Making the move from Permanent to Freelance (what to expect)
If you’re looking to join the growing number of UX’ers taking the (exciting/scary) leap from permanent into freelancing – but without fully knowing what to expect – I’ve put together some info to help you on your way!
Why freelance in the first place?
Freedom and flexibility
The opportunity to be your own boss and choose your own path.
Breadth of experience
Exposure to way more industries and the chance to learn from various teams with a wide range of expertise, and as a T-shaped designer, you also have more control over your specialisations.
Grow your own brand
Being a contractor forces you to constantly have to bring your A-game, your survival and brand depend on it so it keeps you sharp. There’s a much more direct relationship between what you are putting in and what you are getting out.
Higher day rates
Probably the biggest reason for people making the switch; on average they tend to be much higher than annual salaries in the same sector.
Umbrella or Limited company
One of the biggest things to consider when going freelance is whether to go for…You may have asked a ton of people for their advice on this and come away with a migraine – so I’ve made it a bit easier for you.
|Umbrella Company||Limited Company|
|What does it involve?||Becoming under an umbrella company and paying them a weekly or monthly fee for their services||Setting up a separate business bank account. Taking on company administration and/or engaging with an accountant to help with registration, payroll etc|
|Who will it suit?||Those who are new to contracting or are only planning on freelancing for a short period of time.
Contractors working within IR35.
|Mostly used by those wanting to contract long-term|
|Admin/ Paperwork||You only need to submit timesheets and expenses as your Umbrella company will look after all your tax/legal/contractual obligations
|You’ll be responsible for raising invoices, unless you are working with a client that self-bills.
Essentially more admin
Worth noting that many Limited company directors hire a specialist accountant to do their admin
|Tax||Your umbrella company automatically deducts your Income Tax and NI on your behalf
Less tax efficient. If you are working in IR35 this inefficiency is minimal.
|You are responsible for making your own tax and NI contributions.
More tax efficient. If you are working in IR35 savings in tax are minimised.
|Anything else to note?||You’ll be entitled to employee benefits such as sick pay, holiday pay, maternity/paternity pay.||You’re often able to claim a wider variety of expenses such as accommodation, travel etc|
It’s up to you whether you want to have all this in place before taking on your first role or after you’ve secured it. It can definitely help to expedite things if you have it all sorted first though. Speak to Zebra People and we can help you out with this.
Other things to think about
Day rates (again)
Don’t just jump at a high day rate, think about factors such as the brand you’ll be adding to your CV, the team you’re joining, the project itself.
You may not have the chance to work end-to-end or see your work come to fruition.
Jumping too soon
Make sure you’re ready! Realistically, if you make the jump too early on you’ll be doing so before having fully reaped the benefits of a permanent role (in particular the training and development you receive). You may be be entering contracting without having had strong processes embedded.
You could constantly be working at the same level for several years and so there is less opportunity for career growth within a company, particularly around leadership, mentorship, team management and managing multiple tracks of work.
Payments and cash flow
Making sure that you are paid on time, trusting your clients to do so. Bear in mind that most clients will pay you 30 days from invoicing date.
Unfortunately it’s not all that uncommon for clients to pull projects, or end projects early. It’s the harsh reality of being a freelancer and often you won’t have a 1 month notice period to tide you over until your next role. Make the most of the higher day rates and be prepared for these circumstances.
If your perm role has you on a 3 month notice, it will become almost impossible to get a freelance role without handing in your notice first. When hiring managers need a freelancer, chances are they need them to start within 1-2 weeks and won’t be able to wait for you.
Leading on from the previous point, consider at what point in the year you’ll be leaving your perm job. We find that there can be quieter periods in the year such as Christmas, New Year, Easter and August, as well as periods where there are a lot of bank holidays so make sure you’re prepared for when the market isn’t so buoyant
So now you’ve started lining up interviews for your first contract…
Choosing your first freelance role
Don’t be too picky
Don’t turn something down just because it doesn’t tick every single box on your list. Become established as a freelancer first and there’s a much better chance to get more interesting and challenging work later on.
Choose a job you are confident in
For your first roles it’s worth considering roles that are well within your skill set. As you develop, more challenging roles are likely to be more interesting but finding your feet as a contractor is a skill in itself.
Always make sure you have detailed case studies showcasing your work to hiring managers, often a great portfolio can set you apart from the competition.
Day rates (again!)
Don’t go into it demanding an outrageous sky-high day rate but also make sure you’re not underselling yourself just to get the job. Working with a recruiter that you know and trust can help secure a rate that works for both sides. Also consider whether the role is direct or through a design agency, as this can help steer what you are aiming for.
Questions to ask – besides from the usual…
- Has the role been fully signed off?
- What will the project actually entail? For example, is there any UI involved (for UX roles)? Will you be line managing?
- What is the notice period from either side?
- Will working with this client prohibit you from working with any of their competitors in the future?
- Contract length, is it likely to extend?
- What is the team structure – are there only freelancers working there or permanent staff as well? This gives a good indicator as to the kind of environment you’ll be joining
Taking that jump into freelancing can be daunting, but by going into it as prepared as possible you’ll give yourself the best starting chance. And of course (shameless plug time) it always helps to have a recruiter to help you along the way. Get in touch at email@example.com!