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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

There’s More to Freelance Rates Than Getting What We’re Worth

Written By: Diana Schneidman | Comments Off on There’s More to Freelance Rates Than Getting What We’re Worth

real-skills-real-incomeAmong freelancers, the most cherished business objective, as expressed on the internet, is to “get paid what I’m worth.” (Note that more than one third of the U.S. labor force is freelancing per Freelancers Union and Upwork, 2015, and freelancers are projected to be in the majority in a few decades.)

Value and Worth

Obviously, quantifying human value is a touchy subject. It is far more reasonable to attach a dollar figure to what our work is worth.

Professional associations take stabs at determining the worth of work. As an example, check out the rates listed by the Editorial Freelancers Association, which (in my opinion) are surprisingly low, considering that the organization’s goal is to “raise the professional status of its members and to make freelancing more dynamic and rewarding.”

Through years of freelancing – and of slacking off by scanning websites, marketing emails, and social media discussions – I see a consensus among freelancers: They want to get paid what they’re worth.

However, what we think we’re worth may be determined by our self-esteem, objective qualifications or quality of deliverables be damned.

The truth is that you’re worth what people will pay for your service.

Inconsistency

Today’s freelancers rarely determine that their rates are too high. Getting “what you’re worth” almost always means getting paid more – not less.

Some experts (and even some fellow freelancers) recommend that people hire the very cheapest labor from online job boards for the tasks they need done.

And yet, many freelancers demand top rates for their own services. (Apparently, they see no inconsistency there.)

Pricing Tiers

I have dealt with pricing fears and foibles for over 20 years as a freelance writer. I have underpriced and overpriced.

I am also a client for diverse tech, design and administrative freelance services. I have paid from $40 to more than $100 per hour (and much more for specialized coaching).

In other words, I am willing to pay well when it’s appropriate. And when I see the value for me and my business.

In my own business when hiring freelancers, I’m constrained by the limitations of a one-person business that cannot earn back a huge “investment” in a reasonable timeframe.

For freelancers with self-esteem issues (count me in, and many other somewhat well-balanced colleagues as well), this get-paid-what-you’re-worth talk feeds our insecurities and causes us to second guess our rates, no matter how high we raise them.

And if someone else is charging more, we may be very tempted to match their rate, whether it makes sense for our clients or not.

Bad Advice

What if a freelancer isn’t getting enough work? It couldn’t possibly mean that they are overcharging, say well-meaning experts and peers. In fact, quite possibly they are undercharging.

Oh yes! If a rate isn’t high enough, prospects might suspect there is something wrong, and opt for someone who charges more. That a price can be too high and above the market is totally off the radar for many so-called “experts.”

Some “experts” also suggest that if a prospective client does not immediately accept the freelancer’s proposal and dares attempt to negotiate, the freelancer should be deeply offended. “Stick to your guns,” urge fellow freelancers in online forums.

“It’s an investment, not an expenditure,” they are told. That claim may appear to justify the cost from the freelancer’s side – but what about the prospective client’s side?

Example: The local no-kill cat shelter can’t afford a hefty bill, regardless of the work’s quality, while the same fee for a Fortune 50 company may be a pittance. (And let’s not forget that the Fortune 50 assignment may be much more sophisticated in scope, technical requirements, etc.)

Good Strategies

If freelancers want to earn more, they could determine the most lucrative niches, specialize and go after them. That could definitely work.

Or they could understand the price sensitivity of their desired client, price their work appropriately for the client and win more work.

Conclusion

Freelancing rates should have some relationship to the demands of the assignment and the level of complexity, not merely be based on ego. Or some amount pulled out of thin air. Or simply based on what a competitor charges.

Pricing has to make sense for the client – and the freelancer.

Article written by Diana Schneidman
Diana Schneidman is the author of Real Skills, Real Income: A Proven Marketing System to Land Well-Paid Freelance and Consulting Work in 30 Days or Less , available on Amazon. She coaches freelancers and consultants who want to land work quickly at www.StandUp8Times.com and has been a freelance writer for over two decades.