Freelancers face lower-than-usual fees as businesses slash budgets

Freelancers in fields like the arts are pleased to finally be getting back to work, but the economic downturn is putting the squeeze on their usual rates and hurting their professional pride.

Publicity budgets have been slashed due to the pandemic, which has in turn created a dilemma for those working in the creative area and in Mice (meetings, incentives, conferences and exhibitions) industries.

Freelancers say they feel compelled to accept lower pay as they need the income, but doing so could undervalue the quality of their work and cement low rates as a long-term benchmark.

A freelance actor who wanted to remain anonymous said that while low-balling has always been the norm, the massive undercutting of rates in recent times makes negotiation seemingly pointless.

He was recently offered a role in a video for a tourism advertisement for just $100, well under the pre-pandemic fee of $1,500 to $2,000, though rates often depend on factors such as how visible the ad will be and the duration it is shown.

Though he eventually rejected the role as the $100 fee was too low, he has been willing to accept rates that are 20 to 30 per cent lower than his usual fee.

“It’s hard for talent like us to discern between companies who genuinely have a much lower budget for advertising and publicity, and opportunists who are seizing the moment to benefit from lower rates,” he said.

A freelance writer, who spoke on condition of anonymity, said she recently turned down an Internet marketing agency that offered $30 for an article of between 800 and 1,000 words. “(The agency) explained that it’s due to budget constraints, but the maximum they were willing to offer is $40 per article,” she said.

“I’m sure they know it’s low but they should pay fair rates as the work involves a fair amount of writing, research and image sourcing.”

She used to pay her freelance writers $250 for articles of between 500 and 600 words, although she has also worked for publications that paid a flat rate of $100 for articles slightly longer in length.

“Even though there might be established market rates, in reality, many publications set their own rates which writers just have to work with,” she said.

If the low rates persist, she plans to take on a full-time job as freelancing would no longer be viable.

A freelance designer, who wanted to be known only as Ms Leong, 31, said she has been producing digital banners for fees as low as $20 to $30, when she would previously have charged between $80 and $200.

She noted that businesses are cutting costs as they shift to the digital realm, and she is willing to accept lower rates for the time being just to retain her client pool.

Mr David Leong, managing director of human resource firm PeopleWorldwide Consulting, said: “Freelancers and contract workers have much weaker bargaining power in a contract-for-service arrangement, as they are mainly price takers and have little price command unless their skills are exceptional or if supply is limited.”

He added that their situation is one of simple supply and demand: If the freelancers choose to maintain their current price, “they are holding out with little hope that the service buyer will improve on the offered price, which no union or government intervention could help with negotiation”, as it relies purely on market demand.

So when a freelancer rejects a job, the offer will likely go to “someone who is hungrier and ready to bite the bullet”.

Mr Leong urges freelancers to take the chance to “build goodwill and trust with their customers, which will likely be reciprocated with future jobs”.

The approach was echoed by Mr Rudy de Rozario , whose firm Drape Empire sets up drapes and backdrops for events.

“For clients whom I have a long-term working relationship with, I’ll be willing to reduce my prices by up to 30 per cent – something which I call the Covid goodwill package – because of the mutual trust and understanding we have with one another,” said Mr de Rozario, 43.

A typical ballroom drape costs around $2,000 though the price may vary depending on coverage.

But there is a limit to how big a discount he can offer; he has turned down clients asking for cuts of more than 50 per cent as this would not do justice to the quality of his work.

Ms Jean See, acting director of the National Trades Union Congress’ Freelancers and Self-Employed Unit, said: “Businesses will benefit from having a reliable and credible ecosystem of suppliers including freelance professionals.

“Hence, it is in their best interest to engage in sustainable business practices so that businesses gain from freelancers’ expertise and, in turn, freelancers find it viable to invest in building their capabilities and skills.”

She encourages freelancers and service buyers to “have an open discussion to come to an agreement on expectations, fees and contract terms before starting a project”.

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