In spite of the drawbacks, the gig economy is here to stay. The “Freelancing in America: 2017” survey from Upwork and Freelancers Union estimates that 36% of the current U.S. workforce is made up of freelancers, amounting to 57.3 million workers. The study also predicts that the majority of the American workforce will freelance by 2027.
Your friends and neighbors may already be working independently, at least as a part-time side hustle. If you’re wondering whether or not the lifestyle is right for you, these four reality checks will help you make an informed decision:
1. For better or worse, you’re in control of your salary and benefits
Benefits? What benefits? One of the most obvious downsides to freelancing is the lack of employer-sponsored benefits such as paid healthcare, matching contributions to a retirement account, and paid vacations. Freelancers are mostly on their own in pursuing (and fully funding) health insurance and retirement plans. There is some indication that things may change in the future: last year, legislation was introduced in Congress that would use Department of Labor grant funding to “test-drive” ways to provide portable benefits to freelance workers. However, the bill is currently stalled in committee and would, in any case, only serve as an experiment for more long-term solutions.
On a more positive note, many freelancers have seen a financial benefit to working remotely. Michael Burdick, CEO and founder of Paro, an outsourced finance department that has worked to redefine how finance professionals work and are paid, explains: “When your income isn’t tied to a geographical location, it’s possible to beat the economy by raising your wages while lowering your cost of living.” As a freelancer, you can also set your own rates for projects, but you’ll need to differentiate yourself and have a distinctive brand strategy if you want to be able to earn at the top of the scale.
2. For better or worse, you set your own hours
As a full-time employee, how many times have you fantasized about being your own boss? As a freelancer, that’s the reality — you control the hours you work on a daily basis. But you might not feel like you’re the boss because your clients are the ones who determine the deadlines and the volume of the projects you get. Nonetheless, you have tremendous flexibility about when you perform the work. If you want to work the traditional 9-to-5, go for it. If you prefer burning the midnight oil, that’s your prerogative. You’re also rarely tied to a single location, so whenever you feel like a change of scenery, you can pick up and move somewhere new (as long as there’s WiFi).
On the other hand, when the office never closes for the evening, you might find yourself working far more than the 40 hours a week you were used to. True, picking up more work could mean more income, but that creates a dilemma every time you have an opportunity to squeeze in one more weekend project. You’re also responsible for finding your own work, invoicing your clients, and keeping the books organized, which can take just as long as doing the work itself. If you don’t put work-life balance at the top of your priorities, you could succumb to burnout.
3. For better or worse, you measure your own performance
If you’ve seen too much incentive structure gamesmanship in your day, you may be thrilled that you’re no longer bound to corporate measures of success. But that doesn’t mean key performance indicators are something you can now ignore — because they sure won’t ignore you. It can be hard to measure the growth of your freelancing, though, especially considering most freelancers start out with a side hustle and a full-time job. Abdullahi Muhammed, Oxygenmat founder and CEO, notes: “Most freelancers don’t bother with KPIs. After all, they are busy pitching to clients, meeting deadlines, and just trying to keep enough money flowing in to make it all worthwhile.”
Still, as a freelancer, there are many clear indicators of success that you can use to measure your progress. Profit is the most obvious one. Are you making more this quarter than the one before? Other KPIs include the time you need to spend marketing yourself and the number of pitches required to win a client. Keep track of these metrics so that you can confirm you’re on an upward trajectory, or course-correct if you aren’t.
4. For better or worse, you set (and fund) the professional development agenda
Education costs money, but as a freelancer, there’s no longer a parent company footing the bill. However, professional development is critical, as 87 percent of Millennials will attest. Without opportunities for growth, employees are more likely to move on to another job, and this applies to your freelancing career as well. It’s not just about fighting boredom; it’s about maintaining a competitive edge by always keeping your skills sharp.
Fortunately, affordable opportunities for professional development do exist. Try searching a community college’s course list or join a professional association in your field to gain discounts to conferences. Professional development can also offer freelancers — who often work alone — valuable networking opportunities (and a reason to leave the house). Focus on honing your skills and continuing your education, and you’ll be able to bolster your network, command higher rates, and ultimately grow your business more effectively.
To the gainfully employed masses, freelancing used to mean “between full-time jobs.” But it’s quickly becoming the future of full-time work, and it provides a number of distinct advantages over working for someone else. If you have the discipline and the drive to hang your shingle, freelancing might be the most life-changing decision you ever make. Just remember to fully explore both the upsides and the downsides before jumping in. Preparation will make the difference between whether you sink or swim.
William Arruda, Contributor