Freelancing: how to decide if it is right for you
Clients are relying increasingly on the powerful freelance market to meet their project delivery needs. You might have tried freelancing or contracting in the past or it might be brand new to you. In this article, we'll take you through some of the key considerations that will help you decide whether freelancing is right for you.
What does being a freelancer mean?
Freelancing is a form of self-employment. Instead of being employed by a company or committed to a single customer, freelancers have the freedom to choose the projects they'd like to work on and the clients they'd like to work for. They usually work from home and/or directly at client offices, although some choose to rent their own office or co-working space.
The key difference between this and traditional employment is the level of independence required. A freelancer is responsible for his/her own income and job security, in addition to several aspects that would normally be taken care of by an employer (in traditional employment). On the flip side, freelancers can earn significantly more money for their work and are not restricted by commitments that are often found in employment contracts. More on this below.
While it's possible to balance freelancing with employment, many commit to freelancing full time. This is the most effective way to build a strong portfolio and track record of satisfied clients.
Things to consider
Let's start with the biggest plus: higher earnings potential. Freelancers typically earn rates far higher than salaries for equivalent roles in employment. Over 79% of freelancers surveyed confirmed that they are earning more than employees in similar positions. On top of this, your ability to optimise your tax position is greater, as you are in control of how much you pay yourself and in what form (dividend, salary, ...). Many business expenses are tax-deductible, which makes things even better. From a financial perspective, moving into freelancing will usually result in more money in your pocket.
You might be wondering: what does "paying myself" mean? Most freelancers set up a limited company to contract through and "employ" themselves via this company. Although this model is not obligatory, it helps maintain a clear line of separation between business and personal accountabilities. Being a freelancer will invariably involve more admin, as you will need to handle your own employment, tax, social security, healthcare, absence and more. You will also need to manage your own accounts (invoicing, tax returns, etc.) - although many freelancers outsource this work to an accountant for a small monthly fee.
An often-forgotten benefit of becoming a freelancer is the opportunity to deliver a variety of different projects - or develop a deep skillset in areas of your choosing. As you are in charge of which clients and projects you accept, you can build industry-specific expertise or carve out a niche in a particular technology. This might take a little patience and perseverance at the start, but once you've had a couple of projects under your belt, the offers will become more frequent and relevant.
Job security is something that keeps many people in traditional employment. Freelance positions can be less secure, as clients can cancel or delay projects and most clients will not pay freelancers to sit "on the bench". According to a survey, 58% of freelancers considered acquiring new positions as their main challenge. This is partially compensated by the higher earnings potential, which helps pay for the "downtime" spent searching for jobs. In addition, we advise freelancers to grow strong relationships with client teams and agencies, so opportunities continue to emerge. Register with Interval Jobs to ensure you are notified first whenever a new suitable job opportunity arises.
Recent events have changed our perspective on the importance of flexibility and work-life balance. Remote working, which (for many of us) was previously not an option, was brought into the mainstream. Freelancers have long enjoyed the freedom to work from where they want, with flexible working hours too. Because of this flexibility combined with higher earnings, one of the key challenges for freelancers (around 35% of those surveyed) is maintaining a healthy balance between work and private life. To counter this, our associates recommend changing scenery every now and again, even if it means just working from your favourite café for the day or taking a train to somewhere new. Discover their top tips by following us on Instagram!
It's up to you
If the above sounds exciting to you, you're in luck. It has never been a better time to make the leap into the world of freelancing. The market is full of exciting opportunities and clients are relying increasingly on freelance resources to ensure their projects are delivered by experts with the capability and capacity to get the job done. There are probably things you will miss about traditional employment - but we think it's worth finding out yourself whether the grass is greener on the other side.
At Interval, we support our clients in finding the perfect teams for their projects, whether freelance or permanent. We also support our associates throughout their careers with us: from application and onboarding to in-flight project delivery.
What do you think? Leave us a comment or get in touch directly.