Every freelancer has been in this situation: you’re talking to a potential new client, and they seem interested in hiring you, but then they ask how much you charge for your services and you’re not exactly sure what to say.
Answering this question requires some finesse. Offer up a rate that’s too high, and there’s a decent chance that the client will opt for a more affordable freelancer. This is especially true for clients that don’t have much experience working with freelancers, as they often underestimate how much high-quality work will cost them.
But if you offer a rate that’s too low in an effort to improve your chances of getting the job, you could end up working for much less than you’re worth.
As the old saying goes, knowledge is power. If a freelancer knows what rate the average freelancer in their field with their level of experience is making, and if they had some way to present this information to the client, they could negotiate a better deal for themselves.
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The Goldilocks Solution
For years, workers have been using online tools like Glassdoor and PayScale in salary negotiations. Those tools have been a great boon for salaried employees, but freelancers that charge by the hour haven’t had a similar tool that they could use to prove to prospective employers what their objective value is.
Enter Freelance Rates Explorer, Bonsai’s tool for helping freelancers offer a rate that’s not too high, not too low, but just right. Both freelancers and clients can use Rate Explorer to view clear hourly rate breakdowns (ranging from $0 – $20 to $120+) for different combinations of role, skill, experience, and location.
How It Works
Bonsai’s core product creates contracts for freelance designers and developers. We’ve created tens of thousands of contracts for many different types of work in these fields.
To create these contracts, one piece of information that freelancers have to submit is their payment details.
This gave us an enormous amount of data to work with for the development of Rate Explorer, and we commissioned user research surveys to make the tool even more comprehensive.
As of this writing, Bonsai supports contracts exclusively in the US, UK, and Canada, so Rate Explorer only works for these countries. But we are currently collecting data from other countries as well, so Rate Explorer will be available elsewhere soon.
While analyzing the data collected from our contracts, we came across a few interesting insights, such as:
- Regardless of experience level or location, developers out earn designers by about 30%. There are multiple factors that contribute to this pay gap:
- The basic rule of supply and demand comes into play here. According to the U.S. Bureau of Labor statistics, in 2014 there were 261,600 designers and 148,500 developers in the workforce. Developers being more scarce allows them to demand higher wages.
- Developers also get paid more because their work is usually more important to a project. Without a designer, you can make a functioning website or application. It might not look nice, and poor appearance will certainly drive away customers and make a business seem unprofessional, but the site or app still works. Without a developer, you have nothing.
- Regardless of experience level or location, the majority of designers earn less than $60/hour. There are many opportunities for experienced designers to make more than this, though, particularly in the user experience and product design niches.
Rates distribution of Web/Mobile designers with 5-10 years of experience in US West Coast
- Designers quickly earn higher rates of pay during the first 3 years of their careers, but after those first 3 years the rates of pay grow at a much slower rate. Our user research surveys indicate that the most likely cause of this phenomenon is that design projects are often short-term and have low barriers to entry, leading to lower rates.
- Designers and developers in the coastal regions of the US out earn those in the Midwest and south by about 10%. Living expenses are certainly a factor here, but this is a surprising finding considering how easy it is for design and development projects to be completed remotely. Even in a marketplace that’s increasingly populated by remote workers, local relationships prove to be vital for securing high-paying jobs.
Rates distribution of Product Designers with 5-10 years of experience in US West Coast
Vs. US Midwest
- The biggest jumps in pay for both designers and developers occur during the periods of 1 – 3 years of experience and 3 – 5 years of experience. Our user research surveys indicate that during these periods, freelancers are able to earn more because by this point they have established strong portfolios and built networks of trusted clients.
Tips for Increasing Your Hourly Rate
It all starts with the work. Take time outside of work to research your industry, learn more about your field, and strengthen your skill set. When you are working, turn off the TV and tune out all other distractions so that you can focus on the assignment at hand and produce the best work possible.
That said, even extremely good work won’t save your career if you treat your clients poorly. Recommendations from previous clients are almost always required to secure high-paying contracts. When a client emails you a question, answer it quickly. When you have a question, don’t be stubborn. Ask it. Always meet deadlines or, at the very least, let your client know ahead of time if work won’t be completed on schedule. Communication is key to keeping clients happy and building a strong network.
We Help You Have the Upper Hand
The unfortunate reality is that freelancers are often taken advantage of, as they feel pressure to offer relatively low rates in order to secure the contracts they need to be financially stable.
Tools like Rate Explorer allow freelancers to improve their standing in negotiations and earn what they actually deserve.