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Ask HN: Any advice for switching from self-employment back to employee?
81 points by lngtmconsultant 526 days ago | hide | past | web | favorite | 50 comments
Throw-away account for confidentially. I've been self employed for about 15 years, and am contemplating a return to the workforce as an employee. While the relative freedom of self employment has been a net positive, and I've had steady work through that entire time, I'm in a different place than I was 15 years ago, with a family, a home, and additional responsibilities which make self employment more challenging.

I'm wondering if those that have made this switch back to being an employee of a larger organization after a period of self-employment have any advice. I'm finding it difficult to even compare self employment to an employee role when it comes to basics like salary requirements considering most jobs include a benefits package that don't always have direct corollaries in a self-employment scenario.

What's your best advice for how to approach this transition and evaluate whether it might be the right time to change?

I'm back to self-employment after a 6 1/2 year stint as a regular business-hours on-site employee. Couple of observations:

1) Having a flexible schedule allows one to get a lot more done. My personal/family life and side projects received a lot less time when I became an employee. That 40-60 hr/wk job eats way more hours than you get paid for.

2) The stress around hustling to keep work coming long-term when self-employed goes away in favor of a steady paycheck. It's odd getting paid the same no matter how productive you are. You do acquire other stresses, however. Like having to work with people you don't like or jive with. And having to work on projects that you don't like.

3) The flip side of that stress is the excitement of working on something new where you get to learn new skills. You have a lot more control over what you work on being self-employed. As employee, you do what the company most needs you to do.

4) And the flip side of the steady paycheck no matter what is the ability to generate more income by working more or jumping on a lucrative opportunity right away when you spot one.

Regarding equivalent compensation, it depends on your health insurance situation (do you depend on it? how big is your family? or maybe you are young and healthy and only need coverage for catastrophes?), your tax bracket, how much your family/outside time is worth to you, etc. There are no online calculators for a reason. ;)

I switched back to a management-level web development job in January after 4 years of self-employment and 4 years running a small web business with 5 employees. I must say that I am now less stressed, financially much better off, healthier and see my friends more than ever. I do miss the supposed freedom of self-employment, but more often than not, it doesn't really exist. You're chained to running your company and paying the bills so you can't turn down all the bad jobs and bad clients. At least in a job, thats often someone else's problem.

However, you will miss earning your own money and cringe at the thought of making someone else richer on you're time. I personally will return to running my own company eventually, but for right now, I'm quite content with my fat monthly pay check.

Sounds like you were NOT running a business, but the business you built was running you. In other words, you created a job for yourself, rather then a business.

Yes, that's probably very true but it's amazing how long it took me to realise and finally bite the bullet to move on. Basically I really enjoyed running my own business but I didn't like the business was running. It's also really hard to walk away from something you built and was actually bringing in a decent profit (and still is for the new owners). As a disclaimer I still don't like what I do as its in a similar area, but the reduced stress and stable pay check make it more fulfilling, especially whilst I save up the collateral and figure out the actual business I want to run.

Ha! I am almost in the same situation/history. Been running a small starup for a while with up to 11 employees then a bit of freelancing. Now, I am considering just looking for CTO position in an early or more likily a middle management position in a bigger company. Do you mind if I reach out to talk? I am in the Austin area. my email: my HN username + gmail.com

This reminds me of something I told a friend of mine a few years ago when he bought a retail store: be aware you're buying yourself a job. He's since sold his store and moved back to being an employee.

I'm ~2 years into my own very similar transition.

Be wary of too much value being placed on benefits packages, and be aware when you are signing yourself up for golden handcuffs. Also, signing bonuses can tie your hands, so review the terms and be conscious of what you are signing yourself up for.

If you are evaluating whether or not this is a good idea, think about your existing customers and which ones you would like to work for and which ones would hire you. Those are the people who know you best - your work ethic, your potential, etc. You might want to go outside that bubble, but the process of evaluating will make you more aware of the details about your desired environment.

