The Pitfalls to being an Independent Contractor

My friend, Darlene, has been working at home as a transcriptionist for several companies, including a general transcription (GT) company and a medical transcription (MT) company. She recently quit the GT company because she was making more per hour at the MT company, and she also liked the work that was available at the MT company more. Just yesterday, she got an e-mail: She was let go from the MT company effective immediately, because there was not enough work to keep her employed there. They told her that as soon as the work picked back up, they would love to hire her back on, but until then, they had nothing for her but a letter of recommendation.

Darlene went from having two steady jobs to nothing within the space of a week. I’m sure that there would be many out there who would be quick to point out that this could have happened just as easily to an employee as it did to Darlene who happens to be an independent contractor. In some ways I can see that as being true, but there is the fact that as an IC, you are responsible for getting your own work, for paying your own taxes, for scheduling your own hours, and with that flexibility and responsibility comes the fact that you also tend to be more disposable than an employee would be. ICs set their own schedule, so a company will usually hire more ICs than they need, just so they can make sure to keep all of the work covered. Companies rarely know how much work they are going to have in a given week (transcription companies are notorious for this) so they will overhire their IC base on the premise that if they don’t have enough work to go around, they will simply let the ICs go and rehire later when the workload picks up. ICs usually have several companies that they work for, so there is a mentality that it’s okay to change their workload at the drop of a hat–after all, they have other companies they can get work from, so it doesn’t really hurt the ICs.

That’s why I have discussed the idea of having multiple baskets to put your “eggs” into, so that if you do suddenly get released from one company, you have others you can fall back on. Luckily for my friend, she had been recently hired on as a blogger for a website, so she can write blogs while searching for another transcription job. I asked her if she was going to search for an employee position or IC position this time, and she told without hesitation, “IC! I have to have the flexibility!” And sometimes, that’s what it really comes down to.

Would you rather work as an IC or an employee? Leave your comments below!