HR managers and buyers who need to negotiate an adequate freelance fee are often looking for a handhold. Data from a benchmark give the appearance that they can provide a handle on what is reasonable. However, a benchmark cannot meet that expectation, and there are three good reasons for that.
HR managers and buyers who need to negotiate an adequate freelance fee are often looking for a handhold. Data from a benchmark give the appearance that they can provide that foothold of what is reasonable.
However, it is not obvious (to put it mildly) to benchmark freelance fees. And there are three reasons for this. First, there is too little available data. Second, if there is data at all, the data is not qualitative enough. And third, there is no consideration of the weight of a freelancer's job/role.
HR managers and buyers who need to negotiate an adequate freelance fee are often looking for guidance on what constitutes an adequate freelance fee. And actually, it is better to talk about a fair freelance fee. There are a number of reasons why people are looking for what a fair freelance fee is.
The first reason is obvious. In any negotiation, parties must reach an agreement. In an ideal world, one obtains that settlement through a win-win for both parties. One issue in the negotiation is, of course, the freelancer's daily fee. As in any pricing discussion, the price must be fair and correct for both parties.
The second reason is more difficult, and does not always get the attention it deserves. Freelancers (the type of freelancer we are talking about, after all) are well comparable to employees. Companies want to make sure that freelancers and employees are also fairly compensated among themselves. When they are not, you potentially create unwanted effects. Suppose freelancers are (at least in perception) substantially better paid than employees, then you will potentially get a push from employees toward freelance self-employment status.
And in the search for that foothold, we often get asked for benchmark data of freelance fees. And we see the market responding to that. The thing is: benchmarking freelance fees doesn't work (not directly, anyway).
Why benchmarking freelance fees doesn't work? Well, there are three good reasons for that 👇
If it is already difficult to collect the necessary data for salary studies (employee benchmarks), it is even more difficult to collect data from companies regarding freelance fees, especially since that data is usually not in HR, but in procurement/purchasing.
Freelance fees are established (exclusively) through positional bargaining and the mere operation of the market. One of the reasons you benchmark is to install greater (distributive) equity among freelancers, but certainly also between freelancers and employees.
The lack of methodology (at least so far 😉 ) has just created an injustice between freelancers and employees. Using the distributively inequitable fees in a benchmark solves nothing. A benchmark would only perpetuate the prevailing injustice.
No weight is given to freelance fees based on, for example, the complexity of the assignment, a freelancer's expertise and/or experience, etc. Why not? Because that data is simply not available.
Good news! We wrote a paper about it 🤓.
Now, to argue that freelance fees cannot be benchmarked is deliberately provocative.
Why is that necessary?
Well, to take issue with certain practices, practices in which it is all too easy to juggle benchmarks and analyses whose underlying data are of a questionable level.
Throughout this paper, the reader will also discover that the story is a lot more nuanced than what the title suggests.
Yes, there are certainly challenges in benchmarking freelance fees. Nevertheless, it is possible - at least when using the right methodology - to benchmark freelance fees.
So how and what exactly are those challenges?
Well, you'll find out in this paper 👉
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