Banking

Turning free agent: Risks and reasons

Thinking about quitting your job as "company" worker to become an independent consultant? Be sure you know what you're getting into. This article, which looks at the reasons why people choose to be a free agent, can help you prepare for the switch.

If you’re a full-time employee for someone else, you’ve probably thought about becoming a free agent (self-employed worker) at least once in your career. If so, you’re not alone: About 33 million American workers—one in five—now work independently, according to Dan Pink in his new book Free Agent Nation: How America's New Independent Workers Are Transforming the Way We Live.

But why would you want to leave the relative comfort of a full-time consulting position to go it alone? In this article, we’ll examine some of the reasons why IT consultants are making this change and look at the added responsibilities you’ll face if you make the switch.

First in a series
In this series, you’ll see how to prepare for a free-agent career while keeping your day job, so that your transition will be more akin to simply stepping over the line instead of leaping off of a cliff. We’ll also gain some personal insight from the author, who is in the middle of making his own transition to free agent. In the next article in this series, we’ll take a look at building the infrastructure (support system) for a free-agent career.

Flexibility, control, and—job security?
In his book, Pink suggests that a free-agent career may actually be more secure than a regular job. He likens free agency to a balanced stock portfolio: Instead of investing in just one stock (employer), a free agent invests multiple skills on projects for several clients. If one client goes away, you have others generating revenue for you.

The relative “job security” of going solo may be enough to turn your head, but many consultants have made the switch for other reasons. Mike Culver, a Seattle-based independent IT consultant and trainer specializing in Microsoft SQL Server database, was attracted to the free agent lifestyle for the flexibility: “I looked at what my income could potentially be for a given amount of time on the job, plus the opportunity to create my own schedule and take time off whenever I felt like it, to take the consulting jobs I wanted to take. Plus, there was the possibility to do some traveling, which I wanted to do.”

In addition to its promise as a lucrative profession, independent consulting also tends to give its practitioners more control over the money they make, according to Gregg Shipler, an IT consultant also based in Seattle. “You have more choice of where [your money] goes: the type of machinery you have, the tools you have, the type of conventions [and] training you go to, and who you employ to do certain aspects of your work,” Shipler said.

In my case, I decided to pursue a free-agent lifestyle for a very different reason: economic self-defense. I first considered making the move after I read The Circle of Innovation: You Can't Shrink Your Way to Greatness by business guru Tom Peters, in which he predicts that up to 90 percent of white-collar jobs could be eliminated in the coming decade. I had also seen the rise in outsourcing first-hand and the increasing use of H1-B visa workers in many companies. My competition for Oracle database administrator jobs, for example, no longer came from San Jose, CA, but from Bangalore, India.

If you saw a highway sign telling you that your lane would disappear in a mile, wouldn’t you get ready to change lanes?

Less of what you like, and more of what you don’t
Being in business for yourself may seem quite attractive, but the increased flexibility and control come at a price: increased risk. Instead of just doing your own job and trusting others to do theirs, you have to do it all yourself—and do it well or pay someone else to do it for you. As a free agent, you become:
  • A strategic planner
  • A product development manager
  • A director of marketing
  • A salesperson
  • A customer service rep
  • A scheduler
  • An accountant

And that’s in addition to doing the actual work.

Think that being an independent consultant will allow you more time to do what you like to do? If you’ve made that assumption, you’re wrong, Shipler says.

“You’re actually doing less of what you like to do,” he said. “You’re being more diverse in the things you do. I can be less successful by going out on my own. Even though I’m more successful in what I do, I could be less successful because I’m not good at the other things I need to do as a business owner.”

If you like to travel, you haven’t done enough of it
Many consultants who have been on their own for some time list another drawback to the lifestyle: the erratic schedule that comes with business travel.

After spending a year and a half as a free agent, IT trainer Paul Turley recently returned to full-time employment. When he began working as an independent consultant, he envisioned spending two weeks working and one at home. He soon found out that the industry doesn’t follow that pattern.

Instead, he found himself teaching in the spring then taking the summer off. Because he was traveling so much, people stopped coming to him for help on projects outside of work. “They’d always say, ‘Paul will probably be out of town,’“ he said.

Turley recalled a conversation during a job interview in which the CEO asked if he liked to travel. “I knew this job would involve travel, so I said, ‘Sure.’ He said, ‘Then you haven’t done enough of it.’”

“For a single person or someone with no kids, that might be an exciting lifestyle. I was able to bring my wife along on some of my trips,” Turley said. “But the novelty wears off until it’s just not fun anymore.”

Start thinking like a free agent
When I declared myself a “free agent in training” 18 months ago, I knew it would be a while before I could truly operate successfully as a free agent. But I resolved to start thinking like one.

I decided to treat my relationship with my current employer as a client that had placed me on retainer. I didn’t tell them, of course, but in my mind, I was already a free agent—and 100 percent billable for probably the last time in my life.

It didn’t hurt me as an employee to think like a free agent. But it would hurt me as a free agent to keep thinking like an employee.

Employee vs. free agent
Let’s compare how an employee sees the following duties or initiatives as compared to a free agent:
Sales
  • An employee: It’s someone else’s problem.
  • A free agent: If I don’t sell projects, I don’t eat.
Strategic career planning
  • An employee: Thinks about his or her career in college, or every few years between jobs
  • A free agent: Clearly defines who he or she is and then reinforces that idea with each project completed and goal accomplished
Accounting
  • An employee: Receives a net paycheck and spends it
  • A free agent: Deals with the whole cycle of billing clients, paying vendors, paying taxes (employer as well as employee share), and reserving funds for investment in new equipment, and finally… receives a paycheck


The result of this one mental change surprised me. By acting as if I was already a free agent, my whole perspective on work changed. Instead of seeing one unchanging flow of work across my desk, I started to see a series of discrete projects, each one of which had to have a payoff for the client contact (my boss).

Weekly staff meetings were now sales calls. Instead of fighting to stay awake, I began to look for project and networking opportunities. I took assignments that I would have tried to avoid as an employee, because I saw in them opportunities to develop skills and relationships I knew I would need later.

My annual review was now a client review meeting, something I had to prepare for lest I lose my key (and only) client. The surprising result was that I received a quarterly employee award for the first time, while all the time I was trying not to be an employee.

Have you made the leap?
Are you priming yourself for a job as an independent consultant, or are you returning to work as a full-time employee after time as a free agent? Tell us about your experiences in a discussion below or send us an e-mail.

 
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