I am finding it difficult working on Upwork due to the fact that most clients don't pay real world rates and are just after cheap solution providers.
The vast majority of freelancers I have seen are on low rates.
Rates that might be good in their country, but here you would starve on or quickly look for a local job or sign up for welfare payments.
I just tried (unsuccessfully so far) asking for a small pay rise from a client that I have been working for, for over a year.
Recently I had a lot more expenses (new computer products and some very expensive software packages) and they are also discussing putting tax up here. There is also inflation / rising prices etc.
Do you ask you long term clients to provide an annual pay rise?
There is no connection between the rates I charge and my expenses, neither those expenses incurred by the work I do, nor my living expenses.
I would never think of asking clients for an "annual pay raise," or anything of the sort.
I do renegotiate my rate over the course of 1-3 years or so by first consistently over delivering and creating a bunch of additional value, and then ultimately pointing at all the additional value I created. This has worked well. (Knocks on wood.) I wouldn't do this on an annual basis because I am not looking to make $2-3 more but $20-30 when I am ready to bring it up.
I've seen many people try to renegotiate their rate or negotiate a raise by bringing up cost of living and expenses. It's an entirely irrelevant argument to clients, because they want to pay for value, not your personal expenses and hardships. Put yourself in their shoes. Imagine you hire a plumber, would you pay them a few bucks more just because they told you they bought some tools? Unlikely. Would you pay them more if they not only fixed the problem but made three more things run more efficiently? Many of us would.
It makes sense. While Preston might be happy working for the same rate that he got when he first entered the world of freelancing, the rest of us are subject to continual rising costs on pretty much every single expense we have.
At some point that's going to start eating into our quality of life, whether your rates are linked to your expenses or not. I see nothing wrong with asking for a raise... although I wouldn't say "Please sir, can I have a raise?", I'd just put my prices up. Putting them up on the 1st of January or the first day of the tax year would probably be the wisest course of action. Putting them up at any other time would probably look a bit unprofessional. Like you hadn't budgeted properly for the year or something.
If you have long term hourly clients then questions might be raised, but the answers should be pretty straightforward. If you have fixed rate clients then the increase can just be incorporated into your quote. Also, I guess it depends on the client as well. If you have a long term client then in theory, your work should become easier with them over time... you get to know them, what they like, what they don't like etc... so you might consider waiving your rate increase as a result. At least for a while.
But there will come a time when we're all whizzing around in our flying cars, with our giant throbbing brains, and a loaf of future-bread is going to cost $20, and we need to take that into account.
This is extreme, but I asked for a raise (added $6 to my hourly rate) after only a month of working with a client - and they agreed! But that was my first long-term contract here and I regret that I asked so early because it wasn't very professional.
Other than that, I ask for a raise every 6-12 months with all my clients. I also make it very clear that if they don't want to increase the rate or at least compromise, then we can go our separate ways. Part of the reason I do this is because my rate is already too low for the cost of living here (people say that expenses shouldn't determine your rate, but I have to consider mine to justify my fee - because I am not expert enough to demand very high rates).
Anyway, try to make yourself as indispensable as possible and you'll find that the client will be more than happy to increase the rate. Given your profile, it's strange that you were unsuccessful with yours.
re: "While Preston might be happy working for the same rate that he got when he first entered the world of freelancing..."
Scott, I didn't say that.
My rates go up, but those rates are simply not tied to my economic situation. My rates are based on scheduling considerations.
"I would never think of asking clients for an "annual pay raise," or anything of the sort."
Sorry, it's just the 'or anything of the sort' part came across as you never raising your rates.
"My rates go up, but those rates are simply not tied to my economic situation. My rates are based on scheduling considerations."
They don't need to be tied to your economic situation, but they should at least be tied to some economic situation. Scheduling consideration is a good way to do it... airlines, for example, usually use capacity controlled pricing which works well for them. Got one week of work for the next month, charge one rate, got four weeks charge less.
However, your rate can be completely independednt of your economic situation, but sooner or later it's going to be an issue. The airlines may put their prices up and down based on capacity, but they're not charging double eagles and half unions. They're not saying "well, the average annual income of a family in the US is $3000, so would should charge accordingly."
@Preston H wrote:
My rates are based on scheduling considerations.
This. Once you hit the pay rate of maximum happiness, it really becomes more about the work (scheduling, interest level, etc.) than the reward. The underlying economic principle is also why Google got so rich off of AdWords.
"This. Once you hit the pay rate of maximum happiness, it really becomes more about the work (scheduling, interest level, etc.) than the reward."
I completely agree. But the point I'm trying to make is that if your scheduling and interest level in a project is exactly the same in 10/20/30/40/50 years, as it is now... would it make sense to charge exactly the same then as you do now? Especially if gas is $50 a litre, smokes are $20 a pack, a loaf of bread is $10, a cheap bottle of wine is $40 and an entry level house is $1m.
@Scott E wrote:
But the point I'm trying to make is that if your scheduling and interest level in a project is exactly the same in 10/20/30/40/50 years, as it is now... would it make sense to charge exactly the same then as you do now? Especially if gas is $50 a litre, smokes are $20 a pack, a loaf of bread is $10, a cheap bottle of wine is $40 and an entry level house is $1m.
That's not a valid point to make. By using an external valuation formula, I don't set my rate any more than Google sets the rate for the ads they show. I have no idea what I might charge in 50 years; that'll be for the market to decide. It might be more. It might be less. I might be dead.