On Negotiating Pay Rates with Freelancers
A couple of weeks ago I was negotiating with some freelancers who were interesting in writing for a new website I am developing. We were discussing what kind of articles I needed, the length of each article, frequency and the like. The main point of the negotiation was the pay rate, however.
Most of the freelancers were replying to me asking if I knew how much the market was paying for similar gigs, or how much I was already paying to my other writers. Initially I replied to these emails with a number, but that made me a bit uneasy, because the first person who throws out a number usually loses the edge on the negotiation.
After thinking more about the issue I came to the following conclusion: what does the market rate has to do with how much I will pay to that freelancer in particular? Even if the market average for writing gigs is $15 per article there are people out there charging $2 per article and people charging $100.
How do those freelancers come up with how much they should charge? Usually by calculating how much they make per hour doing similar or alternative jobs. For example, if a freelance web designer makes around $50 hourly from his normal activities and you ask him how much he will charge to design your website, he will calculate how many hours the job will take and multiply it by $50 (a bit more if his plate is full, a bit less if he is lacking work).
From this point onward I changed my negotiation strategy. Whenever freelancers asked how much I was paying to other writers or how much the market was paying for similar services, I replied asking how much would make the job worth their time. Any professional worth his salt will know how much his time is worth.
Most of the writers replied with a number, and then I was in a much better position to evaluate the expectations of each and to negotiate with them.
But I am curious to know what you guys think. Do you agree that it makes more sense to start with the earnings expectation of the freelancer in question rather than with the market average? What is your strategy to negotiate pay rates with freelancers? If you do freelance work, how do you negotiate with your clients?
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25 Responses to “On Negotiating Pay Rates with Freelancers”
I believe that the freelancer should know how much he is willing to make with a site he is going to be doing based on a few things such as how much content, design, advertising, how long it’s going to take to put everything together, and more.
If you ask how much they think they are worth and you get numbers you are doing yourself a favour and can then decide who you would like to go with without letting on to the others about who or why they may not be to your liking.
Clive @ Local Internet Leads
“…because the first person who throws out a number usually loses the edge on the negotiation” – this is an old school perception and something that many people are questioning. Certainly it is not true in all cases!
I would suggest that putting out a number of what you are willing to pay has a number of big benefits. Firstly it establishes some trust which I think is huge.
Secondly it will very likely shorten any negotiations and prevent a lot of wasted time. People who command a much higher fee will move on and not waste your time.
Obviously if you do this you still need to do your due diligence! Make sure you are comfortable with what you are getting by reviewing their work, getting testimonials, checking references, etc.
I know what I am willing to pay for an article. I don’t care about the market, only the value of the piece to me and that’s what I pay.
When I sell my articles, they are generally sold to publications that have staff. So I just seek parity in that regard with some extra consideration for the fact that I am supplying my own office and have my own overhead and they don’t have employer deductions and other HR headaches.
Very nice point!
Web Marketing Tips
Well you wont believe this but there is certainly a prevailing rate going on for every kind of service. You just have to look here and there ask for quotes and their work first and than take the decision.
I think there’s a piece about this on Dumb Little Man.
I’ll search for it then get back.
I agree with you , the freelancer needs to come with the price first, you can counter offer or meet half ways. You both come up with a happy number and then conclude the deal. It works both ways.
I agree with Caroline Goddard; the freelancer should know the market rate, and it’s up to them to present a good case for themselves with their experience, skills and the job on offer. I sometimes outsource small tasks to freelancers worldwide and find it frees up time for me to focus on important issues. No matter how skilled a freelancer, I usually ask for a sample task (paid, of course) to gauge whether they are good enough for the long haul 🙂
In my case there are two sides of this situation.
When I’m talking to clients I usually tell them what’s the hour rate of my company depending on the nature of the work. Then I tell them how much time it will take to do the work. This is my way of explaining the value of the work which I think is easy to understand (the time to money relation).
When it comes to hiring people I try to disclose the amount of money I’m ready to pay them as soon as possible. This way I don’t have to deal with people who charge much higher rates than I can afford, and also I can reach to others who would even do it for less money but they see that I’m ready to pay them more which creates a better relationship between us.
And as for the market-thing. I usually don’t care what amounts other companies are charging (or paying). I just try to look at the value that I can give to the customer or the value that a freelancer can give to me, and then try to put a price tag on this.
Dana @ Online Knowledge
The freelancer should open the price. You should already know the price if you are profesional.
I had a very hard time deciding how much to pay writers for a new site I’m launching. I’m on a tight budget, but at the same time, I want high quality articles. I ended up placing an offer on the problogger job board, and the results were pretty impressive.