As a business owner, you are used to making decisions. Many individual contributor roles don't have a decision making component. It's something to seriously consider when evaluating positions.

As far as the finances go, it's a whole different ball game. My health insurance costs were night and day - although the whole once-a-year chance to make changes is frustrating. Employee and group discounts can be significant. But if you aren't going to take advantage of them, you have to leave that off of your evaluation.

I found online paycheck calculators pretty good at estimating income for budgeting.

There is a certain level of stress associated with being self-employed and that's gone for me now. Some of it has been replaced, but overall I'm a much more relaxed person.

Good luck!

Don't do it. The biggest benefits employers give to you such as : steady income, predictable working conditions, career opportunities are basically a marketing trick.

I had an employee contract after 6-7 years freelancing which I terminated 2 years ago and I needed more than half a year to recover.

If I was you I will try to increase the price to your current clients to the point that you can do this in a sustainable manner

Please could you elaborate a little more on how steady income is a marketing trick. Seem pretty set in stone to me. At a set date you will get paid a set month providing you turn up for work and do a good enough job to not get fired.

The question of whether or not that will continue from one month to the next is completely out of your hands as an employee. Regardless of how well do you do your job, if any of the billion layers above you bungle their budget, or their marketing, or there's merging or reshuffling between departments, or somebody just plain doesn't like you, your "steady income" can vanish in an instant. The company's health is not tied to your performance, and if the company's health wanes enough, you start getting squeezed as a bottom-runger before anybody at the top.

You might get paid. I've had companies go broke on me. (As a consultant, I factor in non-paying clients to my rate. It's much harder to do that as an employee.)

You might keep your job. Your definition of "good enough job" and your boss's might not be the same thing. Or your boss might lose an internal fight and your team could be laid off tomorrow.

As a consultant, I always have at least two clients active at any given time that can pay my rent and monthly expenses. I work 24 to 30 hours a week. The "marketing trick" is that you are being hired in exactly the same way I am: tomorrow you may be gone, with no recourse, nothing. In a sane world you'd be compensated for that risk; I am, as I'm pricing that into my rates and making hay while the sun shines. :)

You could arrange for the same while self-employed. One account could pay out to a spending account on regular intervals.

The only piece of evidence you've presented is a situation from your own career.

Do you really believe you can generalize well enough from your personal situation to give such strongly worded & unconventional advice, especially to someone you know very little about?

It may be the right choice for certain people at certain times, but it's definitely not a trivial decision.

OP asked for anecdotal advice anyway. Curious, what's the "conventional" advice in this situation?

The person I replied to basically implied that working as an employee is falling prey to some sort of "scam". This is not a widely held view.

I understand what they are getting at, and I'm actually sympathetic to the view point. But the reality is much more nuanced.

Edit: To more explicitly answer your question, I would say that being self-employed is more difficult and demanding than working for someone else. Thus for many people it makes more sense to be an employee.

> for many people it makes more sense to be an employee.

Not for me though. I wonder if we could make a poll among people who have tried both.

I'm similar -- I'll probably be self employed at some point. I highly value my autonomy.

However, I suspect your poll would be biased towards those who prefer self-employment, as those who are certain it is not for them wouldn't bother trying it.

See if you can transition into full time with one of your current clients. Having that trust already built really helps (along with not having to deal with the interview process).

You should be able to check your past financial expenses, and don't be afraid to get as much detail as you need to get a real apples-to-apples comparison. You can potentially negotiate your way into all-cash compensation, especially since you're likely wanting to continue to manage your investments manually.

As far as whether or not it's "the right time" - that's totally your call.

When I went back to a full time job after running a company for 3 years I felt like I was on vacation. I had 2 small kids and a steady job with paid time off and a 40 hour work week...pretty much feels like vacation by comparison.

Wrote up the full story (it's long) if you are interested though. http://www.brightball.com/articles/what-exactly-happened-to-...

