Which is better: freelancing or working in-house?



The answer is not simple. They each have their pros and cons, and which one is right for you depends on your personality and how you want to work.

So to help you make the decision, I’m going to look at how freelancing compares with salaried employment in a range of different areas, such as flexibility, control over your work, job security, and more.

Whether you’re sitting in a cubicle dreaming of freedom, or getting tired of freelancing and hankering after a full-time job, this tutorial will help you make the call. It will also be useful if you’re just starting your career and want to know which path to take.

First, here’s a quick note on definitions. The roles of freelancer and salaried employee are blurring to some extent these days, but for the purposes of this article, I’m assuming that “salaried employees” are working full-time for a single company with a contract and a regular paycheck, while “freelancers” are people who are self-employed and work for a variety of different clients.

Flexibility

How It Works for Salaried Employees

Many companies are getting better at “work-life balance” these days, but employers in general have still got a long way to go.

Plenty of employees work much longer than the once-standard “nine to five”, and are now expected to be available on email when they’re outside the office too. While part-time work, reduced hours and job shares are often possible, most forms of salaried employment involve an inflexible, fixed commitment to particular working hours, week in, week out, with just a few weeks of vacation per year.

And while employers do often make provision for people to take time off for major life events, studies have found that people who devote more time to their families often suffer in their careers—particularly women who take time out to have children.

How It Works for Freelancers

As a freelancer, you generally have a lot more flexibility. You can set your own hours, pick and choose your assignments, increase or decrease your hours, and work around family life and social commitments. As long as you meet your agreed deadlines, you can take the whole day off and work at night if you want.

Photo of a woman working outside on her laptop.

But don’t get carried away and think you’ll be spending all your time playing with your kids and having quality time with your spouse. Work can pile up, and when deadlines hit, you may have to cancel your plans and work through the night to get the job done.

As freelance translator Eline Van De Wiele says in a blog post on the myth of flexibility:

Without the structure of regular in-house hours, colleagues to cover for us, and a guaranteed paycheck at the end of the month, it’s easy to take on too much. When you put it like that, do we really have that much flexibility?

What It Means for You

If you like structure and are fine with being tied to a daily schedule, then a full-time salary job is probably a good fit. If you want to make your own hours, or have lots of commitments outside of work that require you to take time off, then freelancing is a great option.

Office Politics

How It Works for Salaried Employees

This HBR article says it best:

Office politics tend to eclipse formal organizational roles and hijack critical organizational processes, making simple tasks complex and tedious, and organizations ineffective; wearing people out and accounting for a significant portion of work-related stress and burnout.

Of course, not every workplace turns toxic, but in many organizations, especially large ones, there’ll be some form of personality clashes or power struggles to deal with.

How It Works for Freelancers

As a freelancer, you don’t have to deal with office politics for the most part. For one thing, you’re not tied to a particular company, but have multiple bosses in multiple organizations. And even if you have regular clients, you’re usually detached from the office politics. You often work remotely, or are only in the office for short periods, and you just complete your assignments and hand in your invoice. If the politics get too much, you can fire that client and find new ones instead.

Again, though, there’s a caveat. As web design agency owner Paul Boag points out in his course on Working With Clients to Get Design Approval, freelancers often have to deal with their clients’ office politics, leading to problems like endless iterations and design by committee. So it’s something you’re relatively free of, but can’t ignore completely.

What It Means for You

If you thrive on reading people and their emotions, navigating complex environments, and sometimes competing with others for rewards, then you won’t be put off by the office politics that often come with working in-house. If you get turned off by it, then freelancing offers partial respite.

Benefits

How It Works for Salaried Employees

One of the big advantages of salaried employment is access to benefits like health insurance, paid vacation time, parental leave, and a pension or other retirement scheme. Those things can make a huge difference to your financial wellbeing and health, and that of your family too.

And beyond the main items, companies often organize events for employees and provide things like free gym memberships, subsidized company cafeterias, and access to a range of discounts and freebies. They’ll often have a budget for training, too, so that you can develop your skills on the company’s dime.

How It Works for Freelancers

Generally, as a freelancer, you’re on your own. You have to arrange your own health insurance, you don’t get paid when you take time off, and you have to plan for your own retirement. When it comes to training, that’s your responsibility too.

What It Means for You

This is one of the few areas where there’s a clear winner. The extra benefits provided by a good employer are very valuable, and a major downside of freelancing is the need to arrange things like insurance and retirement accounts yourself. Our recent Freelance Financial Bootcamp series can help you with organizing some of this.

Control

How It Works for Salaried Employees

In a company, you have a boss, and that person tells you what to do. You also have to work within the rules of the organization (both written and unwritten), which can be quite extensive. So at face value, you have less control over your work than you do as a freelancer.

But it’s not clear-cut. If you have a good boss, he or she will give you some autonomy, and as you rise higher in the ranks, the amount of control you have over your work should increase. You’ll still be dependent on others to get things done, but you can certainly carve out a high degree of autonomy.

How It Works for Freelancers

On the face of it, you have total control as a freelancer. You choose what to work on and what not to. If a particular assignment doesn’t interest you, you can simply reject it.

