Freelance v. Flexible Working: Which is right for you?
Now with the Labour Party’s Flexible Working Manifesto and a worldwide adoption to remote working, does flexible employment have more pros or cons to going freelance over the long term?
They say when you have children or become a carer your life changes overnight. Your career often does, too. For those that don’t have the 9-5 care support, going part-time or freelance is often the only viable solution. And that decision is often taken by women or mothers.
The number of freelance working mothers has increased by 69% since 2008, according to IPSE. Katy Fridman, Founder of Flexible Working People, a talent and recruitment resource that pairs flexible working candidates with hiring companies, put a poll out on LinkedIn to learn if parents had left their salaried jobs to go freelance or set up their own business to get the flexibility they needed. Here’s how they responded:
The thing is, women on average earn £10,405 less than men in permanent roles and £44 less in freelance day rates. Could we see an incremental change in the next two years with the acceptance of remote working and greater flexibility in the workplace, eradicate the gender pay gap or at the very least lessen it? Please leave your comments and experiences on this topic in the comments section.
- Yes: 63%
- No, but I would like to: 20%
- No: 13%
- I’m going to have to: 4%
What if I am not ready to go freelance and just want flexible working?
The Flexible Working People site has produced a Guide that helps anyone looking to apply for flexible working through the steps to make a successful application.
Staying in a salaried position, yet on a flexible basis, can mean retaining company benefits, such as sick pay, holiday pay, pension contributions, other perks, such as discounts on private healthcare, gym memberships and other services.
In the end, it can often come down to the quality of life at the office (or lack of it) that can sway someone to go freelance. Or if one finds that when working remotely for an employer there is no “off button”. This can be the case equally for salaried workers and freelancers if you do international work. However, if you clearly state on your out of office email your working hours for any given day (or even on your signature) whether you are a freelancer or a flexible worker, then boundaries or rather expectations can be set.
There is nothing stopping anyone, however, client or employer from reaching out in an urgent situation by mobile phone or a WhatsApp message, but as long as the boundaries are defined the majority of the time, then you can try to avoid burnout.
No upward mobility?
If you feel that a part-time or flexible position will always leave you on the sidelines of promotion given the corporate culture, then you may want to take fate into your own hands and offer your services to your employer on a freelance basis while simultaneously building your own freelance business with a growing client base.
You may be able to charge a higher day rate that makes you better off than working part-time or on a flexible basis. There is a difference between part-time and flexible time because flexible time can mean putting in an 8-hour day, just not between the hours of 9 am to 5 pm.
However, if you do become self-employed you will have to include other costs of running a business, such as an accountant if you decide to have a more complex business structure (limited company), business insurance depending on what industry you work in and placing pension contributions into your own SIPP. However, if you can work from home, you can save on commute costs and have greater flexibility on fitting in personal and work-life. Yet, we are not saying that is easy. It isn’t.
For example, children are unpredictable and can suddenly need to stay at home from nursery or school because of a bug, say, on the very morning you have a crucial presentation to make for a new client or the client CEO. This could equally be a dilemma for a freelancer or a temp or flexible working employee.
But which individual will feel more guilty or embarrassed (even if it is out of their control)? My guess is on the freelancer because in their minds if they do not produce they do not get paid and could ultimately be feeling like they personally are letting the team down. They could also see it as losing an opportunity. Even if everyone is empathetic. Freelancers are often harder on themselves because their success is really down to them. Is it ever the same for the agency contractor? Please leave your comments and experiences in the comments section on this topic.
Does the contractor and freelancer market eradicate ageism?
But what if your kids have left the nest and you are nearing the later half of your career. How does flexible working versus freelancing compare?
According to a study carried out by Ireland’s Trinity Business School, being a freelancer or portfolio contractor could put you in a much higher cash flow situation than if you were a salaried employee.
The study suggests that ageism does not carry over to the freelancing sector, with the researchers suggesting that experience is “highly valued” in the independent contractor market. This holds true the argument that the highly skilled freelancer market is the great pay equaliser.
According to the Trinity study:
- Contractors generally earn 58% more than the equivalent employees and averaged job satisfaction levels of 80%
- Self-employed and project economy workers over 60 are among the highest earners in the sector
- Confidence levels remain high among freelancers even in the face of COVID-19 with 64% of the contractors believing the contracting sector would increase in the next 3-5 years
- The researchers surveyed 1,458 individuals, made up of contractors, recruiters who engage in contract recruitment and clients who include contracting services
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Pros and Cons of Freelancing
- Freedom to choose your clients and the projects you take on
- Control your workload, which can mean more or less by week or month
- Flexibility to work the hours you want but within reason (client calls do need to be rescheduled)
- Independence can mean taking on projects and new interests a boss may have never assigned you to
- Exposure to new clients, industries and skills which will help you build your portfolio
- The responsibility to find work is on you if you don’t go through a recruitment agency or freelancer platform
- Tax filing can get complicated, but software options are making it easier
- Work can be sporadic which makes cashflow unpredictable if you are not on a set contract (outside IR35)
- Isolation can become a problem if you do not join freelance communities online or with a related union
- Holiday pay, sick pay, business insurance, computer equipment costs are all down to you
We’ll leave you with some more stats to ponder courtesy of IPSE:
There has been an overall increase of 40% in self-employment since 2008
The solo self-employed contributed an estimated £305 billion to the UK economy in 2019
The number of highly skilled female freelancers has increased by 69% since 2008
The key reasons people go freelance are for the flexibility (88%) and control over work (88%) it offers