Are Freelancers a Commodity or a Profession?
Lately, I’ve been exploring various “commodity” freelance job boards where one bids for projects. In perusing a number of sites where only experienced web developers and graphic designers are competing against each other, one thing stands out vividly: every buyer/job source has set their price not only low, but outrageously out in left field low.
Another stark fact is that the relationship between client and designer is flipped: the client dictates a cost and the designer does the work for that price (or lower).
Yet, there are always bidders. Lots of bidders with low-ball ($90 for a Joomla! site done in one week) impossible bids. And I sit scratching my head trying to figure out how this commoditization of a skill set and art form has happened.
There seems to be a basic disconnect between what is needed to earn a living as a freelancer and what clients seem to want (at least on these outsourcing sites) to pay. The disconnect goes even deeper. Suddenly a client can define all aspects of a job from price to design, causing the designer’s role to change from that of a professional to that of a technician. It is unnerving.
Pay Surveys & Freelancing
According to FreelanceSwitch’s excellent survey, The Freelance Statistics Report sold by Rockable Press, the average hourly rate for a freelance web designer is $46 (and if you are a programmer, that hourly average rate can jump to $49). Several articles in the blog confirm that the best way to price a job is to consider the hours it takes to do it, plus a percentage added for overhead as well as the complexity of the job and whether it is intriguing; and then figure out if you want to do it fixed fee (my preferred pricing structure) or by the hour.
- Read “Figuring Out How Much To Charge” for a quick overview.
- Use the Freelance Hourly Rate Calculator to figure out how much you should be charging.
- Read “How Low Should You Go?” to find solutions to single clients who ask you to lower your fee.
But each of these articles and the survey assume that we are using word of mouth and our own networks to find our next gig and nobody is dictating the parameters of a proposal’s price (although as we question potential clients we do get a strong sense of what they are willing to pay).
Here’s a site that clearly describes the different levels of skill sets and how the “real world” prices a web site based on who is performing the work. You can read the article at How Much Does A Website Cost? (and do realize that this was posted in 2006 and the economy is a different place now). Again, these hourly rates are totally in line with everything else I’ve read and do not answer the question about where buyers are getting their pricing information when advertising a job on job listing boards as well as how anybody bidding on these budgeted projects can set their fees so low and survive.
A basic guide for about 10 hours of work is:
- Student: $100 – $200 ($10-$20/hour)
- Freelancer: $200 – $1000 ($20-$100/hour)
- Expert Consultant: $500 – $2000 ($50-$200/hour)
- Company: $700 – $2500 ($70-$250/hour)
Recommended project budget:
|Logo Design:||$150 – $750|
|T-shirt design:||$101 – $500|
|3-fold Brochure:||$501 – $1000|
|Simple Website:||$501 – $2,500|
|Complex Website:||$1,501 – $25,000|
|MySpace-like site:||$5,001 – $30,000|
|Custom Applications:||$10,001 – $100,000|
Common hourly rates:
Commodity Budgets Abound
And for the most part, each one of these articles, calculators, surveys, and lists are completely on target with my own experience. And because there is a logic and seeming standard to how jobs are priced and budgeted, I’ve found that it is best to work through your information network to gain new projects.
But when the networks dry up should you consider jumping into the fray and joining the global competition for web design jobs? Should you sign on to any one of the large number of job listing sites where bidding is the norm and low bids often get the gig?
What holds me back is a huge question I can’t find a good answer to: why are the budgeted amounts for work so out of sync with what all our careful calculations of pricing say should be the going rate for a web site or graphic design?
Here are some facts I’ve come up with:
- Our typical clients are those we are able to “talk” to via phone, in person, or over the Internet. This communication is crucial to build trust between freelancer and client.
- Unlike job boards where the buyer posts their requirements in sometimes vague and database-driven terms and our bids are not customized but must fit in 160 characters or less, we are able to collect many more facts about a client’s needs, budget, and corporate culture (what makes them comfortable) when we deal with a network-based client
- If the client’s budget is not at a level where we can afford to take the work, but who’s project is intriguing, we can educate potential clients about why we are charging the rates we propose and especially about the value of what we offer (be it years of experience, the importance of adherence to web standards, the flexibility of using vector-based design tools to create a unique and elegant corporate branding solution; and on and on) and for the most part this negotiation phase of the proposal process is very rewarding.
The end result is that we either are awarded a contract with a win-win scenario, or we can walk away from those clients where we fail in our approach or with whom we can’t communicate. This is a professional relationship.
Is there a professional relationship with its give and take available on job listing boards? I don’t believe so for these reasons:
- The only access you have to the buyer is via internal PM which the buyer may or may not answer.
- The job requirements are one-sided since there is no way to add your design and/or development expertise to possibly assist the buyer in making an even better result since what you are typically given to work with to create a bid is the budget, a website to look at or a document stating the requirements. One developer is like another in this scenario.
- Budgets for jobs seem to be based on the client completing a form and setting the price by checking off a range that has very little to do with the amount of work involved or any negotiations. Web design becomes a commodity and site projects are no longer unique.
On a deeper level, the entire culture of buyers who use job sites versus those who identify candidates for freelance work via word of mouth and references is completely different. Job listing boards contain hundreds of small businesses and entrepreneurs who are used to low-balling their sub-contractors and suppliers and see a web site as a marketing tool and overhead (which it is), and set the price accordingly.
But there is no negotiating when someone is willing to bid the low price and promises to deliver. In addition, sadly, from the way a lot of the job descriptions are worded on sites like JoomLancer.com, Get A Freelancer, OutLancer, and so forth, prior designers, developers, and programmers have not fulfilled their promises and these guys feel burned and wary.
Statements like: “Have been through numerous unorganized programmers who disappear way too often, private and social life takes priority over their work. We are searching for mature, dedicated people like ourselves, who take their jobs seriously and are married to their work and value their clients. We are not interested in working with anyone outside of the U.S” tell me that buyers are trying to protect themselves from deceptive bidding.
More Questions Than Answers
So, my question remains: Where do all these guys who list jobs on freelance job boards get their budgets from and do these projects ever actually get off the ground and produce high-quality results? Is this the wave of the future? If so, how can we learn to live in such a world?