5 Freelancing Advantages and Disadvantages

Freelancing is pretty much a foreign concept to so many people in the Philippines before the pandemic. When I told my friends in 2018 that I was quitting my job to be a freelance writer while traveling to different parts of the country and the world, they were dumbfounded. They couldn’t fathom why someone who has a lot of things going on in her career (I was earning really well at the time) would trade it to gamble on something unstable. Honestly, I understand where they were coming from. I too was skeptical about my plans at first but when I finally took the leap, I never ever wanna go back.

Although, it’s important to note that while freelancing offers flexibility and other advantages, it also comes with its own set of challenges and disadvantages that people considering freelancing as a career option should carefully consider and plan for.

1. Competition is very stiff

Competition in freelancing is often fierce due to several factors. Firstly, the rise of online platforms has made it easier for individuals from around the world to offer their services as freelancers, leading to a global pool of talent vying for the same projects. This has increased the number of freelancers competing for the same jobs, making it more challenging for individual freelancers to stand out among the crowd.

Additionally, clients often look for freelancers who can offer competitive prices and deliver high-quality work within tight deadlines. This puts additional pressure on freelancers to continually improve their skills, stay updated with industry trends, and maintain competitive pricing, which adds to the overall competitiveness of the freelancing market.

2. Lack of benefits

Unlike traditional employment, freelancers do not typically receive benefits such as health insurance, retirement plans, paid leave, or other perks that are commonly provided by employers. This means that we need to handle our own insurance, retirement savings, and other benefits, which can be costly and complex.

Good thing that I found SafetyWing, a travel medical insurance made for digital nomads like me. It provides both medical and travel insurance under one policy to make sure that I’m covered during unforeseen situations such as getting ill, accidents, lost checked luggage, natural disasters, etc.

3. Self-employment taxes and government-mandated benefits

Freelancers are responsible for paying self-employment taxes and government-mandated benefits such as SSS, Philhealth, and PAGIBIG. This can result in a higher tax burden compared to traditional employees. Plus, it’s very inconvenient. Unlike traditional employees whose taxes and mandatory fee payments are deducted from their salaries monthly, freelancers will have to run to the bank or Bayad Centers quarterly to make these payments.

4. Inconsistent income

Freelancers often face irregular income streams, as we rely on projects or clients for income. There may be times when there are few or no projects, leading to financial instability and uncertainty. We may also experience fluctuations in workload, with periods of high demand followed by slow periods. This can make it challenging to plan for the future, manage time effectively, and maintain a stable work-life balance.

And the thing I dread the most is being let go in an instant without prior notice. It is for this reason that many freelancers maintain a minimum of 2-3 clients at a time as a precautionary measure. Additionally, we often face challenges with getting paid on time or dealing with clients who do not pay the full amount for our services which can potentially impact savings, cash flow and financial stability.

5. Isolation and lack of workplace benefits

Freelancing often involves working remotely, which can lead to feelings of isolation and loneliness. We may also miss out on workplace benefits such as social interactions, professional development opportunities, and networking events that are commonly available to traditional employees.

On top of that as freelancers, we have to produce our own equipment. This means that we do not just need to have the skills but also the right set of gadgets and equipment in order to vie for a shot in the ever-competitive world of the freelancing world. We need to invest in our own equipment, software, and resources needed for our work, which can add to our expenses.

1. Flexibility & Freedom

Freelancing allows us to have control over our work schedule and location, providing the flexibility to work when and where we choose. This can be especially beneficial for those who prefer a flexible work-life balance or need to accommodate personal or family commitments.

We have the freedom to choose our clients, projects, and work style as well as set our own rates, negotiate contracts, and make decisions about our business without being bound by the policies or procedures of a traditional employer.

Of course, this doesn’t apply to someone who’s new to the industry. As much as we hate lowballing clients, many still think that someone has to start somewhere and often take on low-paying projects. However, the situation will definitely get better once you have acquired the experience and skills to entice high-paying projects and generous clients.

2. Higher earning potential

We have the potential to earn higher income compared to traditional employees, as we can negotiate our rates and directly charge clients for our services without any intermediaries. This can lead to increased earning potential and financial independence. This is also quite true in the Philippines where newbie freelancers can potentially earn a minimum of $5/hour doing data entry and other light administrative tasks.

3. Diverse and varied work opportunities

Freelancing offers the opportunity to work on diverse projects and with different clients, which can enhance professional skills, broaden experiences, and expand the portfolio. This can be especially appealing for individuals who enjoy variety and novelty in their work. We can continuously develop our skills, learn new tools or techniques, and stay updated with industry trends, leading to continuous professional growth.

We also have the ability to steer our career in the direction we desire, taking on projects that align with our skills, interests, and long-term goals. Plus, we have the flexibility to pivot or specialize in different areas based on market demand and personal preferences.

4. Greater work-life balance

Freelancing can provide the flexibility to create a work-life balance that suits individual needs and preferences. We can choose to work part-time or full-time, take breaks when needed, and have more control over our work and personal life integration.

5. Lower commuting costs

Freelancers can save on commuting costs and time as we have the flexibility to work from home or choose clients/projects that are geographically convenient. This can result in cost savings and reduce the stress associated with commuting.

There you have it, lovelies. If you’re planning to try your hands on freelancing then these are some of the challenges you’ll need to consider. Share with me your thoughts in the comments. Until next time. Ciao!