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I see this argument often, and this is how I generally respond.

Benefits can almost always be compensated for with more money. 401(k), heath, dental, paid time off -- all of these things are just another form of compensation. If you make enough money to make up for what you would otherwise lose, then these are no longer a reason to stay with a company.

Security, on the other hand, is a bit different, but in a way can still be compensated for with money. For example, think about how long it would take you to get a job after your own company goes under. 6 months? A year? If you're able to stash enough of a buffer to cover you during that period, then you have just established security.

Of course, I realize it's easier said than done to earn enough of an income on the side to make up for the monetary value of all of these benefits/security. But my point is, comparing benefits, security, and compensation as separate things overcomplicates weighing working for a company vs. working for yourself -- it all (for the most part) boils down to money.

4 comments

In my experience it's very rare to get any sort of real job security these days.

Whilst working in the financial industry throughout 2008-2010 I saw many of my colleagues let go for no reason other than that they were told to reduce head count. Many of them had worked there for 10 years.

Unless you're working for a government organisation or similar there is every chance that you will be let go at any time with your minimum notice period.

There are plenty of companies that focus on ROWE (results oriented work environment). You can have a stable job and not have to pretend to work. And if you have to do busy work in the office when you're unproductive as a show, leave and find a place that values results.

There is some value in having employees and colleagues available in the same physical space within the same general timespan. I understand why entities don't want you to just "pack up and go home" whenever you get bored. Part of the reason they pay you is so that you'll be there when you're needed, within the pre-agreed timeframes. "ROWE" is all well and good, but it's not mutually exclusive with a work environment that expects, in general, to be able to swing by your desk during the day and talk to you.

>Benefits can almost always be compensated for with more money. 401(k), heath, dental, paid time off -- all of these things are just another form of compensation.

The thing is that some of these are worth much more than their transformation into a raw dollar value. As someone who has just recently transitioned from primarily self-employed to primarily corporately employed, the ability to take a day of PTO at basically any time has been amazing and no amount of raw dollars can compensate for that ability (except as these dollars are deployed to arrange affairs such that others can assume your responsiblities at the drop of a hat, but this takes more than raw dollars). I can also say that health insurance is worth more than its face value -- health insurance is an admission ticket into the doctor; if you have an insurance policy, they'll give you everything you want and treat you well, and if you don't, they'll demand large sums of cash on an almost-daily basis to continue to provide for your medical needs. If you have an astronomical amount of money maybe this isn't a concern, but most people not making double-digit millions per annum are going to find it difficult to cope with self-pay rules for any significant medical work.

>If you're able to stash enough of a buffer to cover you during that period, then you have just established security.

Security doesn't really work this way either. As an employee, you have an implicit sense of perpetual security. As long as you continue to provide the base value you were hired to provide, you will, in general, continue to collect your paycheck indefinitely. Getting paid in perpetuity is MUCH more secure and less stressful than watching your six months' worth of saved money tick down, especially if major or unexpected expenses occur.

Though I did well consulting full-time for the last five years or so, my wife and I were always worried when it came time to make big purchases and would often opt not to do so, since we'd never know for certain when our next chunk of money would come in. Since I've switched to employment by a corporate entity, we've felt much more comfortable making these necessary purchases and have been trying to clear our backlog of major stuff needed (appliances, vehicles, etc.).

It's more than just money. There's a peace of mind and freedom from stress that comes with corporate employment that can't necessarily be mapped onto an [attainable] dollar value.

Everyone wants to cross the chasm to independent wealth, but they don't understand that the process of doing so can be extremely onerous and stressful. As for me, I haven't given up yet, but it's not a pleasant experience.

> no amount of raw dollars can compensate for that ability

I'll play the devil's advocate here: Wouldn't the raw dollar amount it costs to work a day compensate for that?

No, because there are ramifications outside of just losing 8 hours of billable time. You don't have colleagues who can take over your responsibilities or who can maintain without your involvement at a moment's notice like you have in a robust corporate environment. It takes a lot of work, notice, and involvement to schedule a day off, you worry about the way it will affect the perception of the clientele, and you lose the 8 hours of billable time. There is much more stress and much different potential long-term consequences of taking a day off as a self-employed individual than as an externally-employed individual.

It seems to be a psychological thing. If you get a higher hourly/daily rate to make up for the lack of traditional PTO, you feel even worse about taking unpaid time off because you're "losing" even more money.

I agree, but I think that means the comparison should be about the things that really are different. Like having to pester people to pay for work that you completed honestly and on-time.