Navigating the Gig Economy:

7 Strategies to Negotiate Higher Pay and Greater Career Stability as a Female Contractor

“Have it your way” isn’t just the infamous Burger King tagline from the 70s, but an anthem for the freelance economy. And women workers are here for it. Women make up 48% of the freelance workforce, a popular way forward for career autonomy and flexibility, not to mention a way to cash in your skills at a higher rate than traditional employment.

Now, it isn’t just workers who are on board, but employers, too. Organizations can have their cake (in this case, burger and fries) and eat it too with independent talent who offer innovation, flexibility and specialized skills at a lower cost than W-2 employees.

The big question though is: Is it right for you? And if so, how can you ensure competitive compensation as you take control of your career? Take my hand, friend, and let’s wade through the waters of the gig economy together, with 7 tips to bolster your contracting confidence to get paid what you’re worth.

FREELANCE DEFINED

Work from anywhere, set your own rates, dictate your hours and control your workload? Yes, please. This is the life of the average freelancer or contract worker. What is freelancing exactly? It's a fluid work economy where you take on project or contract-based work with different companies rather than making your home at just one organization.

78 million U.S. workers are doing just that, a 32% increase from 2020, per Upwork's Freelance Forward 2022 report. And there is a growing demand. 56% of hiring managers engage with freelance workers and 66% of them foresee leaning further into independent talent for their workforce strategy over the next 2 years. With almost half being women, it’s important to consider how this fits your values, priorities and goals before making the leap.

Photo by Daniel Thomas on Unsplash

THE SKINNY ON CONTRACT WORK

The grass is always greener, but is it? The 2022 Freelancer Income Report touts that women report a higher level of career satisfaction than men, revealing the ongoing potential for freelancing as an attractive alternative to the traditional workforce. Contract work offers women numerous benefits, such as flexibility, autonomy, and financial stability, but it has its challenges, too. Let’s spell them out, shall we?

PROS:

Exposure

Short-term contracts give you a taste of the work you want to do without the full-time commitment, especially in knowledge services fields like IT, computer programming, marketing & business consulting.

Flexibility 

Contract work provides women with greater flexibility to work from anywhere and at any time, making it easier to integrate work and personal life. 62% of freelancers in the U.S. work from home and 72% have a flexible schedule, per Upwork's 2022 report.

Financial Stability

41% of women in the gig economy earn more than in their traditional jobs and 38% increased their savings since starting contract work, according to McKinsey & Company’s American Opportunity Survey.

Career Growth 

Gig work can provide women with more opportunities to develop new skills, work on a variety of different projects (where are my multipotentialites?), and network with clients and other professionals. It can also open doors to in-house, full-time opportunities. So, not only can this be a career lifestyle, but a long-form job search tactic, too.  

CONS:

Perception

Stacking up contract roles can lead to a perception of career instability. It’s an outdated mindset that is being sidelined, but you may still run into it. With that said, there are resume tricks to counteract this narrative.

Lack of Job Security 

Unpredictability is one of the risks. You may experience periods of slow or no business. This lack of job security can make it difficult to plan for the future and maintain a stable lifestyle. 

Lack of Benefits

Contract work does not typically come with benefits such as healthcare, retirement plans, or paid time off, which can be a significant disadvantage. The 2022 Freelance Forward report found that only 28% of freelancers in the U.S. have healthcare coverage through their work. So if you want to be a contractor, securing benefits elsewhere is a must.

Taxes

If you are self-employed, as contractors are, you are responsible for withholding and submitting your taxes, including quarterly estimated taxes. This will require consulting with a qualified tax advisor to ensure you are setting aside (and remitting) the correct amounts to both the state and federal government.

Photo by Fabian Blank on Unsplash

MAKE BANK

As more women choose to pursue freelancing as a career path, it's imperative to hone the art of negotiating. And, ladies let’s get honest for a second. Self-promotion isn’t our forte. Our natural mode of operation is to diminish our accomplishments, beat ourselves up over mistakes and overvalue expertise (which makes us undervalue ourselves in the process). 

