Pros and cons of self-employment versus working for an agency as a caregiver - Care.com

Being your own boss sounds great, doesn't it? There are reasons being a self-employed senior caregiver is enticing, says Sheila Davis, Senior Vice President, Area Operations for Always Best Care. "The independent caregiver can determine their own hours, which clients they take on, and the hourly rate they can charge," she says. "But being an independent caregiver also has its costs that many caregivers are unaware of." 

A field like professional senior caregiving comes with high risk, given that someone's health and even life are in your hands — and since you might be one-on-one in a private home. When you're self-employed, you're on your own to get adequate liability coverage and ensure that you're working with individuals you can trust. 

Caregiving agencies don't offer as much flexibility and freedom as self-employment, but in turn, they can offer steady work, cost-saving benefits and less personal risk. If you're torn between working for yourself and working for an agency, read on to weigh the key pros and cons, provided by two industry experts. 

"You have the potential to earn more money, you are your own boss, you can create your own flexible work schedule and pick those clients that you wish to care for."

— SHEILA DAVIS, SENIOR VICE PRESIDENT, AREA OPERATIONS FOR ALWAYS BEST CARE

Working for yourself as a senior caregiver

The benefits of working for yourself as a professional senior caregiver are undeniable, says Davis. "You have the potential to earn more money, you are your own boss, you can create your own flexible work schedule, and pick those clients that you wish to care for," she explains. However, self-employed senior caregivers need to be prepared to secure their own benefits and wear a number of hats. 

Pros of working for yourself 

You can set your own rates. 

While agencies may have a maximum rate they'll pay employees, solopreneurs can charge clients what they feel they deserve. Also, without an agency as a middle-man, you won't lose money to agency fees and can pocket more profit. 

You can choose your patients. 

Caregivers working with agencies may not always have much say in which clients they're matched with. Pamela Jung, President of Cross Country Healthcare's Workforce Solutions Group, is experienced in staffing for senior caregiving and notes that agencies do the work of finding clients. While self-employed caregivers must do this themselves, they do have a unique opportunity to make decisions regarding their client base, Jung says. Caregivers working solo can handpick patients and families they mesh with, or be more particular about working (or not working with) a certain population or type of need/condition. 

You can enjoy a flexible schedule. 

Jung says that scheduling flexibility is one of the other key perks of working as a self-employed senior caregiver. With no employer dictating policies or scheduled, you decide what days and times you're on the clock. Some agencies can be flexible, but it's not guaranteed. If you want to work part-time, end your workday at 4 p.m. to be there when the kids get home from school, or start late some mornings for medical appointments, there's nobody to say you can't — as long as you find clients whose schedules and needs are accommodating.

Cons of working for yourself

You may experience uncertainty of pay/work. 

A key disadvantage of self-employment for caregivers is "the high uncertainty of employment and financial risk," notes Davis. If a major client no longer needs you, you may not be able to get paid until you find a new one. Additionally, you won't have paid time off unless you're able to negotiate something with a client.

You'll need to pay for your own benefits and insurance. 

Jung says it's key to be aware of these hidden costs of entrepreneurship. 

Jung notes that the cost of insurance and liability coverage for an individual is a must to consider. You'll also want to factor in the costs of health insurance, which is normally subsidized by employers, along with a buffer if they have to take unexpected time off work for injury or illness. This could mean also paying for disability and/or workman's comp insurance. 

Your taxes may be trickier. 

While there are certain tax benefits for the self-employed, Davis says, the need to pay self-employment taxes and manage the day-to-day finances of your burgeoning business can be difficult. 

You'll need to seek out training on your own. 

Agencies often facilitate and/or pay for continuing education and learning opportunities, so caregivers considering self-employment should consider how they will maintain current training and education, says Davis. 

You wear all the hats — for better or worse. 

Davis finds that self-employed caregivers must be prepared to do tasks that go well beyond helping patients. "Being a self-employed caregiver means that you do everything yourself and are responsible for the day-to-day running of your personal business," she says.

