I want to address a critical issue that affects all of us in the freelancing world: the outdated system of hourly rates. Even the name has a less pleasing sound to it …arghhourrrly.
The current system often rewards slower and less efficient work—essentially, the longer a contractor takes, the more they get paid. This approach doesn’t reflect the true value of our expertise or the years of experience we bring to the table.
I am sure any of view can do a specific task in 0,5 hours, a task that would take somebody more junior 2-3 hours. Of course, you might say that that’s why your hourly rate is higher than others
It also enforces a perverted mindset that clients might have thinking they own the hours of that freelancer that they are paying for.
We need a new model.
Where does money come from? From other people’s bank accounts.
Typically the money gets transferred to our accounts when we do something useful for that person, we provide a value that they are willing to pay for.
How can we reinvent the model for compensating freelancers that truly reflects the value of their contributions, rather than just the hours they spend? We need a system where efficiency and quality are rewarded more than mere time expenditure. What is the real value you bring - a question that if answered honestly by the client could create a better collaboration model.
Hourly rates are not a problem, lack of clear and precise KPI’s that are anchored in the reality of the global market is the true problem. I’m currently working on a section & pixel based quoting formula for web design services which once finished and polished can then be further re-applied and re-adjusted for any creative service. Let me know if you want to debate the subject, maybe we can define together this new model you’re asking for.
You’re spot on about the need to ditch the outdated hourly rate model. It’s straight up broken and fails to recognize the real value experienced freelancers bring to the table.
I think AI could be a total game changer here. Imagine an AI system that can properly assess a freelancer’s skills, portfolio, and track record of delivering killer results. This AI could then match freelancers with projects based on their proven ability to solve complex problems and create massive value for clients.
Instead of compensating based on hours logged, the AI could analyze factors like project complexity, innovation required, and the measurable impact the freelancer has delivered in similar gigs. The pay would be tied to the freelancer’s expertise, creativity, and the potential business impact of their work.
This value-based, AI-driven approach would incentivize quality work and foster a more transparent, collaborative relationship between freelancers and clients. By shifting away from obsessing over hours, we can cultivate a true partnership mindset focused on achieving outstanding results.
Embracing AI in this way could completely revolutionize the freelance game, ensuring skilled pros are compensated for the real value they create, not just their time. It’s time to break free from the outdated hourly trap and unlock the full potential of the freelance community with bold, future-focused solutions.
and you have written this reply with AI, right?
i don’t thing such a system can be automated 100% with AI.
the problem is in the perception of the client and we need a mindset switch.
i am successfully using a new model with my clients where I charge a percentage of what they earn based on what i have helped them build.
