I think this question is specific enough to qualify for GQ. If not, mods, please move it.
I am going to be doing some consulting for a management training group. They are starting to branch out into designing employee surveys of various sorts and need me to give expert input on question design, statistics, etc. (I have a Ph.D. in psychology and do a lot of survey research.)
I have done a couple of larger projects with the company before and billed them on a project basis. However, this time they only want to consult with me for a few hours here and there.
My question is: How much per hour should I charge and/or where can I go to get informaton about average consulting fees for this type of work?
Probably more than you think you should. What geographical area are you located in and what area of psychology is it? As a general rule of thumb, all of the independent contractor consultants charge at least $100 dollars per hour to upwards of $250 dollars per hour. One rule that seasoned consultants know is never undercharge! Undercharging makes you look unconfident or cut-rate which are two traits that a consultant should never portray.
Of course, these rates only apply to a large company. Mom and pop shops would probably faint if you requested that much but the larger outfits expect to pay that much.
I had a consulting firm for 10 years (up until August, 2000) and I charged $115/hour when I quit that. At the end I had already come to feel that was too low, as I knew of others in town (and where you are makes some difference) who were charging $150-200. While I was contemplating the shift to $150, I was also aware of people out there who were charging $50/hour.
Some consultants, when they’re working hourly, bill a half-day minimum; I never did that. I did, at first, bill mileage, parking and ancillary costs. I pretty much dropped that, with the exception of media, like 8 mm tapes and/or CDs. I was able to get $65-100 for those without appearing out of line. And I charged for plots. Both media and plotting charges, in my state, require collection of sales tax.
And, in the long run, I also did a bunch of freebie favors that I never billed.
I co-sponsor a user’s group that meets once a month to discuss a pricey specialized software package that we all use. While not the point of this paragraph, I’ll add that this activity was a great way to maintain visibility and, even though I mainly just aid my co-sponsor with lining up speakers and making sure facilities and lunch are in place, it helped to fertilize the idea that I am an “expert” in this area. Back to your regularly scheduled paragraph. Most of the talks given demonstrate a technique somebody has developed to do something we all would like to do, or perhaps relate how a new development in industry can be exploited by the group. But one of the most popular talks we’ve had (based on attendance) in the last 4 years was one I gave that didn’t really focus on the software at all - it was just a summation of my then ~8 years experience of running a consulting company with tips and pitfalls, discussion of marketing, client relations, organization, data confidentiality issues, etc. The whole thing was pregnant with the thought that everybody wanted to ask, but nobody would address - how much do you charge?
Charge whatever you charged them for the project work plus a enough money to cover your preparation. Remember, when you worked on projects, you factored in (one hopes) all the time for the analysis. Now, when they call you, they are going to assume that they should be paying for your direct contact time. However, you know that that “contact” time is going to cause you to spend background time on research, planning, analysis, and preparation. You need to be compensated for all your time. Since they will probably figure your time only as the “contact” time, your rate needs to be higher to cover the non-contact time.
Maybe those of you that have done consulting work can correct me, but I’ve used the rule of thumb that I would charge 2 - 3 times what a full-time employee doing the same job would get paid. The extra price is justified by the fact that contractors don’t get any benefits, and are supposed to be more “expert” than the average employee.