I thought it’d be a fun exercise to do a comparison between working for a company and working for yourself.
Salary:
It’s steady income, and you can expect a paycheque deposited into your account bi-weekly like clockwork.
Time:
Sure, you may work some overtime here and there, but for the most part your workweek is pretty good.
35 – 40 hours a week, and you even get paid leave in some cases, like sick days, paid vacation, personal days, or whatever your company might offer.
In consulting, if you don’t have a project, then you’re “benched”, otherwise lovingly referred to as “beached”.. meaning that you sit at home and wait for the next project, but you’re paid to do so.
Healthcare:
Usually covered by your employer, giving you a whole range of great benefits that you otherwise may not have had the cash to pay for.
This I hear, is especially helpful if you live in the States, but not so much in Canada, as we are under the universal healthcare plan.
Retirement:
Again, an employer sometimes generously offers a 100% match!
Which means whatever you put into the retirement plan, they’ll match up to a certain percentage.
If you put in 3% of your salary, they give you 3% — it’s free money and a great perk of working for a company.
Office Supplies:
Need a pen? Paper? Huge industrial photocopier? Scanner? Huge projector? For the most part, everything is available at your fingertips, and if it isn’t, you can request it.
You don’t have to worry about having an office to work at, a good desk, a locked cabinet, buying your own computer or having a chair to sit in.
Resources:
Lots of people around you to pick the brains of, and you can lean and ask for help from anyone in your department. At least, in theory.
Paperwork, Taxes and Deductions:
Automatically taken off your paycheque.
You don’t have to worry about contributing to any of it, the company has everything set up automatically, and they just deliver a summary to you at the end of the year, which makes your taxes super simple.
If you need to change something, you just call HR.
You don’t have to deal with any of the nuances of being self-employed — you get your expenses reimbursed in full with (barely) any questions asked.
THE DOWNSIDES
- Having to work overtime for free (in most cases)
- Lots of seemingly redundant & unnecessary paperwork for performance reviews
- Never having autonomy to do what you want without deferring to your manager
- Office politics are pettier, because you’re all employees jostling for raises
- Not getting reimbursed or paid on time
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
I never let them make me work overtime. 🙂 (This can be country-specific, I don’t think they’re allowed to make me work more.) If there’s more work to do, I agree to make extra-hours that I will “take back” later and make sure to do that.
My company is small enough not to make us do any reviews, and I always get paid on time. Politics are so insignificant that they are just fun to watch.
Autonomy? I’m in a place right now where I wouldn’t want it: I prefer the safety my manager gives me. If I don’t make my part on time, it’s the manager’s fault: he didn’t assign enough people. If I made it but it sucks, it’s the manager’s fault: he didn’t schedule enough tests. Okay, we do have cases that are the programmer’s fault and he then has to work for free overtime to make up for his deeds, but basically, I feel very safe and taken care of, which is my top reason to work for someone.
I’d just like to note that I’m super-lucky to be a programmer, and one in a very cool company. In my country, people do have issues with being informally forced to work overtime, or don’t get paid on time, and of course, a company without all the politics – that’s gotta be rare.
Do you think you'd be a freelancer if you worked in the US and without the socialized medicine safety net?
Yes. The money I’d make is more than enough to cover a health plan equivalent in Canada.
While these aren't my top reasons for not wanting to work for myself, they are pretty good perks. Mostly because my company does take care of all this stuff. I haven't had to pay for a move yet!
I’d be interested to know what your top reasons are! 🙂
This is all from my consulting experience but I don’t have experience in any other industries.
Well, a lot of these are pretty specific to my situation.
In my field, products can cause billions of dollars total and the whole project can last for 15-20 years. The only places that can afford to do something to that scale are large corporations. My education is very niche, so to work on the best stuff, I work at a large company.
I hate sales. I dislike trying to drum up business. I am not a people person. I'd prefer to sit in the back and work on models and equations all day.
The biggest benefit so far was that my company paid for my $40,000 grad degree without me putting up a single red cent. And if I stay here for a few years, I get some stock options as a reward!
But you can't work in your pajamas. Which has to be the worst reason to love freelancing/not-working-for-a-company ever, but it's still kind of a fantastic perk. And no one looks at you like you're insane if you take 5-15 minute breaks to do yoga or jumping jacks or whatever between tasks to keep the blood moving.
I suppose those are poor substitutes for a steady paycheck which is, admittedly, awesome.
Why working for a company is the best…if you work for a company that does all those things.
One of the reasons healthcare reform is such an important issue here in the U.S. is that employer health benefits are getting so rare. Even when they're offered, it's usually only to people that work full-time and companies have sneaky ways of making sure people only work 39 documented hours and crap like that. I don't know the numbers so I don't know if companies do "usually" offer health benefits, but it doesn't sound right to me. Maybe it's just regional, though. I feel lucky to have health insurance but they've given me the run-around on multiple occasions and definitely cost me way more than expected thanks to their sneaky way of asking for more money AFTER the fact when everything was done and supposedly paid for.
Likewise, I don't hear a lot about company retirement unless people are working for the government. I know the company my husband works for doesn't have a retirement plan. We're on our own.
Companies are also tightening up on supplies. I know it's not technically "company" work, but I hear all the time about teachers having to bring in their own supplies. As if they aren't paid low enough here! Sad.
I remember growing up and constantly being told how great the military was because you'd get health insurance and retirement. Those who weren't planning to go into the military themselves were told that they should marry into it and there were quite a lot of hasty marriages for that reason. Quite a few members of my family went in. Now, I have nothing against the military itself and I really respect people who do it for the right reasons, but I feel sad that a lot of people are literally risking their lives because they don't see another way to get those benefits that are becoming more and more crucial here in the U.S.
But, I do get your point. People sometimes fantasize about working for yourself. As a business woman I can say that it definitely has its rewards, but it's not nearly as easy as some imagine. It's easy to forget and fail to appreciate what other people do when you work in a company. When you work for yourself you end up wearing a lot of different hats. Some fit better than others, but you don't always have the resources to be able to delegate tasks to other.
Right now, I work within an organization. There's definite pros and cons for sure. However, in a few years, I might consider opening a small business on the side.