Of course, I would write about the cost of contract labor.
Race to [Get to] the Bottom [of This]
Of course, I would write about the cost of contract labor.
Yes, I have a horse in this race; I have skin in the game; I have a literal 100% stake in the company. Consequently, I HAVE to discuss this even at the risk of sounding defensive. I take the risk for the broader goal of education as I often get asked about the nature of my rates (which go beyond even what an independent contractor would charge but with additional value). I believe that it remains an important reminder for ethical hiring practices but also in the face of a world that has gotten more expensive. While most salaried employees in the United States will see 2–3% average cost-of-living salary increases this year and moving forward, independent museum professionals (IMPs) or independent contractors do not raise prices often nor do institutions raise their budget expectations for contractors often enough. While museum employees unionize and strike, freelancers’ rates have largely stagnated. This post does not aim to bemoan hiring managers like a condescending adult (“you should know better…”), but to inform.
I will caveat this whole piece by saying that it takes 2 to tango. In other words, contractors themselves should also avoid working for less than their preferred rate if at all possible. By working for less than you believe you are worth, you set a precedent and help to establish a “market rate” for the job. If you work for less money, I recommend seeking other forms of non-financial compensation such as recommendations to other potential clients, use of a client’s name in promotional materials, an guaranteed extended period of work, or something else of value to the contractor.
Despite (or because of?) my obvious position, I will let someone else do most of the talking on this subject of independent contractor rates. In 2021 in the midst of the COVID-19 pandemic, the American Alliance of Museums (AAM) released this article by MJ Hagan and Avi Decter called “Ethical Contracting: Is Your Museum Doing It?” I will include some excerpts of that article as well as the companion paper put out by AAM and the Association of Registrars and Collections Specialists (ARCS) “Working with Independent Museum Professionals A guide to help museums find and work with IMPs”
IMPs spend approximately 25 to 35 percent of their time on non-billable hours, which includes creating proposals. If you’ve narrowed down the list of bidders to the final candidates, consider compensating them with a stipend for their proposals.
This seems like a good place to start in “Ethical Contracting…”
In addition to their base pay, salaried staff at museums typically receive around 30 percent in fringe benefits, plus paid sick leave and vacation time. The museum also covers the costs of overhead—workspace, utilities, and insurance. IMPs, in contrast, must cover all these costs themselves. Thus, consultant rates two or three times higher than the going rate for staff salaries are generally closer to equivalent than would appear at first glance.
Consider, also, that rarely does a contractor work the same number of days as a permanent employee purely based on the timing of jobs. In other words, one rarely ends one contract and immediately begins another on an indefinite basis. One has to constantly generate more work and projects do not often adjust to a contractor’s schedule. As a result, when a contractor does not work, they do not get paid.
From “Working with IMPS…”
IMP Rates
The prices that IMPs charge can vary enormously, and may depend on a range of factors such as experience, value provided, locality, costs associated with the project (equipment, travel expenses, materials and so on), the ‘going rate,’ competition and demand for services, the length of the project, the complexity of the project and the project risk.
In general, regardless of whether an IMP employs an hourly rate, a day rate, or a flat fee, an IMP should be paid more than an employee. It is neither fair nor appropriate to take a comparable employee’s annual salary and split it by the number of working days to give you an indication of an IMP’s day rate, as this does not take into account:
• The additional costs that IMPs incur (e.g., business insurance, self-employment taxes, retirement contributions, professional services such as accounting, IT equipment, subscription services and tools, office space, training, marketing)
• That IMPs cannot spend every working day on billable work as they need to spend time on new business development, marketing, accounting, training and self-development, office administration, etc
• That IMPs do not have any paid annual leave or paid sick leave when reviewing IMP rates, it can be helpful to keep all these expenses and factors in mind. After expenses, taxes, and benefits, the ‘take home’ pay of an IMP is considerably less than their rate. When negotiating rates with an IMP you should be respectful of their right to determine the value of their own labor.
I will additionally offer that proposals from independent contractors often contain plans for realizing large projects that get appropriated as the new “scope of work” by a hiring institution while they decline to proceed with the contractor who devised the plan in favor of in-house help or a separate contractor altogether. A nefarious practice all too common in the field.
Naturally, every hiring institution will respond that they just do not have the budget to pay more despite wanting to do so. While I understand the argument, I also see the amount of money spent on other tasks and services. Simply put, it is not a priority. Next fiscal year, either ask for fewer credentials in return for a lower pay rate, or pay more for experience while reducing other costs (hello, traditional couriers). One even could take a more holistic approach and hire fewer permanent staff and hire specialists as needed. Here you save on employee benefits which averages $12.77 per hour worked and translates to roughly $26,561.60 annually for private industry workers according to the Bureau of Labor Statistics.
In summary, contractors should say no to low-paying jobs in order to push up the market rates, or at the very least, demand non-monetary compensation for their time.
Institutionally, attempt to cultivate a reputation as a great place to work and attract the best contractors to your field. Often, the best way to reduce costs on a project is through efficiency provided by an experienced hand at the helm. “Buy cheap buy twice” as the saying goes.
Despite what seems like a take-it-or-leave-it tone, I do not wish to suggest an adversarial relationship between institutions or contractors. Far from it. Most contractors come from institutional positions and fully understand the handcuffs in which hirers find themselves. I see it as the contractors’ job to educate the institutions as to their position and merit as well as to stand up for themselves.
