We tend to believe that freelance salaries are always less than standard employee salaries. In fact, we don’t even use the term “salary” and prefer using the term “freelance earnings“. After all, the freelance status is assimilated to self-employment, and as such, doesn’t benefit from the same perceived stability as traditional salaries. However, all this doesn’t seem to stop people from leaving good-paying jobs for freelance positions. The question needs to be asked: do freelancers earn less that other professionals in more traditional roles? And if so, what can explain the decision to transition to freelancing?
The 7 criteria of employee satisfaction
Whether one adheres to Herzberg’s theory of employee satisfaction or not; whether you have your own ideas or prefer to look at survey results, we can agree on 7 essential criteria. Said criteria are applicable to the freelance status as well as employees. In fact, some HR specialists have identified the following 7 criteria to employee satisfaction:
- The work environment: in other words, is the work place source of anxiety and distress? Or is it a place where they feel fulfilled and accomplished?
- The pay: obviously, a good salary will contribute to work satisfaction. And conversely, any worker that think they are underpaid will not be satisfied with their current occupation.
- The work load: burnout is one of the biggest obstacles to employee satisfaction. Prolonged mental fatigue is a huge source of anxiety for the worker.
- The available resources: what are the resources that the employee can access to gain new skills, specialize or train themselves in various ways?
- Work security: a stable job is a source of satisfaction, whereas a job with a bleak outlook will only motivate workers to look for greener pastures.
- Career advancement opportunities: the feeling of career stagnation is one of the main reasons workers leave their current employers.
- Work-life balance: more and more workers prefer occupations that don’t force them to choose between personal life or work life. Which is why the interest for remote work and the digital nomad lifestyle has been steadily growing.
Why working as a freelancer is becoming more attractive?
The growing interest for the freelance status during the last few years is anything but surprising. What has been unexpected though, is the trend’s acceleration. In particular, the development and explosive growth of specialized platforms that count up to tens of millions of users.
One thing is certain, the current uncertain economic context, the realities of a world transformed by the COVID-19 pandemic, the discovery of remote work as a viable work arrangement, as well as the new perception of the freelance status have created a perfect storm that now motivates a whole generation of workers to look for greener pastures.
After all, headlines stating how young professionals are leaving good paying jobs or abandoning promising careers are almost commonplace. The stories of professionals on forums like r/antiwork and similar articles all seem to point to the same conclusion: the traditional organization of work doesn’t fit the expectations and needs of a stagnating generation.
The digital nomad lifestyle as a solution?
Getting started as a freelancer is not always an easy task. Not even for professionals who leave traditional occupations. However, contrary to fresh graduates, these professionals already have real world work experience, proof of their solid skills and maybe even a network of contacts.
Even though the freelance status appears to provide greater satisfaction to workers, it still requires them to adhere to a self-employed status depending on the country where they reside. This also means accepting a temporary loss of income before they get enough traction to rise back to previous levels of income.
This is where some workers who transition to freelance positions opt for an innovative solution: the digital nomad lifestyle. For a lot of freelancers, it’s a means to:
- take advantage of their newfound autonomy,
- reduce of effects of temporarily reduced income by settling in a country with lower cost of living,
- joining a community of digital nomads and grow their network of professional contacts,
- satisfy the needs of their private and family life in some cases.
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TL;DR
In practice, the transition from a traditional job to freelance status is often accompanied by a loss of income. However, there are ways of mitigating this loss by properly planning said transition. The professional should:
- Identify their niche and skills to provide as a freelancer,
- Develop their network of clients and leads,
- Start freelancing on the side,
- Fully transition when the income from freelancing jobs catches up to their salary
And in the event where a methodical transition is not feasible, the digital nomad life can be an interesting alternative to live better, even with lesser pay.
The illustrations on this page were provided by blush and Ira Design.