May 31, 2011

6 Tips for Getting the Hourly Rate you Deserve

Contractors and freelancers are often asked to name their hourly rate for jobs, or state their salary expectations. Depending on the industry and the type of work you’ll be doing, rates can vary widely. I personally have found that for jobs I can properly scope, quoting a flat rate for the entire job is more worthwhile. But sometimes you need to know what figure to quote for work that will be billed at an hourly rate.

Here are some ideas that have worked for me:

  1. Determine how much you’re willing to do the job for. You will have a sense of how much it costs you to work (transportation, child care, clothing, lunches, etc.) and about how much per hour you’d need to earn to make it worth your while to take the job. That figure is your low end, rock bottom amount. See what they’re willing to offer above that figure. If they offer less, you must realize that you’ll be losing money by taking that job. Unless there’s a compelling reason to take that particular job, or if you have some other way of making up your shortfall, tell them thanks but you really need to be making at least $XX.00 per hour.
  2. Simply ask them what their budget is for this work. Sometimes they will tell you. They usually have a figure in mind, but want to see if the person they hire will require less so they can save money. Since nobody likes the game of I’m Not Telling You Until You Tell Me, you can say that you are very interested in doing the job (if you are, of course!) and that you don’t want the money question to be the deal breaker. You can tell them that as long as they tender their best offer within their budget you’d certainly be willing to work for that, or at least consider it. If their figure is enough above your rock bottom price that you feel good about it, it should be satisfactory. I usually say that working at a great company, doing challenging work, and having awesome colleagues is more important to me than money, as long as I am making enough to keep my cat fed (or put gas in the Maserati).
  3. What is the usual range for the work you’ll be doing? This can depend on the industry, size of the company, what salaries they are typically paying their full time staff, and so on. Depending on your skills and experience, pick a figure within that range that gives them room to maneuver. Choose a number that you think is fair to both of you. Cite the range for them, and if they come in at the low end of that range, if you’re okay with doing the work for that price, then you can accept it if you want, or negotiate a higher figure. Say “My research (or my experience) shows that the typical range for this kind of work is $XX to YY per hour. I’d be willing to accept a figure within that range.”
  4. If the complexity of the job and the work involved is still somewhat unknown, and you think that once you get working it might turn out to be more complex than you anticipated, you might want to build in an opportunity to review the rate either as soon as you see it’s becoming more, or at the 3-month mark, whatever seems reasonable. If they don’t know themselves, it’s good to just raise that as a question … “If this turns out to be a lot more work either technically or as far as complexity or volume, will there be the possibility of revisiting the hourly rate at some point?”
  5. You might also want to think about the length of the contract, etc. If they are going to guarantee you work for a longer period, you might be okay with a slightly lower hourly rate than if you were only going to be working for a couple of months. Also, as a contractor, you are responsible for your own benefits, so the hourly rate should reflect those additional costs. If a full time employee with benefits gets $35.00 an hour for doing the same work, they should be offering you more like $45-70, for example.
  6. Ultimately, figure out what hourly rate they could offer that would make you happy doing the job. You know your rock bottom, you know the range for that type of work, and you know more or less what the job entails. Ballpark for yourself what a weekly or monthly paycheck might look like, and see how you feel about that number. Does it make you feel content and smiling, or are you starting to think that you’re being a little taken advantage of? It’s those subtle internal signals we get about money that tell us a lot, even if we’re not conscious of any particular issues with the rate. What amount pushes you over from “this is a grind” into “ooh, nice boost to the bank account”?

As long as you’re getting paid enough to feel good about the job and keep yourself healthy and happy, you’re off to a good start. Honest communication with your employer about what is appropriate pay for your skills and experience as well as the requirements of the job will help focus the discussion on an hourly rate that pleases you both. Getting a win/win is always a good goal. If they aren’t able to come up with a number that makes you happy, tell them “I’m sorry we weren’t able to work out the details for compensation, but if your situation changes, I’d be glad to reconsider any offer.” Always leave the door open for the conversation to be revisited, and keep that relationship cordial. You never know when circumstances might change to give you another opportunity to work together.

Comments (1)

Bhupesh Shah

June 6th, 2011 at 1:15 pm    


Great post!

I always say that “I don’t get hired for my time – I get hired for my expertise” and charge accordingly 🙂

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