What's the going rate for freelance work?

I was recently laid off and have decent instructional design skills and experience building elearning courses.

I've been asked to do some freelance work but am stuck on what to charge for my services.  I don't want to charge too much, but at the same time I don't want to undersell my skills.  Can anyone give me some general guidelines for freelance work?

Thanks in advance.

28 Replies
Steve Flowers

I undercharge for work regularly, so take my advice with a grain of salt

There are two factors that I would consider:

- Your expectations + expenses

- The value you're bringing and how that matches up with your client's expectations

Do some math from a couple of different viewpoints to calculate your range / bracket. The first would be what you need to make it worth your while to do the work. That's your bottom threshold.

For your top threshold should take into account the going rate for the level of quality you are able to provide. Let's say the going rate for an hour of delivered level 1 / level 2 courseware with a couple of novel performance assessment activities is between 6K and 13K depending on package quality, features, etc... This may be high or low depending on your industry and customer expecations.

Let's say you drop 50 to 80 hours into incremental design effort for the storyboard output.  You need to take into account the other activities that contribute to the output. If you aren't doing graphic design, take that out. If you aren't doing assembly or custom programming, take that out. If you aren't doing QA or project management, take it out.

So let's say your contribution to the total effort is 60%. If you're level of quality match on the outcome is equivalent to average, you might be looking at an 8K total delivery for e-learning presentation with course features. That places your provided value at $4800. Looking at the total in this scenario, if you're spending 80 hours of design time, you'd be looking at an upper end of $60 / hour. That's the math for this instance. YMMV.

Depending on where you fall on the capability scale, this could be right on the money. It could be low. It could be high. Create a bracket. At the lowest end, plot what you'd need to bring in to make it worth it (consider tool cost, etc..)  I think this is key to setting your rates. There isn't a set rate. It depends... :)

Carla Stewart

That's a great question Tess

One school of thought is to find your hourly rate and stick to it - no matter what the job, client or project. Another approach - the one I adhere to - is evaluate each project individually. Have a target rate, but don't be afraid to lower it - or raise it - based on the project. I often bid around $35-$60/hr for writing and development. You'll find your writing is always the biggest variable. Articulate development and assembly is easy to estimate.

Another thing that factors is if you're bidding the job individually or if you're being contracted by an agency. Sometimes you can't get the same individual rate when someone else is managing the client.

Steve Flowers

One thing to watch for when estimating your rate / value are these non-equivalents:

Web design != Multimedia design != Instructional design != Print design ... I could go on. These are discrete crafts. Conflating one type of design with another dilutes focus and diminishes the value of the specific craft. Each design specialty will correlate to it's own rate / value curve.

This is one of my largest criticisms of our field. Lack of focus. If what you do well is instructional strategy and design, focus your rate structure around that and try to focus on strengths in that rate band. Too often I see ISD's that charge a flat rate structure and try to do it all. Some end up doing a significant portion poorly and these tasks that diluted the primary focus should have been charged at a lower rate to begin with (even lower since the performance was sub entry-level).

Most times, the tasks that challenge an ISD are complex enough to afford this focus

James Brown

If you think about it, that's why there are different shop rates and as they say, you get what you pay for if you fail to check out the person before you hire them. You should always request a portfolio. Not everyone can do what they say they can and a portfolio and references is how you weed these individuals out. I know I have seen an individual recently posting in these forums that boasts how well they could design instructional materials with a link back to their website. When I navigated back to the website not only could I not find any of their previous examples that they so proudly boasted of, but their website contained a lot of broken links and confusing navigation. In my opinion this person's website alone questions their ability as an instructional designer and I would not hire them specifically because of their lack of attention to detail.

With that being said, I can understand your frustration with poor instructional designers and this is a valid argument currently being made in the realm of academia. Instructional Designers making training materials who do not understand learning theories or principals.  However this is an issue not confined to the field of instructional design. I see it all the time in the tech industry. A client will hire a network professional who turns out to be a self taught ID10T that charges the client an absorbent amount of money to fix something that they, the professional techie, screwed up to begin with. A more common example shown on tv is Holmes on Holmes where a contractor has came in to do a job and bilked the unsuspecting homeowner out of a lot of cash only to have Mike Holmes come in and fix the issue.

