CNNMoney had an article on the growth of freelance hiring.  Freelance professionals now make up 26% of the workforce, up from 19% in 2006.

“As the economy contracts, there are not only more people looking for new ways of earning money, there are also more companies looking to make their employment practices more efficient,” said Rob Palmer, CEO of GoFreelance.com, a job search site for freelancers.  Freelance positions fill both needs.

One obvious benefit for businesses is not having to pay for benefits.  Health care premiums are always increasing.  There’s no 401k match for the company to make for freelancers.  Using temporary employees also precludes the company from having to add to its pension liability.

But freelance jobs can be less cost effective for workers. Freelance paychecks can be erratic, plus freelance workers are vulnerable during down times, as they are the often first ones cut when companies scale back.

I’ve worked with many freelancers in my career in the defense industry.  Most of them were design engineers, who we referred to as job shoppers or consultants.  They were usually the first to go, but not always.  I worked with a freelancer whose specialty was a software language.  He’s still going strong after 10 ten years, and has survived a few downsizings.  The article gives some helpful advice:

For those trying to make it in the world of freelance, Erickson recommends creating a safety net first. She advises workers to find an inexpensive group health insurance plan like the one offered through the Freelancers Union, contribute to an IRA, which offers tax-deferred growth on your savings, and pay quarterly estimated taxes that include Social Security and Medicare taxes.

Freelancing is not for everybody.  I know that I would miss the steady paycheck.  There would be some anxious moments when the bills are due if I hadn’t worked that month.

The freelancer’s plight isn’t much different than my friend’s father’s.  He operated heavy equipment, and we saw alot of him during the winter when construction jobs were scarce.  He periodically went on unemployment, and used his savings from the warmer months to carry his family through the lean times.  This is where sticking to a well-planned budget is important.

How many of you freelance, even if it’s part-time?

Follow me on Twitter: CorpBarbarian

• Getting Rich in America Book Review and Summary, Part 2 This is Part 2 of my review and chapter summary of Getting Rich in America: 8 Simple Rules for Building a Fortune and a Satisfying Life by Dwight R. Lee and Richard B. McKenzie. You can read Part 1 of this review by clicking the following link: Getting Rich in......
• Getting Rich in America Book Review and Summary, Part 1 This is Part 1 of my review and chapter summary of Getting Rich in America: 8 Simple Rules for Building a Fortune and a Satisfying Life by Dwight R. Lee and Richard B. McKenzie.  I won't turn this into a Cliffs Notes version, but I'll hit the high points, and......
• Are Layoffs Harder for Men? The sting of layoffs can be sharper for men, according to this Yahoo Finance article from the New York Times.  If it sounds like the Times article is a little sexist, you're probably right: While gender roles are malleable, and many people are adjusting the boundaries, the roles that have......

• 10 Tips For Going Green And Saving Money One of the great advantages about thinking of ways to preserve and protect our environment is that it often puts money back in our pocket. This shouldn't be the only reason why you would take steps to be greener, but it's an added bonus that we cannot overlook. I started......
• How the Right IT Solutions Can Save Your Company Money In this new era of fiscal responsibility and uncertain economic times, all businesses are looking for ways they can save money and be more productive. Information technology (IT) enables companies to be more efficient and effective; it can help them save money. Leveraging the right technologies by adopting recent......
• The Friday gathering - House updates edition Failure number 2 occurred last week in our house hunting adventure.  I sure hope this isn't a sign of things to come.  I know many of you have been following our progress and wanted to provide you with an update. The first house, the foreclosure, didn't work out as......