Question

Nowadays many people choose to be self-employed, rather than work for a company or organisation. Why might this be the case? What could be the disadvantages of being self-employed?

Model Answer

Many people are now employed in the so-called 'gig economy'. This is a flexible form of self-employment in which people are paid for completing specific tasks such as designing a company logo. Whilst the popularity of this form of employment continues to grow, some people have voiced concerns that it may be exploitative.

The main reason that more people are choosing to be self-employed is that technology has made it a realistic proposition. New digital platforms make it far easier for individuals to connect with potential customers. In the past, you would need a physical store to attract customers but you can now easily sell goods or services via an online marketplace. Flexible working hours is another reason people choose self-employment. Freelancers often set their own deadlines which means work can be arranged around their other commitments.

However, there are a number of disadvantages to this form of employment. Firstly, it is often relatively low paid. People tend to underestimate the amount of time that it will take them to complete a task. As they are not able to renegotiate the price with the customer, this means that the hourly-rate is often less than the minimum wage. Another problem is that the online platforms often control the terms and conditions of their employment. For example, many Uber drivers report being kicked off the platform for no reason.

In conclusion, the ease with which you enter the gig economy can make it seem like an attractive option, but people should be careful to research the possible downsides before choosing to become self-employed.

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