Freelancing Vs. Employment: What Would You Choose?

Have you ever wondered about quitting your job to become your own boss? Apparently, this is starting to become a trend now which is pouring in soon but steadily. But is it really a wise decision?

Freelancing and employment suggest two distinct paths in the work culture, each having its own set of advantages and disadvantages. Making a choice between the two often depends on individual preferences, lifestyle, financial goals, as well as risk tolerance. This blog will take you through the pros and cons of being an employee and being a freelancer that you should know if you are thinking of taking the leap.

The Pros of Being an Employee:

1. A Steady Paycheck

The most obvious advantage of choosing employment over freelancing is the financial security aspect that comes with it. A steady paycheck guarantees that your future is protected and that your finances are predictable. Even if the company did not make much profit in the observed financial year, the paycheck is still yours to keep!

2. Easy Budgeting

Since your income is steady and predictable as an employee, setting a clear budget and abiding by the same becomes easier. Division of the income set into portions depending on your needs, wants, savings, investments, and emergencies is clear.

3. Benefits and Perks

Another benefit of being an employee is the benefits and perks that a company offers. This can include paid vacations, reimbursements, allowances, parental leaves, health insurance, retirement plans and pensions, etc.

4. Develops Social Skills

Honing your social skills complements being an employee as one needs to constantly keep in touch with their co-workers. The conversation can revolve around work or something completely out of the blue, but the fact cannot be ignored that it gives you exposure and helps you develop your tolerance and emotional intelligence towards people.

The Cons of Being an Employee:

1. Fixed Working Hours

One of the first limitations that cross the mind is none other than the fixed working hours the employee is bound to follow. It is as good as having no control over your entire day or schedule.

2. Fixed Salaries and Slow Increments

Having to stick with the same number on the paycheck for a long time can surely be frustrating. To top it off, slow increments demotivate the employee, resulting in a lack of productivity and work performance.

3. Commute to Work

Commuting to work can surely be an exhausting task. It not only has a bad effect on your energy but also on your time and money. Although it can be fun and exciting in the initial stage, it proves to be stressful in the long run.

4. Bound by Company Policies

As an employee, you are restricted to complying with the terms and policies of your employer. If you fail to live up to the policies perfectly, there are chances of severe repercussions, sometimes resulting in termination of employment.

The Pros of Being a Freelancer:

1. Flexible Hours

As a freelancer, one of the biggest benefits is the flexibility it offers. There are no such work hours one has to abide by. Freedom to control the schedule and work at one’s own pace exists. This kind of flexibility is seen as a boon especially when you are a student, a homemaker, or simply not a morning person. Additionally, it gives you leisure time to relax and complete other projects as well.

2. Control over Income

Choosing to freelance allows you to make your own decisions. It is often seen that freelancers have the potential to earn more money than traditional employees, especially when the gig economy is booming like never before. Also, they can set their own rates for the gig and negotiate their pay, which can lead to higher earnings over time.

A report by Razon Pay suggests that the average income of freelancers across India is INR 20 lakh per annum.

3. All Profit Is Yours to Keep

Since all the services are rendered directly by the client, there is absolutely no need for a middleman in the freelancing culture. This suggests that all income generated is entirely yours to keep and is not split between you and the company as it is done in traditional employment.

4. You Work on Your Terms

Another advantage of being a freelancer is that you work on your terms and conditions. You are not required to act per the employer; you can simply craft a deal that works best for you and your clients.

The Cons of Being a Freelancer:

1. Little Financial Security

Yes, freelancers have their own share of benefits but there are certain limitations as well that cannot be foreseen. The harsh truth here is that their financial security is not guaranteed and that there is always a chance that they can run out of work. This uncertainty makes budgeting difficult to plan and hence discourages aspiring freelancers from taking on the risk.

2. Inconsistent Workloads

As compared to traditional employment where the workload is divided among co-workers, this is not the case when freelancing. Situations can arise where you might be completely drenched in work one month and struggling to find gigs/projects the next.

3. Slow Career Growth

When it comes to professional growth, a freelancer’s path to career advancement may be less defined. They may constantly need to be active in the market in order to look out for new opportunities and enhance their skill set.

In conclusion, both freelancing and traditional employment have their own unique advantages and limitations. While freelancing offers greater flexibility and independence, it lacks in job security. On the other hand, one with traditional employment enjoys several company perks and offers greater stability, the main concern lies around fixed work timings and paycheck. Nevertheless, the best choice depends on striking the right balance between the two and rightly aligning it with your personal goals and professional aspirations.

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