How can freelancers from developing nations charge more for their services that can be on par with their counterparts from developed nations?
In the world of entrepreneurship, it’s becoming more and more trendy to outsource to developing countries, since this way you can hire skilled people for a fraction of the cost. I always had mixed feelings about this: is it really okay to pay someone a slave-wage only because they are living in the Philippines or India? It seems that most entrepreneurs think that it’s justifiable, therefore I was pleasantly surprised to stumble on an article by Janet, a Filpina web designer from USA, who called BS on this whole thing.
I know that many of you guys are from developing countries, therefore I decided to interview Janet, and ask her to explain her take on this outsourcing trend and share how she went from working for low paying clients to working for high paying ones.
In this interview:
- What was the difference between working as a web designer in the USA and working as a web designer in the Philippines.
- Why Janet presents herself as a location-independent web designer instead of a Filipina web designer.
- Why Janet thinks that web designers from developing countries should increase rates for their services.
How much web designers around the world are getting paid
When you hire web designers from developed countries, a good web design can cost thousands of dollars, especially if they are already established in the industry.
- Stephanie Hobbs charges $1,200 for a 4-page website. She charges more depending on the size and complexity of the project.
- Noel Green charges between $2,500 and $5,000 for a complete website.
- Artisan Pros offer different packages with prices ranging from $1,495 to $3,595.
Wondering what web designers from developed countries charge per hour? Many people start out with a low rate, for example $15/hour. However, over time they gradually increase their rates from to $60-70/hour.
- Mary-Frances Main charges $60/hour for most web design work
- Dixie Vogel charges between $60- $80/hour for most web design work
Web designers who are really established and well-known often charge $100/hour or more. Now, when it comes to web designers from developing countries, that’s a completely different story. Sure, there are some who managed to establish themselves and therefore can charge the same rates as web designers from the US or UK. However, the majority of them earn significantly less money for the same amount of work.
I don’t want to point out anyone in particular who is charging low rates since that might make them feel uncomfortable, therefore I suggest you to take a look at popular freelance boards like Freelancer and oDesk to get an idea about the differences in rates. Pay attention to average bids. Sure, there are some projects where average bids go over $1,000, but on many others they are in $50 -$250 range. There are also many jobs that offer $4-$7/hour rate. Why clients offer low rates like that? They know that there are people in developing countries who are willing to do the job for a that amount of money.
Here’s a real screenshot from a real ad on one of the freelance boards:
Yes, you read it right, they want a high quality homepage and logo, with three different versions for a website and six different versions for a homepage, and, of course, unlimited revisions in their selected version, all for $70.
Sure, there will always be a big difference between the rates of those who just started freelancing and those who are more established, which is perfectly fine. However, we all know that there’s something else going on. People who pay extremely low wages don’t target inexperienced people who are just out of college. They look for decent web designers from developing countries that are willing to work for a very small payment.
Now, here’s the question: is it okay to pay someone from India $70 when you would pay $2,500 to someone from USA for that same job? Is it about bringing more opportunities to developed countries or is it about exploiting people who are vulnerable due to their financial situation? Let’s see what Janet has to say about this.
Please introduce yourself to our readers.
I’m Janet, an intuitive graphic/web designer for conscious creatives and heart-based small businesses. I’m interested in passionate people making positive change. I guess that’s my “elevator pitch” but like attracts like and I’m finding there’s no shortage of amazing people I make connections with.
Why did you get into design in the first place?
I knew I wanted to be a graphic designer since sophomore year in highschool when I job shadowed one who worked for a sewerage agency. Not a glamorous design job at all, but he talked with so much passion that really attracted me and made a big enough impact that I chose to make that my career path! Before then, I had no idea that “graphic design” existed but I was always interested in art since the moment I could hold a crayon at age 2.
What is your professional design-related experience?
I taught myself html when I was 13. So I became a “professional” web designer when I got on the WordPress bandwagon and slowly got into paid gigs. I now spend most my time designing e-books, opt-ins, logos and websites for solopreneurs. My first professional design job straight out of art school was a graphic designer for a souvenir company.
What is the difference between working as a designer in USA and working as a designer in Philippines? What about the difference between presenting yourself an American designer or as a Filipina designer? Do clients treat you differently depending on where they think you live or what nationality they think you are?
