Freelancing vs Full-Time Employment

Freelancing vs Full-Time Employment

The pros and cons of self-employment and working full-time

By Marcia Smith

Many employees yearn to escape the nine-to-five – to be their own boss, to work to their own schedule and to be free. On the other hand, many freelancers envy the security and stability of a full-time salary, the camaraderie of the office and perks such as paid leave.

The grass may look greener on the freelancer's side of the creek, but when it comes to figuring out which way of life is best for you, you need to consider your own circumstances and priorities, and whether freelancing would truly work best for you.

Stability of the office

Employees have the security of an employment contract. This doesn’t guarantee they won’t lose their job, of course, but it does bring with it strong legal protection against things like wrongful dismissal, unfair pay and discrimination, along with a wealth of rights including paid leave, sick pay, maternity leave and redundancy pay.

Employees have a predictable working schedule, and, importantly, they have a predictable income, allowing them to budget easily and plan for the future. They'll also most likely benefit from a workplace pension to which their employer will contribute. They may also get employee perks and bonuses, and there may be prospects for promotion. From a psychological point of view, employees can also benefit from the social structures and support of the workplace.

Freedom of freelancing

Freelancers have none of the above. They won’t get paid for a single day or hour that they don’t work, even if they’re unwell. There can often be no guarantee of work next week, or even tomorrow. Their income is likely to fluctuate unpredictably and they’re unlikely to have a personal pension. They’re likely to work alone, and they have the added task of having to calculate their own profits and prepare their tax return (or employ an accountant to do so).

However, freelancers have freedom. Many can work whenever and wherever they like – at night, in bed, on the couch or in a local cafe. They don’t have to worry about workplace politics, gossip, unfriendly colleagues or bad managers. They don’t have to ask anyone for permission to take a break or a holiday. Freelancers who work from home save both time and money by not having to commute to an office. In many cases freelancers can get more money just by working a little bit harder, or a little bit faster, which can be a powerful motivating tool.

Typically, if a business owner hires a freelancer, the relationship is the same as with any other supplier the company does business with. The business will commission a certain product or service from the freelancer, which will be agreed in the form of a contract, but beyond this they’ll have little control over how the freelancer actually delivers the service.

The freelancer can offer services to multiple businesses simultaneously, or hire their own staff to carry out all or part of a project. They’ll usually fulfil the contracted work in their own time, using their own facilities.

What works best for you?

So the answer of whether it’s better to be a freelancer or an employee really comes down to what’s more important to you: security or freedom?

If you have a family and kids to support or a big mortgage to pay, and if a drop in your income is likely to be a catastrophe, then full-time employment is probably best for you. If you’re relatively free of commitments, if you’re highly self-motivated and if you find office life stressful and constricting, then freelancing might be a better option.

Taking either route doesn't bind you forever. You can still move between freelancing and permanent employment if your preferences change over time. There are also a number of resources online to have a look at if you’re weighing up the costs and benefits. Do a little research and the process will never be as daunting as you fear!