People are sometimes surprised that UX research consultants are charged out at so much more than developers – the day rate can be 50% to 100% higher. So are UX research agencies more profitable as a result? Surprisingly, the answer is often no.
When you visit a top UX agency in the heart of London, what do you see when you walk in the door?
Lots of empty desks. Not because of layoffs, but because most consultants are working in labs or doing off-site consultancy projects. This means there are a lot of overheads for space and for kit that’s just sitting there, unused. When you hire a UX agency, this is one of the things you’re paying for, and it’s not money well spent.
Another problem is billing efficiency. UX research engagements can be very short – sometimes as little as two or three days (for expert reviews), usually a couple of weeks long (for face-to-face user research and analysis). The shorter the project, the bigger an issue you get with gaps between projects. In an agency, resourcing becomes a crazy Tetris game that’s almost impossible to win. Consultants end up with a lot of bench time, where they’re waiting around being paid but not bringing in any money. If you hire a UX agency, you’re having to cover this cost, and again, it’s not money well spent.
Also, agencies often try to include a research assistant and some senior consultant time into the costing. The fact is, if you get an experienced consultant, they usually don’t need support from anyone else. UX research is often well suited to “lone wolf” consultancy.
Enter the UX freelancer:
- She’s nomadic, and works on-site with clients. No overheads there.
- She has Morae and a couple of laptops. She can set up a research lab in any room in seconds, no need for an expensive facility with half-silvered mirrors.
- Having worked at an agency for a couple of years, she has all the credentials she needs.
- She’s able to charge less than half what an agency charges, and still make a very comfortable living.
- What’s more her low rate also means she’s more cost effective to hire for long engagements – which means better billing efficiency for her.
Today, clients seem to be waking up to the value of freelancers, where historically they seemed to be more risk averse, gravitating to well known agencies. Just last week I was talking to Be Kaler Blake (Director of Futureheads, a London-based UX recruitment agency), who described the market for UX freelancers as “buoyant” – an unusual word to hear in the midst of a worldwide financial crisis.
So, how do agencies feel, knowing that every time they train up a new consultant, they are paving the way for a new freelancer who may ultimately become a competitor? And what does this mean for the industry in general?
One way or another, things are changing. Charging Â£10,000+ for single round of usability testing used to be such an easy way to get by.