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Dear Writingfourmylife: I’m Cheap

23

Sorry folks. Try as I might, I couldn’t find the humor in this one….

 

“Dear Writingfourmylife,

—-Thank you for submitting a proposal for: “Need someone for writing articles find online”. Unfortunately, the buyer has declined your proposal for the following reason:

Project Name: Need someone for writing articles find online
Buyer Reason: Bid is too high“—-

I get these pretty much every time I decide to give placing bids on popular write for hire sites another try. Back when I first started freelancing and didn’t know anything about these job marketplaces I thought that maybe I was being unrealistic. After all, there are tons of folks bidding left and right and getting the jobs. I took the time then to consider some of the portfolio’s of those I was bidding against and in some instances was shocked by what I found, and in some cases intimidated. The level of skill is certainly wide ranging, but I satisfied myself that I am well within a competitive scale. I had done more than a cursory amount of research into what constitutes acceptable rates, and once I managed to beat down my overly optimistic self assessment, had settled on a range I felt was honestly commensurate with my abilities.

I’ve done enough work since my first entrance into the freelancing marketplace to have received a fair amount of feedback, and to date have yet to be given anything resembling a poor evaluation. In several proposals I have made, my work and writing style is singled out as “really great” despite their decision to decline my offer. So what is the problem then? If I go the slow and difficult route of chasing down work, making direct contacts, and working on a wholly independent level I invariably find good reception and will eventually land a contract that pays somewhere within the range of my established rates. This is fine and in fact the real way to operate as a freelancer. However, until you are established and have mastered the art of self marketing, it’s a slow and painful process.

 If I go to any of the jobs marketplaces however I find myself repeatedly told I am too expensive. This happens in spite the fact that when I frequent those places I often reduce my usual rates by half. Obviously there is something at work here I was overlooking. So I spent still more time researching rates, their fluctuations, and the averages. This led me to note some trends; most notably that of foreign workers consistently making offers far below those of their counterparts in my own country.

And so there it was, Outsourcing. To be more precise, the problem is the outsourcing of jobs and contracts to offshore providers. Although the mantra today is “Global Economy”, too much emphasis has been placed on the size of the global marketplace and not enough on the lack of market uniformity or regulation. While it may be true that expanding the marketplace beyond national borders increases the pool of available goods and talent, which is supposed to promote competition, it is also true that differences in economic and cultural characteristics can have a massive negative impact on the quality of the marketplace as a whole. Far from creating competition and a wide pool of resources, rates can become depressed, overall quality standards may suffer, and domestic workers can find themselves unable to compete at all as employers ignore them in favor of rates that are impossible to match in western countries.

The attractiveness of outsourcing lies in the greatly reduced costs associated with hiring offshore workers. In nations where the standard of living is well below that of their western counterparts, and economies far weaker, the value of western currency holds a great deal more power.  India for instance has a third of the world’s poor and is classed a poor country by the World Bank. Over 80% of its population lives on under $5.00 U.S. dollars a day. To give some perspective, a U.S. Dollar is worth approximately twenty two times its Indian counterpart the Rupee. What this means is that western currency like the U.S. Dollar has immense buying power in the Indian economy. In the U.S. a dollar will buy you a soda, in India it will help feed you for a week. It is no coincidence then employers seeking to lower expenses through reduced production costs and decreased salaries have made India and its ultra cheap labor pool the biggest recipients of outsourcing from western countries. No coincidence at all.

Although India has made several inroads towards improving its economic situation through improved education and increased focus on improving infrastructure, its median income still lags far behind most economically developed nations. Even though India now has huge numbers of engineering and technical graduates, the quality of their education is below that of western graduates. In an attempt to shore up India’s lagging quality and production standards, the country increased the rate of graduations yet failed to significantly improve the quality of that education. This has led to Indian graduates still being unable to compete with their western counterparts on a skill to skill basis, and thus still being unable to command similar rates.  The end result is an even greater influx of lower paid workers into their respective markets, further driving down labor values.

