The global market doesn't care about your local rate, but I do.
Many think the rate should be reflected based on their location or experience outside of freelancing or freelancing platforms like Upwork.
It’s also a huge misconception when it comes to hourly rates on platforms like Upwork:
“Just be ready to get paid 20 bucks per work done.”
“$20/hr is ...not a competitive rate for a professional”
“Personally $20 is not much for anything, in all due respect.”
For context, $20/hr was my example rate in a previous post on pre-freelancing.
Here is what to keep in mind when thinking about your initial rate (let's continue to use $20/hr as an example) on Upwork:
Nobody cares about your location unless it benefits them
When someone is looking for a freelancer, their location takes priority. Not yours. If someone in Iowa comes across a developer in Silicon Valley, they don’t need to accept that's the going rate of that area. Would it be nice if they did? Absolutely, but they're acting in their best interest to get work done.
Your competition is global now, no longer local. This is a potential client, not employer. The average hourly rate in San Francisco isn’t globally accepted.
It’s temporary
Everyone needs to start somewhere. Just like in the corporate world, entry-level jobs are necessary before senior roles. Your accolades outside of freelancing help you land clients but it’s not often the deciding factor. They will be much more valuable in the long run.
But when starting off? Nobody cares if you worked at Google/Facebook/Netflix/Bob's Burgers, you could still suck at freelancing on your own. Time to show and prove otherwise.
Don't quit your day job (yet)
This is oddly common. Many people think freelancing is a replacement for a full-time job, and although it can be, it’s not. In most cases, it’s used as supplemental income. As in you're home from work (or it's the weekend) and need a few extra bucks for a vacation trip, what are you going to do?
You can freelance for a temporary lower rate or you Uber people around. Nothing against Uber but, freelancing is a more scalable solution because you can build the relationships and reputation to go full-time.
This is so common that I named my personal site freelance after five. The operative word is after as in after your 9-5 job :)
Here are some ways to get to your ideal rate ($80/hr)
Smaller project wins
Make your initial projects smaller. Offer a lower rate and time box it for a limited time
Let's say you land a $20/hr project and complete it within a month.
Land two of these projects in your most comfortable development area (front-end, back-end, etc) to keep it simple for you.
After that month has passed, raise your rate $5-10 for the next batch.
Now aim for a couple $30/hr projects.
Once those projects are completed, you can now be a little more confident in charging $45-55/hr, and it only took you two months. Imagine what can happen in a year.
It would take years to get this type of growth in the corporate world, the average is 2%-5% increase annually unless you switch jobs. With freelance, it's not uncommon for a 100% increase.
Ask for a freaking increase in rate!
Let’s hack the first tip of smaller wins. What if you have a project and it’s lasting longer than expected. You're valuable to the project because you are still on the project. Ask your client to increase the rate. No magic. No explanation. Just ask. Ever heard of the coffee challenge? (watch, don't skim)
Example:
You: Hey, are you ok with the current quality of work?
Them: Yep, it’s great!
You: Mind boosting up the rate $5 or $10. I’d really appreciate it!
What are they going to do? Kill the contract because you want to be compensated for your growth? The most they can do is say “No”. Just follow up with “Ok, thanks!”.
I was going to give a neat example of how to ask AND provide a good reason why. Then I decided, screw that, time to learn to deal with rejection! It will only make you stronger. Sorry, maybe next time :)
Invite other clients into Upwork
I would consider this a hack but, Upwork has a program to bring clients into Upwork as a referral. For bringing them in, they wave fees.
For someone who has been using this platform for a pretty long time, I find this to be great. When people reach out to me to start a project, I always point them to the signup page on Upwork first. Why? It’s simply more convenient for both of us.
Pro tip:
Once you have a decent Upwork profile, make it public and share it with people outside of Upwork. The problem you're solving is universal, not Upwork specific. Only people who worked with you can review, so It holds much more weight, this is why it's more powerful than google and facebook company reviews.
