The news this morning about the jobless rate and the predictions going forward were less-than-inspiring. Ten percent is bad. Worse, jobs aren’t just drying up temporarily – they’re never coming back or they’re moving overseas. Fewer people are doing more work, and it’s a matter of time before the collective meltdown of overworked Americans occurs.
As freelancers, we’re fortunate in that we can take the load off our corporate counterparts. Because we don’t cost the companies benefits, we can get a higher rate. Since one employee can cost a company hundreds per hour in benefits alone, it makes sense, right? So why are we settling for less?
The goal for me, for all of us, is to find work that allows us to work a 37- to 40-hour week or less and still meet our financial goals. So the obvious path is to choose clients whose projects pay us more for our time and talent. If you can secure three clients paying you your rate (which should be figured based on the amount you’re hoping to earn this year), you can drop projects whose pay rates are well under what you need to survive. We all have one or two that we do because the work is steady or easy or both. It’s up to you to determine if those jobs are worth keeping.
Thanks to more projects coming in this month than I could have hoped for, I’m about to drop a client whose projects went from well-paying to half-pay without warning. Because the work was easy enough, I continued. But it’s no longer cost-effective for me. While this may not seem like good client loyalty, you have to understand that loyalty goes both ways. If the client had been loyal to me, I’d have been told the pay was about to drop or had some communication regarding it. I wasn’t.
What job do you perform for a client or clients that is lower paying than what you’re otherwise willing to take? Why do you stick with it? Is it worth your time and effort? What other benefits do you get from the relationship?
8 responses to “More from Less”
I've stuck with some due to misplaced loyalty, but I'm in the process of changing that.
I think it's worth making the distinction that it's not merely that we freelances don't cost the companies we work for as much as a full-time employee – it's that those costs of employment are directly transferred to us.
My day rate (which has made many a full-timer's eyes pop out) reflects the fact that I have to pay for my own training and development, my own equipment, my own accounting and admin, my own marketing – and so on. All of which full-timers take for granted.
We freelances also have to make provision for our own sickness pay, holiday pay and – should the work dry up – redundancy pay. So not only are we bearing the costs of employment, but its risks – which have their own premium.
When I first started out, I set my price based on the idea that I could survive by working for six months of the year. Of course, I can barely remember when I last took a holiday, but a good chunk of my working week is spent managing my business, not doing billable work. I hope your financial goal for your 37-40 hour work week takes all this into account too!
I'd be very wary of working for a client who doesn't understand the professionalism that freelancing requires. Your client who cut your rate without warning sounds like a completely amateur operation that deserves an amateur service. Good for you for maintaining your professionalism by ditching them.
Clare, very good points. As freelancers, many of us are not blessed with partners who have health care. Even so, we are charged with our own 401(k)s, our own pension planning, and our own sick days, vacation days, etc. We are now charged with our own business insurance, as well. You mentioned risks – we run businesses that are rife with risks. The smart freelancer covers that with insurance and airtight contracts.
Yes, all plans have to take into account our business management. That should be figured into the price we charge. It's why I'm shocked when freelancers say they're able to make a "whopping" $60 an hour writing 6 or more articles in that hour. That's bad business. It's also quite clear that the details of their businesses aren't considered.
I have one client whose rates aren't up to snuff. That's about to change. I'll have several new ones who pay for reliable, compelling writing. This particular client has changed the rules too much for my tastes. I don't tolerate it. I don't have to. Writers too often allow their clients to dictate their business models – a HUGE mistake.
Devon, yours is a sound model. I've watched you set, and enforce your professional boundaries quite well over the last several years.
I have one long-time client for whom I do some lower-paying work. They've raised my rate several times during the four years I've worked for them, so they've tried, but it hasn't risen as fast as my regular rates. Still, I keep them because the work is easy and fast, they pay immediately, and because I genuinely like the owners of the company. Plus, because I've worked for them for so long and know the topics and what they need, I can work faster on their projects than any other client's, which brings the rate up to a more manageable hourly.
Any other client, though, I wouldn't put up with it. I recently dropped a client because their rates were so much lower than the rest of my clients. I ddin't do much work for them anymore, but I realized that I didn't want to do ANY for them anymore, and that decided that. I haven't missed them. ;o)
I have worked with one client since I started freelancing. He doesn't pay as much as I now regularly charge and the scope of the work has increased quite a bit.
I guess this also a case of misplaced loyalty (to quote Devon). I decided last month that when they contact me again I will inform them of my "new" rates and not budge.
Interesting timing, Lori.
Just this morning my sister (freelance graphic designer) and I were commenting on being thankful for some of the older lower-paying clients we were close to axing a year or so ago. For her, it's because she's been struggling to find work in recent months, but a lot of companies aren't updating their collateral materials or doing big marketing pushes that require her level of design service. For me, it's because my lower-paying clients are still good for fill-in work.
Yes, I prefer the 75-cents to $1/word markets, but even 25-cent/word articles help pay the bills, especially when they assign a lot of long articles. (My higher paying markets all assign shorter pieces. Since the bulk of the work is in the research and interviewing anyway, and shorter pieces still require the legwork and more editing, the hourly rate isn't as different as one might expect.) One thing I do make clear to the lower-paying editors: I prioritize my workload by how much the assignments pay. They all seem to understand.
Also this morning, I saw and ad on a job board seeking "ex-pat" writers and editors who live in countries with lower income levels! They pay $7 per hour. Hmmm…I always thought one reason some ex pats chose to live outside the US was because they could afford a better standard of living on their US-level income.
I feel obliged to help folk out that have helped me in the past or who I know will help if I get desperate. However, we'd usually still maintain communication. If they dropped pay without warning, I might just drop them without warning. But I'd replace the work/revenue first.
I'd work for a charity organisation or non profit publication for less money than usual and I might – MIGHT – offer a student a discount when I was typing if they had a lot of work, like a 15,000 word thesis.
Generally, though, I have a bottom whack that I don't go below, and I rarely cut my rates for an existing client. Call me old fashioned, but when you're known to be reliable and come up with the goods even at short notice, the rates should go the other way.
Katharine, sometimes the relationship with the client dictates the way you want to handle it, right? I've worked for people in the past who were just great people, paid on time, and whose work was enjoyable to handle.
Kimberly, I had a situation like that. It's sad when it ends. You really care about that person and his/her business, but you've grown in opposite directions.
Paula, that was me a few months ago. I was thankful for the work, but I felt so stagnant. I couldn't earn more because I was busy with the lower-paying stuff. That's fine if that's all there is. But rarely is that all there is from my experience. Devon knows the struggle I've had with this current client, which is a large group. I've held on because of the guaranteed checks, but it's turned from a job that takes just an hour and a half each day to sometimes three, four hours each day. The workload increased. The pay decreased. And the demands are beginning to smack of employee status rather than freelance. Even one of those conditions is enough. In combination, it's a large, waving red flag.
Diane, I like that – "when you're known to be reliable and come up with the goods even at short notice, the rates should go the other way." Amen. Rarely would they cut the workload, right?