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
| Category | Self–Employed | Employee | Winner |
| 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?
I’ve coached many professionals like you to become a self-employed consultant. I’m happy to help you too.
