Freelancer is a free worker. The term “freelancer” is commonly attributed to Walter Scott and is used in Ivanhoe to describe a medieval mercenary warrior.
Freelancers often offer their services themselves - on special online resources, through advertisements in newspapers or orally, that is, through personal connections. Freelancing is especially common in such spheres of activity as journalism (and other areas of activity related to writing texts), law, computer programming, architecture, design in all its forms (advertising, web design, interior design, etc.). However, in construction, translation, photography and video filming, various types of expert consulting work, and self-employment are widespread. It is more profitable for contractors to hire workers for the season than to keep staff in working order.
The professional services market is already well developed in Western Europe and the United States and is growing rapidly worldwide. It continues to attract more and more new members, both artists who volunteer their services and individuals and organizations looking to continue working on an often remote base.
Advantages and Disadvantages of Self-Employment
Benefits:
For freelancers
• Independence (not for everyone).
• Free work schedule (very useful for students).
• Ability to work from home (this is especially important for young mothers and people with limited mobility, as well as for people with health problems).
• Relatively low threshold for running your own business (a freelancer often does not need to spend money on office rent and daily travel expenses, although for some work, such as photography, he will need to buy expensive equipment from his own funds).
• Do only their job.
• Often, but not always, the most pleasant working conditions: personal workplace, clothing, temperature, food, etc.
• Creating an optimal balance between work and family.
• Possibility of wider participation in public life.
• Ability to independently choose a job and refuse uninteresting and unprofitable projects.
• Ability to independently choose partners and not adapt to the established team.
For the employer
• Pay only for work done, not for hours spent on the job (although piecework pay is also possible for permanent full-time employees).
• Attracting high-level specialists from different regions, and not just full-time specialists from their region.
• Savings on expensive office workstations (relevant only in large cities with expensive real estate) on the purchase of furniture and equipment to design a workplace.
• There is no need to give social guarantees, pay for vacations and get sick.
• Ability to minimize paperwork and reporting (however, attributing payment to a freelancer as a production cost, especially for high-tech or knowledge-intensive products, is more difficult and not always possible, which forces them to be paid to freelancers out of profit).
• Terminating a freelance job at any time is much easier than firing a full-time employee, which requires specific reasons and more complex legal processes.
Disadvantages
For freelancers
• It is necessary to constantly search for new orders on your own, which entails temporary and sometimes direct financial costs (payment for the services of specialized freelance sites, advertising, etc.).
• Income is highly uneven compared to the advance / accounting system for in-state employment. It requires the ability to plan a personal budget.
• Problems may arise with the approval of applications for a bank loan.
• For some psychological individuals, this may be a more nervous working style than working in corporate personnel.
• The need to keep your own records and pay taxes.
• It takes extra effort to motivate yourself and manage your time.
• Lack of social guarantees.
• In some cases, you have to pay for your health insurance yourself.
• Depending on the type of state pension system, a self-employed person does not have an old-age pension at all or receives a minimum pension or has to pay contributions to the pension fund himself.
• In the legislation defining liability for parasitism, possible problems with the law due to the lack of official employment or tax deductions.
• If a freelancer does not report his income and does not pay income tax, in most countries of the world there can be problems with the law.
• There is a high risk of fraud or other illegal actions on the part of the employer, when it is difficult for a freelancer to prove the existence of a contractual relationship (regardless of whether the contract is concluded orally or via Internet resources, if this is not possible, the parties to identify the transaction).
For the employer
• It is more difficult to follow the progress of work.
• There is a high risk of fraud or other fraudulent activities on the part of the freelancer, especially remotely.
• Issues related to the protection of confidentiality and the high risk of losing classified information.
• Inability to attract freelancers to work that requires access to state secrets or personal information.
• Difficulty attracting a freelancer to a long-term multi-stage project, as there is a risk that the freelancer will leave or increase the cost of his services at any time.
• Depending on the applicable tax regime, the company may have problems paying for the services of a freelancer who does not want to declare his income or is not a tax resident.
