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Employed versus self-employed – what would suit you best?

June 6, 2017

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In the construction industry a large proportion of people are self-employed. But is that because it’s better than being ‘on the books’ or more because being employed is not an option for some and others simply don’t understand the benefits of being employed.

Flexibility versus financial uncertainty

It’s true that working for yourself would give you some flexibility about who you work for, what kind of work you do and how many hours you’re willing to work each week.

But with that flexibility there is also the uncertainty about where the next job is going to come from and the pressure of having to think ahead about keeping customers happy and not losing work to competitors.

On the face of it you may be paid more for your work but if that work could dry up at any time and you are spending unnecessary hours chasing payment, is it worth the risk of working for yourself?

Investing time and money

Losing the division between work and home time is often one of the biggest adjustments that self-employed people must make.

Successful self-employed people must be prepared to invest time and effort into book-keeping and invoicing – not to mention the dreaded annual tax and quarterly VAT returns.

By way of comparison our staff can put their feet up after a hard day on site but as a self-employed worker you’re likely to spend hours at home as you work late into the night on a computer crunching through paperwork. There is always a bit of admin that could be sorted out, even if it’s 11pm and a Saturday.

The lack of employment security that comes with going self-employed means you have to be extremely disciplined financially. Saving to cover periods of sickness, holidays (which will no longer be paid) and unexpected van breakdowns has to go with the territory. Parental benefits, such as paternity and maternity pay are non-existent for the self-employed. Oh, and don’t forget your pension, although retirement may seem a long way off for most of you.

Cashflow is king

Collectively these things can be seriously bad for your cash flow and overall bank balance. The self-employed often have to be prepared to put up with loans and overdrafts to get by!

Whatever industry sector you’re in, you should anticipate that you’ll need a serious nest egg of cash to get your business started. For electricians even a second-hand, half-reliable van could set you back £10,000 and then there’s the £2,500 you might need to invest in racking it out, buying roof bars and investing in power tools. Oh, and don’t forget the insurance cover that you’ll need to put in place and the investment in your future training.

Add to that the risk that you don’t get paid on time by a customer or someone disputes one of your bills and you could find yourself in financial deep water.

Brexit – what will the future hold?

We’ve just been through a period of buoyant workloads but what if the economy takes a turn for the worse with Brexit looming large? Employed staff will always get priority on available work.

Being self-employed means the buck stops with you, and only you. But do you have the self-belief to keep going, when the going gets tough and you’ve not got your colleagues around to ‘gee’ you up or an apprentice on tap to do some of the spade work?  

Being employed by a local business means you can take advantage of lots of perks. From paid holiday and sick pay to Christmas parties and childcare vouchers…the list goes on.

Is the grass greener?

We’re beginning to convince large numbers of former self-employed workers to join us ‘on the books’ at Clarkson Evans. So, if you’re starting to think that the grass will be greener if you’re employed by us, get in touch.