With plenty of freelancers promising the world for your business, all for the cost of a lunch out, it can be tempting to choose the cheap option. However, when it comes to freelancing, if sounds too good to be true, it probably is. Enter the term ‘race to the bottom’, which explains the process of freelancers offering heavily discounted services to businesses to secure work in an increasingly competitive environment. In this blog post we’ll break down why the race to the bottom doesn’t save on expenditure but instead costs you more time and money.
First of all, why do we have a race to the bottom?
Different Economic Zones
Firstly, the race to the bottom is also influenced by freelancers competing across the globe. Different freelancers from different economic zones are applying for the same projects, while their cost of living vary greatly. For example, the cost of living in India is on average 65.4% lower than here in the UK; a project that offers an attractive income for someone based in India might not pay the bills for a freelancer working the UK.
At Prolancer inclusion and equality is an important part of our brand and our priority is finding the right person for the right project, wherever they may be and whomever they are. We avoid loose matching and high commission fees for freelancers by using smart algorithms and relationship managers for accurate matching of vetted and professional resources for every project. We consider skills, rating, experience, reviews, geography, time-zone, currency, language and culture when matching prolancers to projects.
The challenge to get noticed
In largely deregulated economic markets (like here in the UK), it is down to individual freelancers to ‘name their price’ for projects, rather than following an enforced ‘industry standard’. In order to win projects (and pay the bills!), new freelancers can feel forced to offer the lowest price and undervalue the cost of their labour. Indeed, projects aren’t fairly distributed on most freelancing marketplaces, and hirers rely on choosing freelancers with 5-star ratings and reviews. If you’re new on these sites, the only way to get noticed is by cutting your prices.
When low prices become a trend, as it has in the gig economy, the race to the bottom can lead to less overall economic security. Clients that once paid very little for a freelancer’s services threaten to go elsewhere when fees rise, leaving freelancers in exploitative working situations.
We need to recognise the responsibility of businesses here, and the government’s failure to regulate the industry. The demand for cheap labour keeps the race to the bottom going, which has been exacerbated by the economic shock of the pandemic. Companies are keen to cut expenditure, or in the case of big multinationals there can also be sense of entitlement that comes with the brand name. Multi-national corporations are able to exploit their global reputation and frame poorly paid working situations as ‘opportunities’.
We reject this way of working. At Prolancer we have a fair wage for fair work policy, which means that everyone that works through our marketplace is guaranteed a living wage that properly reflects their value. As we are a fairly new platform, now is a great opportunity for freelancers to join Prolancer – experts that build a profile now will have the most established portfolios as our marketplace grows.
Pay more for reliability
While it can feel like you are turning down the best deal of your life by moving away from cheap freelancers, you are in fact saving yourself plenty of headaches later down the line. As a business you want to work with freelancers that are reliable, can balance their workload, and know their boundaries.
You will, most likely, not find reliability when working with freelancers stuck in the race to the bottom with a cripplingly long list of clients (needed to make ends meet). Someone that spreads themselves too thinly won’t be able to spend the proper time and attention needed on your project, and may cut corners to meet deadlines.
There is also a greater chance of burnout, with freelancers overpromising because they need the money, and underdelivering due to overworking. Let’s remember that we are still in a pandemic, and according to the IPSE almost half of freelancers feel less productive (48%) as a result of job-related stress. When something finally gives, as a hirer you can be left with an unfinished project and a freelancer on the brink of a breakdown. That can mean going back to the drawing board and spending the money for the service you should have done the first time round.
Paying more for a freelance expert that will deliver a project within the agreed timeframe, and is confident communicating their boundaries, is much more cost-effective than going down the race to the bottom route, only to turn back halfway through.
Experts know their worth
The number one thing to remember in business is that experts know their worth. Freelancers that have spent years developing their skills – either through self-employed projects or working in industry before going freelance – will charge a price that reflects their experience.
While on the surface it may only take your expert a short amount of time to complete their work for you, they will have invested in their training over a number of years to get to that stage. As a hirer you pay for their experience alongside the service. Experts will have a water-tight portfolio that showcases their ability and includes previous examples of work, so you as a hirer can feel confident that they are worth the investment. Going for a cheap alternative most probably will not yield the quality you had hoped for.
Finding freelance experts, however, can be a challenge, and often relies on word of mouth and contacts. On the large freelancing platforms, real talent can be easily drowned out by people overpromising their skillset or underselling their economic value. At Prolancer we pre-vet all experts using smart algorithms and our brilliant relationship managers. When working on a search for a hirer, we will also interview, assess and screen potential candidates before providing a shortlist for final interview.
At the end of the day, in business it is better to pay for quality over quantity. Investing in trusted expert resources will make developing new processes and technologies significantly easier. You’ll be able to operate in a more agile way, with the reassurance that you can get your project done right, first time round.
At Prolancer, we match top freelancers with businesses not only by skill set, but also location, communication, cultural understanding and a fair price for fair work.