I have experienced day jobs both in the US and Philippines and I have to say that people in the US have it easy. In general, there is a lack of organization in Philippine companies and less worker protection. Working overtime is a norm, so it’s not just 40 hours a week, it’s also 50+ for less than you’d earn in the states. I definitely think there’s some influence as to presenting yourself as a US based or Philippine designer. It takes some branding skills to avoid getting taken advantage of. Since its often assumed that you outsource to Filipinos, I struggled with this early on.
You’ve mentioned on your blog that this month you will be breaking your personal record for income while self-employed. However, in the past you’ve had a full-time job that pays only $400/month, as well as your share of low-paying clients. How did you get out of this and started earning decent money?
It’s a mindset shift. As simple AND hard as that. I think I had collective cultural baggage of being a Filipina. I had never felt like a minority in the states because it never affected me until now. The poverty consciousness was something I had to work through emotionally. I trained myself to be in an abundant mindset. I’m big on personal and self-development so I’m grateful for this path because it’s been a big learning curve.
It’s also important to brand yourself in an empowering way. Rather than promote myself as someone who lives in the Philippines, I say I’m location independent and a digital nomad, and I work with clients from around the world. I reject the outsourcing business model. That’s not what I do. Slowly but surely, I’m learning how to stand in my power.
There are a lot of designers from the developing countries that feel that they are being massively underpaid. However, they feel stuck because they don’t know how to raise their rates, get better clients, and earn more. What would be your advice to people who are in this situation?
It’s tough because I’m fortunate to have the Western background of being raised in the US, which does help. There’s a sort of colonial attitude that we’re somehow ‘under’ Westerners and with outsourcing, it’s viewed as helping developing countries because it provides jobs. I don’t think its that black and white.
More designers should stand up to low rates and not accept them. The more you accept low rates, the more that you will continue to receive low rates so why not help the industry out and raise the standards rather than be part of the problem? Thinking outside the box is also good.
The time = money model isn’t very scalable so thinking more entrepreneurial in regards to solving problems and offering a product could be more rewarding in the long run.
Technology is empowering and it’s also the greatest equalizer. Most people in developing countries don’t see that because they’ve also been taught that they’re not equal, so you have to empower yourself and despite external circumstances, it starts from within.
Keeping in mind that there are low-paying clients who are tight with their budget and high-paying clients who are after quality. But high-paying clients are suspicious when hiring people, especially from developing countries. How can designers from developing countries present themselves in a way that would dispel doubts of high-paying clients?
That’s a great question because it addresses the fact that low-paying clients tend to hang out in this cesspool. People in developing countries tend to get this low hanging fruit. My advice would be to reject the outsourcing business model. It’s tricky, and I’m not even sure what that would entail. But “outsourcing” just has that connotation that attracts low-paying clients so it’s not the right brand to pursue if you want higher paying clients.
Many designers from developing countries feel uncomfortable with charging the same rates as their counterparts from developed nations because it seems “unfair” to them since the cost of living is higher for developed nations. How can designers from developing countries overcome this mental barrier that keeps them from charging more?
Yes, there’s some truth towards having a lower cost of living, so charging a US price seems counter-intuitive. But there are still ways to earn more and increase your livelihood because you DO deserve to live more than paycheck to paycheck. I’m not saying you should be making $100/hr. but you shouldn’t be making $2/hr either.
Ask yourself what’s a fair price to work towards. There’s this cultural emotional baggage that’s a collective experience, and you’ve got to break through the scarcity mindset. I’ve really benefited from personal development techniques like EFT.
If you are hiring someone for a minimum wage job, aren’t you justified in paying a person living in the USA $1,160/month and a person living in Lithuania $360/month for the exact same job. Many employers justify this by saying that they’re paying them the equivalent amount of what they’d make on their own country. What’s your take on this?
As I said, it’s not so black and white and I believe there needs to be more education on both ends; entrepreneurs and workers in developing countries. On one end, you shouldn’t be a “slave master” and I’ve talked to Western entrepreneurs who have outsourced and secretly feel guilty about that issue. And on the other end, you shouldn’t happily accept $300/mo. especially if you’ve got a full family to take care of. I don’t know how locals do it! I also love the phrase my VA friend said: “If you pay peanuts, you get monkeys!”
Outsourcing to developing countries is becoming more and more popular among entrepreneurs. However, the ethical side of it is quite a complex topic, since on one hand, it provides a lot of opportunities to people from developing countries, while on the other hand, paying someone from Philippines way less than you would pay someone from USA seems like outright racism+nationalism when you think about it. What is your take on the whole thing?