On a side note, I don't quite agree with this.

Web design != Multimedia design != Instructional design != Print design

Actually my thought process on this would be   Web design + Multimedia design + Instructional design + print design = an effective training course. In other words you can bake a cake without milk and eggs. It just doesn't taste very good.

Steve Flowers said:

One thing to watch for when estimating your rate / value are these non-equivalents:

Web design != Multimedia design != Instructional design != Print design ... I could go on. These are discrete crafts. Conflating one type of design with another dilutes focus and diminishes the value of the specific craft. Each design specialty will correlate to it's own rate / value curve.

Steve Flowers

My point is... wouldn't it be better to sharpen your ISD skills and be worth that $$$ / hour than to be mediocre at the whole tomale? One person shouldn't try to be everything. And when you try to be everything and charge your top rate, you end up ripping off the customer for things that should have been charged at a lower rate.

Example:

  • Timmy is an ISD. He likes to dabble in graphic design and he stumbles a bit through web design. Timmy fancies himself able to do it all. Timmy charges $70 / hour.
  • Sally is a graphic artist. She's focused on her craft. She is quick and efficient, turning out consistent results. Sally charges $35 / hour.
  • Gino is an integrator. He's focused on his craft. He is quick and efficient and easily recognizes issues for resolution. Gino charges $65 / hour.
  • Timmy decides that it's cheaper to do things himself. He produces a heap of graphics that take him 4 hours to complete. He charges his client $280 for those deliverables. He also thinks it's easier to assemble the product himself. He spends 20 hours to complete the assembly and runs into many integration problems that take another 20 hours to remedy. He charges $1400 for the technical integration (even though he spent an extra 20 hours spinning his wheels).
  • Sally sees those outputs. She could have finished them in 2 hours with a much higher quality output.
  • Gino sees the output. He could have easily finished the assembly in 10 hours with little or no integration problems.
  • So Timmy charged the client $280 bucks for something that could have been better for $70.  Timmy charged the client $1400 for something that could have been better (and less painful) for $650.

My point isn't that one person can't do it all. It is that one person can't do it all well.  And even if they could, the resource balance simply isn't there for some outputs. ISD is a premium service. It's expensive. Why deliver sub-standard design outputs in other disciplines and charge the same $$? You end up making a value sacrifice.

An effective training course is alot of things and it isn't always the things you list. A quality output that's worth the money is worth involving a team of folks that are good at what they do. I believe eventually the industry will catch onto this Some already have. When you try to do all of those things you are shortchanging one of them. 10 pounds of stuff fits into a 10 pound sock. If you jam 9 pounds of other stuff in there, what's left for ID?

Some can get away with it. But there's always going to be a sacrifice in one or more components regardless of what's charged back to the client.

For the record, I too often attempt to one man band and do everything on my own. I started on the technical / creative end and moved into the ID work through coursework and experience.  I hate making sacrifices when a customer is being charged for professional services. And when you think you can do everything you really can't. Something has to give. I do some things really well and others passably. I firmly believe that I could have better products if I left those tasks to those that focus on the craft. I endeavor to do so on every project.

Steve Flowers

The trouble with this...

"If you think about it, that's why there are different shop rates and as they say, you get what you pay for if you fail to check out the person before you hire them."

  • A shop indicates a group of folks. The portfolio is an aggregate of their best outputs. This is no indication of an individual's capability.
  • I will rarely hire a person that says they do it all regardless of what their portfolio looks like unless the person can build my confidence in the parts that they did build. The best products are team efforts. The products I've seen that were solo efforts contained one or two elements that disappointed me - and supremely disappointed me when I recieved their rate quote.

I assume that the products demonstrated on someone's site are team efforts. I need to make a hire a known quantity. I go back to known quantities. I avoid folks that try to do it all and fail at one component or the other because they can't judge the quality of those skills.

