How Corporate Pay Bands Can Help Freelance Writers Earn More

What I’m listening to: Keep On by Portugal. The Man

I was reading an article about how freelancers can stop undervaluing themselves (a subject after my own heart) when it occurred to me that corporations don’t have this problem.

Let me rephrase — they don’t have a problem determining the value of each position. That they undervalue women is an all-too-prevalent issue, but I digress. This is about freelancers of all genders, not about the obvious gender bias in corporate America.

Companies typically set pay bands that rank jobs based on experience, education, and job responsibilities. Once the powers that be decide what a particular skill level/job function is worth, they assign a monetary value. Yet it’s not exact — they set a range of compensation. That range includes a minimum and a maximum compensation for that particular job. That’s a pay band.

Let’s assume a healthcare company pays its PhD-level employees with 12 years of experience between $150,000 and 190,000 annually. Anyone with that kind of education/experience coming into the organization will be paid somewhere within that $150,000-190,000 band.

How does this apply to freelance writing? Simply put, it’s just one way to come to a more realistic conclusion about what you should be earning.[bctt tweet=”Pay bands can help freelance writers understand the value of their skills.” username=”LoriWidmer”]

Let’s look at the current way we do things. Whenever a website, market guide or anyone who thinks they know what they’re talking about says a writer should be earning on average X, well, X takes in a lot of income levels. X may have been determined by talking with 400 writers, 300 of whom are undercharging. Or X could be an average based on both part-time and full-time freelancers’ responses. Or X could be what the author started making and what he’s making right now, ten years later.

Sort of unclear where that mysterious X is getting its definition, isn’t it?

So how do you apply the pay band method to your earnings potential?

• Identify a number of writers with your experience level, education, and acquired skills
• Ask them what their hourly rate is
• Compare that to what you charge
• Create a makeshift pay band with the high and low numbers
• Ask yourself why you think you don’t deserve to be paid at the high end of the pay band

Got it? Now do one more thing:

• Throw everything out and charge what you want

But Lori, why did you make me go through that entire exercise just to throw it all out?

Because I want you to get in the habit of valuing what you do, and if that means showing you how much you’re not earning compared to those writers around you, so be it.

There’s a good chance, though, that you’re undercharging for your skill level and experience. If that’s the case, there’s nothing like some healthy competition in the hourly rate department to get you moving.

Some things I don’t want you to do:

• Believe that your rate is determined by “what the market will bear” — the market bears whatever you charge. Just ask Starbucks, which sells coffee at $4 if the McDonald’s of the world, which sell coffee for $1, determined their rate.
• Think you have to charge within any predetermined or researched pay range. Guest poster Walt Kania outlined the simple truth about rates here a number of years ago. Read it. It’s enlightening.
• Let anyone tell you what you must earn (including clients). That’s up to you entirely.
• Go low thinking you can go high later. Go high now. You’ve earned it, haven’t you?

Writers, how did you decided to charge your current rate? What went into the decision?