Agency vs Freelancing: Which Is Right for You?

Agency vs Freelancing: Which Is Right for You?

Figuring out the next step in your career can be tricky. There are many paths, each with their own pros and cons. Two options that we often see people contemplating are working for an agency versus starting their own business as a freelancer.

Agencies may offer full-time employment contracts with steadier pay and benefits, while freelancing gives you more control over your schedule, clientele, and day-to-day operations.

In this article, we’ll weigh freelancing against working for an agency to help you decide which is the best fit for your lifestyle and career goals.

Understanding agencies and freelancing

Before deciding whether you want to work at an agency or cut your own path by freelancing, you’ll want to understand how they differ. Some people prefer being part of the team that agencies offer, while others like working more independently and running their own businesses. They each have different environments and workstyles. Learning more about your options will help you figure out what suits you best.

How agencies work

Agencies provide specialized services to their clients. If a company doesn't have the resources to complete a project, like developing a mobile app or rebranding, hiring an agency can be cost effective. Some companies prefer outsourcing marketing, sales, or customer service to an agency rather than building their own in-house team.

Common types of agencies include:

  • Digital marketing
  • Public relations
  • Social media
  • Branding
  • Customer service
  • Software development

Depending on your role at an agency, you may work with multiple clients at once or dedicate yourself to one project at a time. Agencies come in all shapes and sizes. Smaller agencies or start-ups may give you the opportunity to try on many different hats and roles. Well-established and larger agencies can offer more structure and the chance to learn from experienced professionals.

Boutique agencies typically focus on a specific niche or industry and offer customized services to their clients. Full-service agencies are a one-stop shop, providing many different services that often fit together.

How freelancing works

Freelancing is when independent professionals offer their services directly to clients. Freelancers work for themselves and run their own businesses, which means they're responsible for finding new clients and pitching their services.

As a freelancer, you could work on a platform like Upwork, submitting proposals to projects that are posted on the Talent Marketplace™ by potential clients. Clients on Talent Marketplace are motivated and actively looking for freelancers. Upwork connects independent professionals with clients of every size, facilitating communication and project submission, as well as offering payment protection (hourly and fixed-price).

When freelancing, you can decide which projects to bid for and accept, as well as the clients you work with. You largely have the freedom to choose when and where you work (unless the job requires you to be online at a particular time, to attend meetings for example). Freelancers typically charge clients hourly or work on fixed-priced contracts for deliverables.  

Working at an agency vs. freelancing

The biggest difference to consider between working at an agency and freelancing is whether or not you want someone to assign you clients and projects. In an agency, you're likely part of a team with a manager that you report to, who delegates tasks. The environment is more collaborative, with multiple people often contributing to the same project.

As a freelancer, finding new clients and projects you want to work on is up to you. You're your own boss, which comes with more freedom like working from home and choosing your projects. But it also carries more responsibilities, such as tracking and billing hours and marketing your own services. The way you work with clients can vary from contract to contract. Some clients may incorporate you into their teams, checking in frequently, while others are hands-off and let you work independently and only give feedback when needed.

Your clients may have you working in a silo, incorporate you into one of their teams, or hire your services over mulitple projects with each project having different expectations in your workflow.

The client is who approves your deliverables, and your job is to make sure you meet and exceed their expectations. If you're working on a platform like Upwork, client reviews and public feedback are how you build your reputation.

Pros and cons of working at an agency

Agencies can be appealing to those who like the idea of working with different clients and having a variety of projects but aren't sure about being an independent professional. At an agency, you may have a more structured team environment. Some agencies allow remote or hybrid working.

Agencies may offer full-time employment opportunities that include steady pay and benefits. This stability can come at a cost—potentially giving up flexibility, control, and opportunity for growth that comes with freelancing.

Let's dive deeper into the pros and cons of working at an agency.

Pros

One of the main benefits of working at an agency is the steady income and perks that full-time employment contracts can offer. When working as a full-time employee, you get paid on a set schedule and may be eligible for benefits like healthcare and paid time off. This can be important for financial planning, especially if you're a caretaker.

At an agency, you can be part of a team and have more opportunities for collaboration. The agency may also have in-house resources for employee development and growth or networking opportunities. Instead of working by yourself, you have colleagues you can turn to for support and advice if you need it.