  Compounding the problem of a weak middle class and a disproportionately large poor population are India’s serious problems with international trade disparity. Consider true free market trade for example. India has made huge gains in acquiring access to foreign markets like the U.S. However, India practices what in the U.S. would be derided as protectionism and places great restriction on foreign access to its own markets. Business.com cites an agricultural example of this and notes that India has one of the most protected markets in the world. In justifying this protectionism in India’s agricultural markets for example, India’s commerce secretary stated,  

“For us, it is a livelihood issue of some of our poorest citizens….. We cannot allow the whole groundnut economy of Andhra Pradesh and Gujarat to be wiped out for some economic gains.”

In other words, they want access to foreign markets because of the huge profits they represent, despite the fact that their low economic standards have a severe detrimental effect on those markets, but they refuse to allow foreign access because they fear harming their own markets.

To me this says that far from wanting to participate in the “global economy”, these poor nations like India are in fact interested only in exploiting the weaknesses of global trade. There is no concern on India’s part, or other countries that enjoy widespread outsourcing from western nations, for the welfare of the national and international markets and those who operate within them. Because of their ability to flood international markets with rates up to 80% lower than their western counterparts, they are able to eliminate competition outright. This does a serious disservice to everyone, the offshore worker included.

 As companies have as their most important criteria the reduction of costs, the rates held by these markets are then highly sensitive to fluctuations in perceived supply regardless of its quality. Rates drop unnaturally as companies insist on applying the lowest available rates regardless of their origin or viability, as the new normative state. This is an unnatural reduction in value however because these lowest rates do not represent an improvement in quality or production. They do not represent a reduction in demand and they are not a product of organic competition. These lower rates are produced only by the offshore worker’s ability to operate outside the market conditions of those they are competing against within that market.

Where a simple graphic design project once may have once commanded rates in the $250.00 – $500.00 dollar range, the influx of devalued labor from offshore providers kicks those rates down up to 80%, resulting in a huge net loss for all providers across the board. This is unfortunate considering that the highly underpaid offshore workers are those who stand to benefit the most if rates remained intact. But there is yet another problem that is preventing this and as unpopular as it may be, I’ll say it outright; the quality of offshore work is generally lower than that produced on-shore.

Were offshore workers truly more capable and producing results that exceeded those found in the U.S., they would have no problem commanding competitive rates. Rates which would go a long way towards improving their own economic standards. However, this would necessitate them actually having a competitive capability. Were they to try commanding rates commensurate with U.S. standards, they would overnight find themselves without any work. They get the work because they are dirt cheap, and that as any professional who is willing to honestly tell you, is the bottom line. Consider for example-

“American firms were beginning to move call centers and other back-office operations — or “in-sourcing” — back to the U.S. because costs in China, India and other top outsourcing countries had risen sharply and quality hasn’t been consistent.” –(La Times : U.S. jobs continue to flow overseas)

“Nearly 50% of outsourced projects fail outright, or fail to meet expectations.

51% reported that outsourcer was not performing to expectations.” -( Aberdeen Group. )

“Only one-third of those executives that have abandoned off-shoring would seriously reconsider it even “if both security and quality issues could be satisfactorily mitigated,” –(IT Today)

Perhaps the most disconcerting thing about all of this are the attempts by employers to apply the devalued rates off-shoring represents to market niche’s as a whole. As a writer, my work obviously involves holding a solid grasp of the necessary language for my region, which is of course the English language.

Employers state outright in their job postings that they will only consider fluent English speakers or those who have English as their native language. This is the tipoff that they are already well aware of the poor quality of outsourced written content. However, although they are willing to abandon the non native providers work, they are not so willing to abandon his rates. This is where I am finding most of my job marketplaces bidding problems are coming from. I have no doubt this is the same for other markets as well.

 This is the true damage from outsourcing that western nations face and in fact ignore. If only it were possible for us, the workers who make up the bulk of the marketplace labor to also ignore it.