I see it as a kind of colonialized attitude. It’s a slippery slope and I think there’s a lot of room for improvement and education on both sides. And it’s not just Caucasians who are outsourcing. I know Filipino-Americans who are taking on this model and starting businesses to provide for Filipinos. The upside is they want to help raise the livelihood of Filipinos and create a stronger middle class. I don’t have all the answers and outsourcing is neither good or bad. But we are a globalized world and outsourcing is here to stay. There are still many opportunities for better solutions.
You’ve said on your blog that if you pay peanuts you end up hiring monkeys. Honestly, I never understood the obsession with hiring people who are willing to work for ridiculously low amounts of money, because it seems to be counterproductive in the long run. Would you agree that it’s penny wise and pound foolish?
I agree that it’s counterproductive in the long run. It might end up costing you more money in the end, because it’s the difference of hiring a professional from the start, vs. outsourcing and then having to backtrack and hire people to fix it. The quality of work IS usually less because outsourcing businesses tend to hire people straight from college and train on the job just so they can pay their employees even less. You’re not hiring professionals. You’re hiring people who are still learning and who knows how organized their internal systems are!
What would be your advice to young people from developing countries who want to become professional designers (and get paid as such!), but are at the very beginning of this path?
On the job training can work if you’ve got good mentors, so look at the team before you decide to take on a job. Job interviews should be as much interviewing the company as they are interviewing you. Look for internships or apprenticeships. Don’t underestimate the internet beyond Facebook. As I said, it’s the greatest equalizer. You can find the latest Western-based design trends and learn from example. Read and learn as much as you can through design blogs. Find a niche that interests you so you can stand out. If you love outdoor sports for example, you could design specifically for outdoor sport companies and start to brand yourself within that niche. Don’t just be a designer. Be a designer for a particular passion. You’ll stand out & be less generic.
Last, but not least (and slightly off-topic), you have this crazy experiment going on right now, your “Live on $2/day” challenge. That sounds quite extreme! Can you tell us more about it?
I’ve been quite lenient about it. I’m living on $2/day but relying also on “gift economy” which also just means my boyfriend gets to pay for me. The idea behind it isn’t to limit myself with a poverty consciousness but see exactly how abundant we are if money weren’t a consequence. There’s a lot of options when you choose to simplify. It doesn’t become limiting, but very freeing! I’m also selling stationery for $2 and donating 30% to my favorite non-profit, Her Star Scholars.
Thank you, Janet!
In a nutshell:
- As a web designer from a developing country, you have to understand your worth and drop the limiting beliefs regarding your nationality, because only when you do that you will be able to successfully charge reasonable rates.
- You don’t want to be dealing with low-paying clients for the rest of your career. It’s okay to take on questionable jobs when you are only starting out, but it shouldn’t become a habit, and you should move on from that as soon as you can. Keep in mind that clients who pay the lowest fees are also the ones that are the hardest do deal with.
- There’s nothing wrong in charging your clients western rates even when you live in developing country. Think about it: if a web designer from USA would move to your country, would they start working for $2/hour, or would they keep charging the same rates as they did when they were living in the states (assuming they work with international, not local clients)? You are under no obligation to adjust your rates based on the country you are living in.
- Take time to figure out how you can present in a way that would allow you to attract high-paying clients. Good branding will help you to avoid being taken advantage of. What can you do in order to distance yourself from the “cheap labor from the third world” image?
- As an entrepreneur, it’s important to understand that when you pay someone low rates, you will not get the same quality as if you would pay someone a decent amount of money. People from developing countries are not living under a rock, they know what the international industry rates are, and therefore understand that you are being a stingy douche when you try to hire someone for $2/hour. People who know that they are being exploited simply won’t give you their best.
Here three articles that are really valuable to web designers who want to increase their rates:
- Ramit Sethi explains how you can earn more money as a freelance web designer.
- Pricing your work: how to guarantee that the price is right
- Quality-price-ratio in web design (pricing design work)
Pay attention how important your positioning is. Charging lower rates doesn’t necessarily lead to more clients. Would you rather position yourself as someone who is willing to work for peanuts or as someone who knows their work and has their price that is non-negotiable? Think about which person you would like to work with if you would be a client with a decent budget.
Guys, what are your thoughts on this whole issue?
Have you ever struggled with being underpaid because you are from a developing country? Have you ever hired someone from a developing country for an extremely low rate?
Is outsourcing an ethical thing to do?
Let me know in the comments!