I’m going to say something that might be totally alien to some of you, but paying hourly can have little to do with the outcomes you want.
It only feels normal because we’ve been conditioned by an industrial revolution mindset: punch in, punch out, pay by the hour. That may have worked on a factory floor and in routine work. But when you’re buying expertise, it has perverse incentives.
Think about it: hourly is the one setup where you can actually pay more than the work is worth.
Because hours don’t measure value. The outcomes you get do.
- Did fundraising increase?
- Did your team get time back?
- Did member complaints drop?
That’s the bottom line results you’re actually after. Not how many hours a consultant happened to log.
This came to the top of my mind recently after a couple of early phone conversations with a potential client. After a check-in, they emailed me yesterday and let me know (summarized):
We’ve moved to [XYZ Vendor] and are paying for hourly support.
Candidly, we likely would have gone with you but for the project-based rather than hourly charges. If at some point you would consider hourly with prorations, we would consider utilizing your skills. I’ve heard only good things about you.
They liked my skills. They’d heard good things. But they defaulted to the “safety” of hourly.
Here’s the deal:
Hourly shifts all the risk onto you.
- If the work drags on due to a misunderstanding of scope, you’re paying.
- If the consultant is less efficient than you “hoped”, you’re still paying.
- And because every “yes” adds more billable hours, the vendor has no incentive to tell you when something isn’t worth doing.
That’s not a great partnership. Nor is it fiduciary duty. And let’s not even get into the “padding the hours” issue.
The alternative flips the incentives. Fixed-price projects create win-win scenarios that tie a consultant’s success to your outcomes and limit your risk. (I’ll unpack that next time.)
For now, remember that measuring by hours doesn’t assure project success. You could measure my height (said in a facetious voice), or how many emails I send during the project — none of it tells you if the project worked and met the goals.
I’m 6ft 3in by the way.