I took a half-way approach to this, and now work for a small consulting firm. It's much like self-employment in that I'm still working for a variety of clients and only getting paid when I work, but we have business development staff that finds the clients, and a benefits plan that I buy into at cost (this was more useful before the ACA exchanges were available). The firm handles billing and negotiating rates with the client, and pockets the difference between what the clients pay and what I get paid. In the end I net pretty close to what I'd get paid working full-time for any large employer. I found this firm from the other side, we used them to locate consultants while I was working at a previous employer, but I imagine with 15 years experience you can probably find similar organizations within your existing network.

Two things I noticed when going from employed to self employed is:

1. You gain a lot of time back due to zero travel 2. You can earn less to earn the same as you were when employed. This is true because I removed the transport and time cost.

It's worth keeping in mind these will be reversed if you situation is similar to mine. You'll have much less time available, and your salary will need to be higher than you earned being self employed to achieve the same end-of-month income.

Good luck.

Don't. Working for other people is always a scam. You will never get paid what you're worth. You will never get the respect you deserve, and you will be fired or laid off for no reason. Employment is about theater, not about production.

Self-employment is the way to go.

If you've been working flexible hours with that relative freedom, start working fixed hours ASAP just to get used to it again.

Have you considered looking up previous clients, business partners, suppliers, or other stakeholders your've formed over the past 15 years, and asking them?

Prepare in advance, but you bring skills in not only what you did technically, but in a broad plethora of business skills, likely ranging from marketing to operations and finance, and take an attitude as a business owner.

These are great attributes at a VP/Director level.

I'd also suggest contacting high-level headhunters. The type of headhunters that only care about placing 10-20 people per year.

One thing you could consider doing is to get a part-time job. That way you can see how you feel about the transition without completely shutting down your current gigs.

Know of companies that do part time jobs in this industry? I went freelance entirely because I couldn't find a part time employment situation that made sense. Most people I talked to were enthusiastic about hiring full time folks, but just didn't even know how to begin hiring someone part time, or explicitly said their companies didn't do that.

I am sure if I was less picky or had a skill set with broader appeal (I'm somewhat specialized at this point) I'd have maybe found something, but part time in tech is a shockingly hard uphill battle.

I've been looking for part-time work with very little success. Still hearing the old "if one person is working part-time then everyone will want to" excuse.

Everyone should want to - and more companies should support that. I believe that the reason they don't in the tech field is that once you define you "part time" in hours - say 20/wk - you are exposing the fallacy of "full time" being 40/wk.

I was self-employed for 5 years. Ran my own consulting company and was then an EIR for a bit.

My advice: give yourself time to make the switch back to full-time employment. You may find your skills and interests don't necessarily make you an ideal candidate for many roles. When you run your own business, you're the ultimate full stack developer: doing everything from marketing through dev ops.

This makes you a less than ideal fit for a lot of full time employment opportunities, where companies aren't necessarily looking to hire people who are passionate about wearing many different hats and doing a lot of different roles.

I found smaller startups were generally the best opportunities for me.

That said, there are some real benefits to going back to full-time employment. Taxes get simpler, mortgages are easier to get, you can focus on the work you enjoy doing and not the accounting / paperwork stuff that you have to do when you run a business.

Holidays are a lot more relaxing and refreshing without the constant thought you're wasting money. Although, this does take a while to sink in.

I've consulted to many people on making the jump from self-employment to employee and the other way around - probably more of them making the opposite change.

As for the right time to change, that's a question with lots of factors and most of those are related to your situation. You say you've had steady work but that self employment is "more challenging". How is it more challenging, and which of those challenges will be solved by becoming an employee of someone else?

One consideration for the right time question is the value of your skills as a self-employed person vs the value of those skills on the open market.

15 years is a long time to be on your own (for the record, I've also been mostly self-employed for about 15 years), so I'm guessing you'll get at least a bit of resistance from employers thinking you may not be accustomed to playing the game of working with others in an office environment. If you have a highly marketable skill set and are in tech, and are talking to smaller companies that may not put much value on that ability, that may not be a non-issue for you.

