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I’ve been in writing-publishing business for over 20 years and technical writing business for over 10 years at this writing.
So with great honesty I can make the following generalization: most of the technical writers on a corporate payroll will end up making more money over their entire careers than most of their freelancing counterparts.
Because freelancing demands a lot more personal energy, sacrifice, and drive than payroll work. If you are a freelancer, you already know how hard it is to find 2,000 hours of work a year; year after year.
However, individuals differ greatly of course. And I’m sure that a top-earning freelancer will always make more money than a top-earning payroll writer.
Having established that, let me also count the four reasons why employers may consider hiring a freelance technical writer, with this one note: in terms of per hour fees, a qualified freelancer usually costs more.
Here are the reasons why it might make more sense to hire a freelance technical writer:
1) If the job is a temporary one, if all you need is just one user manual, why commit yourself to a long-term relationship with a permanent employee?
2) Why commit a permanent office space, utility, computers, printers, phone lines and all the other office overhead that goes with it if your documentation project is a temporary task?
3) Why pay social security taxes, medical coverage, liability insurance, retirement plan contributions, etc. for employees when they, as independent contractors, can pay all that out of their own pockets?
4) If the documentation task is too specialized for a beginner- or mid-level technical writer, like for example configuring a DITA schema, then it makes sense to hire an expensive technical documentation consultant, but for as long as the project lasts. Again, a freelancing temp technical writer would be the ideal choice since such a decision would save you the high cost of re-training an employee.