James Brown

I like the thought pattern and for large corporations where you have the luxury of a team I'm totally with you. Me personally I really don't like going it alone but you have to do what is expected of you sometimes, especially when working on a budget in a small company. At least until I get the chance to become part of an e-learning team where I can then begin to specialize on one area. However right now due to monetary restrictions I must be the team.

James Brown

I'm also with you when it comes to money. I want to give my client my personal best and I cannot, nor will I charge a person for my learning curve. It's just my personal work habit and I like the motto an honest wages for an honest days work. My wife calls me too picky sometimes but I pride myself in the fact I like things to be as perfect as possible.

You mentioned an interesting thought about a portfolio and it doesn't surprise me that people would do this. Personally it would bug me too much. Everything in my portfolio was created by me, myself and I and I don't believe in show casing a project that was done by team because in my books that is false advertising.  So if you look at some of my college projects,  you can rest assured that the only person who built any of these projects was me. "My own one man band!" Ahh thank you.. thank you very much.. Elvis is going home for the day.

Bruce Graham

The price is based on a mixture of:

  • The value you can bring to the organisation, (so you need to understand the £/$ impact you will have on the business),
  • The local rate for your skills
  • How well you can negotiate ABOVE that rate, defending your value.
  • How large their budget is.
  • Your skills

Once you have set your price, it can be difficult to raise it, so ensure that expectations are set correctly.

Bruce

Daniel Brigham

Hi, Tess:

I generally charge $65 per hour, if that's any help. I can't tell you how many hours I've worked for free to get at that rate, though.

Steve is right on when he says that one person can't do it all, but I think we can get pretty close, and for many of our clients, that's "good enough." If you have other questions about freelancing, you may want to check out the freelance heroes thread. http://community.articulate.com/forums/p/16452/93910.aspx#93910

Perhaps more important than rate is one's ability to accurately scope a project. Get that wrong, and well, the hourly rate is pretty much meaningless.

Eric Rohrer

This is a great thread and some fantastic points, but I have to say I have a different take than others...

I personally feel you need to be good at EVERYTHING to have high value. Back in the 90s when I got involved in the "instructional design" world, there were very few tools to develop in (e.g. Toolbook and Authorware) and they were very expensive and complicated. Professionals in the industry segregated themselves into two groups: Designers and Developers - and it was "against the rules" to try to be both. 

I bucked the system, though - I wanted to be both, and it has served me very well in my career. Today, you really pigeonhole yourself when you say you are just "one thing". I've seen many "Instructional Designers" drop out of the industry or lose out on opportunities because they don't bring any other skills to the table. They fought and resisted technology and change and they lost.

Think about it - how successful is an instructional designer if they don't know how to use any tools? Could an instructional designer survive in this day and age without knowing Storyline, Captivate or Lectora? A decade ago this was acceptable, today it is not.

This is true with graphic design. Let's face it, the graphic design requirements for most e-learning work is pretty low. Having a good foundation around digital imagery (raster vs. vector, color theory, basic PhotoShop skills) are all things that are easily learned and will serve you well. IF a client demands/requires very high-end layout, custom characters, etc., then yes - hire a professional graphic designer.

Additionally, my clients don't want to hire all of these people and to have to manage and pay different rates. I can charge a HIGHER rate than what most have listed on this post because I can provide all these services and do them well - at least well enough to meet and often exceed my client's expectations. This accounts for 80-90% of my work. When my client requires professional voice talent, I hire it out. Need a custom illustrated character? I'll farm that out, too. A crazy complicated interaction? I will ship that off too (but completely deconstruct it and learn how to do it myself for next time).

The point I'm trying to make is that you can't be a "one trick pony". The world is becoming very hyper-competitive. I'm no longer competing with local talent, but global talent, and there are a lot of eager, creative and hungry people busting their butts to be better than me, and I'm simply not going to sit back and let that happen.

I will never be an expert graphic designer, but I can learn to be a good one - at least for e-learning domain. There will always be better instructional designers, but I will be pretty good and keep up with the trends and review the fundamentals. There will also be better developers, but I will always keep up with the tools and experiment. 