Rather than actively pitching clients and looking for work, depending on your position, your manager may assign you projects and tasks. You could have a client-facing role or hand off your deliverables to other internal team members.

If you prefer a more collaborative and structured work environment, an agency may be a great place for you to grow. In an agency, your manager will likely handle many of the logistics of a project, like timelines and dependencies, so you can focus on doing your specific job.

Cons

Agencies may not be for everyone. They have a reputation for being fast-paced environments, which can potentially mean long hours and stress, depending on the company. Some industries like marketing and advertising highly value agency experience, making positions (especially entry-level) more competitive.

Unless you're an independent contractor or part-time worker, you likely won't be able to create your schedule and choose when you work. The workloads at an agency may be higher than what you would choose to take on as an independent professional.

Instead of negotiating your compensation for every project or client, you'll likely be paid a set hourly or salary rate, possibly also with a bonus or commission. If you think you deserve a raise, you'll have to ask your manager or wait until your annual review.

Compared to freelancing, you may have less creative freedom at an agency. The agency may have specific procedures and styles that you have to adhere to, and other teams or leadership may be the ones making the creative decisions. You also have less control over the projects and clients you work on. Depending on the agency, you may get to choose some of your projects, but clients will likely be assigned to you.

If you like the idea of being part of a team and collaborating, you can start your own agency on Upwork. Maintain more creative freedom and control while working with other independent professionals.

Pros and cons of freelancing

One of the appeals of freelancing is having more freedom to choose when and where you work. As a freelancer, you make your own schedule and set your working hours. This flexibility can give you the freedom to travel, care for your loved ones, or work when you feel most productive.

Freelancers have to be self-disciplined and spend time pitching clients. The workload may not always be steady, so you have to be financially prepared for the slower times, especially in the beginning. Building a freelance business can take time.

Pros

Freelancing is essentially running your own business, which gives you more flexibility and control over your career. You get to create your schedule, deciding what your working hours are and when you're available to clients. Some people prefer a traditional 9 to 5 schedule, while others need to be available for school, appointments, and other responsibilities. You may decide not to have set hours at all, working around meetings and whenever creativity strikes.

As a freelancer, you get to choose the specific skills and services you offer, as well as the clients you work with and the projects you work on. One popular freelancing strategy is to find a niche and work as a specialist rather than a generalist. Pick what you enjoy doing most and try to become the best you can at it.

If a project doesn't fit your schedule or the client doesn't seem like the right match, as a freelancer, you get to say no and decline the offer. This gives you a greater say in the work that you do. Freelancers work contract to contract. Some are short or one-offs, while others are long-term and ongoing. If you don't have a great experience with a client, you can choose not to work with them again.

On Upwork, the review system works both ways. When applying to projects and evaluating offers, you can see the client's public feedback from other freelancers. This can help you avoid working with difficult clients.

Freelancing gives you more creative freedom over your work. You answer to the client, not a manager or another decision-maker. Clients choose you based on your portfolio and pitches. Your style and creative choices are what make you unique and often what attracts clients.

Working as an independent professional, you set your rate and decide how much to charge clients in your pitches and negotiations. At first, you may set your hourly rate toward the lower end of the average range for your skill.

As the demand for your services rises and you have less availability in your week, you can give yourself a raise and increase your rates. You can even include a scheduled rate increase in your Upwork proposal for long-term contracts.

Freelancing gives you the potential to earn more income than working a set hourly or salaried position. You can upskill and offer more services to your clients, potentially charging more. The only limit is what clients are willing to pay, and this depends on your skills, experience, and reputation.

See what clients are looking for your skillset right now on Talent Marketplace.

Cons

Every job has its drawbacks as well. Freelancers are small business owners. This means that you do not have any guaranteed employer benefits like health insurance and paid time off.

Freelancers have to budget correctly, keeping in mind that the income may be inconsistent. Instead of getting paid a set amount every week, you may have some contracts that pay more than others. Unless you're working an hourly contract (which has weekly billing cycles), you may not get paid until you complete a milestone or submit an invoice.

When freelancing, you have to set aside time for finding and pitching clients, marketing, and other business management tasks. These are unpaid hours that you need to factor into your hourly rate. You can use the freelance rate calculator to help establish the minimum freelance hourly rate you'd need to cover your expenses.

