Make 2021 the year you move away from hourly rates
"Today's freelance reminder: hourly rates devalue the end product and punishes contractors who are efficient, and encourages dawdling. Project rates are a much nicer place to live (and project rates can be calculated based off an estimated hourly rate, who the client is, etc.)"
Journalist Wudan Yan encapsulated my thoughts on hourly rates in her tweet. You should be following her if you aren't yet (so much wisdom), but here, as we're all thinking about the change we hope to see in 2021, I want to push on this with my take.
Newbie freelancers have no idea what to charge, so it’s no wonder they end up working hourly. They take their old salary, divide it by a 40-hour workweek, and figure that should be their ballpark for earning.
Working hourly limits your earning capacity to the number of hours you can/want to work and the going rate of the marketplace.
That's fine and good if you're a lawyer, say, and you can quote an hourly rate of several hundred dollars and no one will bat an eye. But too many people still have the impression they can get content created on the cheap, so they'll want to keep an hourly rate on the low to moderate side. Of course, what’s low to moderate varies by your cost of living, your expenses and your previous salary. It can be thrilling to set your own price at first, and you may be outlearning your last salary–bu scaling up form hourly earning is really, really difficult.
Then there’s the efficiency trap. The more experience you become, the more efficiently you can work. Things take less time. This translates to earning less for doing the exact same amount of work. '
Trying to raise rates to compensate–inching from $30 to $40 an hour, say–is a recipe for pushback from clients, who will want you to justify the higher costs with better work–and that’s if they don’t just look for someone cheaper.
Prevented from raising rates outright, writers strike back by dawdling.
In grad school, I spent hours on the phone with a friend who’d mastered the art of the camera time tracker her client used to make sure she was writing his blog posts. She still got his work done, but she didn’t give it her full attention while we were gabbing away.
It took her far longer than it would have if she was able to earn a flat per-post rate. She lost a lot of time she could have spent on writing her novel, for one.
Freelancing comes with built-in costs employees don’t have to cover–things like health insurance, business insurance, supplies, your website, etc. That old salary expressed as an hourly rate isn’t going to pay those extra overhead costs, even if you’re earning your desired hourly rate.
As a freelancer, your value lies in providing content as a service, whether you’re doing ideation, content strategy, content curation, social media or all of the above. Yet earning hourly encourages clients to treat you like an employee, rather than an independent contractor providing services.
To move from charging hourly toward other pricing structures, like per-project or per-word, you need to understand how much you want to earn per hour in an ideal world. And you need to know how much time it takes you to get stuff done working efficiently instead of dragging your heels to milk a gig.
Say you want to earn $100 an hour, and you *could * get that post done in 60-90 minutes but right now you let it take 2-3 hours because your boss is stuck at a $35 an hour rate. You could recapture at least an hour of your day just by switching over to a project fee structure and working efficiently.
The Write Life’s got a script you can copy for migrating current clients away from an hourly rate toward a project-based model. And with new clients,you can estimate how much time it’ll take you to meet their needs and provide an accurate rate.
Things I read and loved this month:
Electric Literature: What are White Men So Angry About? - Ijeoma Oluo, author of “So You Wanna Talk About Race?” takes on white male entitlement and its dark twin, the anger men feel when they don’t get what they feel the world owes them–and how that harms the rest of us. I can’t wait for the book!
The Freelance Creative: How to Find Inclusive Style Guides That Lead to More Thoughtful Writing - A roundup of style guides to help freelancers cover communities respectfully by using inclusive terminology.
James Clear: What is Your “Average Speed” in Your Life, Your Health, and Your Work? - The author of Atomic Habits talks about pacing and the idea of average speed, or the small-yet-sustainable amount of a good habit, like going for walks or writing 1,000 words a day. Clear's argument is that by doing our average speed on a consistent basis, we produce exponentially more than waiting only until we've got the time or the inspiration to go big. There's a section on how to bump up your average speed of there's something you want to do more of, but can't seem to prioritize.
My latest piece:
Mashable: The best online tools to trace your genealogy from home - I wrote about genealogy apps as a replacement for travel in *these times* for Mashable and got to test out a few apps to trace my roots. This was a fun one to research and report!
Get your q’s answered!
Every two weeks, I answer your questions about the writing life and making it work for you. Want yours answered? Email lindsey.danis[at]gmail.com.
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