This, like most pieces on Medium, is just an extended platitude. Having complete flexibility and ample free time is great. You know what else is great? Stable employment with a benefits. There's a reason that most people continue to operate within the established hierarchy instead of becoming self-employed: companies afford certain things to their employees that freelances do not receive.
Working for yousef can be difficult and fruitless. Working for a company can be more lucrative, more secure, and easier. The latter are worth being bored with your job to many people.
I see this argument often, and this is how I generally respond.
Benefits can almost always be compensated for with more money. 401(k), heath, dental, paid time off -- all of these things are just another form of compensation. If you make enough money to make up for what you would otherwise lose, then these are no longer a reason to stay with a company.
Security, on the other hand, is a bit different, but in a way can still be compensated for with money. For example, think about how long it would take you to get a job after your own company goes under. 6 months? A year? If you're able to stash enough of a buffer to cover you during that period, then you have just established security.
Of course, I realize it's easier said than done to earn enough of an income on the side to make up for the monetary value of all of these benefits/security. But my point is, comparing benefits, security, and compensation as separate things overcomplicates weighing working for a company vs. working for yourself -- it all (for the most part) boils down to money.
In my experience it's very rare to get any sort of real job security these days.
Whilst working in the financial industry throughout 2008-2010 I saw many of my colleagues let go for no reason other than that they were told to reduce head count. Many of them had worked there for 10 years.
Unless you're working for a government organisation or similar there is every chance that you will be let go at any time with your minimum notice period.
There are plenty of companies that focus on ROWE (results oriented work environment). You can have a stable job and not have to pretend to work. And if you have to do busy work in the office when you're unproductive as a show, leave and find a place that values results.
There is some value in having employees and colleagues available in the same physical space within the same general timespan. I understand why entities don't want you to just "pack up and go home" whenever you get bored. Part of the reason they pay you is so that you'll be there when you're needed, within the pre-agreed timeframes. "ROWE" is all well and good, but it's not mutually exclusive with a work environment that expects, in general, to be able to swing by your desk during the day and talk to you.
>Benefits can almost always be compensated for with more money. 401(k), heath, dental, paid time off -- all of these things are just another form of compensation.
The thing is that some of these are worth much more than their transformation into a raw dollar value. As someone who has just recently transitioned from primarily self-employed to primarily corporately employed, the ability to take a day of PTO at basically any time has been amazing and no amount of raw dollars can compensate for that ability (except as these dollars are deployed to arrange affairs such that others can assume your responsiblities at the drop of a hat, but this takes more than raw dollars). I can also say that health insurance is worth more than its face value -- health insurance is an admission ticket into the doctor; if you have an insurance policy, they'll give you everything you want and treat you well, and if you don't, they'll demand large sums of cash on an almost-daily basis to continue to provide for your medical needs. If you have an astronomical amount of money maybe this isn't a concern, but most people not making double-digit millions per annum are going to find it difficult to cope with self-pay rules for any significant medical work.
>If you're able to stash enough of a buffer to cover you during that period, then you have just established security.
Security doesn't really work this way either. As an employee, you have an implicit sense of perpetual security. As long as you continue to provide the base value you were hired to provide, you will, in general, continue to collect your paycheck indefinitely. Getting paid in perpetuity is MUCH more secure and less stressful than watching your six months' worth of saved money tick down, especially if major or unexpected expenses occur.
Though I did well consulting full-time for the last five years or so, my wife and I were always worried when it came time to make big purchases and would often opt not to do so, since we'd never know for certain when our next chunk of money would come in. Since I've switched to employment by a corporate entity, we've felt much more comfortable making these necessary purchases and have been trying to clear our backlog of major stuff needed (appliances, vehicles, etc.).
It's more than just money. There's a peace of mind and freedom from stress that comes with corporate employment that can't necessarily be mapped onto an [attainable] dollar value.
Everyone wants to cross the chasm to independent wealth, but they don't understand that the process of doing so can be extremely onerous and stressful. As for me, I haven't given up yet, but it's not a pleasant experience.
No, because there are ramifications outside of just losing 8 hours of billable time. You don't have colleagues who can take over your responsibilities or who can maintain without your involvement at a moment's notice like you have in a robust corporate environment. It takes a lot of work, notice, and involvement to schedule a day off, you worry about the way it will affect the perception of the clientele, and you lose the 8 hours of billable time. There is much more stress and much different potential long-term consequences of taking a day off as a self-employed individual than as an externally-employed individual.
