8/07/2015

Freelancing on the Rise

The world is changing.  It's been changing.  For billions of years.  Why are things different now?

Things are bought and sold.  Based on the rule of supply and demand.  As the supply goes down, the price goes up.  When the supply goes up, the price goes down.

During the 1990's boom, there were more jobs available than workers, so salaries went up, to attract employees.

During the past 10 years lull in the economy, the number of job candidates has gone up, and the salaries have gone down.

There is more competition at the low end of the market, where less education is required.  High supply of candidates, salaries are low.

For jobs that require greater skills like STEM, employers are challenged to find and retain skilled workers.  The demand is high because the supply is low.

The current trend is for employers to get rid of full time workers and replace with freelance workers.  There are benefits to this on both sides.

The employers reduce expenditures, like health care, insurance, vacation, retirement, training, etc.  Employers can scale up during peak times, reduce during low times.  They can hire people from across the globe.

The freelancers have potentially more freedom to work from home, increase in wages, variety of clients, etc.

I've worked as a temp, where you get paid hourly, and the job lasts for a single day, with no chance of extension.

I've worked part time, where the hours are below 40, the schedule changes weekly, including nights and weekends, with no insurance or vacation or benefits.

I've worked full time, with full benefits.

I've worked as a contractor for a firm, working for a specific client for specific duration of time, with no benefits or health insurance.

I've worked full time for a consulting firm, with full benefits.

And  I've worked as Freelancer or Independent Consultant, with no benefits or security.

There were pros and cons for each.

I liked the freedom of freelancing, the rates were higher, multiple clients, variety of technology.  On the downside, you have to set aside money for quarterly taxes, you don't get paid vacation, and fewer options on heath care.  A client could dry up overnight, the pay cycles are not set in stone, sometimes you wait for payment, you have to produce daily and meet deadlines and don't have much leverage.  There's liability insurance, laptop, software, training material that you're responsible for buying.  You have to be a one man army, in marketing, accounting, public relations, technology, networking, etc.  So although you're billing hourly for work performed, you have to subtract out of that rate for all the other stuff mentioned including down time.  So if you're accustomed to living paycheck to paycheck, this may not be an option, as you need some savings to hold you over and so you can sleep at night.  There's less security than a full  time job, although full time workers are not completely safe.  And freelancers have no glass ceiling on potential earnings, which is nice.

I chose to go back to a full time consulting role.  Work from home mostly, good technology, good clients, good rate, etc. Less politics, less bs work, less limitations.

The role of freelancer is growing and it has definite advantages.  However, for people in the mid to late end of their career, there're possibly too many unknowns to support a fixed lifestyle with existing  responsibilities.

Bottom line, get some good skills, continually learn, and be prepared for change.

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