It pays to weigh up your options before deciding which path to take.

It pays to weigh up your options before deciding which path to take.

Is it safer to work for yourself than for a big company? A few years ago, the answer would have been unequivocally no. Those seeking job security were better off with a corporate job, regular pay cheque, defined workplace conditions, holiday and sick pay.

Perish the thought of an ambitious young entrepreneur forgoing a university education and “safe”’ career in government, teaching, or the professions. Or not doing a trade.

That answer is no longer as clear-cut, at least in some industries, and depending on your definition of risk and how you define starting a venture.

For most, the biggest risk of a corporate job is being axed. But there are others:

  • Your pay is deflated by stealth thanks to no or low pay rises over several years, and an ever-increasing workload. You do much more for the same or less as the cost of living rises.
  • You're asked to take on your boss’s role and responsibilities for nowhere near the same pay. Role “deflation” increases career risk.
  • Conditions are eroded as the company takes advantage of a weak labour market to reduce costs. Penalty rates and other perks are re-negotiated.
  • Your employer has poor training programs or you become so specialised in a job you are virtually unemployable – at least at the same rate – if fired.
  • Your new boss goes out of his or her way to sink your career. A once-promising journey up the corporate ladder is derailed because you now report to a buffoon.
  • Your physical and mental health suffers from workplace stress.
  • You make a poor return on the huge investment of university fees and other training programs. Graduate salaries remain flat for years and rapid pay increases are rare. You end up earning $45,000 after spending $70,000 at university, and face years of student debt.

On the flipside, the budding business owner:

  • Is able to build a portfolio of clients because of rapid growth in the micro-jobs market.
  • Can start ventures cheaper than ever before thanks to new technologies and a growing emphasis on lean entrepreneurship and getting into the market faster.
  • Can take more calculated risks because it can cost far less to develop proof-of-concept in many tech-based industries compared with five years ago.
  • Is better placed to combine launching a venture with a few decent-paying micro-jobs to cover the bills.
  • Finds the flexibility of self-employment and being his or her own boss removes a layer of stress rather than adds to it.
  • Is able to earn a higher salary much faster and build a financial buffer if the business slows or fails – a redundancy payment, so to speak.
  • Is able to take risks with a venture or portfolio of micro-jobs while his or her partner has full-time employment.

Of course, the full-time employee who is good at his or her job and has worked for a secure company for years still has much more job security that an entrepreneur launching a risky start-up venture. High failure rates and the prospect of losing capital are significant threats.

But I’m interested in the shades in between: comparisons between the self-employed, who contract to companies or build a portfolio of regular micro-jobs, and full-time workers who feel their job security continues to weaken as companies restructure and redefine their workforce.

Have we finally a reached a point where it is safer to be a contractor, freelancer, consultant or other professional who has several employers, but no concrete guarantee of recurring work? In a growing number of industries, where jobs and conditions seem less secure, the answer has to be yes.

What’s your view? Is it still much safer to have full-time company work than work for yourself? Has the gap narrowed in recent years, and how do the self-employed reading The Venture feel about their job security? Is it as much of a risk as it once was to work for yourself? And why has the risk gap between full-time and self-employment closed in recent years?

Post a comment and let us know what you think.