There's a good chance you have wondered about quitting your job to become your own boss. After all, everyone else seems to be doing it lately. And this trend is becoming even more apparent year after year as the gig economy booms.

But is that really a smart idea? Here are some pros and cons of being an employee and being a freelancer that you should know if you're thinking about making a switch.

The Pros of Being an Employee

1. A Steady Paycheck

The most obvious benefit of being an employee over a freelancer is the financial security it offers. A steady paycheck every month allows you to rest easy, knowing that your future is protected, and your finances are predictable. Even if the company didn't make any profits this year, you would still get paid.

2. Easy Budgeting

Since your income is steady and predictable as an employee, budgeting for your household will be easy. You can divide portions of your income into specific purposes like needs, wants, savings, investments, and emergencies. In other words, you can plan your life without any unwanted surprises.

3. Benefits and Perks

Another great thing about being an employee is the benefits and perks that you are entitled to. This can include paid vacations, reimbursements, allowances, parental leaves, health insurance, retirement plans and pensions, and more. These benefits are likely to make you want to stay loyal to the company.

4. Consistent Growth

Depending on the way you look at it, consistent growth can either be a pro or a con. But for most people, knowing that they will get steady increments in the form of raises is enough motivation and reassurance to stay put with their employer.

5. Develops Social Skills

Improving your social skills is a by-product of being an employee, as you are constantly engaging in conversations with your coworkers. Whether it's about something work-related or something else entirely, being an employee exposes you to an environment where you can train your social skills and increase your emotional intelligence.

The Cons of Being an Employee

1. Fixed Working Hours

Perhaps one of the most uncomfortable things about being an employee is how it controls your entire schedule. There are fixed working hours that you have to abide by.

Unless your employer has granted you flexible hours benefits, your job will largely influence how your day goes. In other words, you have little to no control over your time.

2. Fixed Salaries and Slow Increments

Negotiating a salary in an interview and then having to stick to that number for the rest of the year is certainly not a fun thing to do. While a stable income ensures security, it also creates a ceiling on top of you.

This limits your growth since you have to wait an entire year for a possible raise. Speaking of that, asking for a pay raise is quite stressful for many, and it can be demotivating to constantly have to advertise your worth to the company.

3. Commute to Work

Commuting to work is bad in three ways: it eats your time, your energy, and your money. It's a lose-lose-lose situation as it not only wastes your work hours that you could be using to do your job, but it also exhausts you and requires you to spend money on fuel. Unless you work remotely, commuting will be a problem.

4. Subject to Micromanagement

A lot of managers and supervisors tend to micromanage their subordinates, i.e., monitor the smallest of their actions and criticize them for not doing a certain thing in a certain way. In other words, they want it the way they prefer it and not necessarily what's most comfortable and natural for you.

5. Bound by Company Policies

As an employee, you are bound by the terms and policies of your employer. While it's true that some policies are more flexible than others, you usually don't have much of a say in those decisions. And if you fail to live up to the policies perfectly, you may be subject to some repercussions.

The Pros of Being a Freelancer

1. Flexible Hours

As a freelancer, you are not bound by any rigid working hours that an employee has to abide by. You have the freedom to control your schedule and work when you feel most productive. This kind of flexibility is especially useful if you are a student, a homemaker, or simply not a morning person.

2. Saves Time

Since you don't need to commute to and from work, you can save a lot of hours every month. This extra time you now have in your hands can be spent with loved ones, taking on additional projects, partaking in volunteering work, or simply relaxing and doing leisure activities.

3. Control Over Income

While a stable income for an employee is nothing to take for granted, the control over that income is still in your employer's hands. Freelancing puts that control in your hands and allows you the freedom (and responsibility) to make your own decisions. You can set your own freelance rates via self-evaluation and market research.

4. All Profit Is Yours to Keep

Since you sell your services directly to your clients, there is no need for a middleman. This means all the income generated from your labor is entirely yours to keep and is not split between you and an employer. Whatever your hard work earns, it goes straight to you.

However, do note that a part of your income will have to be spent on buying new work gadgets and equipment since you don't have an employer providing you with those tools.

5. You Work on Your Terms

Perhaps the most liberating thing about being a freelancer is being able to work by your own rules. You don't have to conform to the policies set by an employer; you have the control to create and write your own terms and discuss them with your clients to make a deal.

The Cons of Being a Freelancer

1. Little Financial Security

Freelancers don't enjoy the same level of financial security that employees do, simply because their income is not guaranteed. You get paid for your work, not your time. This uncertainty makes budgeting harder and can discourage aspiring freelancers from taking on the risk.

2. Inconsistent Workloads

As an employee, you are aware of what's expected of you, i.e., your workflow is fairly stable and predictable. That is not the case when freelancing. You might find yourself overwhelmed with work one month and struggling to find projects the next.

You can mitigate this inconsistency by motivating your clients to stay loyal to get stable, recurring work. While you're at it, don't forget to use project management tools to organize your tasks.

3. Self-Imposed Pressure to Work

As great as it is to be your own boss, it comes at a cost. Although you don't have a manager telling you what to do, you may fill that gap yourself. Enjoying your leisure time can get tricky if you keep telling yourself, “I could be working right now”. Be sure to create a schedule to help avoid this.

4. Subject to Isolation

Freelancing can get lonely after a while, as you don't have coworkers around you to interact with. While you might like your solitude, losing track of your social life can subject you to isolation and feelings of anxiety. A good way to counter this is by setting time aside to meet loved ones or do volunteer work.

5. Too Many Responsibilities

If you are a freelance writer, writing is only one part of your job. As a sole proprietor of your business, you are responsible for marketing, IT, client satisfaction, HR, accounting, legal, operations, administrative, purchasing, etc. All of this combined can be really overwhelming. If you have the budget for it, it's a good idea to delegate some of these responsibilities by hiring talents.

Balance Risk to Reward

Being an employee and being a freelancer are two very different things. While the former is suitable for someone who likes security and stability, the latter can be more rewarding if you're willing to take the risk. Ultimately, it depends entirely on the kind of person you are and your lifestyle.