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herisetiawan
Community Member

Standardized Rates for Freelancers

Bidding to projects on Upwork is troublesome nowadays, as there are many of them are underpriced. I even find out some projects with expert requirement have budgets under USD$10 per hour.

 

We can't deny this typical problem is partly due to the facts that talents for some countries have really low hourly rates. This is unhealthy.

 

I suggest there is a standardized hourly rate for freelances based on their experiences and success rate, thus creating a clear and unified freelancer's classification and healthy competition.

 

Edited, to clear up some misunderstandings:

In short, my recommendations are as follows:

  • There should be a set of freelancer's rate standards, could be based on experiences, successful projects. This could be developed as an algorithm with data from the marketplace.
  • Using the algorithm, there should be a rate recommendation for freelancers with low rates and meet higher rates standards, to increase their hourly rates to match up with the current market values.
ACCEPTED SOLUTION

Heri/Teri,

I sense a general lack of understanding about freelancing. UW is a big fish in the small pond of internet brokering boards; the ocean of freelancing is far larger. And neither the pond nor the ocean work that way.

A client comes to UW and offers an opportunity. Some are for commodity services, such as data entry, or hours of waiting by a phone. Typically, those are bought on price, assuming that every service is identical. That is rarely the case, and in non-commodity services buying on price is a mistake almost as bad as trying to win on price.

Petra and I can both translate English to German. When I do that the client gets a good sense of what the English meaning is. When Petra does that the client gets a clear understanding of the precise and nuanced meaning of the English text. I don't work as a translator, in part because clients are better served by freelancers such as Petra. There are ranges for translation work that are generally accepted, but most UW clients want to buy on price. And they get what they paid for.

My core business was identifying the real underlying issue and exploring the drivers and levers that can be manipulated to resolve it. There were perhaps a thousand like me in the world, most charging a minimum of $250/hour. I charged $500 an hour. There are people on UW who claim to do what I do and offer their services at $15-25/hour. Clients who believe those people fail the IQ part of my qualification requirements. I've added to clients' bottom lines at rates of $2M-$50M/hour billed. What's the standard rate for that? There isn't one.

I became one of a handful of top-tier global management consulting firm veterans who decided to walk out of the rat race and work with small businesses. I enjoy it and am quite good at it. For health reasons I've had to quit and turn all clients over to another of my breed. She's also good at this. My listed standard rate is deeply discounted at $150/hr, hers is similar. We answer clients' existential questions, and rarely even apply for work on UW and similar sites. That's the other end of freelancing from commodity services. There are as many models of freelancing as there are freelancers. Each of us runs his own business his own way. Petra is highly successful on UW and runs her business differently from how I run mine, which gets most clients off-line. Chacun a son goût.

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tlbp
Community Member

That's not how free markets work. 

petra_r
Community Member


Tonya P wrote:

That's not how free markets work. 


Nor is it how free markets should work.

If Upwork was ever a free market, it would lack a perfect competition that demands among other things, zero transaction cost and rational buyers.

What you are suggesting, if implemented, which of course will never happen because it's a ludicrous idea, would result in tens of thousands of freelancers losing their income.

 

Or were you really under the delusion that clients who currently pay $ 5 an hour would suddenly pay $ 30 or $ 40 an hour?

 

And who would decide which freelancer's rate should be at what level?

Based on what, exactly?

Hi, Petra. It will be a lot helpful if you could reply without judgmental tones. I'm not delusional.

 

What I'm saying is, there could be a feature such as rate recommendation, where freelancers could be informed on how much their services could actually worth if they are under the average market values.

 

It's not that clients who are paying $5 per hour will suddenly pay way more than that. In opposite, it will save times for both clients and freelancers to match each other. 

The new feature of hourly budget is definitely one of the implementation that I'm looking for. 


Heri S wrote:

 

What I'm saying is, there could be a feature such as rate recommendation, where freelancers could be informed on how much their services could actually worth if they are under the average market values. 


