Is Freelancing Worth It? The Pros and Cons
The freelance revolution is massive and growing rapidly. Freelancers can be found in every industry and business size, across a wide range of disciplines including finance, technology, legal, sales, and marketing; contributing some $1.3 trillion a year to the U.S. economy.
Sure, the promise of being your own boss sounds alluring, but is freelancing really all that it’s cracked up to be? And perhaps more importantly, is it actually a feasible long-term career? We’ll investigate whether freelancing is worth it for working professionals and explore some of the biggest pros and cons of self-employment.
My personal take on freelancing
Before we go too far, and in the interest of full disclosure, I want to go on record and state that I’m a big fan of the freelance, or gig economy. It’s probably an unusual stance for a staffing company owner to take, as freelance work often cuts out the need for a third-party recruiter, but as this article will show, the pros for both the individual (e.g. talent) and “buyer” often outweigh the cons.
The truth is, I’m a consumer of freelance talent, which represents some of the best workplace relationships I’ve had throughout my professional career. I’ve hired experts in their respective fields, such as design, development, and digital marketing (SEO). While not every new engagement is a match made in heaven, separation is quick and painless for both parties. The ones that have lasted, however, evolved into true partnerships with mutual benefit for all involved. Unlike the traditional (and too often unhealthy) employee-employer relationship, the very nature of a freelance engagement is built on trust, respect, and a dollar paid for a dollar earned. It’s how work is supposed to…work.
For anyone who thinks my perspective on the traditional workplace model is exaggerated, ask yourself why HR departments are so large, why labor unions are necessary, or why there’s an entire industry built around attorneys representing one side or the other in lawsuits over harassment, discrimination, and wrongful termination. Let’s just say it’s not because things are going so well out there between workers and those who employ them, and if you or I were designing a system of buying and selling both labor and talent (which, is really what we’re talking about here), it probably wouldn’t resemble anything close to what we have today.
So, is freelancing the future of work? Let’s look at some data.
The state of freelancing in 2022
We’ll dive into the upsides and downsides of freelancing in just a bit, but it helps to start with an overview of the current market.
According to the most recent Freelance Forward survey conducted by Upwork, one of the world’s largest online talent marketplaces, 36% of U.S. workforce members are freelancers. That’s the largest share in the eight years since the survey started.
Freelancing as a profession is growing among the nation’s most educated workers, with 51% of post-grad professionals freelancing. That number is up 6% since 2020, driven by high demand for skilled professional labor.
Skilled services make up the largest chunk of the freelance marketplace. That covers fields like computer programming, IT, writing, design, marketing and business consulting. But even hands-on work is represented in the freelance market; 20% of production and manufacturing workers are freelance, as are 25% of food prep and food service workers.
It’s no secret that the freelance world has been expanding for many years now, and according to all market indicators, that growth is only going to increase.
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The pros of freelancing
Starting has never been easier
Gone are the days of pounding the pavement and cold-calling for leads (though you can certainly still use these strategies, if you’d like). Online talent marketplaces, like Fiverr and Toptal have exploded in popularity, making it easy for companies to connect with the exact type of freelancers they’re looking to hire and in turn, making it simple for freelancers to find work.
In fact, there’s plenty of work to go around. The majority of freelancers find their plates consistently full with projects, with 60% reporting having “enough” or “too much” work, according to a global survey of freelancers in more than 30 countries.
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Unparalleled flexibility
Greater flexibility is one of the top reasons people look for a new job, so it’s no surprise that millions of workers have turned to freelancing to find that flexibility. The ability to set your own hours can create a better work-life balance, while choosing your own clients enables you to pivot from one project to another as you see fit.
Earning potential
When you set your own prices, there’s no need to approach your boss and make a case for why you deserve a raise. If you’ve got high-quality skills that are in demand, the only limit on your earning potential is you and the time and energy you’re willing to invest. How high can you go?
In the Freelance Forward survey we mentioned earlier, 44% of freelancers said they earn more working for themselves than they would with a traditional job, a number that’s up from 39% in 2020.
Creative freedom
Freelancing affords the ability to try new things on a regular basis and easily change up what you’re doing if you get bored or something is no longer working. As your own boss, you’re the chief creative officer of whatever business you’re running. Many workers find that having a higher level of creative control leads them to feel more engaged with their work.
You can do it while job searching
Not all freelancers are in it as a long-term career move. Freelancing is a great temporary option if you’re looking to bring some money in the door while you look for a more permanent position. You can leverage the same skills from your full-time career or do something completely unrelated like administrative work or data entry to make fast cash.
…Or use it to supplement your regular job
Likewise, not all freelancers consider it their full-time job. A portion of the freelance workforce takes on projects during their off hours, like nights and weekends, to supplement their income or flex their creative muscle. Stay-at-home parents may freelance for a few hours a week to provide some more wiggle room in the budget. Some employees negotiate going freelance with their employers to give them more flexibility.
Cons of freelancing
Risk
The nature of freelance work inherently comes with a different type of risk than maintaining a traditional, full-time job. When you’re not a W-2 employee, there’s no guarantee of a regular paycheck and your income is entirely dependent on your ability to generate revenue. The amount you make may be unpredictable or may fluctuate depending on timing and market conditions. What’s more, you’re more expendable to your clients than their full-time staffers, so if they fall on hard times, freelance contracts may be one of the first cuts.
It’s worth noting that the rise of freelancing has also brought about the growth of programs designed to give independent workers more protection. The CARES Act, for example, was instituted during the height of the pandemic and gives states the ability to extend unemployment benefits to freelancers so they have a financial safety net if work unexpectedly dries up.
The best way as a freelancer to mitigate risk is to always know your value in the market and the demand for the service you provide, which you can then balance against working in a traditional setting.
Lack of structure
The flexibility that freelancing offers comes with what some would consider a downside: a lack of structure. When you’re in complete control of your own schedule, bringing order to your days is totally up to you. Many find it hard to adjust to such a fluid workflow. You’ll need to be extra diligent to avoid getting sidetracked by things like your phone and your refrigerator.
Additionally, it can be surprisingly challenging to feel a sense of accomplishment without the rigid goals of a traditional workplace. Without a boss setting expectations and checking in on your progress, you’ll need to take charge of your own professional achievements and career development.
Loneliness
When you’re flying solo, you don’t have coworkers to commiserate with or a manager to make the final call in tough decisions. Freelancer loneliness is a genuine concern, with a whopping 64% of freelancers saying their job makes them feel lonely on a daily basis. When the stress and demands of the job fall squarely on you, your mental health can take a hit. Being attentive to your needs and taking steps to combat loneliness–like connecting with other freelancers–is essential to avoid burnout.
Added expenses
In addition to regular income tax, which every worker pays, freelancers are also subject to an additional self-employment tax. This makes up the portion of Social Security and Medicare taxes that are usually covered by a W-2 employer. Depending on your line of work, you may also need to consider liability or other business insurance to protect yourself and your assets.
Competition
The growth of the freelance marketplace doesn’t come without downsides; it also means the market is saturated, and freelancers in popular fields like skilled services face steep competition. In addition to the time you spend on actual client work, you’ll need to devote time to marketing your services and closing new deals.
So, is it advantageous?
So, now for the burning question: is freelancing worth it? The answer depends on you–what you want from your career, your professional goals, your responsibilities outside of work and your preparedness to deal with the challenges in addition to the benefits freelancing can bring. Our best advice: learn as much as you can and consider testing the waters with a few part-time freelancing gigs before making a decision on whether it’s right for you.
Related: How to become a digital nomad