But the trouble is, you have to pay the bills at the end of the month. Unless you’re in a very good position, you’ll probably have to take on some assignments that you’re not that happy about.

You also have a “boss” for each assignment: your client will give you instructions, and expect a certain standard of work from you. You may get some autonomy or control over how to do the work, but if you depart too much from the client’s expectations, you’ll run into problems.

What It Means for You

The myth is that being self-employed gives you more control over your work than working for a company. That’s partially true, but as we’ve just seen, there are mitigating factors.

Motivation

How It Works for Salaried Employees

When you’re working for a single company, your motivation often comes in very structured ways. You get performance reviews at the end of every year, and those reviews determine things like whether you’ll earn more money next year, or get a bonus, or even get a promotion.

Even the much-maligned “daily grind” serves a motivating purpose: if you show up late to work, your boss will be angry, and if you show up late too often, you’ll get fired. So that should motivate you to get out of bed when the alarm goes off!

How It Works for Freelancers

As a freelancer, you have to motivate yourself. You have to find your own clients, do your own marketing, set up your own website, negotiate your own contracts. You have to keep putting yourself out there all the time, with nobody at your back telling you to do it.

And when you get the assignments, you have to manage them yourself. If you land a massive job that’s due a month from now, for example, there’s nothing to stop you spending the next 29 days getting up late and watching daytime TV. Nobody will be angry or fire you. But there will be consequences on day 30, if you’re unable to meet your deadline. So it’s up to you to organize your own time and make sure you stay on top of things.

Photo of a Calendar.

What It Means for You

If you’re not good at motivating yourself, the more structured environment offered by regular salaried work may work well for you. As a freelancer, you need to take the initiative yourself. But don’t worry too much—I don’t consider myself highly motivated, and I’ve survived as a freelancer. An empty bank account is a pretty strong motivation.

Security and Stability

How It Works for Salaried Employees

The “job for life” may be a thing of the past for most people, but still, in general, salaried employment is more secure than freelancing. You get a regular paycheck, and as long as you do a good job, you can rely on that paycheck each month. Even if you do get fired, your employer will usually have to give you some notice or provide some compensation.

How It Works for Freelancers

Freelancing can be very unstable. You may end up in a “feast or famine” cycle, where one month you’re swamped with work and the next you can’t find a single assignment. That makes it hard to plan and hard to manage your financial affairs. And even if you have regular clients, you might lose them at a moment’s notice.

But it’s not all bad news for freelancers. Those poor salaried employees have all their eggs in one basket, so for them, losing their job is catastrophic. As a freelancer, on the other hand, you have multiple clients, so if you lose one, you can simply rely on the others for your income until you find a replacement. It’s unlikely that you’ll lose them all at once, unless there’s a huge economic slowdown or upheaval in your industry—and that would affect salaried employees too.

What It Means for You

Generally, salary job is more stable, offering more predictable income from one month to the next. So it’s a good option if you don’t like the idea of worrying where your next month’s rent payment is going to come from. Working freelance, on the other hand, can be very up and down, so you’ll need a strong tolerance for uncertainty, especially in the early days. Keep in mind, however, that having multiple income streams does give you some extra security.

Community

How It Works for Salaried Employees

When you work for a company, you get a ready-made social network too. You work with the same people every day, and you’ll likely become friends with some of them. Companies often organize social events and training programs, and even trips for employees.

How It Works for Freelancers

As a freelancer, you’re often a lone wolf. You may work from home most of the time, or from your own rented studio space. Even if you do work on site for a company, you’re only there temporarily, and it’s harder to form the strong bonds that permanent employees do when they’ve worked together for years. There are plenty of opportunities to meet people, but you’ll have to make more effort to go out there and do it.

What It Means for You

If you like being surrounded by other people and being part of a strong social group, think twice about going out on your own as a freelancer. If, on the other hand, you’re an introvert like me, you’ll probably love being able to work in your own space, listening to your own music, with no distractions.

Summary

So to summarize, here are some of the main pros and cons of each:

Advantages of Freelance Work

Lots of flexibility to choose your own hours. Ability to choose the work you do. Little involvement in office politics.

Disadvantages of Freelance Work

No employee benefits. Lack of community. Unpredictable income. You have to be able to motivate yourself.

Advantages of Salaried Employment

Provision of benefits like health insurance, paid vacation, and retirement contributions. Generally more stable and predictable than freelance work. Strong sense of community, of belonging to a social group.

Disadvantages of Salaried Employment

Fixed hours, lack of flexibility. You may have to get involved in office politics. Often you have to defer to the boss over what work you do and how you do it.

Next Steps

In this tutorial, you’ve learned about the pros and cons of working as a freelancer and in a full-time job, as salaried employee. The next step is to decide which career path is right for you.

As you’ve seen, there are good and bad things about both choices, so it’s impossible to say that one is “better” than the other. It depends entirely on your personality and what you want from your work life.

So engage in some self-analysis, understand who you are and what you want, and then see how freelancing and salaried employment will work for you. The following tutorials may be helpful for you: