Empowering the Freelance Economy

The freelancer pay model is outdated – is this the alternative? 

Hourly rates might become a relic of the past, replaced by fixed fees for complete projects. This incentivizes freelancers to work efficiently while still ensuring they are fairly compensated for their creative output.
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Jon Williams, founder of Liberty Guild, has sparked a conversation within the advertising industry about how we value creative talent. But The Freelance Informer believes this topic of conversation should be discussed among all freelancers who provide creative and problem-solving services

In a recent report by Shots, Williams argues that the current model of paying freelancers by the hour is outdated. He proposes a shift towards a system that compensates creatives for the value of their ideas, not just the time it takes to execute them.

This proposition holds significant weight. For many freelancers, the hourly rate offers a sense of security – knowing exactly how much income each billable hour translates to. But it also disincentivises efficiency and innovation. If a freelancer cracks a campaign concept in a few hours, they’re still compensated the same as someone who takes a full day to arrive at a mediocre solution.

Hourly rates might become a relic of the past, replaced by fixed fees for complete projects. This incentivizes freelancers to work efficiently while still ensuring they are fairly compensated for their creative output.

What does an ideas-based remuneration model look like?

Value-based pricing: This model requires a shift in mindset on both sides. Freelancers need to confidently articulate the strategic value their ideas bring to the table, not just the technical execution. Agencies, in turn, must be willing to pay a premium for ideas that solve client problems and move the needle.

The ability to be rewarded not just for the time spent, but for the impact of their ideas, has the potential to unlock a new level of creative freedom and financial security for freelance talent in the advertising industry.

Focus on results: Success metrics will move beyond billable hours and towards demonstrable outcomes. Did the freelancer’s concept lead to a successful campaign launch? Did it increase brand awareness or drive sales? By tying compensation to results, both freelancers and agencies become invested in the project’s overall success.

Rise of project-based contracts: Hourly rates might become a relic of the past, replaced by fixed fees for complete projects. This incentivizes freelancers to work efficiently while still ensuring they are fairly compensated for their creative output.

The transition to an idea-driven compensation model won’t be without challenges. There will be a need for clear communication and a standardised way to measure the value of an idea. However, for freelancers who are confident in their creative vision and ability to solve problems, this shift presents a promising future.

The ability to be rewarded not just for the time spent, but for the impact of their ideas, has the potential to unlock a new level of creative freedom and financial security for freelance talent in the advertising industry. But once this model takes shape and is indoctrinated more within the industry, we see this being replicated in other industries.

Do you agree with this model?

Share your thoughts in the comments section.

3 Comments
  1. Tony Evans says

    If this is such a great idea, why don’t the ‘professions’ like lawyers and accountants use it?

  2. Iain Sturrock says

    An additional advantage to project based contracts with payment by results rather than time, is that it supports the engagement status as being outside IR35

  3. Carsten Pitz says

    The problem with work packages here in Germany are implicit requirements. Imagine you get an RfQ for a simple car port. After finishing that the customer tells you that it is expected a car port to feature a guardroom. After finishing the guardroom you will be told a guardroom at least features a three bathrooms. And so on …
    I keep to bill on time & material base 😉

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