Contracting vs. Being Employed: The Pros and Cons

The UK's gig economy has boomed in recent years, with over 5 million being self-employed or freelancing. And we're seeing this in pretty much every sector including child care, construction and health and social care. Some employers provide the option to work with them on a freelance basis as we see in assessor professions.

Plus, the thought of becoming your boss and having the flexibility to work when you want is very tempting. According to a blog post written by Caunce O'Hara, 63% of UK employees say they are willing to consider freelancing.

But to go out on your own is a big thing! To help, we explore the pros and cons of contracting/freelancing and being employed full-time

Full-time Employment

Full-time employment is still by far the most popular route to securing regular income. And despite the rise of contracting, full-time employment is not going to go anywhere.

When you sign a full-time permanent contract, you become an employee with a fixed and regular salary, and you become the responsibility of the employer. You will be working for them, hopefully, for the long-term, they will oversee your methods, and they will look after your taxes. 

In addition, most employers provide their employees with a number of perks. This often includes paid annual leave, sick pay, compassionate leave, paternity and maternity leave. And plus, you're given regularly work

But despite these amazing perks, there are drawbacks you have to keep in mind. For one, you would need to abide by their working hours and policies. And if you were assigned to do a project or task, you really can't say no unless it is outside your remit. 

Also, since full-employment does offer these benefits, it quite competitive to land a role, especially with large organisations, since everyone would like to have those benefits as well.

Contracting

Contracting, whether that may be via self-employed or freelancing, is the alternative option to full-time employment.

Contractors are usually actually classed as self-employed individuals, or they are employed via an agency. And contractors are usually in demand when companies are experiencing very busy periods. 

The contracting route provides a number of advantages. For one, they can usually earn up to three times higher than permanent employees. And since contractors are responsible for their taxes, there are some benefits in this area too.

Another benefit, and this is especially the case with freelancing, is that you can commit to tasks, assignments and projects, as you see fit. So you're more likely to be doing projects that interest you. Of course, this is not always guaranteed.

The downside, though, when contracting, you are not an employee. And so you don't get the same benefits that employees do. And when you want to take time off, for any reason, you won't get paid. That's the harsh reality.

Summary of The Pros and Cons

Employed

Pros

• Regular work.
• Regular salary.
• Access to company benefits like holidays and sick pay.

Cons

• Little flexibility.
• Can't really choose what work you can do.

Contracting

Pros

• Flexibility.
• Tax benefits.
• Choose which projects to work on.

Cons

• No access to employee benefits.
• No paid time off.

Which Should You Choose?

Whether you go down the contracting route or full-time employment route, whichever you decide, the choice is yours. Both routes have their advantages and disadvantages but we hope this article has enabled you to weigh up what your options are.

You need to consider everything before you decide which path to go on. If you are switching from being an employee to self-employed, you might have to make adjustments to your lifestyle. If you need further information, you can speak to a careers adviser or attend meetups for freelancers to gain their perspective.

About The Learning Station

The Learning Station is a London-based training provider that specialises in delivering online distance learning course in child care, construction, and health and social care. For information on how The Learning Station can help you, please contact the main centre on  020 8342 7210.

Thanks for reading! What are your thoughts on this topic? Would you prefer to be contracting or be employed? Please let us know in the comments section below.