Freelancers Feel the Squeeze, Too

Thanks to Rose for letting us know about this article regarding freelancers in AdWeek Magazine...

Aug 3, 2009

- Noreen O'Leary

NEW YORK Consider the current work situations of two creative freelancers who made their names with high-profile, award-winning advertising: One, a writer based in New York, agreed to chop his day rate by one-third for a miserable assignment and 12-hour workdays. He didn't have much choice, having worked only four other days this year. Another, a West Coast art director who previously enjoyed a day rate of between $1,500 and $2,500, is close to giving up on freelancing and will relocate, if necessary, for a staff job.

Over the past nine months, as layoffs and hiring freezes became the norm, freelancers might have expected to see their part of the business hold up in an otherwise bleak employment picture. But even established freelancers say there's less agency work these days and what was once a lucrative lifestyle is coming under the same budgetary pressures as everything else in the industry.

"It's brutal out there. People are cutting fees," says Liz Gumbinner, a former Deutsch cd who runs a Web site, CoolMomPicks.com, and consults on social media and online strategies to offset the decline. "It's certainly different than when I started freelancing eight years ago, [when] I could have double- and triple-booked jobs. If you worked more than 12 hours, you would get paid 50-100 percent more for the day. Now, agencies are cutting fees, taking 90 days to pay. You work a five-day week for a three-day rate."

Lots of freelancers are nervous, many for the first time in their careers, Gumbinner adds. "They may have been freelancing for 10 years, but they're panicking now and thinking of taking staff jobs," she says.

Many agencies, already in cutback mode, now include the cost of freelancers in comparative ratios that monitor expenditures by measuring salaries to revenue. In the past, many agencies could spend on freelancers without impacting those comparisons, but it now affects them and raises red flags.

Richard Pels, a cd who has worked at Saatchi & Saatchi and BBDO and has been freelancing for about 10 years, says he knows one creative manager who asked her agency to increase her freelancer budget from $2 million to $2.5 million. Instead, it was cut by $1.5 million to $500,000. "People are making you a temporary staffer rather than a freelancer because they have no freelance budget," Pels says. "It's catch as catch can, but even more so because there's more competition and less freelance work available."

Amy Hoover, evp at recruitment agency The Talent Zoo, says talent supply is making for a tough market. "On the traditional side -- and I don't want to insult anyone -- the fact is, talent is a dime a dozen," she says. "There are so many people on the street because of layoffs. Historically, there were freelance jobs in other downturns, like the early '90s and in early 2000, and work picked up for them because there were so many cuts at agencies. There's no 'normal' these days, and there's [no] money."

Adds another observer: "People who are used to getting $3,500 a day are now getting $1,500. Even heavy-hitting teams are not getting work."

Many freelancers say it's fairly standard now to settle for two-thirds of what one might have commanded two years ago. One industry veteran, used to a day rate of $1,500-2,500, is now settling for $500-600. Pels, who also teaches at the School of Visual Arts in New York, says young freelancers will take as little as $100 to $300 a day. "It's a buyer's market," he says.

A creative manager at a large New York agency confirms: "There's big-name talent available, and they're negotiable."

This executive adds, "In some cases, a day rate of $2,000 goes down to $1,000, but it depends on the size of the project and the kind of talent. There's a whole range: It could be $200 a day or $2,000. ... It depends on what they're doing, their skill set and role on the project. For a month-plus, say 38 days, it could be $45,000. For new business, it could be $30,000 and a bonus."

One freelancer says some agencies are using project fees rather than day rates to "get as many nights and weekends as possible."

Indeed, the fundamental nature of the freelance business may be changing. "The gang bangs where agencies put 20 people in a hotel room -- I don't see that kind of effort or money being spent," says one recruiter.

A journeyman freelancer concurs: "There's more pressure on agencies to come and do it with existing staff."

Expenses have come under the knife as well. "Agencies are cutting down on out-of-town per diems," says Gumbinner. "They've gone from putting you up at the Sunset Marquis to the $89 place by the airport."

Dany Lennon, president at the Creative Register, doesn't include freelance placement in her business, but will do it as a favor to clients. "It's all about repeat business," she says. "Anyone with established relationships is working. Agencies aren't going to take a risk with someone unknown to them. Those who are new or less than famous will find it hard."