I’ll leave you with some fun things to ponder for next time you’re feeling defeated about your initial low hourly rate:
- This is your lifetime initiation fee into freelance
- You’re competing globally NOT locally
- This also will help outside of Upwork
I also have pretty unpopular opinions on free work if you are interested in a change of perspective.
Hope this helps, let me know if otherwise!
Top comments (20)
Somehow I found the whole recruiting industry rather suspicious.
The first thing I learned about freelancing was, don't charge per hour and all these sites ask that I tell them my hourly rate.
This makes you look like a commodity (what signing up for such a service may do anyway) and it prevents you from doing more work in less time. Like charing X a day, which the client will divide by 8h, while you will only work 4-5h.
This may sound strange on first sight, but the sooner you are done, the sooner a client can use what you created. Faster work has more value for them then slower, but charging per hour gives the impression, faster work is cheaper, even if it gives them more value than slower work.
So I understand correctly, are you saying fixed rates are a better solution?
No, they're just a good solution, when you know that you are really fast. And in software development there are too much uncertainties.
One extreme is charging per hour, the other is fixed rates, but you can also charge per day, per week or per month, depending on what you are offering.
Tiny intervals are okay for people like lawyers, who charge >200€ an hour, beacuse even if you just get 10h a week, you just make good money.
Ah, Ok I follow and somewhat agree. We do live in a world where we have one extreme (hourly) and another (fixed). Similar to the corporate world where it's hourly and salary.
With that said, I think hourly is the norm and it would be an uphill battle to introduce other forms of intervals.
I tried weekly early in my career and felt I was completely overworked. I could have modified my weekly rate for the work, but it was easier to attach hours to features. The same goes for fixed, the client becomes trigger happy with features and expected them to be done ASAP. Needs to be a lot of "rules" in place to prevent them from doing so, hourly does this naturally IMO.
You can also make a name in the Open Source Community, so you'll be hired by clients directly. That's what I'm trying to do, actually. It's harder, but better and more secure: Upwork does prioritize clients in any situations, so they can ban you for no reason. Just google "upwork banned my profile for no reason" and you'll find some blogs/reddit posts about that.
Using open source as a springboard is also a great way. As you mentioned, much harder... but still worth it in the long run.
I can't speak to the banning for no reason on Upwork, but I think that's risk for any platform. I know many people who were banned from Facebook and Twitter for no reason. Much harder to rebuild a following than land a few initial projects IMO.
With that said, you can always use Upwork as a springboard. Some of my best clients started on Upwork and moved to direct work due to the relationship we built.
Upwork? Bah. All tests completed with high score and they didn't confirm my profile. I think they confirm the profiles if they like the person or not. They're not professional, just shits.
I'm pretty positive that's not true and it was just an error :). Have you tried contacting support? No service is perfect.
It isn't just me, my friends is in same situation so we don't check upwork anymore.
I get it, do whatever works for you! Where do you guys check nowadays?
for which test you got high score?
Great tips! I don’t use Upwork, but my experience was similar - my first freelancing job I made $75 (for probably 5 hours of work). I did several jobs like this to get experience and expand my network. Now I’m able to charge a competitive hourly rate.
My rating is slow now (about $8 - $10) because my account is newbie in there but I still don't received any job. Maybe my accout is not trust, the employer don't care about my acc.
What should I do ?
Best regard,
Huy Kon
That rate is a bit low... don't be afraid to raise it a bit!
Take a look at my previous post about first steps
After that, let me know if you have any additional questions on where to start, I'll be glad to help!
Haven't found any offers at all-in Upwork, it just gets me off.
That's no fun! What's your current process to getting offers? How do your write proposals? Do you have a portfolio up that you can point people to?
I try to look for jobs that look simple/intermediate, yikes maybe it's that I don't have a formal portafolio. I wanted to create a little website in Github pages with some projects I have done and maybe point people to it.
It only helps, keep in mind people who you are competing with are showing their past work. A portfolio helps you stand out from the crowd. Take a look at the post on pre-freelancing, it should help a bit!
Simple, but good, ideas. (the best ideas are simple!)
aaa