Kim reflects on her self-employed journey and offers a helping hand to anyone considering going it alone. She explores the various ways to attract projects and earn money and breaks down the benefits and barriers to freelancing and contracting.
In 2021 I wrote an article for The Learning Network that gave people considering becoming self-employed some insight. Even then I was looking at ways I could offer the helping hand I needed when I first started out.
When you start down the path of self-employment, it’s not all about sourcing your own clients (that’s where I went wrong initially). There are various ways to attract projects, bring in clients and earn money, through freelancing or contracting. Here’s an overview of each.
Freelancing and contracting in L&D
Freelancing
Freelancers work independently, providing services to multiple clients simultaneously. They are often hired for specific projects and typically have the following characteristics:
- Flexibility: Freelancers can choose their projects, set their schedules, and work from anywhere.
- Variety: They often work on diverse projects for different clients, which can provide a wide range of experiences.
- Autonomy: Freelancers have control over their business operations, including pricing, client selection, and work methods.
Contracting
Contractors are often hired for a fixed period or the duration of a specific project. It can offer higher income potential compared to permanent employment. Here are some points to think about:
- Finding work: Contracts often come via recruitment agencies, so you don’t need to find the client yourself. Also, the recruiter will often pay you, reducing the risk of non-payment.
- Financial stability: Contracts can provide more stability than freelancing, often lasting several months.
- Specialisation: Contractors might work on specialised projects that require their specific skills.
- Regulations: Understanding and complying with IR35 regulations is crucial for contractors in the UK:
- Inside IR35: Contractors considered inside IR35 are deemed employees for tax purposes. They must pay income tax and National Insurance contributions as if they were employed. They usually need to use an Umbrella company.
- Outside IR35: Contractors considered outside IR35 are genuinely self-employed. They can take advantage of tax efficiencies, such as dividend payments and expenses.
So, you can see pros and cons for each type of self-employed work. I’ve done both, and while I loved the contracts I worked on, I missed the variety that freelancing brought me. And then on the flip side, when I am freelancing, I miss the regular income contracting brings.
Deciding which to do and when will depend on your circumstances, for instance, you could do a contract, earn a chunk of money and then spend the rest of the year freelancing. Then when you need to, take another contract to earn another chunk of money.
I’ve even done both at the same time, and I’m telling you working full time with a client and then having other clients work to do on evenings or weekends left me a little frazzled.
Latest research into employment types in the L&D sector
The latest data provides an insightful comparison of employment types across L&D to previous years.
According to a recent LinkedIn poll (June 2024), the distribution of employment types within the L&D sector is as follows:
This marks a significant change from the same poll conducted in 2021, where the proportions were slightly different:
What does this tell us?
The stats show that the number of freelancers and contractors is increasing. But rather than just looking at the stats themselves, you also need to think about the landscape of work. In 2020, we had to shift – quickly, and take most training online.
Pre 2020 most employed people occasionally worked from home; now a lot of those people only occasionally work in an office – maybe one day a week. So, did the surge in self-employment come from this shift in the work/life balance? Or is the increase due to companies downsizing and making people redundant?
Many L&D professionals seek the flexibility and control over their work that freelancing offers. The ability to choose projects, set schedules, and work from various locations are significant draws.
Whatever the reason, the increase in self-employment from 26% to 50% suggests a growing confidence and interest in freelancing within the L&D community.
Freelancing in L&D: Are you ready to enter a brave new world?
If you’re considering stepping into self-employment, here’s some advice before you take the plunge:
- Assess your readiness: Evaluate your skills, financial stability, and readiness to take on the responsibilities of running your own business. I’d recommend having enough money in the bank to last you at least six months – the more the better as it will take the pressure off you.
- Build a network: Get your networking boots on as early as possible Establishing a robust professional network is crucial. Networking can lead to potential clients, partnerships, and support from fellow freelancers.
- Stay updated: Keep abreast of industry trends, technological advancements, and changes in regulations that may impact your freelance business. You need to know what tools are out there, how much they are and if they are worth investing in.
- Develop a plan: A clear plan outlining your services, target market, pricing strategy, and marketing approach will guide your transition from being employed to self-employed.
- Set up your business: Before you can earn any money, you need to be set up, whether that is as a sole trader, limited company or using an umbrella company. Do your research early and choose the best course of action for you and your business goals.
The shift towards self-employment in the L&D sector is a clear indication of changing preferences and the evolving nature of work. Whether driven by a desire for flexibility, market demand, or economic considerations, more professionals are taking the plunge into freelancing. Are you next?
