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Hiring Hourly VS. Fixed Price

There are basically two types of contracts when hiring a freelance artist; fixed price (sometimes called lump sum) and hourly. Many employers are unclear as to which method to use. As with anything in life, there are advantages and disadvantages to both options.


1. Budgeting:

Fixed Rate projects are without a doubt easier to budget for. You can simply budget for a set amount of money and that is that. X number of drawings at Y number of dollars equals Z. You can chisel it into the books because it isn’t going to change.


It should be noted that lump sum projects rarely come in over or under budget. In fact they almost always come in right at budget. Hourly projects often do come in under budget. And yes, they also come in over budget. More on this later…


Fixed rate projects are also less hassle than hourly billing. Basically you get one or two bills for each milestone and that’s it. Hourly projects can be a little more of a hassle because the amount varies with each check and they are usually billed more often.  However, you are often paying a little extra for the convenience of lump sum billing.


2. Risk:

The bottom line is that Fixed Rate jobs are safer for the employer and more of a risk for the artist.  Of course the opposite is true when it comes to hourly jobs. With hourly projects the employer is taking on more risk than the contractor.


The question you have to ask yourself is who you want to take the risk. Your freelancer will be willing to take on the risk of a fixed rate project, but he or she will insure that they are protected by way of padding their bid. This is not unethical; it’s just good business sense.


As a business owner I need to budget for the worst case scenario. That means that I have to estimate how many hours I think a project will take me and then I add on a few more just to make sure I am covered in case it takes longer.


Essentially when you pay for a fixed rate project you are paying for the insurance to go with it. In return you pay a slightly hirer price, but that is the most you will ever pay.


3. Trust

Another factor in choosing whether to hire hourly or at a fixed price is how much you trust your artist.


Hopefully this only applies to new ventures because you have never worked with this artist before. If you have been using an artist that you don’t trust for multiple projects, then shame on you! You need to stop working with them and go find another freelancer.  There are plenty of talented and ethical professionals out there who would be happy to have your business.


Hiring at a fixed rate allows you, the employer, to rest easy. You don’t have to worry about what your freelancer is doing with their time because you aren’t paying for it. If your freelancer has writer’s block, it is no longer a concern of yours. They can play on Facebook all day long as far as you are concerned.


Once again, the opposite is true for hourly work. If your freelancer spends all day on something that should have taken half a day, you are now paying for it. If their internet is slow today or their computer keeps crashing that is on you. You are now paying for any revisions, miscommunication, or unforeseen problems that arise. 


4. Knowledge:

Knowledge is a BIG player when it comes to hiring hourly or lump sum. The knowledge of your freelancer is essential, but so is your knowledge of the project. This is often why projects run over budget on hourly work. Someone “didn’t know” something.


If you have a great working knowledge of your field and know that your artist does too then you can really shave some numbers off your project budget.


If you are covering new ground with your project, I would recommend that you hire your freelancer at a fixed rate.


It all comes down to how confident you are and how much risk you are willing to take.


Hire for fixed rate projects if:

  • You have a tight budget (no matter the size)

  • You don’t like taking chances

  • You are breaking into a new field

  • You are hiring a freelancer you have never worked with before

  • You don’t have a lot of extra time for additional administrative duties


Hire hourly if:

  • You have a budget with some wiggle room

  • You like taking risks in order to save money

  • You have years of experience in your field

  • You have an artist that is knowledgably and trust worthy

  • You have time on your hands for additional book keeping and communication

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