How to navigate employment options
Many of today’s Boomers have grown with a certain career path in mind. Everyone in the workforce took for granted that one would learn a specific skill whether through higher education, trade school or some other form of training and then find a job for a company if you were not prepared to start your own business. Pursing a single, long-term employment position was for many the only way to get all the benefits required to have a secure retirement. Companies also made an implicit commitment to their long term employees to provide necessary benefits and ensure a secure retirement.
However, the last couple of decades resulted in a radical transformation of employee/employer relationship. Technology, innovation, opening up of global markets and labor pools have changed the job market. The landscape of work available is much more diverse but so is competition for this work. Companies large and small are taking advantage of the new ways to engage workers. Some are actively outsourcing, some are engaging part-time workers and some are actively mixing their staff with independent contractors and freelancers. In this environment workers find themselves faced with ever broadening possibilities for employment, in a variety of arrangements. Boomers seeking work in retirement now have choices to make regarding how they want to be employed.
Leaving aside full time employment, you may have to consider or choose between working as a part-time employee, independent contractor or a freelancer. What are the differences between these options? The key difference is in the nature of the relationship between a worker and a company that hires them. Understanding these differences may help you to find a more satisfactory career path after you leave your full-time job.
Employment part-time is perhaps the easiest one to understand. For all practical purposes it is the same as working full-time except you work less than 40 hours per week. You and your employer will have a traditional relationship. You will be hired to perform a certain specific job for a certain number of hours per day or week and be paid a certain wage per hour. You will also be subject to your employer’s workplace policies and will have to adhere to their practices.
Many companies aim to have part-time employees work less than 27 hours per week to stay below the threshold to offer mandatory health insurance. Part-time employees are often not eligible for many of the benefits available to full-time employees and have little control over their schedules. There are some advantages to this mode of employment. First of all, the company that hires you will withhold and pay required federal and state taxes. You will also get some regulatory protection such as minimum wage, breaks, etc. Depending on polices of your employer, you may have a steady schedule that allows to plan other activities. However as an employee you are exposed downsizing, layoffs or other challenges of today’s labor markets.
Freelancers or the Independent contractors on the other hand are hired on a project basis. Relationship between the worker and the company becomes a relationship between a client and supplier defined by a specific contract. According to the Freelancer’s Union, one-third of working Americans are now employer-independent, working in some capacity either on contract or as a freelancer. Freelancers usually work on shorter projects while independent contractors work on longer term engagements.
Unlike part-time employment, freelancing or independent contacting offers a lot more flexibility. Being hired to perform a specific project allows you to set your own schedule, manage tasks and perform work in a manner that suits you best. You can decide how much you want to work or take a break for a few months between projects. Your clients are interested in the end result, not so much in a way that you achieve that result.
Of course, as a separate business you will have a lot more responsibilities that you normally would not have to deal with if you were an employee. You have to pay taxes, keep track of your expenses, manage your own time and schedule, create your own workspace, etc. You also need to look for your next client or learn how to sell your services. However, every client engagement increases the value of your business and allows you to expand your services. As you build up your portfolio, new projects will be easier to find and you can increase your rates.
The Bottom Line
Nature of work is changing and Boomers seeking employment need to be adaptable to that. Understanding available employment options can open up opportunities that did not exist a few years ago. While there used to be a stigma around freelance or contract work, the shifting economy is changing the rules and perceptions. Those that are able to deal with the business aspects of freelancing can build a successful career with multiple clients and a great degree of flexibility.