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Contractor asking for hourly instead of fixed price contract

a65f0527
Active

I have a job contract out which was for a fixed price and made an offer to someone. The person has a decent upwork history but has asked to do it hourly which will equal the amount of the fixed price offer I sent. The reason the contractator has asked to do it this way is to make their profile look beter on upwork.

 

Does anyone see any sort of issues that may occur if I decide to help him out this way? I've ever done hourly rate before so wondering if we can restrict it to a certain amount of hours as well?

 

I'm also unsure what will happen if he doesn't actually complete the work in set hours, will upwork force me to pay him for the hours done?

ACCEPTED SOLUTION

Glen, if they go over the allowed hours, they will only be paid for those if you approve the extra hours. And yes, if he doesn't turn in work as agreed to, then you have to close the contract, but as long as there are screenshots taken by the timer app that seems to indicate work was done and a reasonable amount of keyboard activity during those screenshots, the freelancer *will* be paid for the allowed hours, unless you choose to dispute them. So there's some risk in converting from hourly to fixed price, but the freelancer really needs the hours and decent feedback so I think chances are very good he will deliver as promised. 

__________________________________________________
"No good deed goes unpunished." -- Clare Boothe Luce

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10 REPLIES 10
yitwail
Community Guru

Glen, you can specify the maximum number of hours he can work per week, and you will only be charged for the number of hours he actually works. Once you've received the work and it's satisfactory, you can then close the contract.

__________________________________________________
"No good deed goes unpunished." -- Clare Boothe Luce

Thanks John. Will they still be able to go over the hours and if they do can I reject it? Or is it just up to me to end the contract if he doesn't deliver in the time frame?

Glen, if they go over the allowed hours, they will only be paid for those if you approve the extra hours. And yes, if he doesn't turn in work as agreed to, then you have to close the contract, but as long as there are screenshots taken by the timer app that seems to indicate work was done and a reasonable amount of keyboard activity during those screenshots, the freelancer *will* be paid for the allowed hours, unless you choose to dispute them. So there's some risk in converting from hourly to fixed price, but the freelancer really needs the hours and decent feedback so I think chances are very good he will deliver as promised. 

__________________________________________________
"No good deed goes unpunished." -- Clare Boothe Luce

Keep in mind that it is not your goal to make a freelancer's profile look good. It is your goal to have quality work done on your project.

 

If this is the freelancer you want to work with, and a condition of hiring him for this project is that he wants to do it as an hourly contract, then that is a reasonable request.

 

But your reason for complying with this request should only be to further your goals, not his.

 

As a client, I often hire using hourly contracts in order to be able to get higher quality results.

 

I do not consider hourly contracts "risky" because I can monitor results and control when they end. But I am aware that hiring using hourly contracts can often be more expensive than using fixed-price contracts. That's not a bad thing, and it's not always the case. It's simply something to be aware of.

In addition to John's answer, I'd like to point out that the hourly limit is a WEEKLY limit. If the job is going to take 10 hours total, and you set the hourly limit to 10 hours, that means the freelancer can log 10 hours this week, and 10 hours next week, and the week after....etc.

 

Also, just remember that with a fixed price contract you are paying for a specific deliverable, while an hourly contract you are paying for the freelancer's time spent and not actually a specific deliverable. If they don't deliver what you were expecting at the end of the allowed hours, you can't dispute the hours just because it's not what you wanted.

 

If the freelancer has a good reputation and seems trustworthy and like they really are just making this request to increase the number of hours worked on their contract, then it's probably fairly low risk if you monitor the work diary and manage it well. But if you're not sure, there's no reason you can't say that you'd prefer to stick with fixed price and choose a different freelancer instead (I've had to do this myself recently, but in the other direction - I wanted an hourly freelancer and my first choice preferred fixed price).

vladag
Community Manager
Community Manager

Hi Glen,

 

Please check the main differences between Fixed-Price and Hourly contracts, how you'll be billed for hours your freelancer logs and make sure your contract is covered by Hourly Payment Protection. Please let us know if you have any questions.