Although my base pay rate was probably lower than what most good writers would expect to get paid, I’ve had 100 applications in the past few days from overly qualified writers. Most of them were just excited to become part of the team, as they liked the idea of the magazine.
So, I’d have to say that the project itself plays an important part in pay rates as well. Are they writing articles for a boring adsense site, or are they going to be part of something exciting.
I’ve never hired a freelancer before; however, I’ve thought about it on numerous occasion though – I would set my own price instead of asking the writer how much he/she charges.
Good luck Daniel
@ROW, well on elance and rentacoder the freelancer must make a bid on your offer.
On my case the I got the contact of the freelancers via friends and contacts.
Not really happened with me Daniel. Writers at popular sites like elance, rentacoder and even DP will tell you the rate without you prompting for it. Of course it demands clarity in the assignment.
May I know, which place you were seeking the freelancers from?
In general, when I worked in the newspaper field, I was paid by the word. I think that system works pretty well.
This is a very sensitive subject to many freelancers. I’m based in South Africa and from my experience freelancers here are very expensive and I’ve resolved to outsourcing such services in India where I find them to be fairly affordable compared to their counterparts here.
It is unfortunate, that each time I talk about this with the local freelancers, I’m viewed as not being patriotic and sending money away, instead of supporting my fellow countrymen/women.
I’m a little surprised that people have asked you what the market rate is. As a freelancer writer, if I’m going to take on a new job, it has to be worth my while — I’d use exactly the process you asked your freelancers to use.
At present, that means my rates are higher than they used to be: I’ve got plenty of regular work, plus my spare time is valuable to me — I’ve got several non-freelancing projects going on.
Also, just in case anyone reading this is thinking of hiring a freelance writer (or any freelancer) … you generally get what you pay for. Sure, you CAN find people who’ll write you an article for $2, but chances are it’s going to be very poor quality.
I agree, asking about expectations makes it much easier, but what truly makes the difference is finding your happy price.
Do as much research as you like, compare the job sites like e-lance with higher published rates on “more in demand” designers or coders and come to a good value price on your own and then don’t sweat the details so much of the proposal- there’s always fluff in there to offset a little scope creep from us.
Then write out some great specs and don’t look back.
The freelancers asking you averaging questions are afraid to bid too high or too low — they’re risk averse. They’re afraid if they aren’t in your ball park, you won’t consider them. They should be doing their homework and figuring out what’s competitive and bidding based on that. As a potential client, you shouldn’t have to feed bidding writers rate information. If the freelancer isn’t going to do the requisite research for bidding, will he or she do the requisite work for your writing? I’m a freelance writer/editor and I have a rate that I work from, which I vary depending on the project, the challenge, and the value it offers for future projects. I don’t accept low-rate work because it would suggest I’m inexperienced or have self-doubt.
Well, it depends on the kind of work you’re asking the freelancer to do. If the freelancer is going to be managing the complete site then let them say how much time the job will take and what’s their rate.
For simple one-off writing jobs, I think you should fix a rate that you pay and ask them if they’re ok with it.
A freelancer should certainly know how much their time is worth. If they are not able to come up with a number easily, then maybe they are lacking the proper experience. That, in turn, might reflect on their ability to provide a valuable product to you.
As the employer however, you also have to be in touch with what the market will allow in terms of rates.
Both parties have to do their diligence.
Great post. You got me thinking about hiring writers to post for my blog. Thanks!
I find it very unprofessional to ask what a potential client is paying others for similar work. A freelancer should already know the market rate for their industry and adjust up or down accordingly depending on the job and their skill set.
I have submitted posts to several different websites and earned money through them – usually, the owners set a specific amount of money they will pay for guest posts, and I just find blogs that give a good ammount of pay and have a good reputation.
If I was to choose the amount I would be payed, I would consider the following:
1. How much the person can spend.
2. How well the blog is known.
3. How well I will be able to write the post.
4. How valuable I think they will find me post.
As a freelancer, it is often difficult to nail down a price for a project. We have to make a living and so we want to get as much money as possible without ripping you off. BUT depending on the client projects could range in time based on how picky they are. If i spend 5 hours on a project but the client comes back with a number of changes that increase that to 8 hours, what was 50$ and hour turned quickly into about 30.
Also, freelancers (like me) want your business and would be willing to do many jobs for less, but don’t want to be working for nothing.
It is a difficult balance. (email me or check out my website if you anyone needs design or media work)
i’ve never used a freelancer to do something for me, but i have one idea for a WP Pluguin that will require one to do it, so your post help me to think about the how to deal with it… but for writting i think it depends a lot about the topic and the skills of the freelancer.
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