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This article has 23 comments

  1. I decided to return the kind favor of you commenting on my blog to come over and see how they might overlap in topic. Let’s just say that I’d be in big trouble if I tried to outsource to India (wink, nudge).

    Snarkiness aside, I totally agree with you on your points. I’m not sure whether to feel excited or guilty about some of the stuff that people will do for $4 over at fiverr.com ($1 goes to the site).

    ((Sending prosperity MoJo)) Mahalo, Kirsten

    • paul novak 10/08/2010, 6:26 pm:

      Oh boy. Fiver eh? Did they ever start a brouhaha or what then they appeared?

      Maybe you SHOULD try tapping into some foreign markets. Bet it would create some notice;)

  2. Rick LaPoint 10/07/2010, 1:56 pm:

    There is so much to this article, I don’t even know where to begin.

    The issue that really jumps out in your post is the warping of expectations. The idea that “we need higher quality than we were getting overseas, but will only pay you those same overseas rates,” is infuriating.

    Not just to those being rejected for “over-bidding,” but for the end customer as well, who is on the receiving end of a poor product or service.

    Ross Perot certainly nailed it when he predicted that “giant sucking sound” we would hear with the loss of American jobs as a result of the “global economy.”

    grrrrr

    • paul novak 10/08/2010, 6:24 pm:

      Yep. That’s the BIG sore point with me. Just because someone is offering cheaper, DOES NOT mean rates must change. If someone can get it cheaper, by all means, go right ahead. I do get a certain amount of enjoyment out of the return requests that sometimes appear wondering if I would like to make another bid. Usually after they have tried going cheaper;)

  3. Doc Sheldon 10/07/2010, 3:45 pm:

    Great piece, Paul! You obviously did some research on the issue, aside from living with it. I think you nailed the economic analysis.

    As a writer, I have experienced the same…”Wow! Your work is fantastic, but I have this guy in India…” It’s certainly frustrating, and has definitely made itself felt around my household.

    I have chosen the approach of simply focusing my efforts on word-of-mouth recommendations. Strangely enough, the vast majority of my gigs come from overseas – clients that want to strengthen their footing in the US market, and that have realized that broken English on their webpages isn’t the best approach to do so.

    As a strange twist (and one that both amuses and pleases me), one of my regular clients is a high-end SEO firm in India. After seeing my work, they never hiccuped when they heard my price quote. Companies such as that will probably eventually have the greatest impact, forcing their local standards (and the associated costs) to rise to expectations.

    Indians, as a rule, I have found to be understandably prone to deal with other Indians whenever feasible. I am seeing increasingly, however, firms that are following the quality, rather than the price.

    You probably aren’t old enough to remember when “Made in Japan” was said with a sneer. Quality, initially, of Japanese-made products was atrocious, at best. With increasing demand for quality, it came.

    Later, “Made in Taiwan” followed the same curve. We are very early in that process for the “Made in China” market, but I have no doubt they will follow suit.

    I see no reason to predict a different outcome for India, although I do believe it will take longer, since that market is more service oriented than product driven.

    The question is, how many western providers will still be around when it’s all said and done?

    • paul novak 10/08/2010, 6:22 pm:

      Oh, I remember Japan being synonomous with cheap and poor quality. There’s more grey hairs appearing every day over here;)

      In the research I’ve done, I’ve ended up with a similar observation. It seems that the questions surrounding outsourcing to off-shore providers are beginning to grow in number and volume as companies find themselves saving far less than they had expected because of all the problems they have to rectify. On top of it, there is quite a bit of corruption involved as a lot of these offshore companies utilize less than ethical practices that they’d never get away with here in the U.S.

  4. Sherryl Perry 10/08/2010, 4:59 pm:

    Well, Paul you’ve certainly painted a realistic picture of the affects of outsourcing. Corporate greed is alive and well in the USA.

    My husband and I have always tried to support our national economy and for years have been attempting to buy products made in America. Even back in the 70’s this was difficult to do. Now, it’s nearly impossible since manufacturing is virtually nonexistent in the states. Outsourcing creative work is no different than outsourcing manufacturing.

