SPOTLIGHT

FREELANCE PAY RATES

I've had recent discussions with many of you regarding the state of our industry and how it's affected our business - especially our freelance rates.  The companies I've interviewed are definitely cutting rates when they can.  However, with all due respect to our clients, this is not a desirable scenario especially once the economy turns (and it will).  As a close friend told me, " No one is reducing my mortgage, utilities or other bills so how can I be afford to reduce my rates?"

I decided to post a discussion on Linked In and was amazed at the volume and variety of replies I received.  I am posting most here because they were so good.  Sorry for the length.  You can see the entire discussion on Linked In.  One respondent posted a great video which I've posted here.

In summary the consensus as follows:

• You get what you pay for - don't lower your rates
  
• Look for cheaper ways to get things done - value added to your clients
  
• Be creative and offer more value for your services
  
• Be willing to work a flexible schedule (not 5 day week)
  

Mike Vennerstromm sums it up nicely in the end - enjoy!  I look forward to your comments!

Maintaining your freelance pay scale
As a freelancer, I've always felt I need to work with, not against, my fellow freelancers when it comes to maintaining our fees and day rates. If we all keep our rates at an acceptable going rate and don't underbid each other, it will keep our rates at a steady increase over time as the cost of living increases. However, this philosophy is being seriously undermined during these tough economic times. With so many of us competing for the same few jobs, it is very tempting to offer rate discounts to our clients. I've found myself accepting flat and reduced rates for proposals and other types of business. I do this because I need the work and if I don't, someone else will. In some cases, I feel our clients are taking advantage of us by making "take it or leave it" deals because they can.

How do we avoid setting ourselves back years, yet remain competitive?

Meg Reeves  
Producer - Events, PR, Media

Comments
Tony Castrigno
Creative Director and Senior Designer
Meg - only 'he who shall not be named" brings greater fear to the freelance community than "I have work for you but ...."
First of all take stock of what you are charging and what it takes to bring that service to the agency or production company. When you truly understand the value of what you offering and what the absolute bottom line is, you can offer your services and negotiate with conviction that your rate is not arbitrary or merely the "going rate" but the right rate.
Producers are getting just as squeezed as we are. Remind them that your experience can reduce risk and save them money. Work out a way to deliver your talent without simply billing on the clock. You can also offer efficiencies such as working remotely so you can avoid charging for a full day just to make an appearance in their offices.
...
Good Luck

Mike Bell
Drawing, Developing & Delivering: events, spaces and experiences - twitter: 'mikebelluckf'
Tony - right on every point - rates will get knocked back, but then we can build them up again when things get better - the way to do that is to keep developing, and improving, what you offer. The 'hallowed' rates for certain roles may need to be maintained, but I think, for the creative roles, new skills, broader techniques, and refined responses to client requests will only help improve your workflow and keep your rates reasonable.

Melissa Elliott
Executive Producer at Blackbox Communications Inc
It's a challenge we're all facing these days. And there are some clients out there that tend to take advantage of the current situation and negotiate hard. I suppose a gut-check is in order when this occurs to determine just how badly you want to maintain or develop that relationship.
Here's something that you can probably relate to... : http://bit.ly/H9zm6

You can follow me on Twitter: @MelyMello


Kiku Terasaki
Film & Television Producer
Dear Meg,

As someone whom you've repeatedly supported and recommended over many years, I can't say enough how I've appreciated your longtime insistence that we stick to our rate. If we've worked for a company before, I think it's fair and appropriate to them to ask for a certain amount of reduced rate, 'on-spec' work because there is already mutual good will. And rates are often negotiable depending on the job.

I don't see, though, how we can accept being treated as so easily interchangeable that the company can say 'we'll get someone else' and really mean it. Else, why did they call us in particular in the first place? I'd prefer to negotiate based on a real understanding of the scope of the project -- or pass.

Jonathan Bentley
Independent Broadcast Media Professional
Melissa good video, However Meg, I must say as a seasoned freelancer you get what ya pay for if some kid ( filmmaker) get's the job on craigslist let em have it, true pro's get the right rate no matter what. I rarely have to settle for anything less the market dictates rate and the market size if some freelancer lowballs clients he gets a bad reputation as a lowballer and gets blackballed pretty quick if his work proves otherwise. My clients know I'm worth the expense and take good care of me once a track record has been seen I will give a discount sometimes out of good faith. Yes there are economic hurdles but we as freelancers always stick together on rates for all purposes and have regular meetings to stay updated. When was the last time your plumber gave you a discount? You get what you pay for Hire a Pro! with that I'm not sounding arrogant but I haven't seen any downturn in rates yet only rates on the rise.

Elizabeth Marasco
Owner at Brady Events and Marketing

I seem to encounter "show me how you did it and we will do it ourselves the next time." Lately I have been experiencing the question, "where did you buy this product or service." I have started recanting with "why do you ask?"

BILL DEDES
FOUNDER & CEO, CUTTING EDGE PRODUCTIONS, INC.

I'm not a freelancer (I used to be) but I run A TV Studio & Live Events company, and I wouldn't (and don't) ask our loyal freelancers to cut their rates, but I do ask for some slack when it's not going to be a full-day...
However, I have run into enough ARROGANT freelancers (over the last 23-years) who would snub their nose at some situations, and are now BEGGING me for work-even SHOP WORK... Go Figure. I think that there needs to be a happy medium between maintaining rates, and being flexible on a case by case basis...
And Meg, It's nice to see that you're still humming along - it's been years since we've spoken.

Mark Ruvelson
Executive Producer
Regretfully, the cutting down of freelancer rates seems to be all the rage these days. Companies can get away with asking for it because as you said, if you say no, someone else will say yes. I'm not sure I agree with the comment that when the economy improves, we'll be able to build rates back up. I hope that's the case, but it may not be - it's always easier to be knocked down than to build back up. My survival strategies in the current environment: Flexibility- I've had to cut my rate and sometimes work on spec for a piece of the back end. If I would have said no, I would have missed the opportunity. Innovation: rather than waiting for the opportunities to come to me, I'm creating my own ideas and selling them to clients, and of course I'm writing myself into every budget! Nest egg: probably one of the best things going for me at the moment is that I'm not desperate. I've been able to tuck away a nest egg that allows me the opportunity to say no to a gig when it's really unattractive. Branding: I'm using free time to update my website, social networking presence, make phone calls to past clients, etc.
Thanks, Mark
follow me on Twitter: www.twitter.com/LightSpeedMgmt

Tony Castrigno
Creative Director and Senior Designer
Reading through the responses to your question I can't help but notice that Jonathan Bentley's note runs counter to the prevailing mood of the business.
Jonathan, I would love to have clients such as yours. Clearly they have not been forced to cut budgets, do more with less or look for cheaper ways to get things done. We recently did a project for a prodcuer whose client was the largest retailer in the world. The task - they wanted the same event they did last year, but done in an event space in NY rather than a hotel in the midwest for less than last year. Now I suppose they can just say "sorry can't be done" but what they did was say "yes". That I am afraid, is what is really going on... no one is looking for a low baller... they need help staying in business.

Mike Vennerstrom
Owner, Equinox Creative
Your last sentance was right on, Tony. Producing agancies, especially the small ones, are fighting the same economic battle the freelancers are. My business is down over 50% and I have staff and overhead expenses to pay. I have seldom asked freelancers for reduced rates, but right now I'm just trying to keep the doors open and avoid layoffs. I'm certainly not asking for discounts in order to increase my profitability.

There are no "bad guys" in this discussion. We're all in this together, artists, producers and management. We have to work together to insure everyone's survival until things pick up again.