To answer the question, "What's the going rate for freelance work"... There are so many variables and factors I take into account, including:

  • Complexity - Of both the subject matter and the level of interaction desired
  • Quality - Does the client want "fast and cheap"? Or are they wanting something to show off to the big wigs, investors, or as part of the sales process 
  • Size of the engagement - I discount large projects because they provide security in cash flow - smaller projects get marked up
  • Speed - Does the client need it by the end of the week? The end of the month? There is a premium for that.
  • Potential for future work - Does the client have a bunch of future work lined up if I do a good job? - if yes, I do the first project at an attractive rate to get my foot in the door
  • Cultural fit/client readiness - Does the client have their act together and have the ability to "play nice", or am I going to have to repetitively chase people down to do my job?)
  • Value - What value does the training effort bring to the client? Can it save the company millions of dollars or is it just to train a handful of admin assistants on the new fax machine? Is it high-visibility? If so, I sell on value and the client generally has a decent budget.
  • Budget - I can generally work within any budget (low budget means less interaction, graphic design treatmnt, etc.)
  • Portfolio potential - If I could land Apple or Whole Foods Market, it will help me get other business)
  • My schedule - if I'm busy, I can command higher rates because I don't need the work)

Therefore, my rates vary between $50 - $125/hr.

Eric Rohrer

Steve Flowers said:

  • The best products are team efforts. The products I've seen that were solo efforts contained one or two elements that disappointed me - and supremely disappointed me when I received their rate quote.


This "can" be true, but in my experience often is not. Yes, putting a team together with expertise in respective skill sets certainly can add value, but you have to take into account the coordination and management of all these people - as well as the risks associated to them (dependability, quality, egos, etc). Additionally, I don't make much of a profit because I can't mark up one's rate much more than what they are charging me. Not to mention if they are like me they are working on other projects which, consequently, can put MY project in jeopardy. And in general, the more "players", the longer the project will take = more expensive = lower margins.

All of these factors play into Brook's Law (from Wikipedia http://en.wikipedia.org/wiki/Brooks's_law):

"Brooks's law is a principle in software development which says that "adding manpower to a late software project makes it later". The corollary of Brooks's Law is that there is an incremental person who, when added to a project, makes it take more, not less time."

Although Brook's Law is in the context of software development, what we do is very similar, and therefore the symptoms we suffer are almost identical: 

  • "It takes some time for the people added to a project to become productive. Brooks calls this the "ramp up" time. Software projects are complex engineering endeavors, and new workers on the project must first become educated about the work that has preceded them; this education requires diverting resources already working on the project, temporarily diminishing their productivity while the new workers are not yet contributing meaningfully. Each new worker also needs to integrate with a team composed of multiple engineers who must educate the new worker in their area of expertise in the code base, day by day. In addition to reducing the contribution of experienced workers (because of the need to train), new workers may even have negative contributions – for example, if they introduce bugs that move the project further from completion. 
  • Communication overheads increase as the number of people increases. The number of different communication channels increases rapidly with the number of people. Everyone working on the same task needs to keep in sync, so as more people are added they spend more time trying to find out what everyone else is doing."

Steve is right, though in that most solo efforts are lacking in one way or the other - which is why it's important to learn how to be good at all of them. You will never be the "best" at everything, but one should strive to have a very good understanding of the whole enchilada. 

The more self sufficient you can be, the more value you provide at a lower cost = higher margins.  

Steve Flowers

Hey Eric - 

I respect your perspective. In many ways I live it as I, as you do, try to deliver max value on a full spectrum of services. However, In my experience, solo folks with high competence across the board are extremely rare.

I've picked up projects from folks who burned a lot of budget attempting to build something that was beyond their capacity (often burning 90% of the budget to produce 30% of the product.) I've seen ID's try to record their own narration, spending hours of budget at full rate delivering sub-standard product at a higher cost. My views are based on my experiences with folks that would get more from spending time focusing their core craft than from chasing other disciplinary verticals with lower per-hour rates.

