by HOW

HOW's April 2008 issue featured a Business column on hourly rates for designers. The information was gathered by an online survey conducted in October 2007 that drew 996 responses. Here's what we learned:

Where do you work?

46%  Solo design practice or full-time freelance business
17%  Graphic design firm
31%  In-house design department

If you work in an in-house group, does your group charge the company back for your time?

77%  No
23%  Yes

What is your hourly rate (blended average, for solo practitioners)?

	Average	Low	High
Northeast	$74	$37.50	$150
Midwest	$65	$25	$110
West	$67	$20	$150
South	$68	$25	$350

What kind of hourly rate do you use?

61%  Blended (a single, averaged rate for all billable functions)
32%  Different rates per task (such as proofreading, design, strategy)
 2%   Different rates per seniority level (creative directors charge more than junior designers)
 6%   Other

How did you determine your hourly rate?

28%  Based on a formula including overhead, salaries and other financial factors
46%  Based on common rates for design in my area
37%  Based on a best guess or gut feeling
13%  Other

Do you share your hourly rate with clients?

82%  Yes
18% No

Do you use a time-tracking system?

44%  Yes
56% No

Do you have a "Pain in the A@@" upcharge?

40%  Yes
60%  No

Do you have a rush fee?

40%  Yes
60%  No

What are designers saying about their rates?

"I usually give an all inclusive estimate based on this rate, but will specify that anything beyond the scope of the estimate will be billed per hour."—Northeast

"I find clients prefer to get a quote for a job in its entirety. A per-hour fee makes them nervous, as they don’t know how many hours I will rack up. Quoting a project based on a good faith estimate of what it takes me to to the work assures I get paid fairly for my efforts. Working effectively and completing tasks in less time than I estimate is the equivalent of extra profit. This does not require a change to the original agreed upon fee, or the terms of delivery, and still allows me to meet the expectations of the client. Over the course of a year it also helps compensate for the projects which, take me longer than I expect."—West

"For the most part people freak out when they hear an hourly rate. But are fine when you tell them a project will cost $X. Costs the same either way, but it focuses them on the big picture of pricing rather than the details."—Midwest

"I don’t charge hourly rates, because it hurts the graphic design business as a whole.  I charge based on the task itself, and the value of the task, based on a multitude of factors, such as how and where it will be used, and what type of licensing I am contracting to the client.  Hourly charges make clients relate graphic design work to other jobs, and doesn’t include the artistic talent that is not hard-priced."—South