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How do YOU outsource? Hourly vs Fixed Rate

Discussion in 'Black Hat SEO' started by macdonjo3, Oct 7, 2013.

  1. macdonjo3

    macdonjo3 Jr. VIP Jr. VIP Premium Member

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    Personally, I do almost all my outsourcing on oDesk for a fixed rate. I occasionally post on Freelancer.

    Recently, I've been debating whether or not I should try paying hourly instead. I spend $x,xxx-xx,xxx per year on outsourcing alone. Most of it is on programmers.

    Fixed Rate
    Pro:
    Know the cost upfront, freelancer will work efficiently to save him/her time
    Con: Freelancer will try to cut corners, potentially costing you more money in the long run

    Hourly Rate
    Pro:
    High quality work, as it will be done slower
    Cons: Freelancer will work slowly, costing a lot more money.

    So, out of those of you that outsource a ton like me, what is your take on fixed vs hourly?
     
  2. indianbill007

    indianbill007 Jr. VIP Jr. VIP

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    I have been on both sides of the game. Worked as freelance programmer for 5 years and right now I hire and manage programmers to build my ideas. Only hourly billing or monthly billing as worked for me, everything else has failed.

    If you are looking for something longterm and serious project and then never look for a one time fixed bid project, you will always loose money at the end and the product quality will be always trash. There are valid reasons for that.

    I even wrote a blog post on this - http://www.codemongoose.com/hiring-micro-managed-resources-a-codemongoose-perspective/

    To summarize -

    If you have small job like a quick wp fix, or a some quick programming job where quality can be compromized then go for a fixed bid project.

    If you are looking for anything serious, like developing an IM product or any idea you have which you think has potential then ONLY HIRE FULLTIME DEV WHO CAN COMMIT PROGRAMMING Hrs and get paid hrly or weekly or monthly like an employee and just works for you and NOT on 10 projects a time. Only then you will succeed with the product development.

    I speak by experience here.
     
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  3. PrinceVisi

    PrinceVisi Elite Member

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    I would personally tell him how much for the product and when it will be delivered. If you don't deliver on time, you will lose everyday 5% of the final price.

    It makes him work harder, more efficiently!
     
  4. macdonjo3

    macdonjo3 Jr. VIP Jr. VIP Premium Member

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    indianbill007, I actually made this thread after you seemed to be busy on Skype. Glad you found time to answer this for me. You were the one I was looking to hear from. :)

    And yes, I know you speak from experience. That's what I wanted to hear from you, because I know most on here don't.
     
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  5. indianbill007

    indianbill007 Jr. VIP Jr. VIP

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    Doesn't work 99.99% of the time trust me. You are trying to create a working relationship with a programmer who is a smart mature individual, smarter than you that's why you are hiring him.

    Don't expect to enslave him, you will never be able to build a good team with this mindset ever.
     
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  6. sm754

    sm754 Registered Member

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    I wouldn't consider anything but fixed-rate, but I don't outsource programming, just design, writing, graphics...
     
  7. Taktical

    Taktical Elite Member

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    ^ This. Strive to build long term relationships with coders. Design projects can usually be done on a fixed basis, but development is complicated and things can go wrong.

    Here is my method:

    1) Post a project with incredible detail, then (in caps at the top) request that anyone who is applying for the job give a RANGE estimate of the number of hours they expect to need.
    Anyone who doesn't give you a range of hours or at least doesn't even acknowledge your request can't read fucking instructions, so screw them.

    2) Remove anyone with low or weak rep.

    3) Remove anyone with skill sets that don't seem specific to your project or are too vague (if your project is a wordpress template, dont hire a guy versed in C++ or "all programming languages")

    4) The rest, start a dialogue. Depending on how fast they respond and how clear their answer and how well they ask questions, you can make a gut decision. For many things that are long term (ongoing linkbuilders or writers) i will actually hire several, even if i only need one. Let them all try to do the same thing for a few days. The one that has the best results or follows instructions most closely wins the long game. Yes I waste a little money with redundant work, but trust me long term its worth it. I have Odeskers that i've been with for YEARS
     
    Last edited: Oct 8, 2013
  8. apoorv

    apoorv Regular Member

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    For me, it depends on the project.

    It's okay for anything trivial to be fixed-rate, and it doesn't require a top notch programmer most of the time. Anyone who has working knowledge of the language you're looking for some quick work in will be okay for the job.

    For anything that's more than a little complex, and will take more than a couple of weeks, I go for a fixed payment on a regular basis that amounts to a certain percentage of the total cost, and the rest in phases, as the work is finished. Software development can be really unpredictable and *can* take a lot more time than you (or the programmer) would imagine at first, so it's important to ensure that the programmer stays interested all this time.

    It's a little more complex than either a fixed or a hourly payment, but it gets the job done. I also ideally want the programmer to be working only on my project, otherwise it's going to result in unnecessary delays which isn't acceptable to me. There are exceptions when I'm working with an agency that I highly trust, but these exceptions are very, very rare.

    For the rest, content writers, link builders and the like, I just go for a monthly payment and get them to work according to my specifications. That way, I'm accountable for the work they do, and they get paid just based on the work which I think is fair. They aren't involved in a lot of the process... it's me most of the way. There's less risk (and more work, less delegation) but I seem to get better results with it. Fixed rates in these cases, for me, has *always* resulted in utter trash.
     
  9. PrinceVisi

    PrinceVisi Elite Member

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    I am not looking to enslave anyone, but due to the nature of internet and how many things can go wrong, I want to be a bit strict for short term products.

    When it comes for products that are long term, of course you need to build relationships.

    Don't get me wrong!
     
  10. PrinceVisi

    PrinceVisi Elite Member

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    Are you talking about BHW in general or about me on this instance?

    I am not a programmer and IT is not my field, and when it comes to building a website according to my needs, I am forced to outsource.
     
  11. howard_hughes

    howard_hughes Elite Member

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    I've tried both, fixed rate & pay per month (I've been hiring people on full time).

    When you pay on Hourly / Monthly Basis
    The thing is that, when you pay them for full time, they tend to be a bit lazy, do other tasks in your work time, Etc, So You need to keep checking for updates and keep motivating them, etc.

    IMO, Fixed rate works better, as you tell them the time frame and discuss the pay, then its their task to finish it, deliver and get their $$ :)
    That being said, again it depends upon the task, work volume and your requirements - can't always go in the same way about different works.
     
  12. W9go

    W9go Jr. VIP Jr. VIP Premium Member

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    never worked on a fix price ........
     
  13. TheLinkGuy

    TheLinkGuy Power Member

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    Indian Bill really made some great points.

    When I hire for real development work I hire hourly and typically on a long term basis.

    Fixed budgets as you noticed produce low-quality work if its a rather large complicated project.For shorter quick short-term tasks a fixed project can warrant a good result.

    Its all about how you hire someone though. I have a rigorous hiring process.
     
  14. DamageX

    DamageX Elite Member

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    I ALWAYS hire per project, i.e. fixed price. I've done the hourly thing, I've been dicked around way too many times. I do per project because I know I can check on the quality during the process and I only pay on completion (or after certain milestones have been reached).

    That being said Taktical made some really great points about the hiring process, it's pretty much what use too. Still, you get a lot of shit flingers wasting your time with nonsense...