Are you considering becoming a freelancer to quit your normal job, but don’t know if it will really be profitable and worth the effort? Look no further, because here you will find the answers to your questions.
In this new guest post by Alejandro Arrieche, from the Generation Freelancer blog, he will tell you how much you can earn as a freelancer depending on your tasks, location, and other factors that you must take into account so that you can make a good decision.
Freelancing is a form of work that has revolutionized the labor market thanks to the rise of online business, globalization, and the increasing development of information technologies.
For many professionals, freelancing has become an opportunity to boost their careers by allowing them to access global job markets from the comfort of their homes.
There are many benefits associated with working as a freelancer compared to the traditional model of work. Of them, some of the most relevant are:
- Schedule flexibility.
- Possibility of working from different locations.
- Reduction in costs and time invested in transportation.
- Unlimited potential to generate income and grow professionally.
- Opportunity to work with large companies located in foreign countries.
On the other hand, there are undoubtedly some disadvantages to working as a freelancer, such as:
- Isolation was due to working outside of an office environment.
- Unpredictable income.
- Freelance work demands a certain discipline that not everyone possesses.
- Difficulties in finding profitable projects at the beginning.
However, what most professionals ask today is how much money can you really make as a freelancer?
According to the Freelancer Income Report, issued by the prestigious payment processing platform Payoneer, the average hourly rate charged by freelancers surveyed globally in the more than 170 countries covered by the company was $19.
However, some items have a significant impact on this fee on an individual level.
In the following article, I will be describing 7 factors that play an essential role in answering this question.
Your country’s economic situation has a major effect on how much money you can earn as a freelancer. For example, a freelancer located in Argentina, a developing economy, might be satisfied with charging $ 8 or $ 10 per hour, considering their domestic economy dynamics.
However, a freelancer located in the United Kingdom, a developed economy, would not be satisfied with the same rate because the cost of living in their country of residence is much higher compared to Argentina.
This distortion in the economic realities of the freelancers’ countries of residence impacts the fees they are willing to charge and tends to be self-regulating.
This means that most freelancers in Argentina, with perhaps a few exceptions, will follow the trend of charging less than their UK counterparts. Therefore their market is confined to a certain range of lower fees.
The most popular Freelancing platforms worldwide, such as UpWork, Freelancer.es, Fiverr, or Workana, work under a Marketplace modality, where freelancers must develop a certain reputation over time, derived from the satisfaction of their clients with the projects and work have done.
With a good amount of positive reviews from their clients and a wide portfolio of projects, an experienced freelancer will have the possibility of increasing their rates considerably compared to their competitors due to the credibility of their profile.
The Payoneer report also points out that academic training plays a secondary role in freelancers’ selection process. However, verifiable experience in the field is one of the most important factors considered by clients when deciding on hiring.
In this sense, the report indicates that as the freelancer’s age is older, the hourly rate they charge their clients is higher.
In this sense, it is observed that the average rate of freelancers between 20 and 39 years old is in the range of $ 16 to $ 20 per hour, while the rate charged by freelancers over 60 years is $ 27 or more.
The rise of information technologies and online businesses has given way to a growing demand for professionals in these industries. Consequently, freelancers whose careers are linked to these important markets obtain a favorable premium in their rates for time compared to other areas of knowledge.
These are some reference rates for the different areas of knowledge:
|Knowledge area||Hourly rate|
|IT & Development||$ 18 to $ 24|
|Design and Multimedia||$ 17 to $ 23|
|Writing and Translations||$ 15 to $ 17|
|Sales and marketing||$ 16 to $ 18|
|Engineering||$ 21 to $ 23|
|Legal||$ 28 to $ 30|
|Administrative Assistance & Customer Service||$ 11 to $ 12|
Source: Freelancer Income Report 2018 / Payoneer
The dynamics of the labor market economy works similarly to that of the market for goods and services. With greater demand, prices tend to rise, and vice versa.
For this reason, the interaction between supply and demand is also an element to take into account to determine how much money you can earn as a freelancer.
In the previous section, you can see how many areas (Writing and Customer Service) offer freelancers much lower hourly rates than other branches of specialization.
This is because the supply of freelancers willing to work in these areas is much greater than the demand, and therefore the rates tend to fall.
On the other hand, because the degree of specialization of these areas is usually less than that of legal or IT branches, many people see the ease of entering the market as potential candidates, which continues to saturate the offer.
Some skills are in high demand today, and it is in these spaces that freelancers will find the most lucrative opportunities. According to a recent report from Freelancer.com, some of these skills are:
- Artificial intelligence
- After effects
- 3d design
- Content Generation
- Lead generation
One element that tends to be underestimated in answering how much money you can earn as a freelancer is the type of client you work with.
A peculiarity of freelancing platforms is that many companies that register on these portals are startups or small companies that need to hire talent at low prices to reduce their costs and guarantee their viability.
For freelancers, this represents a certain challenge, as these companies are not stable and may not be able, in most cases, to offer opportunities to establish a long-term relationship.
A freelancer who works with startups or short-term companies will generally be paid less than freelancers who manage to access job opportunities with more established companies that can offer superior compensation for their services and a stable and long-lasting employment relationship.
Your Personal Brand
As I mentioned earlier, credibility plays a crucial role in developing a freelancer’s career.
On the other hand, while establishing a solid reputation on traditional platforms has a considerable impact on it, developing a personal brand is also a factor that will affect how much money you can earn as a freelancer.
Many freelancers stand out from the crowd due to certain elements that add value to their proposal. One of these elements is a website. The freelancing portal Workana recommends that freelancers develop a personal website as a marketing and promotion tool for their personal brand.
Based on your recommendations, such a website may include a bio, a list of services, customer testimonials, a personal blog, and a contact form.
On the other hand, registering and developing a profile on different social networks can be equally powerful to convey greater credibility to your potential clients. In freelancing, credibility and reputation are the most profitable assets.
For many professionals, freelancing may seem like a risky or low-profit opportunity. However, the facts support that there is ample potential to generate income through this innovative work modality.
Using the data, I provided throughout this article. You will be able to aim high from the beginning so that you can quickly consolidate your career as a freelancer.