23. July 2019. | Author: techysium

How to Know What To Pay For a Freelance Developer?

Negotiating with a freelancer about money can be quite confusing, especially if you’ve never done it before. Contract-based work is so different to working with coworkers and employees.
While cost is obviously one of the most important factors of a project, it shouldn’t be the most important one, as it is highly relative.

One thing you know for sure is that you want the project to be done, and done well and on time. There is no clear-cut guideline for setting the rates because of the special requirements of every assignment. But we can certainly provide some basic aspects to consider, making the budgeting process easier on your mind. 


1. High demand skill sets cost more. 


Freelancers can demand more if the skill they have is in high demand, if they have more experience (seniority) and if it’s a niche skill. Everything that significantly narrows down the talent pool drives the costs up. Techysium might alleviate some of this pressure because the registered professionals  have a set average hourly rate on their profiles. So when you discuss the specifics of your project, you can gauge how close or far the price offer is to that average. But it’s still perfectly reasonable that the freelancer will ask more for a project with special requirements or the newest technology. 


2. Complexity costs more. 


Freelancers sometimes like quick and easy solutions to straightforward problems, but some tasks require more intellectual effort, creativity, and more research. Depth and complexity will drive costs above average, while clean and simple tasks in a field where the freelancer has considerable expertise (did basically the same thing several times already), will come cheaper. 


3. Freelance rates have nothing to do with salaries. 


It might be tempting to calculate the freelance project work hour costs based on the hourly pay rate of a salary. You should stay away from that approach, because there are so many differences to consider that you can get better estimates via other ways. Keep in mind that you pay for the delivery, and for the delivery only. The freelancer is using equipment you did not buy, on a location you don’t manage, they adhere to deadlines and appointments but you have no influence on their working hours unless specifically required. Their income is taxed, they have additional costs, they have no paid holiday and no benefits. They charge you for the raw working hours of your project, with no downtime whatsoever, their working time windows usually don’t include breaks and meetings - many freelancers charge the additionals tasks like communication and research differently than the deep work on the project itself. The specific service they offer also has a real time market value, which has a direct impact on their rates. 


4. Time is money. 


Sometimes you get lucky with a fast and early delivery, but usually faster than normal turnarounds come with a premium price because the freelancer will need to reschedule other work, work overtime, or scale down other work opportunities to meet your deadlines. Availability is hit by steep deadlines bigtime: if you need something fast, it can really narrow down the professional pool. 


5. Finally: consider the costs to you. 


Obviously driving costs down and keeping them as low as possible is good for business, but an honest conversation with yourself can lead to some good basic guidelines. How important this project is? What exactly hinges on its success? How serious the consequences of errors or delays are? How much would you pay to be sure your project is in the best hands? These are some good things to consider and remember when you find someone with rates that seem a bit over your budget first. What is this guy really offering? What’s behind these rates, what is the extra that you can get? Is it maybe worth it? Or, on the other hand, where is this other, cheaper freelancer cutting the corners? Or how do you want your freelancer to feel while working on your project? What mindset they should be in? 


As you can see, cost is actually a complex issue which is practically meaningless without context. Analyzing the context before you even start searching for the freelancer is a key to satisfying work with independent professionals. 


Further reading on the topic at Toptal

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