That looks quite different to;

 

Heri S wrote:

I suggest there is a standardized hourly rate for freelances based on their experiences and success rate, thus creating a clear and unified freelancer's classification

Again: Freelancers are and should be free to set their own rates based on their own criteria.

 

Why should I lower my rate to reflect "average market rates?"

 

Professional freelancers want Upwork to meddle LESS with their business, not more.

With this idea, there is no way a freelancer need to lower the rate. It's the other way around, i.e: encouraging freelancers with low rates to increase theirs if they meet some specifications (hence standardization, but pardon if I use the word incorrectly).

 

As I mentioned, this should only apply to those that have lower rates than the average market values.

 

 


Heri S wrote:

Hi, Petra. It will be a lot helpful if you could reply without judgmental tones. I'm not delusional.

 

What I'm saying is, there could be a feature such as rate recommendation, where freelancers could be informed on how much their services could actually worth if they are under the average market values.

 

It's not that clients who are paying $5 per hour will suddenly pay way more than that. In opposite, it will save times for both clients and freelancers to match each other. 

The new feature of hourly budget is definitely one of the implementation that I'm looking for. 


_________________________

Who would be the judge of how much a freelancer is worth? 

 

herisetiawan
Community Member

In short, my recommendations are as follows:

 

- there should be a set of freelancer's rate standards, could be based on experiences, successful projects, etc.

- there should be a rate recommendation for freelancers with low rates and meet higher rates standards.


Heri S wrote:

- there should be a set of freelancer's rate standards, could be based on experiences, successful projects, etc.


And who would decide those rates, for tens or hundreds of thousands of freelancers with wildly differing skillsets and levels of expertise?

 


Heri S wrote:

- there should be a rate recommendation for freelancers with low rates and meet higher rates standards.


And who will decide if those freelancers should be charging more, based on what and how, for tens or hundreds of thousands of freelancers with wildly differing skillsets and levels of expertise?

 

Are you expecting Upwork to hire thousands of staff with the expertise to decide what others should be charging? So we can pay 40% Upwork fees to pay for that nonsense?

 

Why are you so set against grown ups deciding for themselves? 

 

PS: Upwork does or at least did something along those lines, it is or was called "rate tips" where people were shown a suggested rate. I've never seen them myself and there were mixed reports as to how realistic they are / were.

And who would decide those rates, for tens or hundreds of thousands of freelancers with wildly differing skillsets and levels of expertise?

The market average rate on specified freelancer criterias (treshholds), e.g..
when average freelancer's rate on those who has 5 years experiences on Upwork and 80% successful rate is $25, those who are in that specific range and lower rates (less than $25) would be then notified with a rate recommendation.

 

 

And who will decide if those freelancers should be charging more, based on what and how, for tens or hundreds of thousands of freelancers with wildly differing skillsets and levels of expertise?

Again, Petra. This will not affect those who have rates equal with or more than the average market value. So, we can leave this premise behind.

 

 

Are you expecting Upwork to hire thousands of staff with the expertise to decide what others should be charging? So we can pay 40% Upwork fees to pay for that nonsense?

I'm simply suggesting an A.I., using the data from the marketplace. (And again, its not to decide a rate, but simply do a rate increase recommendation, i.e.: notify users to increase their rates)

No. Just...NO.

 

I am not fine with someone else deciding on rates...least of all an AI. 

Irene, not deciding, but recommending to increase someone's rate. 


Heri S wrote:

I'm simply suggesting an A.I., using the data from the marketplace. (And again, its not to decide a rate, but simply do a rate increase recommendation, i.e.: notify users to increase their rates)


Upwork's algorithms are notoriously simplistic, scattershot, and most often annoying to ludicrous in their results. Its interpretations of its data are often off the mark, and the policy changes implemented from those interpretations sometimes have to be walked back.

AI is not generally regarded as simple. Upwork would certainly seem to regard it as not within their budget.

bizwriterjohn
Community Member

I sometimes engage in the tactic in providing a discount to my rate (particularly for work that would be enjoyable or builds a skillset I believe I need to work on) -- specifically -- so as to make sure my proposal crushes competitors coming in at higher prices to the degree I can engineer such conditions.

