Security for Freelancers and Consultants

Many people are reluctant to become freelancers or consultants because the risk seems too high. I’m not convinced that working independently is necessarily much riskier than a full-time job though. In fact, sometimes it can be safer.

Many people are reluctant to become freelancers or consultants because the risk seems too high. You have flexibility to set your work schedule and take the kinds of projects you want, but you trade that for the security of a full-time job.

I’m not convinced that working independently is necessarily much riskier than a full-time job though. In fact, sometimes it can be safer.

Security for Freelancers and Consultants

The Risks of Full-Time Employment

Having multiple clients and income streams can actually be more secure than having a single full-time income.

Think of it this way: you would never invest everything in your IRA in the stocks of a single company. That would be ridiculously risky to trust your entire future retirement income to the success of a single enterprise.

But full time employees trust their entire present income to a single company. If they lose their job, they lose 100% of their income. They usually have to ramp up from nothing to find a new one.

Reducing Risks, Increasing Security

Multiple Clients Reduce Risk

I usually have at least two active clients at all times, plus sometimes smaller side projects and more in my pipeline. If one of my two current big clients suddenly cancels their project, it will hurt my income–but not nearly as much as losing a full-time job hurts. I’ll still have income coming in from my other active client.

Nurturing Leads and Your Network Increase Security

I also have the security of having additional leads so I can ramp up quickly on other work. I have a network of colleagues. I refer work to others when I’m busy, and they return the favor. I know I can reach out to my network if I need more work.

Being Able to Find the Next Project

Yes, my income is variable, and I have had both good and bad years overall. However, I don’t see freelancing as being as being that much less secure overall than having a full-time job. The security comes from being able to find the next project, not from having a guarantee that the current project is a sure thing.

After all, if you have a full-time job and it ends suddenly, your security is really a measure of how fast you can find a new job. Freelancers and consultants are generally better prepared for finding that next thing.

I think many of us consultants and freelancers probably have more security than we realize, and many people in full-time jobs don’t realize how little security they truly have.

More Freelancing Tips

Kai Davis shared some ideas on the balance of flexibility and security in his daily email newsletter for freelancers. This is based on my response to his email. If you’re interested in learning more about other ways to improve your security (and improve your processes as a freelancer in general), I recommend his newsletter.

3 thoughts on “Security for Freelancers and Consultants

  1. Hi Christy,
    Thank you for this article. I value your perspective on this issue because I know you’re speaking from both experience and observation. One question: for a 2nd career person who recently graduated from a masters degree in instructional design with a portfolio, but little experience in ID, would you suggest they “get experience” with a traditional job first or just dive in to the the field of consulting? The reason I ask is because in most industries a certain level of experience is typically required before venturing into consulting.

    1. That’s a great question! I think you could find some entry level freelancing work even without experience, but maybe not higher end consulting.
      Let me clarify how I’m using the terms here. Freelancing can be any independent work (in the US, that means paid on a 1099). In practice for elarning, freelancing often means being a spare set of hands on a project, usually doing development in a tool like Storyline or Captivate. It might mean subcontracting too. The scope and direction for the project are decided by someone else, and you’re an extra resource to fill a gap on a team or help a project finish faster. Freelancing tends to be paid hourly, although you might be paid with a fixed budget.
      Consulting tends to be higher level and more strategic. You’re helping clients figure out what solution they should pursue, setting the scope and the direction. The pay tends to be higher because you’re using your expertise and adding more value. Consultants are more likely to specialize in a particular type of work and to be known professionally for that niche. Consulting is more likely to be paid a fixed price for a project.
      Note that both of these types of roles are needed and important. There’s no moral judgment here that consultants are “better” than freelancers, but they do tend to be more experienced. I don’t think you’re at the level yet where you can call yourself a consultant, but I do think you could find freelancing development work, probably subcontracting to start. I suggest avoiding anything with a fixed price budget rather than hourly until you get some experience and know how long it takes you to finish tasks.

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