Is Freelancing More Stable Than a Corporate Job?

Freelancing can offer more job security than a corporate job. I will die on that hill.

It’s not an immediate perk, but I wholeheartedly believe that once a freelancer has at least four or five high-value client relationships (regular work, good pay, good volume), their financial stability is greater than that of a W2 employee.?

The typical non-freelancing person has one source of income — unless you’re one of those ambitious members of the workforce who manages to secretly have two or more full-time jobs.

If a corporate employee loses their one source of income, they’re out of work. (Layoffs happen. They’re happening in bunches right now.) If a freelancer loses one client, they take a hit financially, but their income isn’t reduced to zero — they usually have other clients to lean on.?

Let’s visualize it with numbers.?

• Corporate Collin has a W2 job that pays $10,000 per month.?
• Freelancer Felix is an independent contractor with five clients, each of which pay him $2,000 per month (totaling $10,000).?

Even if Freelancer Felix loses two clients, he’s still making $6,000, which should be enough to cover expenses, save, etc. while he looks for replacements. On the other hand, Collin hopefully has severance to lessen the blow or else his income resets to square one (i.e., zero).?

Moreover, while it’s not everyone’s favorite thing to do, prospecting for a new client takes less time than finding a new job. A quick google search tells me that it takes, on average, 3-6 months to find a new job. Meanwhile, if a freelancer sends 100 pitches — which can reasonably be done in a couple of weeks — it should lead to at least a few promising conversations and likely a client.?

In short, freelancers can sidestep lengthy interviews and red-tape-riddled hiring processes.??

Could someone make an argument against this stance of mine? Of course. I’m not blind to the following counterpoints:?

1. It’s hard to get fired. And layoffs are tied to economic cycles, usually.?
2. Predictable paychecks and benefits like health care and 401(k) matching add a layer of security and lifestyle quality that you won’t find in freelancing.?
3. Even though having multiple clients is a buffer, not all clients are created equally — the loss of a major client that accounts for a sizable percentage of income can be as devastating as losing a job.?

I suppose the operative word in my original thesis is can. It’s a subjective debate with plenty of nuances and variables that can swing the idea of job security in either direction. But my point is that this is a debate, not a foregone conclusion that corporate life is safer than freelancing like many perceive it to be.