This includes not just finances, but also finding your own clients and individually selling yourself to the potential client, explains Davis. 

Working for an agency as a senior caregiver

Not sure you're cut out to be a lone wolf? There's nothing wrong with wanting the reliability that comes with a full-time job. "The benefits of working with an agency would be a steady income, health insurance, paid time off, paid training and possible opportunities to further education or career path," Jung says. 

To get benefits, agency employees sacrifice flexibility in a number of ways, but for some senior caregivers, it's worth it to avoid the burdens of managing an entire business. 

Working for an agency means working with a team of care managers, schedulers, trainers and office staff that support you in your job and promote self-care.

— SHEILA DAVIS

Pros of working for an agency

You can count on reliable pay. 

Jung says one of main benefits of working for an agency is you'll have steady work and income. If a patient no longer needs caregiving, your agency will find you a new one; you don't have to hustle to find new clients yourself and go without pay. 

You'll enjoy camaraderie. 

Working solo can be lonely. Even if you spend most of your days one-on-one with patients, working for an agency means "working with a team of care managers, schedulers, trainers and office staff that support you in your job and promote self-care, as caring for the elderly can be emotionally draining," says Davis.

You'll get employee benefits. 

Independent caregivers miss out on numerous money-saving employee benefits, says Davis. "These benefits could include paid training, pay increases, health insurance including dental and vision, paid time off, paid holidays, incentive programs, bonuses, referral fees, backup care providers," she adds. 

Someone else manages operations. 

If you're with an agency, you'll spend most of your time caregiving. The agency handles most of the other tasks, such as scheduling, billing, finding a back-up if you're out sick, marketing, etc. Those who work for themselves have to find time for all of these other duties along with caregiving. 

Your patients will be vetted. 

One of the top perks of working for an agency is they will vet patients before you're brought in as a caregiver, points out Jung. This can offer an extra level of safety and save you time (and headache) in case someone isn't serious or seems very difficult or unsafe to work with. 

Cons of working for an agency

There's less flexibility. 

One of the trade-offs of being supplied with work and patients is that you may not be able to choose your schedule. Some agencies may allow caregivers to choose their schedule or number of hours/days worked, while others may be more rigid. 

You're limited by rates. 

If you've gained significant experience or taken on extra training or certifications, you can ask your agency for better pay — but you may not get it. Agencies have a budget for salaries, and depending on the business, your income (and potential for growth) may be limited, especially if the agency also charges steep fees. 

You'll have less choice when it comes to who you work with. 

Agency employees don't get to choose their coworkers and managers, and depending on the agency, they may not have much say in who they provide care for. However, some agencies are more open about the matching process and ensuring a good fit. 

How to figure out whether to work for yourself versus an agency

With so many complex factors to consider, choosing the fork in the road between self-employment versus being an employee can be a difficult decision.

The simplest way to look at it is that self-employed caregivers have more overall freedom and choice, but they must be a jack (or jill) of all trades and balance caregiving with running a business.

"Self-employed senior caregivers will continually need to focus on community visibility to ensure there is a sufficient patient base to provide a steady income," says Jung. Some people love the hustle, while others find it stressful and would rather sacrifice flexibility and perhaps some income for the certitude of steady work and benefits. 

If you're exploring going out on your own, research the costs of professional and liability insurance and consider how they would go about marketing in their community, recommends Jung. Additionally, "any individual that is considering self-employment should educate themselves on the local, state and federal requirements, including the cost to maintain these requirements," she says.

If you're feeling indecisive, here's the good news: neither choice is permanent. If self-employment isn't the right fit, you can start applying for agency jobs anytime. If working for an agency isn't right for you, save up and make a plan to go out on your own. At the end of the day, it's about making the right choices for your life and taking care of yourself — that way you can be the best caregiver when you're on the clock, whether you're your boss or someone else is.