There’s a lot of talk about self-employment, entrepreneurship, and being your own boss today. Granted that’s a dream for many, but it isn’t the dream that everyone has. Sometimes being a well-compensated employee with certain benefits is the better opportunity. Would you rather work for someone or work for yourself? Here are the pros and cons of being an employee to think about today.
What Are the Pros of Being an Employee?
1. You know you’re getting a paycheck.
Even if the computer system goes down or if you’re at your desk, twiddling your thumbs, you know that you’re getting a paycheck. If you’re working on your own and your equipment stops functioning, you don’t start earning money again until you get through the unpaid job of fixing the issue that has stopped your productivity.
2. You get paid vacation days.
Self-employed workers might have freedom in the scheduling, but they have to stop taking work to take a vacation, which means they stop getting paid. As an employee, paid vacation days are a common benefit. So are paid sick days – something many in the self-employed world wish they had.
3. There are reduced levels of uncertainty.
Even if you’re living paycheck to paycheck, there is a level of certainty associated with your job that gives you confidence. The self-employed don’t have to be worried about layoffs or being fired, but they do need to find their next client if they want to get paid and that’s not always easy to do.
4. Don’t overlook the other benefits.
Health care is another major employment benefit that entrepreneurship and self-employment don’t always have. Having help with your health care insurance premiums in the US is like having earning extra money every month.
5. There is a defined working structure.
When you go to work, you know with reasonable certainty what needs to be done every day. You may or may not like your boss, but there is a certain level of comfort which comes from being able to plan out your work week with confidence.
6. Taxation is easier.
You don’t have to worry about estimated taxes, self-employment taxes, and other tax-related costs when you’re an employee. Your human resources and payroll departments take care of that for you.
What Are the Cons of Being an Employee?
1. You don’t get to control your own destiny.
You can put in all the hard work needed for a promotion and have the boss choose someone else. Although you can control your job stability to some extent as an employee, you’re not necessarily in control of the final decisions being made. From this aspect, self-employment and entrepreneurship have the upper hand.
2. Then there’s the micro-managing boss.
Most people leave a job because they don’t like their boss. Whether it’s because of how the boss is always looking over your shoulder or criticizing the work that you do, there are plenty of reasons why you’re not going to like that person. As an employee, you can either request a transfer to a different supervisor or choose to quit. You have no control over what the company does with that boss.
3. Sometimes your job will change without your choice.
Sometimes referred to as a forced transfer, many employment contracts put in a stipulation that your services will be best utilized by the company at their discretion. If you’re on a great team and you love your boss and the company transfers you over to a different team and you hate it there, your options to create another change may be rather limited.
4. Your schedule may not be fixed.
If your employers needs you to work second shift instead of first shift for 3 weeks, you’re kind of stuck and have to make lifestyle adjustments. If a co-worker calls off and no one is available to fill that open shift, you might be forced to do so.
5. You might not be paid what you’re really worth.
Companies might offer more benefits, but that usually comes at the expense of your take-home salary. You might even need to work from home to meet your job requirements, but the tax deductions for this type of home office are harder to take than if you were self-employed.
6. Wage reporting is mandatory.
You must accurately fill out your tax paperwork to receive the take-home pay you deserve. If you take too much out, you’re giving the government a short-term loan. Take too little out and you might be facing a tax penalty.
The pros and cons of being an employee are important to consider for anyone who is thinking about striking out on their own. Have you worked for yourself and as an employee? What were the employment perks you missed when you started working from home?