Hourly rates

I’ve recently been thinking about hourly rates again and how I don’t have a singular number that I focus on or aim for - it varies a ton based on all sorts of factors.

There’s this idea people generally have about their hourly rate, where it has an absolute floor that just kind of grows over time as they age or gain more skills and responsibility. They tie that number to their own self-worth. “I hate my job and I’d like a different one, but all the roles I’ve looked at that I’d be a fit for pay less - I could never take a pay cut.”

But the value of people’s time is variable. It also varies for an individual. For example, if you’re salaried, there might be several hours in a week where you work hard and are incredibly productive, but there’s a good chance your work on Friday afternoon isn’t quite so valuable. If your rate was somehow pinned to productivity in each hour, there would be peaks and troughs throughout the week. Your salary effectively smoothes out that variation.

People do grasp the idea that the value of their time is variable. Play one of those games where you and your mates come up with ridiculous hypothetical scenarios and haggle over how much you’d need to be paid to do them, and everyone happily throws out numbers ranging from a tenner up to generational wealth. And yet they don’t apply the same thinking to their own working life.

Maybe this all stems from the idea of having a salary and a single job role and our continuous movement into an ‘all money happens monthly’ world where people budget their income and outgoings on a monthly basis and have everything accounted for, leaving no room for changes.

For me, there’s work I’d do basically for free, or far below minimum wage. Volunteers do this all the time. This pretty much happened when I was producing and selling low-margin physical products like the PC Nameplates and enamel pins. Fulfilling orders and doing all the other admin work took so much time that my effective hourly rate for the work rounded to 0. (I appreciate the irony that I no longer sell those products when I’m talking about how I would accept lower rates, but it all depends, that’s my point.) It’s pretty much exactly what’s happening right now as I try to build a business - I’m working for free with the hope that unpaid work pays off later.

On the other hand, there’s work I only do for a substantial rate. If you need specialist skills and knowledge and only a couple of hours of my time, it needs to be worth my while for me to set aside the time and get into the right mindspace.

It’s all about the context. Do I have free work time available and I’m looking for opportunities? In that case, working for a lower hourly rate might be attractive, especially if the work is easier or more interesting. If I have no time and something I don’t really want to do comes up, my rate becomes a large made-up number slightly below the expected value the work produces for the client. Something more predictable and consistent over time? Likely a lower rate. Something highly variable and spiky? A much higher rate. And so on.

Between nothing and loads, there’s a massive spread: underpaid, average, what friends think is incredible, and what strangers assume is a straight-up lie.