Deciding to Permalance – the Pros and Cons you need to know
March 6, 2019
A new trend is on the rise within the gig economy: permalancing. But what exactly does it mean to permalance? Well, permalancers are technically freelancers, but they work with the same organization for a long period of time, or choose to dedicate a certain number of hours each week to a specific client’s projects. For example, as a writer, I’ve worked closely with creative agencies on a recurring or nearly full-time basis.
Often, once you’ve established a track record with a creative agency or content platform, you’ll be able to easily roll over from project to project as opportunities arise. In many ways, permalancing allows you to build a stable book of business. But it’s important to evaluate whether this is the right working style for you.
What Is Permalancing?
The gig economy has created various different types of opportunities for companies to work with talent on demand. In particular, permalancers are independent workers who maintain a relationship with a creative agency or consulting firm. They spend the bulk of their working time — or even all of it — on projects for one or two companies, yet they see the agency as more of an anchor client than an employer. In freelance parlance, “anchor client” means a recurring client that promises a certain amount of work each month — whether that involves set hours, a retainer or even just a number of individual deliverables, like one article per week. While an anchor client can demand a lot of time, they contribute stability and regular income to indys.
As this new workforce of full-time indys continues to grow and develop, you’ll find a variety of different opinions of permalancing out there. According to the Chicago Tribune, “some companies take advantage by hiring contractors to essentially be full-time employees without paying benefits.” While many indys feel quite positively about this new working style, it’s important to be wary of the potential flaws.
The Pros and Cons of Permalancing
Of course, it’s important to note that adopting the permalance lifestyle has both advantages and disadvantages. “The benefit of [permalancing] is that you have more stability when you’re on a permanent retainer every single month,” says Stephanie Caudle, owner and founder of Black Girl Group. “The disadvantage would be putting your eggs into one basket and allowing one client to cover the majority of your income, risking entering the feast or famine world if that client decides to let you go or cut your hours.”
Scott Reyns, a voice actor, sees the pros and cons, as well. “I’m relatively new to ‘permalancing,’ but so far, I like it,” he says. “I do it as an independent consultant and contractor. It lets me have up to 40 hours per week of billable work if I need it, while still keeping some flexibility to dial it back to closer to 25 or 30 if necessary. I get paid for the time and labor I put in — no more and no less.”
Of course, permalancers — like all indys — are responsible for a lot of costs that are partially covered for those who work a traditional 9-to-5. “Yes, I have to come up with my own health and dental insurance,” stresses Scott. “I get no bonus and no equity.”
But many of the benefits go beyond the hours and pay — and focus on the relationship, instead. “I get to keep a safe distance from politics,” says Scott. “I have to show results daily, but I’m not subject to formal performance reviews. I get to work for corporate clients with stable businesses and where equity participation wouldn’t make me seven figures anyway. My manager on any given assignment is technically my client, not my boss, and when I don’t have an equity stake I remain a service provider focused on doing quality work. There’s a refreshing agnosticism and freedom to the vibe.”
Questions to Ask Before Accepting a Permalancing Role
Before you enter into any permalancing arrangement, it’s essential to evaluate whether the situation makes sense for your freelance business and overall indy lifestyle. Ask yourself the following three questions:
1. What Does Job Security Mean to You?
In other words, do the guaranteed hours or income make up for the fact that you’re putting all of your income in one or two places? One of the benefits of freelancing for many of us is a diversified income. If one project ends or a client goes out of business, it’s easier to replace a fraction of your income rather than finding a new job entirely.
2. Is It Legal?
Permalancing has a somewhat complicated reputation. If you’re working with one long-term client, have other clients and dictate your own hours, there’s a clear line. If you’re a contractor who’s technically the employee of an agency and they’re hiring you out to another firm, that’s kosher. But if a company is trying to hire you directly and treat you as an employee without benefits, it’s important to look into the arrangement and determine if the IRS needs to be involved.
3. Where Can You Find Opportunities?
If a dose of stability is just what you’re looking for, there are a few places to begin your search for permalancing opportunities. Creative agencies, media companies, advertising agencies and content platforms often offer these opportunities. Platforms like Toptal and Axiom provide similar opportunities for tech specialists and lawyers, respectively. Staffing agencies and technology placement firms can also be a steady source of work and leads.
Permalancing gives you the chance to get deeply involved in specific projects and work with a set team. This work style adds stability to your project load and ensures you hit a certain income each month. Just be certain you’re choosing a solution that’s right for you, and you’ll get the balance of freelance benefits and increased security.
Liz Alton is a technology and marketing writer, and content strategist. She’s worked with clients including Adobe, IBM, Hewlett Packard, Twitter, ADP, and Google. She holds a bachelor’s degree in journalism and an MBA. She is currently pursuing a master’s in journalism from Harvard University.
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