If you aren’t a freelancer yet, your time may be coming.
The signs are already there: research shows that more than a third of the U.S. workforce freelanced last year, an increase of 7% since 2014, while the non-freelance workforce grew just 2% over the same time. According to some estimates, freelancers and contractors could make up more than half the workforce within the next decade.
While much of that is good news for work-life balance and flexibility, it does put pressure on freelancers to become better advocate for themselves when it comes to pay. Indeed, many companies have eliminated full-time positions in favor of permalance contracts, engaging employees to work as full-time contractors often without benefits. As a result, there has never been a more critical time for freelancers to know their rights and their rates, and to take steps to prepare for these types of negotiations.
Here’s how to negotiate like a pro.
Educate yourself through salary resources and networking sites
Too many freelancers freeze up when it comes to discussions about money. Often reluctant to charge too much for fear of scaring away potential clients, they may be unaware of the critical value of their skills and experience to an organization, or what compensation is customary, and may not have realistically calculated what the project will eventually cost them to complete. Sadly, women in particularly are at even more of a handicap, with research showing that they tend to pitch lower rates than their male counterparts.
That’s why it’s so important to do your homework. Googling “what should I charge” will get you an overwhelming amount of (often useless) information, but tapping trade-specific platforms can help. For example, a helpful resource for artists in the nonprofit sector is the W.A.G.E. Guide (Working Artists in the Greater Economy), which establishes industry minimums for speaking gigs and exhibitions. Another is Study Hall, an online support network for media professionals, who last December put out a call on Twitter for rate transparency that went viral.
There are also more traditional career development outlets like Mediabistro, local organizations by state (in New York, the Council for the Arts), and the Freelancer’s Union, whose blog often posts useful tips for setting freelance rates. Networking sites like Alignable, Contently, and freelancer groups on LinkedIn, Facebook and Twitter, also provide support. Ultimately, however, freelancers always need to be their own best advocates.
Calculate how much you personally need to make a job worthwhile
“Responsibility for negotiating rates is one of the many hidden costs of freelancing,” says Leanne*, a former magazine editor who currently works as a freelance writer and graphic designer. She explains that while clients may feel a rate is fair, they’re often oblivious to the “real costs” to a freelancer, which may include everything from tax issues to time expended on administrative tasks like invoicing and printing.
What helped Leanne establish her rate was working backward from a year-end income goal and then dividing by 50 weeks–the number of business days in the year assuming two weeks of vacation–to research a weekly rate. She then divided further by day and even by hour, factoring in office rentals and health insurance.
“Those target numbers become my ‘break-even point,’ and I remind myself that accepting any work for less will require doubling up on hours,” she says.
She recommends all freelancers track their hours, drafts and revisions, and overall content output–everything from word count to pages–to get the best sense of their workflow. “Too much of the responsibility has fallen on the content creators, who are more vulnerable to begin with,” she explains. “This is why quantifying what goes into a project has been so helpful for me.”
Stephen Heller, co-chair of the design department at the School of Visual Arts says that while freelancers should be aiming to get the best deal possible, they should factor in other considerations, such as the potential for a job to lead to new opportunities. If the job is If it’s a terrific gig that may open doors, he encourages drafting a cost/loss estimate.
“It comes down to asking yourself, ‘How much do you want the job not to cost you?’” he says.
Don’t be first to put out a number, if you can avoid it
Jonathan*, 70, built his career managing corporate teams and providing cost-cutting solutions to companies in the financial sector. This frequently put him in a position to hire new contractors and employees. He advises that anyone going into a negotiation should try avoid sharing their salary expectation without first hearing what the client is willing to offer. “Never be the first to pull out a number, if possible,” he says. “This gives the other party the upper-hand.”
Instead, let the client explain what amount they have in mind and why; if it’s unsatisfactory, you can always try to bargain up. By waiting, you also diminish the chances of underselling yourself; the rate your client offers could be above what you were expecting.
Connect your skills to the core needs of the job
It often happens that a client will pay more to get the exact right person in the job, so let them know how your skills and talents can help them solve their greatest needs. Alex Serio of Nameless Network, the company behind the wildly successful Museum of Pizza pop-up, says demonstrating that kind of value is essential to getting what you want in terms of pay.
“Ultimately, I want someone’s unique talent, not just to get the work done,” she says.
The same ethos is espoused by Astrid Stavro, who recently became a partner at Pentagram. “I work out budgets based on real numbers, and I’m very frank, honest, and upfront with any freelancer who works with me, both regarding fees and payment schedules. People are worth what they are worth, and fees are fees. There is no in-between.” She explains that when you get an exceptional designer, you often find that person to be not only good for the job but good for the company as a whole. “When it happens, it’s priceless.”
Remember that this is a business agreement
No matter how upbeat your conversations with a potential employer are, you have to recognize that you’re striving to negotiate a business deal. Feeling like you have to sign onto a job to be nice is out of the question. “You may like the client, but they are not your friend,” says corporate consultant Jonathan. “They are interested in your services, secured for the best price. You may later become friends, but never forget that this is purely business.”
For that reason, be sure to take the time to all of the expectations of the agreement. Luke Anton, VP Brand Marketing & Buying Director at 2-TIMES, a private multi-brand fashion retailer and independent digital publisher, recommends that freelancers take care to ensure they understand all deliverables and timeframes. “As a freelancer, it’s your business to understand what you can and can’t deliver on, and to perform excellently and on time.”
*Last names removed to protect sources’ identities.