Ok, a primer on fees, salaries and rates-
I’ve been working freelance for 5 years and corporate for 6 and have both negotiated salaries, hired for corporate and paid consultants. I am currently working with several different clients on a retainer basis.
- Working corporate.
You are getting paid based on the principle of a fixed exchange. They pay you X amount, you do Y. Your X includes a minimum number of hours expected, no matter the workload. If the office is busy, you may have to do unpaid overtime, if not busy, you stay at your desk and look busy, or do “research”. Your compensation includes benefits, taxes, the office overhead and job security.
Corporate jobs have some security as the employer can fire you, but normally has to pay some amount of wages to do so, and hiring someone will require they invest some time/$ into training, typically 1-2 months until they are fully up to speed, depending on the position. Plus, depending on the position there may be additional costs like relocation, signing bonus, headhunter fees, etc.
- Working Freelance/Consultant.
You are doing X for Y. X is the deliverables. Y is your rate multiplied by the hours in your estimate. You may roll this into a fixed cost per project, or provide a breakdown. Two important things with Y: A)both rate and hours are important. Charging $500/hr and quoting for 1 hour of work is equal to charging $50/hr and 10 hours. B)How many hours you quote may or may not be the same as the number of hours it takes you to do the work. Managing rate and hours is an important thing for all consultants and there are many factors and strategies to consider.
As a consultant, you have no job security. You may or may not have work next week or next month. You have to spend time to do business development, accounting, etc. You have to assume the costs of running the office, paying utilities, new computers, etc. Assuming we are talking about a single person here, you are likely not doing 40 hours of billable hours a week. If really busy and efficient, maybe 30.
A consultant’s rate is normally much higher than the calculated (salary divided by 40/wk) corporate rate as there is a premium for the one-off job (no hiring/firing/training expenses), and you are subsidizing the non-billable hours and overhead needed to provide the availability of the consultant. As well, it is normally the case that the consultant offers a greater level of skill and experience which allows him to be a consultant, vs. a hired employee.
As a consultant, you can also write off a lot. While you may not have benefits, you can write off typically around 30% of your gross income, which lowers your taxes and increases your net compared to a salaried employee.
3. Working with retainer contract as a freelancer
A retainer is a guarantee of work. As a consultant, this guarantee mitigates a lot of the time/expense needed in normal business development, and provides some security which is worth piece of mind (and cashflow). It also offers the client “priority” and availability. A good freelancer may be so busy they turn away work. A retainer avoids this for the client and ensures they are available. Typically, a retainer allows for a set number of hours at a discounted rate. This discount depends on many factors. Essentially the consultant needs to determine the opportunity cost for their time. If you are so busy you don’t need the security there would be less opportunity for discount as you could be working on something else at full rate.
Now to the specifics -
Rates as well as salaries all depend on the location, job and the designers experience.
the rates Iab quoted are within reason.
The coroflot or any other salary survey results are pretty much worthless as there are so many factors (experience, position, skill, etc.)
The OP’s question is pretty simple. Firstly, it depends on your position and how important you are to the company, and how much the company needs you. If it’s a full time job and you want to work part time, the likely result is the company will just look for your replacement. If anything, they are doing you a favor. Working part time, I would expect the company at best would keep your current rate and offer no benefits in exchange for the inconvenience of having to deal with part time work at a set number of hours.
If you are freelance, you have to account what value you bring the company. If they can just hire a replacement, why would they pay you more to do the same work?
Think of the problem from the company’s perspective and it’s much easier.
R