Freelance Work – Pros and Cons

The freelance work model is gaining momentum in the modern job market.
The desire to preserve one’s independence, less need for permanent jobs and the rapid development of computers and Internet are the main reasons behind this trend. Meanwhile many organizations are trying to reduce manpower quotas – giving up fixed costs and buying work only as needed.
This article presents the freelance employment model from the perspective of both the employer and the employee.

Not long ago most freelance workers were writers, especially journalists. The word “freelance” originated in the Middle Ages when knights who possessed lances would hire out their services to the highest bidder. The word might have roamed to the field of writing because the pen is parallel to the lance. Today the term has come into wide use in a range of fields.

Freelance work is based on executing projects. From the organization’s standpoint this form of employment reduces expenses, particularly when it comes to fixed overhead. Many organizations also believe it saves them other employment costs such as pension payments, unemployment compensation, etc. (Sometimes this assumption proves wrong, as we will see below.)

On the other hand, this method does not allow the employer to obtain the level of commitment expected of a permanent worker. Sometimes the learning curve of a freelance worker entering an unfamiliar organization creates additional costs, both monetary and in terms of management resources.

From the worker’s perspective the freelancer maintains his independence, is less reliant on a single organization and has more opportunity to work in a broad range of fields or focus on a specific area of expertise.

Still, many workers are deterred by the uncertainty of fluctuating income. The greater the financial needs the worker faces (e.g. a wife and kids to support, a wife who does not work outside of the home or who also works as a freelancer), the more inclined he will be to seek employment on a fixed basis. 

Jobnet investigators spoke with several freelance workers:

Nimrod (a pseudonym), 27:

“Over the past year I’ve been working in communications on various television productions. The problem in this field is that the work is on a per-project basis. Each time they hire new services over again, without any ongoing commitment. This harms my financial security. When I finally find work as a production assistant, researcher, etc., generally it is for a very short time period, just a month or two. Once the project is over they send me home as if they didn’t know me. Then I wait again until someone decides to hire my services. For every month of productive, challenging work, I am unemployed for about four months.

“Now I’ve been unemployed for almost six months and the last production I was involved in is a distant memory – and I am not getting any job offers.

“When I receive a job offer, on one hand I’m glad, but it creates problems. On several occasions the offer has been on a day-to-day basis. They ask you to come in today or tomorrow, and not just for an interview but to start working. That means I have to drop everything and make myself available for very demanding work that fills up the whole day and every day of the week.

“But I don’t want to do anything else. I derive real pleasure and tremendous gratification from this kind of work. It’s exactly what I love to do. So it’s a real dilemma.”

Mila Prugger, 25, of Be’er Sheva works as a translator (Hebrew-English-Russian):

“Working on a freelance basis offers me many advantages. First and foremost, I can work out of my home. As a mother this is very important to me. Second, it allows me to organize my work in a flexible way according to my needs – setting the right pace for me and deciding which hours and days to work.

“It makes it easier for me to choose which employer to work with and who I don’t want to work with. At present I’m working on a regular basis for several translation companies that I really enjoy working with. Also, I can decide what work to take and what interests me more. All this allows me a degree of independence, freedom of choice and varied, dynamic work.

“Of course there are also disadvantages, the vast majority of which are related to a feeling of uncertainty. This feeling is present on several levels.

“First of all, I don’t know what will happen the day after the project ends – i.e. when the next project will arrive.

“The second disadvantage is that the income is not fixed. I don’t always know how much money (if any) will go into my bank account the next month. This uncertainty makes it very hard to plan and manage expenses.

“Also the work is like being on call. I can go a week without any work and then suddenly I get an e-mail message or a phone call asking me to do some work on the double and then I work like mad for days or even weeks.

“Also I don’t get the benefits and fringe benefits salaried workers receive, nor am I entitled to certain government benefits like unemployment compensation. I have to take care of pension funds and a safety net should I one day find myself without work, God forbid.

“This work model forces me to be very organized and to demonstrate powers of concentration and self-discipline, especially since I work out of my home. Also, I constantly have to be on the alert for available projects, keep updated and initiate new contacts.”