I don't see the difficulty in establishing salary requirements, because the market dictates that more than anything else. You need to discover what your experience is worth on the market. Talk to an agency recruiter who places people like you in your area and they should be able to give you an idea better than the average websites. That value will have some fluctuation based on a number of factors, the value of benefits likely being one of them.

Are you working out of home? If so, have you considered getting a real office to get legit working time?

Maybe you just need physical separation, and not necessarily W2 income / benefits...?

I did what you are considering for the reasons you mention. I sorely miss the freedom of being self-employed. My employer is extremely flexible, but nevertheless, I almost never have time for my personal projects. I'm far less efficient when I'm a FTE because the expectation is that I will bill hours, not work efficiently. I'm strongly considering a move back to self-employment, warts and all. If not that, then maybe a position with a small company.

I did this about a year ago after being self-employed for about 6 years. One of the biggest reasons was actually the social aspects of working; I rarely worked with other people, or if I did, not for long.

There are plenty of downsides to going back to being an employee, though. I wouldn't do it if it weren't with the right people. At the time, I took a pay cut to do it, but it worked out and I'm happy with my decision, because I got what I wanted: to work with great people and build relationships with them. And the reduced stress from not having to hustle all the time has been good.

Since you're self-employed, take your time and really find an employer that suits you. You have a lot of leverage in negotiations since you know you don't _need_ any given job you interview for.

I've gone through more than one cycle before of building up a set of clients from scratch, so I know that I can always go back to freelancing if I want to. I wouldn't be too worried about getting stuck as an employee unless you let your skills stagnate.

I don't have long term self employment experience. My guess is that you'll give up a lot of freedom, the ability to pick and choose the things you want to work on and who you want to work for, and you'll gain the ability to focus on one part of the business instead of the marketing/sales/bookkeeping and have a much better idea of what your finances will look like over the next 1, 2, 6, 12 months. Here are a few things off the top of my head:

1) Find a shorter term contract gig with one company. This might give you the option to try something on for a bit without making a long term commitment. If you like it, and it's a to-hire situation, you can stick around.

2) Find a remote job that still gives you the at-home time and schedule flexibility that (I'm assuming) you are accustomed to.

3) Depending on where you are and what you decide to do, keep in mind that you can always bail and go back to self employment if you think it sucks.

If you haven't already been keeping up with it, refresh your wardrobe and regulate your sleep pattern. Also, if you intend on packing a lunch, start getting into that habit now so you don't have to worry about it when you get going.

My path after 7 lean years self-unemployment following the dotcom bust on the wrong side of 50 was landing a full-time programming job at a small startup, followed after 6 months by being recruited , by a large tech company as a contractor in the slightly rare main skill I picked up in the startup. After 5 years as contractor I became full time employee and hope this will see me through retirement. Do the math on salary and benefits since my full time position appeared to be a pay cut but was really a 30% raise. Life will seem to enter slow motion for a while at large company, but don't worry it soon wears off :-)

Are you in tech? If you're skilled it's relatively easy - just find a good employer, with 5 star rating on glassdoor. Consider non-profit as they usually have more flexibility at work.

Also, you may want to take some time to interview preparation, depending on your skills. Google the most common interview questions and see if you're in shape. If not, stay self-employed and improve your skills until you'll be able to land a really good job in a really good company.

Don't waste your time on looking for just something. Set a goal, find a good position, work for a year and then decide if it's for you.

Do some contracting / consulting for a future employer first; and then ask if they will take you on as a regular employee?

As for how to evaluate. Try imagining a 5-10 year period in both scenarios, calculate your pay/earnings, be realistic about sick leave, holidays, periods without earnings (as self-employed), figure out where you will be career-wise as an employee.

I can absolutely understand why being an employee again can become attractive again after a while as self-employed.

If you've formed a company, consider keeping it alive.