I can dig that one man bands can do things well (or good enough to get by.) I can also dig that folks should try to improve skills in multiple verticals to round themselves out. But I also see an industry confused about its own identity and entrenched in delivering sub-standard work and learning support resources. One way out is for everyone to get better at everything. Another is for folks to gather some respect for specialization while focusing on the core of their own part of the craft.

Steve Flowers

Brooks law applies to adding more people with the same skill sets, not to adding the necessary staffing to begin with. Personnel selection and assignment matters.

Software design, just as work and learning tool design, is complex. I don't think you'd want a programmer with low UX design skills, visual skills, or writing skills to also take on those tasks. You also don't want the programmer to have to take on administrative tasks that someone at half their rate can do more effectively. 

It's a balance. If folks can do everything well, great! If not, we shouldn't pretend that we can while billing clients or torturing teammates by shorting resources with our own learning curves

Eric Rohrer

Yes, Steve - solo folks with high competence across the board is rare. But it's also a differentiator and very marketable - which in turn means one has higher value (can charge more) and do most things at a lower cost (higher profit) than outsourcing.

As far as Brook's Law - although the context is software devs with similar skill sets, it pretty much holds true in any field - the more cooks you add in the kitchen, the more overhead will be incurred (communication, coordination, ramp-up), as well as risk. It often has not been worth the headache for the resulting low profit margin. 

In regard to your comment... "But I also see an industry confused about its own identity and entrenched in delivering sub-standard work and learning support resources". I couldn't agree more... This, unfortunately is often true for many reasons - but primary because "training" is a cost center more often than a profit center for most organizations. The billable rate is very low compared to other "similar" fields (for example, I have charged $100/hr. to clean up marketing PowerPoints in the financial industry, but to do the same work for "training" arena I get offered $25/hr.). I've also worked outside of the training industry doing UI/UX work where I'm billed out at $165/hr doing work that is "easier" than the skill set required to design/develop e-learning (don't ask me why I keep coming back to e-learning )

This is highly unfortunate because there are SO MANY skills in play, and instructional designers/developers - especially those who are experienced and good at what they do - are challenged to charge a "fair" rate for their services commensurate to other fields/industries.

Which gets me back to why it's important to be very good (not necessarily the best) at all facets of e-learning design and development. The margins are low, so if you can figure out how to do most of the work yourself, you have a better chance of making some profit.

Sheila Bulthuis

Steve Flowers said:

Hey Eric - 

I respect your perspective. In many ways I live it as I, as you do, try to deliver max value on a full spectrum of services. However, In my experience, solo folks with high competence across the board are extremely rare.

 I can dig that one man bands can do things well (or good enough to get by.) I can also dig that folks should try to improve skills in multiple verticals to round themselves out. But I also see an industry confused about its own identity and entrenched in delivering sub-standard work and learning support resources. One way out is for everyone to get better at everything. Another is for folks to gather some respect for specialization while focusing on the core of their own part of the craft.

I read this thread with great interest, and very much appreciate the thoughtfulness of the posts.  For me, Steve really summed it up.  And his point is true not just in e-learning, but in learning in general.  (Anyone else remember the great debates back in the day about whether it made more sense to staff a training department with people who did both ID and facilitation, or whether it made more sense for people to specialize in one or the other?)

At the end of the day, whether you can get by doing everything yourself really depends on the client's expectations and the needs of the particular project.  For example, no matter how much I work on my graphic design skills, that is not my core competency and it never will be.  If a client wants a fairly simple course that doesn't need a lot of graphics work, I'm fine on my own.  But if a course needs to be very visually engaging, needs a lot of complex graphics, etc. I'm better off - and the client is better off - if I bring in the graphic artist I work with. 

I don't think this is an all-or-nothing choice; it's not a choice between being a one-man-show or working in a large team.  Plenty of people - me included - don't have a permanent team but work with a network of other specialists so each project gets what it needs.

