A few weeks ago I ranted about how as a client of freelancers and consultants (as well as a freelancer / consultant myself), I am not interested in how or whether their fees meet their cost of living. In retrospect, I may have gotten too emotional in responding to comments. Sorry.
Experts often recommend that self-employed people determine how much money they need to meet expenses and then adjust their rates to cover these expenses and ideally make a profit. I still disagree.
Smart readers noted a problem I had overlooked: If someone undercharges, they may not complete the project specifically because they are not making enough money. Either they have to quit my project in favor of something more lucrative or they lose interest because they are so grossly underpaid.
So there you are. Your project is tied up on someone else’s computer and / or desk and they disappear. Perhaps they disappear with your advance payment in hand.
That is a problem. You may say it is my own darn fault for being such an inconsiderate cheapskate.
No, it’s their problem for being either unethical or simply stupid and I’m merely suffering the fallout.
How much money does it take to cover expenses?
A great question. Unfortunately, I have no answer.
The labor market is international and varies as to cost of living. Rate schedules from professional organizations don’t solve the problem because the size and scope of the labor market do not even nearly begin to match the narrow nature of these groups.
My research identifies only one firm figure on how much someone needs to survive: McDonald’s employees claim it is $15 per hour.
You have to admire them for attaching a dollar amount to such a vague concept. Seriously. These people are putting out a number rather than issuing a lot of hot air about value, human dignity, and other hard-to-measures.
$15 is not a fortune, but alas, it’s more than some freelancers and consultants earn. And by the way, it is far, far, far less than I pay.
Should we offer to pay more to freelancers / consultants who undercharge?
I’ve only done it once. I was working with an editor who undercharged and I told her she should up her rates.
Her rate at the time was $40 per hour.
I had worked with her extensively and believed her market value was considerably in excess of that.
It had nothing to do with where she lived or her cost of living. She didn’t live at The Dakota in NYC or down the road from Bill Gates.
At $40 per hour, it is quite possible she was making $50,000 annually. Not a fortune but above the U.S. national average.
I told her this because of the value I received and because she was a friend.
(She knew the price was kind of low but this was the rate she chose temporarily as she repositioned her practice.)
People who don’t complete a project at the rate agreed to lack integrity, pure and simple.
There is no way clients can head off this problem by insisting upon paying more.
I have been stiffed by a disappearing web person who vanished after months of working with me. Furthermore, she was sitting upon a $250 advance. (In addition, I had already paid for previous work.) I was paying an adequate—even attractive—rate.
I was worried that she was in a hospital bed, unconscious, until a friend of mine that she did not know tracked her down. She answered the friend’s email (which suggested a business relationship and in no way referred to me) in less than a half hour.
What do to when you have undercharged
If you have an agreement, you have to do the work for the price agreed upon.
Go back and look at the contract or the email of understanding. Look at the scope of the project and require the client to stick to it unless they pay more.
What if you have no contract? Of what if you do have a contract but you didn’t think of every way from here to kingdom come that the scope could be expanded?
Speak up for yourself!
If that doesn’t work, you just may have to make like Nancy Reagan opposing drugs in the 1980s and JUST SAY NO.
I am not an attorney. This is not valid legal advice. I have never myself been in this position so I cannot tell you to do what I did.
Every day there are low-ranking, low-paid people who take matters into their own hands and revolt. They aren’t violent. They simply refuse to do what they are told to do. You can do the same.
Say something. Simply disappearing is always extremely unprofessional and not acceptable.
There is no relationship between some cost-of-living figure and your refusing to be exploited.
If you are disgruntled, you don’t need to show the client your checkbook register to justify more pay.
This is because your rates are agreed upon by you and the client based on some valuation of your services. The cost of living in your community and the lifestyle you have chosen are irrelevant.
Originally posted 4-27-15