It seems to be a psychological thing. If you get a higher hourly/daily rate to make up for the lack of traditional PTO, you feel even worse about taking unpaid time off because you're "losing" even more money.
I agree, but I think that means the comparison should be about the things that really are different. Like having to pester people to pay for work that you completed honestly and on-time.
Self-employment certainly isn't for everybody, but your "companies afford certain things to their employees that freelances do not receive" deserves a response.
When you are self-employed, you employ yourself. Most if not all of the benefits that a company can provide to its employees, you can provide to yourself. Many of these benefits qualify as business deductions, and while some of them (such as medical insurance) might cost more when not purchased as part a group (company), that's not always the case. For instance, if you're young, in relatively good health and have reasonable earnings, a high-deductible health plan coupled with a health savings account might actually be more attractive than what you receive from the average employer.
In other areas, such as retirement, self-employment can be a boon. If you're a sole proprietor, for instance, you can set up a self-directed 401(k). Each year, you can contribute up to $17,500 as an elective deferral and up to 20% of your net self-employment income up to a total of $51,000 (at 2013 limits). So if you're doing brisk business as a freelancer, it can be very easy to save more than you ever likely would if you worked at a company and just took the 3-5% 401(k) match (assuming this is even offered).
Can working for a company be more lucrative, more secure, and easier for some people? Absolutely. But for others, working for yourself can be even more lucrative, even more secure and far more enjoyable.
The main problem is health insurance. Contra your claims, I have never seen insurance on the private market cost less than employer provided group health insurance. Usually, individual insurance is anywhere from 25% to 50% more expensive (at least as far as I've seen), and that's if you're in good health. If you have pre-existing conditions, all bets are off. Even if insurance providers have to provide coverage (thanks to the Patient Protection and Affordable Care Act), they're still free to charge you an arm and a leg.
If you're young, in relatively good health and have reasonable earnings, a high deductible health plan coupled with a health savings account might actually be more attractive than what you receive from the average employer.
In my experience, a high-deductible health care plan coupled with a health savings account is what you get from the average employer. All of my employers have at least offered the option of a high-deductible health care plan, and for a couple, it was the only option for new employees. At that point, the usual group vs. individual dynamics apply. A high-deductible group health care plan through a corporate employer will be cheaper than an individual high-deductible health care plan.
I work for myself. I'm 36, with a wife and three kids. Health insurance for of us (in Oregon) runs about $600/month. Assuming an employer would pay 100% of my premium, that means to come out equal I have to earn $7200 more each year than I'd make from a salary. For a freelance software developer, that's no problem at all.
I agree that if you have a pre-existing condition then the numbers might look a lot different. But if you are healthy, working for yourself is a great opportunity, and you needn't be deterred by the cost of private health insurance.
> Contra your claims, I have never seen insurance on the private market cost less than employer provided group health insurance.
I pay under $275/month for a HDHP and the maximum I contribute to the HSA each year exceeds the deductible.
I don't know what a similar plan would cost through an employer, but all things being considered, including the fact the premiums are a deductible business expense and the HSA contribution is pre-tax (post SE tax), I have never once considered that an employer could offer me a significantly better package.
>>This, like most pieces on Medium, is just an extended platitude.
I agree that this is most of what I find on Medium. I'm always surprised that things like this end up on the front page, although I guess people debate their value and that drives it up. However, I think this is a feature of Medium, not a bug. I use Medium. I don't promote anything I write on it, or really even revisit it that much. I use it mostly as a pretty, easy to use, journaling tool. I often find that writing out my thoughts leads me to interesting conclusions (really what PG talks about in The Age of the Essay [1]). Medium lets me do that easily, for free, and in a way that looks very good (kind of like a free PostHaven). Also, although it's not something I have been good about yet, I like the idea of revisiting posts and making notes with their system and reengaging with my thoughts. Maybe some day I will use it as a drafting tool, or use it to share my thoughts with people I respect and let them interact with it in an interesting way.
Working for yousef can be difficult and fruitless. Working for a company can be more lucrative, more secure, and easier. The latter are worth being bored with your job to many people.