Sheila Bulthuis

Eric Rohrer said:

  • Complexity - Of both the subject matter and the level of interaction desired
  • Quality - Does the client want "fast and cheap"? Or are they wanting something to show off to the big wigs, investors, or as part of the sales process 
  • Size of the engagement - I discount large projects because they provide security in cash flow - smaller projects get marked up
  • Speed - Does the client need it by the end of the week? The end of the month? There is a premium for that.
  • Potential for future work - Does the client have a bunch of future work lined up if I do a good job? - if yes, I do the first project at an attractive rate to get my foot in the door
  • Cultural fit/client readiness - Does the client have their act together and have the ability to "play nice", or am I going to have to repetitively chase people down to do my job?)
  • Value - What value does the training effort bring to the client? Can it save the company millions of dollars or is it just to train a handful of admin assistants on the new fax machine? Is it high-visibility? If so, I sell on value and the client generally has a decent budget.
  • Budget - I can generally work within any budget (low budget means less interaction, graphic design treatmnt, etc.)
  • Portfolio potential - If I could land Apple or Whole Foods Market, it will help me get other business)
  • My schedule - if I'm busy, I can command higher rates because I don't need the work)

This is a great checklist of things to consider - I think these factors are usually in the back of my mind when I'm bidding a project but I like having them all written down.  Thanks!

Eric Rohrer

Sheila Cole-Bulthuis said:

At the end of the day, whether you can get by doing everything yourself really depends on the client's expectations and the needs of the particular project. 

Yes, exactly. You need to know and be honest with yourself of your limitations. I just finished a project with a major grocery store chain where we hired an illustrator to come up with an avatar used throughout the course. I could not have done that (but I did everything else )

Vasily Ingogly

I'd class myself as a LAMP developer with basic design skills and good taste. I develop WordPress sites for small to mid-sized businesses. I know my way around XHTML, CSS  Javascript, PHP, MySQL, WordPress frameworks, theme development and plugin development, and SEO. I also know how to set up a WordPress site that's as secure as I can make it, and performs well. As a consequence, I charge $80 per hour which is by the research I've done a pretty average hourly fee for someone with my skills in my area. What number you come up with in your research will depend on the assumptions you make about the nature of your business ... as others point out, web designers != web developers != instructional designers etc.

If someone wanted a one-of-a-kind graphic design or logo, I'd refer them out for that part of the project. But for most clients, off-the-shelf artwork purchased through a site like iStockPhoto works perfectly well.

That's the ticket ... you have to decide what your skills are worth in your market area ... which means, what's the maximum hourly rate you can charge without impacting business? Charge too high, and most people will look elsewhere ... charge too low, and discerning clients will wonder if you're any good. Non-discerning clients will hire anyone to throw together a site, or have their 13 year old nephew/niece who's a "computer whiz" throw something together.

You also have to figure out how much you need per hour to make your solo business worthwhile ... Frankly, I have no interest in designing websites for minimum wage, given my skill set and experience. This means you need a business plan ...  I've found this web site pretty helpful in setting rates:

http://about.salary.com/

Also, I like the One Page Business Plan for Professional Consultants, by Jim Horan. Having a short business plan provides you with focus, even if you're a one-person show.

Marissa Carterud

I recently started to work freelance, and have a range that I charge for courses, and I agree with what has already been said about factoring in your breakeven and then adding on your value to get an estimated range, dependent on the project needs.

I figure out a baseline where I breakeven with Level 1, Level 2, and Level 3 projects.  Ooh, and since it's tax season, I also factor in the 15% self-employment tax that I'll get hit with off the top even before I pay myself. Then I factor in my "value" into the mix and that depends on the project - will I be the only developer working for a company directly? Will I be working for a consulting firm? Will I be with other developers? 

I have another related question that I'm curious about what others think on this thread. I have a client who I'm working for now that I invoice per our contract every 2 weeks. I've invoiced once for hours worked, and was told through their payroll that they will pay in about 30 days from the invoice date. The first one I sent was dated 3/28. 

Is this excessive? Should I push back? I haven't come across this situation, and honestly, I thought it would be weekly or even bi-weekly, depending on when their payroll runs.

Thanks, Marissa