Untitled
sam-sly
Community Guru

As a freelancer, both are fine and have their pros and cons.

 

An experienced freelancer will base a fixed rate bid on the time she or he expects the contract to take. Usually, he (or she) will assume it may take a little longer than expected. They do this because many clients are not aware of the full scope of what they need or do not communicate the full scope.  Some clients also keep adding unrelated tasks to a fixed rate contract to try to get as much work for the payment as they can. This is called "scope creep." Since scope creep is so common, my fixed rate bids usually assume some will happen. Fixed rate projects can be more risky for the freelancer, and they also don't result in hours listed on a profile. (For some reason clients posting fixed rate projects often require a certain number of Upwork hours like 100 hours. If a freelancer only does fixed rate work, that freelancer will have zero hours, so "hours" are not a reflection of platform experience for many freelancers.). Most of the work I do is fixed rate since that is common in writing.

 

I do have a couple of clients who prefer hourly. I will say that my hourly clients tend to pay less per assignment on average than my fixed rate clients pay. With hourly projects, the freelancer does not have to worry about scope creep as much since we are paid for our time. If all goes smoothly, the client ends up saving money (though I suppose the opposite is possible if the project turns out to be more difficult than expected). The other benefit from a client point of view is that you can review the work diaries and see progress on your project through the screenshots. Hourly projects are more risky to the client because you pay for the freelancer's time while for fixed rate projects you pay for the deliverable. However, if you check the diaries early enough, you may see whether the freelancer is working on your project and get a peek at how the deliverable is shaping up. So much of that risk is manageable.

 

In the end, it is really what you are more comfortable with. Some freelancers love fixed rate contracts because they find the time tracker intrusive or it does not fit their workflow. (It really only works for work on a computer that involves a lot of typing or keystrokes). Some freelancers prefer hourly rate since they do not need to worry about scope creep. Others are happy either way as long as the compensation is fair. Either way, you should be able to find a freelancer who will work with you.

 

 

As a client, it is important to understand the differences between fixed-price and hourly contracts.

 

A fixed-price contract can be used to control or predict costs on a very pre-defined project with specific requirements. It is intended to produce one widget. It is not meant to get you everything you want, but have not discussed. It is not intended to maximize quality.

 

A client hired a a freelancer to draw a picture of a cat.

 

The freelancer drew a picture of a cat and sent it to the client.

 

Client: "Um.. It's kind of plain. It's black and white. Could you color it?"

 

Freelancer: "You didn't say you wanted it in color."

 

Client: "It's a Siamese cat. I wanted a Calico cat. Could you change it?"

 

Freelancer: "It's a cat. You didn't say you wanted a Calico cat."

 

Client: "The cat is really just sitting there. Could you draw it so it looks like it is about to pounce on a mouse?"

 

Freelancer: "You didn't specify a pose."

 

Client: "But could you change it?"

 

Freelancer: "Yes, of course. After you release payment for the work that was done, which completely fulfills the contract requirements, then you can hire me using an hourly contract and you can ask for whatever you'd like."

You can also restrict the freelancer from entering manual hours.  This will help to prevent them faking work and you can check their work diaries to verify what they actually did.

novikovma
Ace Contributor

I don't think that fixed price contracts make profile look 'bad'. I had some and prefer it when the work is clearly defined, it allows making more with less effort. In most cases work is either intentionally ongoing (like 'we need some guy to maintain the product we are selling') or very loosely defined so it is impossible to price it, or pricing it will require effort comparable to actually doing it - so i have to ask for the same thing very frequently. But i don't think a decent fixed price contracts makes someone non-marketable or anything.

 

You shall talk with your candidate more about it, maybe the problem is that he's actually not sure how much time it will take so wants to hedge this risk, maybe more effort is needed from YOUR side to scope work better, and have some discipline to withhold from feature escalation. That sounds like asking for too much though, and in most cases, it indeed is, so maybe it's worth making a smaller, reduced price, simplfied prototype fixed price first, play with it, then clearly define what a full product will do and price it accordingly.

 

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