And it costs in cold hard cash. Close to 60% of women leave money on the table when it comes to salary negotiation in the job search (per a recent Randstad U.S. report). Negotiating pay can be intimidating, but it's crucial for competitive compensation, especially when you are hammering out new (and ongoing) contracts on the regular. Here are seven tips to bolster your contracting confidence and get paid what you’re worth:

Do your research

Before entering into negotiations, it's important to research the industry and market standards. Knowing the competitive rate for your particular skill set can help you to determine what you should be charging for your work. Leverage salary surveys and industry association intel to provide guidance on fair rates.

Know your worth

When you’re buying any major item (house, car, big screen TV), you do your homework and find out the value of the item. Heck, I spent hours researching the best diaper bag for my first pregnancy. It's important to have a clear understanding of your unique value promise, aka the unique skills and expertise that you bring to the table.

Do yourself a favor and spend the same time researching your market value. Know what you’re worth — for the type of project, level of experience, and industry. Check out a few to start:

• PayScale - An online resource that provides salary data and tools to help individuals and organizations make informed decisions about compensation. https://www.payscale.com/

• Freelancers Union - A nonprofit that provides resources, advocacy, and community for independent workers. Find free contract templates, advice on setting rates, and tips on negotiating fair pay. https://www.freelancersunion.org/

• American Association of University Women (AAUW) - Find resources specific to women to negotiate fair pay. https://www.aauw.org/

• National Women's Law Center - Check out the Equal Pay Today campaign that provides resources and advocacy to close the gender pay gap. https://nwlc.org/

One more thing. Don’t limit yourself to scouring the interwebs for information either. Research can be in conversation, too. Networking can provide valuable insights into the market demand for your skills, as well as opportunities for collaboration and referrals.

Develop a pricing strategy

Rather than relying on a fixed hourly rate, consider developing a pricing strategy that takes into account the complexity of the project, the level of expertise required, and the value that you bring to the client. This can help to justify higher rates and differentiate yourself from other contractors.

To ensure that you're being compensated fairly, track your time and expenses. This can help you to determine if a project is profitable and if (or how) you need to adjust your rates in the future.

Asking for feedback can also provide valuable insights on how to increase your value to clients. Formulate testimonials from their comments for the social proof you need to nab repeat business and referrals. 

Photo by Zest Tea on Unsplash

Negotiate, negotiate, negotiate

Negotiating pay can be uncomfortable but remember: It's a normal part of doing business. If you feel that the initial offer is too low, don't be afraid to counter with a higher rate. Negotiating is not only about getting the best possible rate but also about establishing a professional relationship with your client.

Once you settle on pay, before beginning any work, establish a clear contract that outlines the scope of the project, timelines, deliverables, and payment terms. Having a written agreement can prevent miscommunication and protect your rights as a contractor.

Be flexible

While it's important to negotiate for fair rates, flexibility is essential. Clients may have limited budgets. Be willing (and on the hunt) to negotiate on other terms such as project scope or timeline that can help to establish a positive working relationship on both sides of the table. Consider:

• Offer different pricing packages: Tailor your offerings to specific needs and budgets. For example, you can offer a basic package that includes a limited scope of work at a lower rate, or a premium package that includes additional services at a higher rate. 

• Identify areas for compromise: Perhaps a lower rate on a longer term contract or even a trial project to foster a go-giver relationship with your eye on future work. 

• Determine alternative payment structures: Instead of negotiating an hourly rate, consider alternative payment structures such as a retainer or performance-based pay. A retainer involves the client paying a set amount upfront for a certain amount of work, while performance-based pay involves tying your pay to the success of the project. 

Consider long-term relationships

If you're negotiating with a client that you hope to work with over the long haul, consider this in your negotiation process. Perhaps you can give a little here or there to build trust and establish a positive working relationship while nabbing a fair rate.

Be unafraid to walk away

If negotiations are unsuccessful, don’t take it personally. Be willing to walk away from a project (or client) that is unwilling to pay a fair rate. Walking away is difficult, but it's better than undervaluing yourself and your skills, which inevitably leads to resentment and bitterness about the work (or client).

Ladies, hear me: Your skills and expertise are in demand. Whether you pursue contract or traditional work, embrace a career that fits your values, priorities and skills now. And remember, you have the right to change your mind and recalibrate when life calls for it.