If you work on a platform like Upwork, many of your administration tasks are built-in, so you can save time. Find jobs and submit proposals, track your hours, deliver milestones, and talk with clients without leaving the platform. You can even market yourself to clients by using Connects to boost your proposal or turning your Availability Badge on.

To avoid platform fees, some freelancers choose to pitch by sending cold emails or inbox messages to potential clients. Freelancers on Upwork pay 10% of their earnings to use the platform. As a freelancer, you can do both as long as you meet the client outside Upwork.

If you attend a non-Upwork networking event or get a lead from a personal connection, you can still work with the client even if they don't have an Upwork account. You can also use Upwork to manage your contracts and accept payment for peace of mind and extra protection.

Some people find freelancing to be lonely and miss the social interaction that being part of a team or working in the office can provide. Freelancers get to choose when and where they work, and most projects are fully remote. Unless your client schedules a meeting or needs you to collaborate with team members, you likely are working by yourself all day. Coffee shops and other coworking spaces can help fill that social gap.

Evaluating your priorities and preferences

When deciding between freelancing and working at an agency, start by thinking about your ideal work environment. Consider your personal workstyle, whether you thrive working solo or prefer to be in the office and part of a team.

Working remotely takes time management skills to stay productive and not get distracted. Some people need the routine and accountability of going to the office, while others find it easier to self-motivate and stay on track.

You'll also want to evaluate your priorities and see which career path is in closest alignment with your goals. Think about what you want to accomplish professionally in both the short and long term—these are your career goals. Take into account your personal goals as well, like the work-life balance or flexibility you may need in your schedule.

Working at an agency may be a better fit if you want to gain experience in your field and learn from others. Agencies are a great way to learn the ropes. It can be a valuable stepping stone for finding a full-time role at a larger company down the road. Having an agency background can help make you an attractive job candidate.

Freelancing gives you the opportunity to do exactly the type of work you love and build a business from anywhere you want. You can fine-tune your skills and become an expert in your industry or skillset. Build your portfolio and work with clients from all around the world. If you decide that you want to work full-time for just one client, you can explore contract-to-hire opportunities.

Take a look at your finances to see if you need a steady paycheck right now or have the budget to freelance. You may not get paid a full 40 hours a week, or have another contract lined up when one ends, when you first start freelancing. You'll need to have a plan for the in-between times and when your schedule isn't full.

Starting a business always comes with risk, which doesn’t suit everyone's personality. This can lead to stress and financial insecurity depending on what your current savings look like. Working at an agency can offer more stability that some people prefer.

Tips and resources for success

Set yourself up for success by investing in your personal growth and career. Think about where you are now and compare it to where you want to be 6-months, a year, and five years down the road. Do a self-skills audit and try to identify any gaps that can help you be a stronger job candidate or win more clients as a freelancer.

If you're interested in working at an agency, here are some tips to help you land an interview:

If you want to try freelancing, here are some tips to help you get started:

Whether you decide to work at an agency or become a freelancer, these professional development resources can help you figure out the next steps in your career:

Making the decision

Deciding between freelancing and working for an agency depends on your personal workstyle and overall career goals. You can read Upwork success stories to see how successful freelancers built careers on the platform and join the Upwork Community to meet other independent professionals and get their advice.

If you want to know more about working at an agency, you can try reaching out on LinkedIn. Find the type of agency you'd want to work at and send messages to employees with the types of job titles you're interested in. Explain that you're considering working for an agency and ask if they'd be willing to talk with you and let you know their personal experience.

One of the benefits of freelancing is that you can work as much or as little as you want. You don't have to go all-in at first; you can try a few smaller projects or freelance part-time to see if you like it. Set aside a few hours each week outside of your 9 to 5 and then slowly transition into freelancing full-time.

Getting started as a freelancer on Upwork is easy. All you have to do is create a free account, fill out your profile, and see what recently posted jobs match your skills. Clients are looking for someone just like you to help with their next project.

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Author Spotlight

Agency vs Freelancing: Which Is Right for You?
Cassie Moorhead
Content Writer

Cassie is a storyteller and content creator with over eight years of experience helping brands communicate to their customers through different channels. She enjoys finding new coffee shops to work from and spending time in nature with her dog, Sweeney.

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