Why are most people Employed vs Self-Employed?

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There is a lot of discussion about having a 9-5 job vs entrepreneurship and having your own business. In my parents time it was very common and normal working as an employee of a company. The industrial age was all about big companies and long stable careers. In recent times there seems to have been a steady shift in employed vs self-employed. This has been enabled by information technology and the internet.

If you are reading this then you are more than likely to be someone looking for opportunities to grow themselves and their wealth in search of financial freedom. It is easy to look at some of the most successful people and think that you have to run your own business or be self-employed to achieve this. It may seem like more and more people are starting their own busineses and this is the only way?

Is self employment increasing or decreasing?

Owning your own business and being your own boss has a great ring to it. When it comes to being successful financially owning a successful business can make you a fortune. For this reason many see this as the only way to achieve financial success. The idea of being an employee and enjoying work and being successful seems to be impossible. Rather it seems like you will work forever and never be able to become financially independent.

The data shows that self-employment has decreased over time. It shows that countries with advanced economies and high GDP the self-employment rate is the lowest. While developing countries and those with poorer labour markets are the ones with high self-employment. This tells you that the majority of people only enter self-employment because they are forced to.

In South Africa our self-employed % as a total of employed sits at around 15%. That is very similar to the figures from developed countries.

At the end of the day there is only a handful of people who will pursue self employment. As the world economy develops and companies get bigger and new companies are created, the majority of people will be employed vs self-employed. Starting and running your own business is not for everyone. It takes a special kind of person and is not easy otherwise everyone would be doing it.

Employed vs Self-Employed – Advantages and Disadvantages

The advantages and disadvantages of employed vs self-employed are like a double-edged sword. What appears as an advantage can be a disadvantage.

Your Own Boss

Being your own boss means you can make all the decisions and do things your way, that is a clear advantage. The flipside though is that you will have to make decisions on everything and you will carry 100% of the consequences. You need to have the responsibility and stomach for that.

One of the biggest advantages of doing your own thing is that you can innovate and change things. For many people with lots of ideas and energy, this is what drives them to self-employment. Following your passion for building and creating something is a dream for many. Being stifled by bosses or procedures or lack of vision creates frustration. There are however ways for entrepreneurial flair to prosper in a corporate environment.

Earning More

Earning more is possible because you either benefit from the full rate or share in the profit of a business. Also you get to deduct more expenses that normally you may have paid after tax. Your income will be more erratic than full-time employment and is not guaranteed. So when it is good you can earn well, but if it is bad you will have no earnings.

In underdeveloped countries the majority of people are self-employed so that’s where you will find wealthiest. South Africa only has 15% self-employed so majority wealthiest are in fulltime employment.


Flexible working hours are possible and often working from home is common for self-employed. Work from home is increasing for full time employees so this is changing. If you don’t feel like working then you don’t have to right? Well not always because if you don’t work you don’t earn. Your customers will dictate that now, so you may not have a boss but still you need to answer to someone.

Work Environment

Choosing your own work environment and equipment and software to use can be a big benefit for some people. No silly policies or procedures to follow means you can get rid of the frustrating parts of work and focus on the work you like. This kind of work environment will be good for you if you are that way inclined.

Self-employed or owning a business means lots of variety and change. That can be exciting and appealing as you won’t be bored. However, a lot of that variety comes in the form of admin and all forms of business management that you will need to take care of. You are the HR, IT, marketing, purchasing department etc. Lots of it you will have to learn as it will be new to you.

Employment Perks

Employment can come with many perks that do not exist in self-employment. These can be in the form of the working environment,  facilities available at work and the tools and technology you get to use. There is also the training and learning opportunities, the connections and access via corporate connections and travel opportunities. Lastly the perks and benefits that some companies offer can also be of significant value. 


We hear about entrepreneurship all the time, these are the people who get out there take all the risks and create something from scratch. They have the ultimate freedom to make all of their decisions themselves. This sounds great but until you have done it you don’t realise what it actually means. It is the ultimate form of responsibility and accountability. You are alone and you will feel the consequences, good or bad, of your decisions.

The opportunity to be in charge, create something new and be innovative is often the driving force behind these individuals. From the outside we see this freedom to choose and to be in charge of your own time. What you don’t see is the risk, the loneliness and the long hard hours needed to build a business.

Entrepreneurship vs Intrapreneurship

A different version of an entrepreneur is an intrapreneur. According to invstopedia   “An intrapreneur is an inside entrepreneur, or an entrepreneur within a large firm, who uses entrepreneurial skills without incurring the risks associated with those activities.” These individuals are able to enjoy some of the benefits, not all,  of being an entrepreneur without having the same level of risk.

It can provide innovative thinkers and leaders with a fulfilling role within a company. These types of roles exist in many businesses, especially now in a period of such rapid change. Established businesses always need to improve their systems to adapt and change to market needs.

They need people who are not scared of change and want to challenge the status quo, just like entrepreneurs. A role like this can be exciting and challenging and feel like running your own business with all the support and backing and but fewer risks.  

My experience as an employee, entrepreneur and intrapreneur.

I have experienced all of these different forms of employment and felt the benefits and disadvantages of them all. I can understand how all of them are possible and no one is better than the other. However as individuals we are suited to some more than others.

I have many ideas, love innovation and change and don’t like complying to norms and rules. So this together with those benefits of self employment drove me to entrepreneurship. I became disillusioned with full time employment and left to start my own business and pursue my dreams.  However I also am not a huge risk taker, I am more of a planner and thinker rather than a doer. I also prefer stability and routine more over flying by the seat of my pants.

As an entrepreneur I was involved in starting 4 different businesses, 3 of them failed and one is still running but small. I still enjoy it and may do more of it but my track record tells me that I am not the best at it. This forced me to evaluate being employed vs self-employed. I realised that my skills and way of working were more suited to employment and that I had a higher earning potential there.

Since then I have had a clear strategy to maximise my skills, work satisfaction and earning potential. This has meant that I returned to full time employment on my own terms. I pursued and created a working environment that inspired me and rewarded me appropriately. This has set me on my path to financial freedom.

The Hard Truth about Self-Employment

The majority of people in the world are increasingly being employed vs self-employed. In South Africa only 15% of people are self employed and in developed countries the number is half of that. Only 25% of new businesses make it to 15 years or more. Many entrepreneurs have started and failed with more businesses than they have been successful with.

A handful of people will be successful at creating a business or being self employed for their entire lives. For the majority of people employment is how they will earn a living. It is therefore important to know how to make the most of being employed to be successful.  

What is your experience being employed vs self-employed? How have you made it work for you?