    Personally, I don’t believe our situation will ever improve until we as a nation band together to support each other. Where is the pride in “Made in the USA”? When my husband and I dabbled in manufacturing a couple of years ago, we outsourced all of our CNC machining to machinists in other states but absolutely refused to go overseas. It was tempting to outsource for a fraction of the cost but we were promoting a product made here and refused to budge. Unfortunately, many people in the USA buy only on price. Until, we wake up as a nation and start a movement where we support our national economy, our future seems gloomy at best.

    As always, thanks for making us think. I do miss your usual sense of humor but obviously there was no place for it here.

    • paul novak 10/08/2010, 6:17 pm:

      Thanks Sherryl. I think the apathy of our public has a lot to do with it, but I also think our elected officials need to begin thinking long term and about how their trade deals and agreements are going to affect the nation as a whole. The idea that simply opening up markets to all options simply isn’t reasonable. While it might make it cheaper for businesses to conduct operations, those savings don’t translate into savings for consumers. Worse, the engine of the economy, us, takes a beating and becomes worth less. Not a good trade.

  5. Susan Oakes 10/08/2010, 9:12 pm:

    Hi Paul,

    When I had a software product I would get many phone calls and emails from Indian software developement companies and still do trying to get work. They sometimes put in prices that are far below what would be normally charged.

    I am not a writer and for one project did look at one of these sites. My perception is that all bidders will be cheap and not very high quality and if you want to take more time correcting the work then you would use one of the providers.

    I could be totally wrong but I am wondering if you are actually doing more harm to you business by bidding on these sites because if my perception is the norm then your quality work will not be considered. Also as you mentioned they will always undercut the price.

    • Dennis Salvatier 10/08/2010, 11:29 pm:

      I see what Susan means. I was referred to similar sites by a fellow designer, but for graphic design jobs. Immediately I saw the rock bottom prices and knew I didn’t want to be a part of this. In my opinion, this sites exist to do one thing only — devalue what we do for a living. What you do isn’t easy and it should be done for those that can appreciate what you do and how you do it. I’m afraid these outsourcing sites aren’t going anywhere.

      • Paul Novak 10/09/2010, 2:17 am:

        Really good points guys.

        I don’t think there is much harm Susan, besides the rather rough reception other writers may sometimes give you when they find you do bid there now and then. It’s something of a waste of time, but I do have to be honest and say that one of my best clients was found on one of those sites. However, that client was found after a great deal of time spent bidding. The return would probably have been better making proper pitches.

        I wish that were the case Dennis, but as I mentioned, the rates are being embraced as the norm by potential clients which is where the main danger lies.

        I never recommend any of these sites, and only refer people with great reservation and warning.

        • Dennis Salvatier 10/20/2010, 3:44 am:

          Hey Paul,

          This is in regards to designers, but I thought you’d like to read this anyway.

          http://mashable.com/2010/10/15/behance-competitions/

          • paul novak 10/21/2010, 3:12 am:

            Thanks Dennis. I finally had a chance to read it through and see why you would want to drop it off here.

            Good example of how a good thing can be abused beyond all reason. Although I can see how they are trying to add some direction back towards making spec work more beneficial for designers and the like, there is no getting around human nature.

            The moment the call goes out, there will be those hungry enough to devote all their energies and and those who will exploit that willingness.

            Anytime you do something for “free”, or without a promise of payment, there should be a goal or absolute benefit to be had from it before even thinking of taking the work on.

            Thanks for thinking of me and stopping in to drop it in.

            Now I just need to do some of my own “free” work and get a new post put up.;)

  6. Rose 10/12/2010, 1:30 am:

    I do a few paid preview posts. I have to turn down most offers because they are below my set price. Everyone wants everything for free. You pay for what you get.

  7. Rosanne Dingli 10/13/2010, 1:32 pm:

    This is a tough nut to crack, and poses a number of frustrating dilemmas. If you think about it carefully, there are several differences between the Japanese and the Indian historic trade scenarios.

