The question of being a freelancer vs an employee is more important to the modern workforce than ever before. 2021 came to be defined as the year of the Great Resignation. According to the U.S. Bureau of Labor Statistics, an estimated four million Americans quit their jobs in July 2021 alone. The question is: where did such a large workforce go?
Freelance work, which was at one time reserved almost exclusively for creative professionals, has gradually made its way into nearly every line of work from IT and finance to consultancy, law, dog walking, house painting, and more. A growing number of professionals are now choosing to switch from fixed-term employment contracts to freelance.
What is Freelance?
A freelancer is an independent laborer who earns wages on a per-job or per-task basis, typically for short-term work. Benefits of freelancing include the freedom to work from home or from a non-traditional workspace, a flexible work schedule, and a better work-life balance.
For example – a freelance copywriter can choose to work for Client A on a project basis but fix a per-word rate of pay with Client B. Freelancers set their own rates and hours of work. And, because they aren’t tied to any one employer, they can take on multiple clients. Freelancers also most often file their own taxes, although some companies do make tax deductions before paying them.
One of the greatest perks of having a freelance job is that you can often do it in tandem with a regular job. If there’s no conflict of interest between the two or the terms of your contract at the day job don’t forbid it, you can always take on an additional gig. For example – you may work as an accountant at a bank but freelance as a photographer on weekends.
One of the main reasons for the growing preference for freelance is the flexibility it provides in the way you work. For many people, working 9-5, five days a week is not a viable arrangement. This could be for multiple reasons ranging from care responsibilities at home to different needs or simply because you need a different work-life balance.
Freelance provides the option to choose where you work, how long you work, and even which days you work. This is a great way to fit work around other commitments. Also, with freelance, you can decline work without appearing rude simply because it doesn’t suit your needs or schedule.
What is an employee?
The most basic common law definition of an employee is someone you hire and pay regular wages to perform a specific job, with the employer controlling how the work is performed.
Unlike freelancers, regular employees don’t have the flexibility to choose their hours of work. As soon as they enter into a contract with an employer, they are bound to abide by its terms.
These include minimum weekly working hours. For full-time work, this is usually between 35-40 hours per week. More and more companies are now adopting remote or at least hybrid work that involves a mix of home and office.
As an employee, you must follow the company policy on this and if it requires you to commute to work three days a week, you need to comply.
Benefits of being a Freelancer:
- Flexibility in choosing your own hours and your rate of pay
- Freedom to choose the kind of projects you accept
- Option to do freelance work alongside your regular job
- Freedom to do what you love
- Freedom to be your own boss
- Unlimited income potential
Cons of being a Freelancer:
- No fixed income
- No sick pay
- You’re on your own
- No health insurance or benefits (provided)
The best option is naturally going to be different for different people depending on their individual situations in life. However, with the right planning and time management, you can try both and experience the best of both worlds.