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We had a potential client respond to a ballpark costing today and his response floored me.
His suggestion was that our hourly rate should be £20/hour as…
“Times have changed & are extremely challenging now, everybody's costings need very careful consideration”
His suggestion was that our hourly rate should be £20/hour as…
“Times have changed & are extremely challenging now, everybody's costings need very careful consideration”
That's obviously way off our hourly rate.
We're an agency of 30+ people and our typical hourly rate is in the £80-120 range depending on the work.
We never negotiate purely on cost but lets play a game and see how £20/hour stacks up
We're an agency of 30+ people and our typical hourly rate is in the £80-120 range depending on the work.
We never negotiate purely on cost but lets play a game and see how £20/hour stacks up
For those that don't know, we're based in Sheffield in the north of England.
Our average salary is around £32,000/year. How does that break down to an hourly rate?
Our average salary is around £32,000/year. How does that break down to an hourly rate?
There are 52 weeks in the year, we provide 5 weeks holiday and there's another couple for bank holidays and random days.
That leaves 45 “working" weeks in a year, we'll ignore downtime, travel, sick days and training at this point.
That leaves 45 “working" weeks in a year, we'll ignore downtime, travel, sick days and training at this point.
We charge for 7.5 hours in a day, so that average salary of £32,000/year would equate to an hourly rate of £18.96.
Amazing, we might be able to work with this company and still make money!
Amazing, we might be able to work with this company and still make money!
Oh but wait!
We have to pay Employers National Insurance, approx £3,000 year on our average salary and contribute to pensions, at least £960 year.
Our £32,000 is now £35,960 a year!
Can we still do it?
We have to pay Employers National Insurance, approx £3,000 year on our average salary and contribute to pensions, at least £960 year.
Our £32,000 is now £35,960 a year!
Can we still do it?
Obviously no.
We're past £20 hour already, at an hourly cost of £21.30!
And we've not considered:
Electricity, heating, offices (yep, still a thing), internet, software, non-billable team members(!), training, travel, sick days, down time.
The list goes on.
We're past £20 hour already, at an hourly cost of £21.30!
And we've not considered:
Electricity, heating, offices (yep, still a thing), internet, software, non-billable team members(!), training, travel, sick days, down time.
The list goes on.
But when you're hiring an agency, that £X/hr comes with the support and knowledge of our entire awesome team backing it up.
So the value provided goes through the roof.
So the value provided goes through the roof.
So whilst times are tougher than they were 6 months ago, I think we'll decline to work for £20/hour and lose money on the deal before we even start 
Times aren’t that tough
Times aren’t that tough
