Independent vs. Employee: 14 point Comparison

Written by on September 3, 2019

Going from employee to self-employed is a life-altering decision. Consequently, it is crucial to understand the benefits and losses.

Should Everybody Become Self-Employed?

I am a big proponent of the idea “everybody who has the skills and experience to become self-employed”.

However, this is an honest comparison with the true upsides and downsides.

Everybody’s story is different, an informed decision is key.

Here’s yours.

I made a quick comparison grid below, check it out.

Comparison Grid

CategorySelfEmployedEmployeeWinner
IndependenceYou are an independent entity. You are seen as an expert, and your opinions are valued. You can choose your days-off, and take a variety of decisions by yourself.You represent a company. Your value is based on your efforts and years in the company rather than your potential. You need a manager’s permission to do nearly everything.Self-Employed
CompensationIn some PM positions x3 higher than an employee. Expect to be paid better than 90% of the employees at your level.More your employer pays for you, more of a cost center you become. Your income is fixed, not scalable, apart from occasional bonus and measly yearly increases.Self-Employed
Job SecurityYour contract can finish any time within the notice period.It is harder to remove an employee, and it has by far a higher cost.Employee
ExpensesYou mostly pay your own expenses. You have to pay your own insurance, your retirement, your trainings, your accountant, lawyer and tools.Mostly covered by the employer.Employee
Paperwork and AdministrationMostly your responsibility.Mostly handled by your employer.Employee
Freedom in Self-DevelopmentPaying for your own destiny lets you choose which training to follow without needing a manager’s approval.You need approval for even a book or course to buy, often series of HR and direct managers involved.Self-Employed
Personal DevelopmentFreelancing makes you focus on professionalism, discipline and carrying responsibility by design.Your company has to align in order to gain self-development advantages you want to draw for yourself.Self-Employed
Freedom in choosing whom to work withYou can work with whomever you want to: multiple clients or a single client. You can fire a client.You can often only work for one company. Since it is a more permanent relationship, you can’t quit easily.Self-Employed
Value of ExperienceYour multiple years of experience in multiple clients is seen as an exponential asset. You can talk from an outsider’s point of view.Your experience counts well in the company, but externals are hired to advise you.Self-Employed
Motivation and CoachingCompletely your responsibility. Self-motivation becomes real. You need to review yourself and have a serving attitude.Your company takes responsibility in your motivation, and shares it. Too much of it can be detrimental, watch out.Employee
Hiring ProcessesUsually easier with freelancers, with quicker start dates.Usually takes multiple interviews and through multiple departmental hoops.Self-Employed
Hiring ReasonTo fill a gap in skills and experience immediately.To have somebody with adequate skills and train them up for the long term.Tie
Office PoliticsUsually you are exempt.Employees must have a deeper understanding of it and have to put up with it.Self-Employed
Sense of Ownership, boredomUsually you own your piece and run with it. You have the liberty to deal with boring tasks in innovative ways.Repetitive jobs, having to get permissions can get boring.Self-Employed

Who is the Winner?

I hate to use the cliche, but “it depends”. You’ll need to see it according to your own conditions.

Becoming a self-employed provides a rich life with more income. But a lot of people prefer the perception of security.

Are you interested in becoming a Freelancer PM, Tech Leader, or Technical Person?

I’ve coached many professionals like you to become a self-employed consultant. I’m happy to help you too.





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