I don't do a lot of side work now, but there was quite a long tail of follow-on work for my past clients that continues to this day. Having the legal entity, bank accounts and such still alive doesn't cost too much and having them has been helpful both with the tax man and in dealing with former customers.

If you provide the information as to which type of job you have now this might make more/less sense. What about growing the business a bit more now to hire someone else, groom them, put them in charge, and then work on administrative work.

I'll take a different tack here: I'd be interested to know what kind of reasons you have for wanting to make the switch back.

I've been self-employed for 14 years, and the couple of times I've done this analysis I've been hard-pressed to come up with justification to get back in the employment "game". My personal situation sounds somewhat similar to yours. I started this venture single, w/ no kids, and relatively uncommitted outside of work. I've since gotten married, had a child, and picked up various and assorted commitments outside of work. If for no other reason I'm interested in your situation simply out of concern that I'm "missing something" in my analysis that self-employment remains the best gig.

I try to look at work, as much as possible, as a business transaction trading my time and energy for money. I've never looked at work as being particularly "fulfilling" or defining my person. I derive pleasure from a job well done and I enjoy feeling like I'm creating good value for my Customers, but my fundamental belief is that my work is just a means to an end.

I should be quick to point out I'm fairly lucky that, although it ebbs and flows, my current gig is generally not very stressful. There are bad days, to be sure, but in general I'm not at my wits end every day. I've also enjoyed the luxury of jettisoning clients who were undue sources of stress. Were stress a factor in my life I'm not sure how I'd factor it into analysis of a job. I'd want to know a lot about the "culture" of the prospective employer.

From a financial perspective I viciously normalized the prospective salary/benefits into an hourly rate number (erring, where I had to, on the side of making the job seem more attractive). I compared that to my current net income and logs of my hours actually spent working (I try to collect a lot of personal analytics). The two employment opportunities I looked at were a significant decrease in income per hour worked. (I recognize that I'm lucky this was the case.)

Even if it were a net positive to change back to employment I think I'd have had a lot of trouble ceding so much control of my life back to an employer for other reasons.

It's particularly bothersome to me that employers, at least in my locality (Midwest US), have almost no legal obligation to be "loyal" to me. They sit in a negotiating position that often allows them to demand unpaid overtime, uncompensated 24 x 7 availability, and silly contrivances like non-compete covenants. (I suppose if I were more credentialed, more of a "rockstar", or just better at "selling" myself this would be less of a problem, but I still consider an employee to be, effectively, a business w/ a single Customer. If that single Customer chooses to take their business elsewhere... That's not a position I could imagine being comfortable in.)

The idea of working in a corporate bureaucracy also grates to me. Perhaps it's just a matter of semantics, but coordinating my schedule with Customers to take a day off is exceedingly more palatable to me than "putting in a vacation request w/ HR" was back in the old job. Likewise, pulling an all-nighter or working a weekend "for myself" doesn't make me feel taken advantage-of like the same work did at the "old job".

Given that the time w/ my now 3/yo daughter has proven to be precious to me (more than I expected it would, for sure!) I can't help but think that I'd feel put-upon even more today than I did 14 years ago. It's difficult to think that any amount of money would make up that that, either.

How has the self employed market been for you in the Midwest? I am also in the Midwest, taking baby steps towards self employment.

Very good, but probably atypical, too. Our venture has been fortunate in that we've gotten good word-of-mouth and have acquired a great set of Customers, many of whom have been with us for very long engagements (10+ years, some of them).

wait i wanna know how to get to the self employment from being employed

  1. Earn sufficient income outside of job.
  2. Quit job.

To get from employed to self employed you stop working for your employer and start a company.

It sounds almost trivial!

It can be, it all depends on whether you can find people who want to pay you money to do work on your terms. If you can and that's trivial to do for you, then that's really it and your company will succeed. If you can't, it's not going to work out well.

There's also a middle route where it kinda works but doesn't really. And some other options for people who want to get really ambitious and start agencies.

Paying you to work on your own terms sounds like freelancing, and nothing more. Starting your own product company is a lot harder than that.

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