Is it Better to be Self-Employed or an Employee?

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In the future, you can either make the decision to be self-employed or be hired by an employer. It all comes down to preference and what work style suits you. In this post I will be highlighting the positives and negatives that come with being self-employed or working as an employee and which I would prefer to be.

Self-Employed

A self-employed person is an independent worker, working as a freelance or an owner of the owner of a business. They don't have an employer and run their own business on their own account. This means they are responsible for the success or failure of that business. The UK's freelance workforce stands at just under 2 million, with 255,000 freelancing as a second job. Approximately six percent of the national workforce is self-employed, so there's a chance you will be part of this percentage in the future!

Positives

  • They typically have more than one job going at a time for several clients. Having multiple clients makes it easier to stagger work and keep the money coming in through multiple income streams. Not to mention you can choose the clients you work with!
  • You have the ability to control your workload. This means that you can choose which projects you'd like to prioritise and work when its efficient. The work environment is more calming than in a setting full of distractions with offices of other people, resulting in better focus.
  • As a freelancer, you get to keep any profits stemming from your labor. Compared to a regular employer, they might have worked very hard on a particular project, yet they have to be paid their regular salary.
  • You are your own boss. This is an advantage because you are able to have greater control and decisions on how you do business – where to source your materials, how you treat your vendors and customers, how you manage your marketing, and other aspects. Being your own boss is usually a more thrilling and passionate endeavor, as being successful while independent has greater satisfaction in the end.

Negatives

  • There's more doubt and uncertainty when you're a freelancer. Without the support of a large enterprise to guide you it can get very stressful, very quickly. You'll have to plan out everything, from business plans to project proposals, without any input from expert opinon like in a workplace.
  • Isolation can be one of the biggest negatives to being a freelancer. This is because in a workplace, you are surrounded by co-workers to whom you can rely on when you are struggling at times to help you.
  • Cash flow may fluctuate at times. Freelacning heavily relies on clients and customers, so if your company is struggling at times, it'll be harder to make profit. Therefore, you should make sure you have sufficient funds to help you in the event of lack of gigs.

Employee

An employee is a person working for another person or a business firm for pay. They are under the supervision and control of their bosses. They are able to build their knowledge and skills, as well as given rewards and recognition. Sometimes this means getting a raise in your pay, promotions and awards that recognize excellent performance.

Positives

  • You will not worry about not getting paid next month. As the pay is reliable and steady, you have less stress on not earning enough. Your means of livelihood will be consistent instead of rising and falling depending on your situation.
  • Working as an employee gives you the feeling of safety and comfort as you are familiar with the structure and consistency to your schedule, hours and location. That means they can strive and usually achieve a work and life balance.
  • Being employed as part of a company usually means focusing only on delivering work instead of having the responsibility of finding new clients, planning new projects and more. This ensures there is a consistent workflow and you are making the most out of your area of expertise.
  • Employee benefits are part of the privileges that come with being an employee. This means you still get paid in situations like maternity leave, sick days and more. This makes life more easier and avoids having to juggle other expenses by yourself like freelancers do.

Negatives

  • An employee dedicates their time and effort to make someone else rich. No extra amount of work will make them any richer. In reality, it will only help their bosses. If you are looking to boost your own income, working for a company may not be for you.
  • Lack of freedom may be a potential con for employees. Boredom and lack of variety can result from this, which makes going to work feel tedious and not enjoyable over time.
  • Poor and unhealthy work environments can affect your mental health. There may be a chance you have to work with someone you aren't very fond of, or is even toxic to you. This person might even be your boss. It might make the employee not want to go to work because of the fear of being disrespected or unwelcome.

In conclusion, I think that I would rather be employed than a freelancer because there's less risk of worrying about your financial issues and stress in general. Although I would like to be a CEO one day, I would first work in an office environment to gain experience from those in higher expertise, to be able to put the things I've learnt into practise. I would like to have more freedom in my career, but it's still possible to achieve this in a company environment. I also like the idea of building relationships with other people, as it makes me feel like I can work with them better.

Would you rather be a freelancer or employed as part of a company?

comfortable_chemistry

Comments (2)

  • DSCF7104.jpg EXPERT: Tomas Key, Senior Economist @ Bank of England
    17 Nov 2020

    Well done comfortable_chemistry, I thought that this was a very comprehensive post covering most of the pros and cons of being self-employed or an employee. How did you research this topic?

    Self employment is actually even more common than you say. According to a recent ONS article, more than 5 million people are self-employed in the UK representing more than 15% of employment:
    https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/coronavirusandselfemploymentintheuk/2020-04-24

    On your first negative point of being an employee, do you really believe that no extra amount of work will make employees richer? Aren't hard workers rewarded in lots of companies?

    Reply to this comment
  • Michael-Faraday-logo-250x250.jpg unique_tiger | Michael Faraday School
    19 Nov 2020

    I would rather be employed as part of a company because I don't want to be stressed when I self employ myself.

    Reply to this comment

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