on the individual, as both options can offer financial advantages depending on the industry and how much work you put in. Freelancers typically have more control over their rates, and they may be able to earn more money in the long run if they are successful at finding and managing clients, and if they can build up their brand.
However, full-time employees can also receive bonuses and other incentives that add to their income, and of course there is usually a predetermined promotional path that leads to higher income over time as well.
Ultimately, which option pays more will depend on how hard an individual is willing to work and how successful they are at finding clients or projects for either job.
What Affects Your Earnings As A Freelancer?
As a freelancer, there are various factors that can determine how much you earn. Firstly, as a self-employed individual, you have the freedom to set your own rates for your services, and you can adjust them according to the demands of the market and the complexity of the projects. You can’t set them sky-high to begin with, but over time, and as you build up your reputation, you can make very good money as a freelancer.
Your earning potential will also depend on your ability to find and manage clients effectively. You need to be able to market your skills and work very well to build a client base that can provide you with consistent work and income.
Your earnings as a freelancer will also be affected by the competition in your industry. The more saturated the market is, the more difficult it might be to secure high-paying projects. This is why it’s really important to continue learning new skills to differentiate yourself from the competition.
What Affects Your Earnings As An Employee?
As an employee, your earning potential is influenced by factors such as seniority, industry, and location. Individuals who have been with a company for a longer period of time are more likely to be paid more, as they have acquired greater expertise on the job, and companies typically also like to reward loyalty.
Certain industries, such as finance or technology, typically offer higher salaries than others due to the specialized skills required. The more specialized the job, the higher the pay tends to be. Of course, demand also plays a part here, as it does with freelancing.
Finally, your location also plays a role, as some areas have a higher cost of living and therefore offer higher wages. Employers may also consider education, qualifications, and performance evaluations when determining an employee’s salary.
It’s important to note that benefits such as health insurance, retirement plans, and paid vacation time can also add significant value to an employee’s overall compensation package, and it’s not just about the dollar amount. These factors will vary a lot from company to company.
Freelancing vs Job: Which Is Right For You?
For those looking for a steady source of income, traditional employment is a better option as it typically offers more stability. Freelancing, on the other hand, can be beneficial for those with an entrepreneurial spirit who prefer to work independently and have more control over their own income.
Digital freelancing allows you to take your work anywhere, giving you the freedom to travel and explore new places without having to worry about being tied down to one location. Employees tend to be more restricted when it comes to where they work.
When you are employed, your employer will typically take care of taxes on your behalf, meaning you don’t have to worry about filing taxes or dealing with the IRS yourself. Freelancers are responsible for managing their own taxes, which can be more complicated and time-consuming.
Employees tend to have fixed working hours, while freelancers typically enjoy the flexibility of setting their own working schedule according to their needs and preferences. They’ll still need to put in enough hours to get the work done of course, but they’ll be able to choose when they do those hours. This makes freelancing worth considering for those that feel most productive outside of the standard working schedule.
Employers typically provide their employees with a retirement plan, which can help them save for the future and enjoy greater financial security when they retire. Freelancers usually have to set up their own retirement plans if they want to have a secure source of income after retirement. If this is a very important thing for you, employment may be the better option.
Does It Need To Be One Or The Other?
You don’t have to choose freelancing or employment – you can do both. Many people take a blended approach, combining traditional employment with freelance work. This allows you to enjoy the benefits of both types of work, such as security and flexibility. It can make things a bit more complicated when it comes to doing your taxes though!
Freelancers may also choose to specialize in certain areas that complement their regular job to further increase their earning potential. Ultimately, it is up to each individual person to decide what works best for them based on their own needs and preferences.
Questions To Ask Yourself
For those who are still uncertain about which path is right for them, there are some factors worth considering before making a decision. You should ask yourself questions such as:
- Do I desire more flexibility or stability?
- Do I prefer working independently or being part of a team?
- How much risk am I willing to take?
Taking the time to consider all the potential pros and cons of each option can help you make an informed decision that best suits your individual needs.
Freelancing and employment are two very different beasts in many regards, and each one is typically more suited to different people. If you’re a very driven, self-motivated person with a specific skill set, freelancing may be the right choice for you. But income security, non-financial benefits, and being able to work as part of a team can make employment the better option for most people.