Is freelancing or working a full-time permanent role best for you? Make a more informed decision based on your career objectives with our helpful guide.
Many of us have been impacted in one form or another by the global pandemic, the silver lining in much of this is the growing “boom” bubbling underneath the surface in the digital space. For creatives, digital marketers, and communications experts, this has become quite an opportune time to evaluate various career opportunities and advance yourself in your field or industry of choice.
While several opportunities opening up in this space are contract or freelance opportunities, there are also tons of great full-time roles opening up as well. But how do you know which is best for you? Does it make sense to pursue a contract role if you’re already a full-time, “permanent” employee? What if you’re a contractor, but would like to make the transition to full-time status? Ultimately, it comes down to your personal goals and preferences and what it takes for you to succeed and do your best work. So let’s take a deeper look at the differences between the two so you can make a more informed decision and accelerate your career!
Freelancing Vs Full-Time Jobs for Creatives
W-2s vs 1099s
One of the most important things to know about contracting or freelance opportunities is the pay. Most agencies I’ve worked for now pay weekly. Depending on the company and your contract agreement, you may be able to delay your pay by submitting your hours worked two weeks at a time rather than weekly if the system allows you to do so; however, most enforce the weekly pay schedule.
Secondly, if you are hired as a contractor or freelancer directly, even if it’s through an agency, you may have the option to be billed two different ways:
- As an employee of the agency, on a W-2 tax form.
- As a business/entity, on a 1099 tax form.
These differences between the two primarily boil down to taxes, but it’s also important to note that if you’re a 1099 contractor or consultant, you are liable for a lot of your own expenses, including transportation, various equipment needed to perform your job, etc. Depending on the client, you may still be supplied with equipment and supplies needed to perform your job properly, but this is ultimately up to the client.
As a 1099 contractor, you will also be responsible for your own taxes as opposed to having them automatically deducted from each paycheck. This means you’ll need to be very diligent about managing your finances, or you may even want to consider seeking help from a CPA or financial advisor to help ensure you’re prepared to take on the costs. The good news is that as a 1099 contractor, you can also write off many expenses that you couldn’t as a standard W-2 employee. If this all sounds like a bit of a headache to you and you’re not an agency comprised of at least 3 or more clients, you may want to stick with freelancing as an employee on a W-2 instead.
If working directly for the client company (i.e. someone at the client company directly invited you to work as a contractor for a specific project or in a specific role or you secured the contract independently rather than being contacted by a recruiter), you may have a better shot at negotiating a higher pay rate as well. Your pay may be a little on the low end if you go through an agency because the agency takes a cut, (rightfully so), for finding the talent (you) and placing you in a desirable role with the client company.
However, if and/or when you are offered a full-time position and decide to take it, you can typically negotiate an annual salary worth more than what your current hourly rate is paying. Essentially, you’ll then be able to also pocket the additional amount that was going to the agency before—in other words, you “cut out the middleman.”
W-2 Benefits Vs 1099 Benefits
- As we discussed in Part 1 of this series, the agency often provides their own insurance/benefits packages (albeit they often aren’t as good as what employees enjoy)
- As a 1099, you’re all on your own! However, there are several alternative benefits options now available for freelancers and contractors, making it a lot easier to stay covered.
- You can also reach out to a certified health advisor to help you put together a customized plan based on your needs and what you can comfortably afford.
Future Growth Opportunities
Here are a few questions you’ll want to ask yourself when you begin thinking about growth opportunities within any organization.
- What does growth mean to you? Is there a clear path up or laterally
- What’s the future of the role? Are there other roles in the company you can see yourself in?
- Do you desire to move up the ranks in a larger organization? It may take longer but some people like clearly designed pathways to get to their desired role or long-term career objective.
- Do you enjoy tackling a variety of projects over time, or would you rather have a more structured workflow of upcoming projects/work?
- Benefits of being a “Full-Time Freelancer” – there are several creative agencies that can help you get gigs that last anywhere from 2-3 months or maybe even 6 months to a year or more at a time. This gives you time to decide what type of work and what type of company you’d like to work for best, or it could help you determine that full-time freelancing is ultimately the better path for you.
- Some creatives may op to find their own opportunities via platforms like Guru, Upwork, and Fiverr and create their own stream of income by working with clients directly for specific jobs/tasks.
- If you’d like to accelerate quickly within an organization as an employee, be aware that some companies require you to stay in your given role for a specific time frame (some require at least 1 year) before you can apply for another role within the company.
Entrepreneur Vs. Employee
Here are some important questions to consider when deciding whether you’re more suited for an entrepreneurial path or an employee path:
- Do you naturally enjoy working for yourself rather than for a company? Are you a self-starter and prefer to work independently, making your own schedule, etc.? Are you self-disciplined enough?
- Do you prefer to not deal with politics or office culture, but still would like the added security of a contract freelance role that allows you to work in 3, 6 or 12-month intervals? Your day-to-day is very similar to other employees, but you may not get access to benefits such as training, resources, conferences, ability to attend quarterly all-hands or other departmental meetings where confidential, proprietary information is shared and discussed at length. (Sometimes you may also be excluded from company parties, etc.) It’s sort of like being a second-class citizen depending on the organization’s policies on how they manage working relationships with contract workers.
- Is creative collaboration important to you? (in office, remote, co-working, etc. office setup, amenities, etc. ) Think about how important it is for you to collaborate with other team members. You may be able to do this more effectively as a freelancer (setting your own hours/times to meet, etc.) or you may be able to find a team in a perm role that’s big on collaboration and is constantly looking for ways to foster a more collaborative environment. Once again, this too will boil down to preference.
Do you like freedom? Ability to set your own hours? WFH (working from home), etc. While WFH may be an ongoing part of some work cultures, others are also considering integrating long-term remote work as part of their permanent culture especially in light of how the pandemic has impacted work culture as a whole. However, it’s important to note that many companies may still require their employees to resume life in the office as time progresses and we resume a “new normal” work environment.
Long-Term Vs. Short Term Stability
- With freelancing, financial stability can be a bit less secure. At any time, the agency or the client can decide to terminate or not renew your contract due to various factors/reasons. Some freelance roles can go on seemingly forever but recently, a new rule was enacted to ensure some companies don’t take advantage of freelancers by keeping them on for extended periods of time without the possibility of full-time conversion.
- Most companies know if they want to hire you on full-time or not after about 12 months, but there may be a variety of reasons why they won’t or can’t seem to convert you. In many cases, you’d have to apply to a new role directly and go through the entire process as a new candidate to become full-time, as if you weren’t currently working there. But, the good news is, many companies give priority to contractors they’ve already worked with as they are familiar with your work and would like to continue working with you. However, this is not guaranteed, as there will be other “external” candidates vying for the job as well.
- Some may want to stay on as contractors only – it can truly come down to preference. Regardless of how it turns out, the relationships you’ve built and the knowledge you’ve gained over time as a contractor will always be beneficial to you moving forward in your career.
- Full-time or perm roles can often create a false sense of security as well, because you can just as easily be laid off as a contractor. The difference; however, is that with being a full-time employee, you are typically entitled to certain provisions such as additional pay/severance and other benefits that may make the transition a little easier.
No matter which path you decide to pursue, be sure it aligns with your personal career goals first. A job can be all the right things on paper, but what truly matters is the day-to-day experience and what you’ll be able to not only bring to the table as an asset, but also what you can gain from the experience to continuously progress and move your career forward in the future.
For more helpful tips and advice on creative professional career paths, shoot me a note: email@example.com.