Another issue is the seclusion. Unlike a salaried worker who comes to a lively place of work where he meets other people who provide not just a social framework, but also a forum for cooperation and fruitful dialogue, in many cases the freelancer is left to roam all alone. He lives a life of flickering employment. He comes for a while and then vanishes. He belongs to the organization, yet he doesn’t belong. In many cases he lacks a feeling of belongingness; he’s not always surrounded by other people and he doesn’t always have someone to talk to and consult with.

In other words the relative freedom comes at a price not everyone is willing to pay.

And what do employers have to say on the matter?

Kobi Ben Moshe, CEO of Aviv Consulting, which numbers 200 employees:

“Ever since our company got its start we made a decision the workers would be salaried employees. This is unusual in the field of consulting because the work is based on projects and companies are uneager to promise work beyond the period of the project, which sometimes lasts just a few months. Many consulting companies base their operations primarily on work by freelance consultants.
“We wanted to be different. We wanted Aviv to be a place where the employees would develop both personally and financially. This is how you build a reputation and a culture of people with pride in their work. This is how you manage and dictate the direction and arrive at your destinations.

“Nevertheless in cases where we do employ freelance consultants it’s only when there are work peaks and it will never be our main pursuit. In the final analysis the freelancers’ loyalty is to their business. Also, because they are more independent and want less commitment it’s easier to work with them on a short-term basis alone. Our projects with our customers are generally long-term and therefore short-term employment is usually much less relevant.

“If you want to build a culture and vision over time, you won’t find an attentive ear among freelancers. This is the only way to lay out joint vision based on culture and values.

Shuli Shaharvani Yishai, Deputy Director of Human Resources at NICE, a major high-tech company:

“We are looking to hire and employ workers directly and for an extended time period, based on a desire to establish long-term work relations with mutual trust, faith in the company’s direction and a genuine desire to allow them to grow and develop at the company. In light of this fact we do not employ many freelance workers at the company. Most of the employees hired are taken in as workers integrated into the company ranks. Those who work as freelancers generally do so only due to a need to execute a specific project.

“Based on our experience, employees who are hired as independent workers sometimes find themselves recruited into the company as regular employees, whether because the work relations and the trust that formed between the two sides led to it or because the task assigned to them continued over an extended period of time and in order to execute it successfully it was important for the workers involved to devote all of their attention and dedication to the company.”

One of the main reasons for employing freelancers is the unwillingness to form employer-employee work relations, with the accompanying costs and commitments. Many companies take pains to maintain total separation, sometimes artificially, between freelance workers and permanent employees.

For example, say a freelance worker has been operating for several months in close collaboration with a certain unit at the organization. The manager of that unit will want him to receive a holiday gift, too, just like the rest of the employees. But the human resources manager won’t allow it, not to save money but so this amiable gesture won’t be seen as a sign, as small a gesture as it may be, of employer-employee relations.

The importance employers attach to this separation is already conveyed at the time of the joint work agreement. Many employers make a point of noting it was made clear to the worker there are no worker-employee relations between the two sides.

This notation is inadequate, however, for on-the-job conduct is what determines the existence of worker-employer relations (e.g. the holiday gift above). Still, it does carry some weight since the issue of good faith is also taken into account. Thus if the worker agreed there would not be worker-employer relations his consent is weighed if later he files a claim to recognize the existence of worker-employer relations.

In summary, companies work with freelancers in one of two cases, which represent totally different managing strategies.
In one case freelance workers are hired to support the organization’s employees, primarily in areas that are not a part of its core operations, or areas that are part of the core operations but the company can only promise work for the duration of the project. In this way the organization, most of whose workers are permanent employees, reduces the risks of overhead and fixed costs.

The second case is organizations whose primary operations are based on projects, therefore for the very same reason – reducing fixed costs – they prefer to hire freelance workers. But unlike the first case in which these workers merely complement the permanent staff, in the second case the vast majority of the workers at the organization are freelancers, i.e. a relatively small core of permanent employees operate a large number of freelance workers.

Notable examples of this are the various media organizations that use freelance journalists and reporters, the publishing industry, which employs writers and translators based on the same principle, training institutions, etc

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