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.
I made a quick comparison grid below, check it out.
|Independence||You 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|
|Compensation||In 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 Security||Your 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|
|Expenses||You 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 Administration||Mostly your responsibility.||Mostly handled by your employer.||Employee|
|Freedom in Self-Development||Paying 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 Development||Freelancing 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 with||You 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 Experience||Your 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 Coaching||Completely 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 Processes||Usually easier with freelancers, with quicker start dates.||Usually takes multiple interviews and through multiple departmental hoops.||Self-Employed|
|Hiring Reason||To fill a gap in skills and experience immediately.||To have somebody with adequate skills and train them up for the long term.||Tie|
|Office Politics||Usually you are exempt.||Employees must have a deeper understanding of it and have to put up with it.||Self-Employed|
|Sense of Ownership, boredom||Usually 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?
Want to find out more?
Check out the full guide on How To Become an Independent Project Manager!
In this comprehensive guide You’ll learn:
🚀 What you need to be prepared for an independent life
🚀 How to see your self-employed journey as a project and create your customized roadmap
🚀 How to prepare a CV that gets clients
🚀 How to test waters BEFORE diving all-in
🚀 How to get clients and sort out your preparation
🚀 Set the mechanics right from the beginning for a successful, satisfying, long freelance career
And more! Are you ready? Then, read on!
Ultimately, I’ve coached many professionals like you to become a self-employed consultant. I’m happy to help you too.