  8. Laine D 10/14/2010, 3:45 pm:

    Look how far you have come! I love your blog and its content and realize that is indicative of your writing style and your professionalism.

    It sucks when people want you to discount your service but the answer is “sure I could do a half as***d job for half the money just like the overseas providers you don’t want to employ but when you want to do something properly call me – I charge the right
    price for the right job (and only charge you 150% to fix what they’ve screwed up) after all I DO understand the nuances of the language and WILL meet your expectations.

    Keep the faith – quality is what it is all about!

    Laine D
    http://www.ThoughtsfromABroad.net

    • Paul Novak 10/15/2010, 3:47 pm:

      Thank you Laine, appreciate it!

      I’ve begun replying to such refusals based on unrealistic expectations of price by showing them what the true going rate ranges are, where my own stand within that range, and then wishing them good luck finding something that will match them in value;)

  9. Melinda 10/21/2010, 4:40 am:

    You are right in there is just no humor in that, but it is funny that I just watched the movie “Outsourced” last week. You are an amazing writer with true talent that is worth a lot. I always say you get what you pay for. If they want something “cheap” that’s what they are going to get. I see the same thing happening in web design which is what I do. Eventually people see what they get with the cheap $200 offshore website and realize there is a big difference. I would hope that more Americans would support their fellow Americans and keep the jobs at home rather than save a few bucks. I see people getting their graphics work done overseas, too, and have had to use the files produced by them. They tend to be very amateur and low quality which I have to fix, and I’m not a Photoshop wiz.

  10. paul novak 10/22/2010, 1:29 am:

    Why thank you Melinda.

    Yes, a lot of what is returned by offshore providers ends up needing to be cleaned up, reworked, or sometimes even just trashed. A few bright spots exist in the news though highlighting how companies are beginning to find that outsourcing offshore really isn’t the big bargain they though it was and moving work back home.

  11. awewriter 10/26/2010, 3:07 pm:

    I’m going to say that we have to know our limits. You know the bills you have to pay and what you have to do in order to get them paid. You want everything, then do what you know you have to do.

    Maybe stop making proposals that don’t work. Find a place that you can fall back on even if you get paid a little less, as long as the work is there.

    But whatever you do begin to publish your own stuff in between.

    awewriter

    • paul novak 10/30/2010, 11:47 pm:

      I have some red flag words and terminology that I look for when considering placing a bid. I also do some checking on the employers history. That’s part of how I try to minimize the amount of time I waste making proposals that fail.

      I have a few gauranteed income streams certainly, but the goal is to rise to a higher level where I consider my goals reached. Which is why I am quickly joining the ranks of those who are beginning to see these places as nothing but detriminental to the overall freelancing markets as a whole.

      Self publishing is definitely in my future if I can ever find the time to do it in addition to everything else.

      Thanks for visiting.

  12. Toffsy Heart 10/30/2010, 10:35 pm:

    Hey, Paul. I understand your point of view, but as you’re providing a few quite clear statements (from LA Times & others) – quality still matters. It always will. I would never go with the cheapest offer, especially if I wanted someone to write an article for me. Imagine getting an article done for $2 and later figure you have to pay $20 for proofreading and editing. Do you mind telling me how much was your bid (or just your average bid)?

    • paul novak 10/30/2010, 11:39 pm:

      Unfortunately you’re in the minority. Most of those posting jobs to these marketplaces wont even consider your bid unless you are in the ultra cheap range. The worst part as I mentioned, however, is when it is clear they understand the reality of cheap vs quality, yet insist on trying to adhere to cheap while still wanting quality. They are happy to abandon the poor quality cheap guy, but they dont want to abandon his rates and instead insist on trying to instill them as the normative rate across the board.

      I’m not real big on discussing what I usually bid, and in truth it depends too much on the vagaries of the work offered to set out any averages. I will say though that for basic writing services I’m in the 30-45 an hour range and that it goes up from there, which is cheap.

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