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The pros and cons of hourly rates

Wondering if it's better to charge per hour or per project? Here are the pros and cons of hourly rates for freelance health writers.

LAST UPDATED: May 23, 2024 | AUTHOR: Michelle Guillemard

the pros and cons of hourly ratesIf you’re getting started as a freelance health writer, you’re probably wondering about the pros and cons of hourly rates and project fees. Most freelance writers have an hourly rate, or range of hourly rates, for various writing projects  – even those who routinely charge project fees.

For example, your freelance pricing strategies could look something like this:

  • Writing: $100-$150+/hour
  • Editing: $100/hour
  • Proofreading: $80/hour

Or, you prefer to charge per item, like:

  • Article and blog up to 800 words: $400
  • Article or blog 800-1200 words: $600

If a client asks for your hourly rates, though, the last thing you should do is send a generic rate card or list of rates. Here’s why.

Why you should never send a generic rate card with your hourly rates

Your client has asked for your hourly rates; that means they are interested in pursuing your services. They are in buying mode, in other words. So, the essential step to take now is to lock in the job – and you won’t close the deal by sending generic rate information. Instead, you need to explain your hourly rates in the context of their project.

Sending hourly rates with no explanation can feel scary for a client. They may be unfamiliar with what a health writer does and unsure of how many hours it will take you to do the work (and that’s one of the cons of hourly rates, which we’ll get to a little later on).

If you send a generic rate card, your freelance clients may over or under-estimate the hours you need to spend on a project before you even get a chance to quote appropriately.

So always personalise your response to rate card requests, and the best way to do this is to get your client on the phone. Having an initial phone call builds instant rapport and gives you a chance to sell your health writing services.

Despite the challenges of rate cards, as mentioned above, there are times when hourly rates are a useful method for pricing your freelance writing projects.

Let’s take a look at the pros and cons of charging an hourly rate in more detail.

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The pros of charging an hourly rate

  • Get paid for all your hours
    When you charge for your time, you are in control. Every hour of your time translates to money in your bank account. When you charge project fees, your estimate can be wrong. If you under-estimate the fixed fee hours, your hourly rate reduces.
  • An unknown end fee may increase your overall earnings
    You may have an unknown end fee which could mean you may make more money in the long run. You know what you’re getting in a project fee, and there’s limited opportunity to extend the job and make more money.
  • Hourly rates may be more psychologically appealing
    In some situations, hourly rates look better psychologically: 40 hours of work at $100/hour + GST can look more appealing than $4400. Clients may find it difficult to commit to a project when they see a large number and don’t know what they’re getting for that.
  • Get paid extra for revisions
    If you don’t include revisions in your hourly rates, you can bill extra for them. You usually include revisions in project fees, though, and if these blow out you may end up doing unpaid work. Tip: Always specify if your quote includes revisions as well as how many rounds you offer.
  • Still get paid if clients change the scope
    If the client decides to change the scope of your project halfway through, you can continue to bill for your work on an hourly basis. If the scope changes in a project fee, you may need to adjust the project fee and have difficult conversations about what is in and out of scope. Your options to adjust the agreed fee may be limited.
  • Charging can be more straightforward for certain projects
    Some tasks, like medical editing and proofreading, suit hourly rates. Generally, it’s best to charge hourly rates when tasks are less subjective and more straightforward. Charging hourly rates is helpful when you can easily estimate a range and not go outside of that range. The project scope needs to be robust, with limited potential to change.
  • Hourly rates build trust
    In my experience, hourly rates are an effective way of pricing when there is a mutual trust established. I charge hourly rates with my regular clients, not my new clients. My regulars know me, and they know how I work. There’s a history there. They know I’m not going to overcharge.

The cons of charging an hourly rate

  • If your hourly estimate is wrong, you lose money
    You need to feel comfortable with your writing processes before charging an hourly rate. If you don’t know how quickly you work, your estimates will be incorrect. You don’t want to end up charging five hours for projects that take 10 hours.
  • You need to be diligent about time tracking
    Your clients may want evidence of the hours you spent on individual tasks. When you charge a project fee, you have more freedom with time tracking. You don’t have to track your hours for your client (and if you work faster than anticipated, you don’t lose any money).
  • You need established client trust
    You may not have as much success charging hourly rates with new clients, as trust is not yet established. Fixed fees work well for new clients, as they know what services and inclusions they are getting. Your client may think you have the potential to overcharge if your hours aren’t fixed, and that can be awkward.
  • You may be less productive
    When you charge an hourly rate, you’re limited by the rate you charged. When you charge a fixed fee, you may be able to work quickly to maximise your time.
  • You may need to pay more for expenses
    It may not be as easy to include extra expenses, like research papers, in quotes for hourly rates. You may need to bill extra for them, which can be less interesting for your clients. Project fees can include separate line items for expenses like research papers and research, making it clear how much every item costs.
  • Interruptions can impact your time-tracking system
    When you’re working on any freelance writing project, you experience interruptions. You get sidetracked, an urgent email comes in, someone phones you, the kids come home from school. Charging an hourly rate can be difficult if you don’t have an effective time-tracking system.
  • You need to factor in productive hours and unproductive hours
    There’s a difference between the quality of your work during both productive and unproductive hours. You may spend 45 minutes staring at a blank screen because you’ve lost inspiration. But do you charge the full hour for that time? You need an honest approach that factors in productivity.

Choosing between an hourly rate and a project fee

As you can see, there are pros and cons for both hourly rates and fixed fees. Deciding on the best pricing system for your freelance work depends on multiple factors, like:

  • How well you know the client
  • The scope of the work
  • How long the work will take you
  • How busy you are
  • If you need to include revisions
  • If the project has the potential to change scope.

Remember: You can change your rates

Freelance rates are fluid. You can charge hourly for some projects and fixed fees for others. You can change your rates, depending on what the work involves. You don’t have to have one hourly rate and stick to it forever.

What are the pros and cons of hourly rates for you?

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Filed Under: Freelance health & medical writing, Getting started in health writing

About Michelle Guillemard

Michelle Guillemard is the founder of Health Writer Hub, the Past President of the Australasian Medical Writers Association and a freelance medical writer. Blogging about health & medical writing since 2012, Michelle teaches health writing courses and workshops to students and corporations around the world. Michelle is passionate about creating better health outcomes and changing lives through effective health communication. Connect with her on LinkedIn.

 
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