I recently had an encounter with an agency who was shopping around for production freelancers. This happens all the time. There is nothing unique about it. In fact, it was typical:
- Agency announces work opening
- Agency sets high standards/expectations of skills, time, and professionalism
- Agency wants to negotiate low rate in exchange for consistent work.
The first time I said no to an offer like this, I got harassed about it by my mentors. They explained the math, and how it would actually work out the same because I wouldn’t have to waste time (equals money) looking for clients.
But I wasn’t into it.
To me it wasn’t an offer, and I didn’t find it flattering. In fact, I felt like a used car, where price was all that really mattered. I say used car because, unlike a new car where the focus is on features and whether it is the right car for the budget, I felt like my qualities were being dismissed as commodities common to the lot, or even exploited for the occasional imperfection, all to get a better deal.
Haggling and manipulation like this is just a sign that something’s wrong. It’s a greedy way of trying to get what you want; having your cake and eating it too.
Note: I finally realized what that phrase means. If you eat your cake, you no longer have it (on your plate). Duh. It means you don’t accept the reality that fulfilling one desire might sacrifice another. You’ve got to choose which is more important to you.
People do this when they begin confusing their needs and their wants. Meeting our needs, though, often requires a few sacrifices of our wants, at least temporarily.
Barking up the wrong tree
The reality of sacrifice reminds me of another old saying, “Quality. Speed. Price. Pick any two.” So, how do you pick? It comes down to your real needs...and a little respect. Let me illustrate by returning to the agency example:
I didn’t like the deal. And it was sounding worse with everything they said. You can tell when someone is trying to “pick all three”, because they begin to manipulate. I was charging $100/hr at the time. I was a skilled and knowledgeable BC developer (think speed and quality), so the rate suited me, but it was still on the high end of what developers charge. One of the tactics the agency used was they told me that they also charge $100/hr, and how it wouldn’t make sense for them to buy an hour just to turn around and sell it for the same price.
Another Note: Two things I want you to know about this conversation. First, the agency was lying. Their rate was $150/hr., so let’s get past their sob story. Second, that sob story comes standard with this type of manipulation, and manipulation is a sign that something isn’t right.
So what’s wrong with this? Let’s look at their needs:
- They needed someone to perform consistent, routine tasks associated with building websites.
- They were looking to increase their revenue by adding an additional resource for site builds.
- They wanted to maintain existing margins, paying similar amounts they were for other development resources.
Which options were they needing? Speed and price (remember, I was speed and quality). They needed a person with sufficient skill, who could perform at par; someone who could simply meet deadlines; who wouldn’t break the bank.
The truth is, I simply wasn’t a good fit for their needs. But they didn’t realize that, so they were trying to convince me to change my shape.
Let’s take a moment and talk about the “shape” of freelancers. First off, freelancers, more than anybody else, are paid based on skill. An hour from one freelancer is not worth that of another. This can’t be said about agencies. Their rates are based on overhead and margins, and their price says nothing about what you will get.
It’s because freelancers rates are so skill-based that you really shouldn’t argue too much with their rate. The market will determine whether that freelancer can continue to charge what he does. Either he’ll be undercharging and working really hard with lots of business, but unable to make a living, or he will be overcharging and so starved for work that he is unable to make a living. People are either going to pay their rate or they aren’t.
As a freelancer, I charge what I do because I can. I charge more per hour than almost every partner who uses me. But here’s the takeaway: they don’t use me for production work. That’s not what you do with a freelancer who charges triple digits per hour. You don’t usually sell their hours, at least not for standard production.
By the time a freelancer is charging higher prices than the rest of the pack, they’ve usually developed a few superpowers. Perhaps they are really fast, or knowledgeable. Maybe they have a skill that is unusual or difficult to acquire, or they are simply great at solving problems.
Up to the point where a freelancer figures out their “superpowers”, their skillset within their field is pretty run-of-the-mill. After all, there is a price every freelancer must pay before they start to separate from the pack, and within a particular field that price is very much the same. After that point, however, some skills will naturally surge ahead, and others will fall behind.
Finding the right fit
Let’s bring this home with a couple takeaways:
- Using the wrong developer for the job is expensive, regardless of their skill or rate. You will find developers do their best work when they are placed in the right environment for their skills. Going back to the car lot analogy, you can pick up a porsche to be your grocery-getter, but certainly there are cars with larger trunks and better mileage at a fraction of the price. Conversely, if you need a car for the autobahn, you could get by with a Ford Fusion, but you’re going to tax that poor car into the ground. Two expensive scenarios, but switch them around and you can save a bundle of money.
- With freelancers, you pay for what they can do, whether you use them for that purpose or not. With the porsche, you’re paying for speed and the name. If that is what you need, you should expect to pay that rate. If the right developer’s rate is too close to your own, or higher than you’re margins can afford, as an agency you need to raise your rate, not ask the developer to lower theirs. On the flip-side, there is no point in paying for superpowers you don’t need. If your needs are run-of-the-mill, find a developer with that level of skill, and pay that rate.
A bit of advice to freelancers: acknowledge your skill level and don’t be afraid to say no to a job that isn’t a good fit. You won’t be happy with the work, or the relationship, and your quality won’t be what you want. And when your mentors tell you you’re crazy for passing it up, tell them you simply weren’t the droid they were looking for.