I'd appreciate keeping my competitive advantage in this regard. I would appreciate keeping the opportunity take competitors to the woodshed with a really big competitive pricing paddle.

florydev
Community Member

Your underlying default assumption is that you cannot sell some skill you have because there people in the market who will undercut you is fundamentally flawed.  There are lots of factors that could play into a buy decision by a client and price is the stupidest one.  A theoretical client that only buys the cheapest is a stupid client and not one I you should want anyway.  That works if everyone was selling the same candy bar, but nobody is.

 

So the thing that has cause you enough concern to post here is not really a concern.

 

 

terimiles
Community Member

Hey, I FEEL your pain! I got on here BEFORE the Corna Virus putting it out there that UpWork needs to set standards/parameters for those that are posting positions. I got NOTHING but grief! There are a number of changes that UpWork needs to make to protect freelancers. They don't seem that interested!

 

Regards,

Teri


Teri M wrote:

Hey, I FEEL your pain! I got on here BEFORE the Corna Virus putting it out there that UpWork needs to set standards/parameters for those that are posting positions. I got NOTHING but grief! There are a number of changes that UpWork needs to make to protect freelancers. They don't seem that interested!

 

Regards,

Teri


UW does not need to set standards/parameters or do anything else that would discourage clients from posting projects. (By the way, this is a marketplace for independent contractors seeking projects, not a jobs board where people advertise "positions.") You say "protect freelancers", I say "meddle in the marketplace." The last thing most of us want or need is for UW to start interfering with how we set our rates or constructing obstacles for clients to post projects.

 

In any case, as long as tens of thousands of FLs continue to earn money for themselves and for UW, there is no reason for UW to invest in "protecting freelancers" or annoying clients.

 


Teri M wrote:

There are a number of changes that UpWork needs to make to protect freelancers.

 

People who feel the need to be protected in their business dealings should probably consider a traditional job. When you choose to run your own business, you set the standards. Asking Upwork to set parameters for my business would be like expecting the newspaper where you saw an ad for a mechanic's shop to set requirements about how much the mechanic could charge. 

 

If Upwork meddled much more than it already does, I wouldn't use the site, and I suspect the same is true of many other higher-earning freelancers. 

Heri/Teri,

I sense a general lack of understanding about freelancing. UW is a big fish in the small pond of internet brokering boards; the ocean of freelancing is far larger. And neither the pond nor the ocean work that way.

A client comes to UW and offers an opportunity. Some are for commodity services, such as data entry, or hours of waiting by a phone. Typically, those are bought on price, assuming that every service is identical. That is rarely the case, and in non-commodity services buying on price is a mistake almost as bad as trying to win on price.

Petra and I can both translate English to German. When I do that the client gets a good sense of what the English meaning is. When Petra does that the client gets a clear understanding of the precise and nuanced meaning of the English text. I don't work as a translator, in part because clients are better served by freelancers such as Petra. There are ranges for translation work that are generally accepted, but most UW clients want to buy on price. And they get what they paid for.

My core business was identifying the real underlying issue and exploring the drivers and levers that can be manipulated to resolve it. There were perhaps a thousand like me in the world, most charging a minimum of $250/hour. I charged $500 an hour. There are people on UW who claim to do what I do and offer their services at $15-25/hour. Clients who believe those people fail the IQ part of my qualification requirements. I've added to clients' bottom lines at rates of $2M-$50M/hour billed. What's the standard rate for that? There isn't one.

I became one of a handful of top-tier global management consulting firm veterans who decided to walk out of the rat race and work with small businesses. I enjoy it and am quite good at it. For health reasons I've had to quit and turn all clients over to another of my breed. She's also good at this. My listed standard rate is deeply discounted at $150/hr, hers is similar. We answer clients' existential questions, and rarely even apply for work on UW and similar sites. That's the other end of freelancing from commodity services. There are as many models of freelancing as there are freelancers. Each of us runs his own business his own way. Petra is highly successful on UW and runs her business differently from how I run mine, which gets most clients off-line. Chacun a son goût.

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