Freelance Versus Employee: Which Is Better?


If you’re weighing up the pros and cons of going freelance versus remaining an employee; it can be a bit of a minefield to navigate. There are, of course, definite advantages and disadvantages to each approach and what’s right for one person may not be right for another.

For example, when you consider freelance versus employee. Freelancers are their own boss, can work from anywhere, choose when they work, pick their clients and keep all the profits. Employees, on the other hand, get benefits, get more of a work-life balance, don’t have to do sales and marketing, get paid regularly (and on time) and have a more consistent workload.

So, let’s take a closer look at the factors that may weigh into your decision about your career:

The Pros Of Being A Freelancer Versus Employee

 

I have to declare a little self-interest at this point – I’ve been freelancing for over a decade and I am naturally disposed to working for myself, I’d like to think that my own bias won’t impact on these lists but you should be aware of it, just in case.

Being Your Own Boss

 

It wasn’t being my own boss that attracted me to freelancing, it was the freedom to escape office politics. However, being top of your own food chain is one of the reasons that freelancers don’t have to deal with office politics.

Being your own boss means never dealing with another day of soul-crushing abuse from somebody higher up the food chain, but it also means that you have to take responsibility for your life too. You can’t blame the bad days on anybody but yourself, they’re down to you as much as the good days.

In truth, it’s not so much being a boss that makes freelancing appealing as the absence of one. Most freelancers don’t go around thinking of themselves as the CEO of a corporation; they just see themselves as free from hierarchy.

You Can Work From Anywhere

 

I’ve mentioned this elsewhere on the site but one of the key things that define a “freelance worker” in law is that a freelancer should be free to work from anywhere. If they’re not and they’re chained to a desk or a specific location – then really, they’re an employee and they ought to get benefits and an employment contract.

You shouldn’t allow yourself to freelance under employment conditions, the taxman won’t like it and you miss out on the benefits of being a freelancer and many of the benefits of being an employee too.

This is why freelance work tends to tie in well with digital nomad life when you can work from anywhere – you can go anywhere that you like to work including Sri Lanka or Colombia.

You Can Work At Any Time You Like

 

This is another key test of what it means to be a freelancer – control over your hours. Now, that doesn’t mean clients can’t demand deadlines of you, it just means that you get to pick whether you work 8 – 5, 12 – 10 or whatever the heck you feel like to get the work done on time.

One of my clients is in the same time zone as me but prefers to work late night/ultra-early morning, I like to work mornings but not that early, so, I don’t.

You Pick The Work And The Clients

 

Freelancers get the freedom to choose the kind of work they take on and the clients that they work with and if they don’t like what’s happening – they’re free to fire their clients and go look for other work or clients.

This doesn’t mean that you’re going to love every piece of work that you do as a freelancer (it wouldn’t be called “work” if that were true) but it does mean you ought to be spending the majority of your time on work that you enjoy.

The Profits Are Yours

 

The final big advantage of being a freelancer is that you get to keep the profits you make but you’re also responsible for any losses or liabilities that you incur too. In theory, a good freelancer can earn substantially more than an employee.

You need to think about how you set your rates and who you work with to get to this position, mind you, it’s not automatic.

However, we know that a lot of freelancers seem to operate on or around the breadline permanently too. If your freelance business isn’t making a profit – you really need to think about how you’re running that business, if you can’t make it viable – you might be better off with an office job or remote work.

The Pros Of Being An Employee Versus A Freelancer

 

OK, let’s turn the tables and take an honest look at why you might want to be an employee rather than a freelancer:

Employees Get Benefits

 

Back when I had a job, they gave me a nice BUPA Platinum Card which gave me worldwide health insurance (well, excluding North America anyway). They provided gym membership. I got a housing allowance (not enough of one but an allowance all the same). They put money into a bonus scheme that paid out each year. I got retirement benefits. I got paid vacation time.

Here are what I get as a freelancer: none of those things. Now, that’s not to say I can’t have those things, but I have to pay for them. They’re not “benefits” anymore but rather “costs to me”.

You can enjoy all these things as a freelancer and, in fact, any benefits that you had as an employee, but you have to set your rates correctly to pay for them. There’s no guarantee that you’re going to be able to do that.

Employees Get More Work-Life Balance

 

Well, some employees do. If you work at one of those horror-show presenteeism culture offices, then it’s quite possible that you have no real work-life balance either. Though, I learned (the hard way) that it’s perfectly OK to stop participating in that kind of culture and still keep your job.

When you work 9 – 5 Monday to Friday, there’s a defined cut off point for the day and for the week. When you work for yourself, you can find that each part of your life bleeds into the other and it’s hard to keep them separate.

It’s really important to find somewhere to work that isn’t where you do the majority of your “living” and never work in the bedroom for more than a few days. It also helps to develop your own routine, so that you can define when you’re switching off for the day.

Employees Don’t Usually Have To Do Sales And Marketing

 

And when they do have to do sales and marketing, that’s normally the whole focus of their job. Most companies don’t expect their employees to find their work for them unless they pay them to find that work.

Freelancers, on the other hand, have to be good at what they do AND they have to be good at sales and marketing. There is no skill more important to a freelancer than sales and marketing. Great freelancers can come close to starvation each month while bad ones can thrive because they learned to sell themselves.

If your vision of freelancing involves permanently working on Upwork – you might want to think again. Learning to sell yourself is an essential skill for freelancers, it’s not optional.

Employees Get Paid (And They Get Paid On Time)

 

While it is true that occasionally an employer goes bankrupt and the employees don’t get paid; this isn’t a common occurrence. Most employees get paid each month and they get paid on time. It’s a perk of having an employer.

Freelancers, on the other hand, will find that some clients take forever to pay up even when they’ve promised to pay “tomorrow” and some will run away without paying at all.

You can structure your business, to some extent, to reduce the risk of this but truthfully, you can’t eliminate it entirely.

I once waited 23 months for a client to pay up and I’ve had one that never did. My freelancing friends tell me that I am relatively lucky, and everyone has their own horror story or two.

Employees Have Someone Else Manage Their Workload

 

An employee will, generally, get a fairly consistent level of work to do each month. Sure, there may be the occasional rush job or the odd slow period but most of the time – it’s pretty consistent.

Freelancers tend to face “feast or famine”. That is they either have so much work on they’re struggling for hours of the day to fit it in or they have so little work that they wonder whether crying in their coffee will help matters.

It’s why many freelancers tend to be more workaholic than their employed friends. They’ve been through a “famine” and they’re terrified that it will happen again.

Conclusion

 

Freelance versus employee? It’s a tie, right? There are 5 strong positives in favor of each.

Yes, it probably is a tie. There’s no right or wrong in this decision. This is about what makes you happy.

There are days when being a freelancer does not make me happy. Then I wish for the stability of a paycheck, benefits and a desk someone else pays for. But most of the time, I’m glad that I made my choice to go freelance. It suits me better than being employed.

You need to decide what suits you best and do that and don’t forget, you can always change your mind at a later date. This isn’t a decision set in stone.

 

Nicholas Barang

Nicholas Barang is a veteran digital nomad. In fact, he was probably "digital nomading" before it was called that. He believes that anyone can make a free and independent life if they want to. He wants to help those who commit to finding their own path. And to cut through the nonsense told about this "lifestyle" by those in search of a quick buck. If you want to reach him you can send him an e-mail at nicholasbarang@gmail.com or to nick at nomadtalk.net.

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