What’s in a “day rate”?

0E7A6414.jpgConference planners (and the event companies that often interface for them and manage the local suppliers) often book photo/video teams well in advance of their conference, and usually long before the agenda for the event is finalized.

The upside of this practice for a client is that elimination of last minute panic scrambling to hire a reliable team during a busy conference season (ie autumn) when there are many other events running concurrently. For the photographer/videographer it’s a “bird in the hand”, a blocked booked date in the calendar which means paid time – always something comforting in the gig economy.

There is a downside, however, which I’ve encountered on numerous occasions, which affects both the contracting entity (whether that’s the direct client or an agency acting on their behalf) and the supplier, and it affects both the quality of the bid received/submitted, and the price.

“…as the day is long”

0E7A3707

I’ll start with an example. When an organizer is trying to lock down costs for an event taking place many months in the future (or sometimes just a few weeks ahead), the aim is to get all supplier costs in on fixed price bids.  In order to do so the RFP, or call for estimates usually asks for a day rate on the job.

A day rate is a fixed price, and means the client doesn’t have to worry too much about providing details on the exact schedule for the day. The problem arises when the concept of a “day” gets stretched to include every waking hour from the 7am early-bird registration/buffet breakfast to the 11pm last call after the bar closes at the end of the opening night reception.

When a supplier offers their day rate, they are usually calculating a day to mean 8hrs, give or take 45 mins to an hour. It anticipates a bit of lag time between programs, a meal when photos of open mouthed chewers are eschewed, and maybe the opening round of a cocktail event. Something like 8am to 5pm, or 9 am to 6pm. What people working regular jobs would consider a normal working day.

Alas, for freelance photographers/videographers, the idea of a normal working day doesn’t seem to factor into many client’s thinking.  And should you be so unwise as to have submitted a bid based on an average length day rate, you may find yourself working the equivalent of two days in one, or effectively getting paid 50% of your normal rate, because the goal posts shifted after you submitted and won the bid.

Being the lowest cost bidder will often win you work, but it doesn’t help your career and ultimately encourages the unfair practice of being asked to bid on work for which the scope remains undefined.

From a client perspective, it may seem like a win to lock in a supplier on a price based on terms that subsequently get redefined to the client’s advantage, but the result is likely a souring of the relationship and “you get what you pay for” attitude on site from a supplier who realizes they’ve been conned.

Build flexibility into the bid

0E7A3127-2.jpg

Most clients are not out to screw their suppliers, but this can be an unintended consequence of asking for fixed price contracts without provided full clarity on the scope of work being requested. One practice that I use that helps is to add a clear note in estimates that the day rate is based on an 8-hour day, and hours in excess of that are billed at a standard hourly rate. This keeps the bid submission price reasonable and averts sticker shock, and if, once the agenda gets finalized it is clear that the day is being stretched to include evening events that expand the hours in the day from 8 to 12, you have a fair basis for negotiating a price that better matches the work actually performed vs. what was anticipated when details were scant.