I usually don’t bother with hiring people that offer a low wage as I make the assumption that they would offer higher once they were skilled enough to help me. Recently I decided to try someone at below the US minimum wage because they wanted to work on the first task for free to prove themselves. They “knocked it out of the park”. I sent them some money because good work should be rewarded, and they have gone on to do some great things for me in just a few short weeks. I’m about to increase their wage as well. Do you ever look at people who make low offers? Have you had similar success?
(and in the past I had bad results trying this)
My assumption is that there is nothing like a minimum wage for IT guys! It depends on how much time a person takes to complete a specific task and how you are billed that decides the overall costing.
Lets take an example : A person charges $5 an hour but says it will take 4 hours to complete the task. Then you ask for minor updates and he says that would add another couple of hours. Finally say you find that the project took you 8 hours to complete at a total costing of $40.
Now another person tells it will cost him $30 an hour but completes the work in just 1.5 hours. Now your costing comes to $45.
Thus, theoretically speaking you find the $5/hour rate quite great, but you need to understand as it takes more hours to complete the project
a) you can take less projects
b) your involvement is also required so you need to add your costing to it
c) net net overall costing would increase and you would need to do more projects to earn more income.
I would separate projects into showcase projects and regular projects. Then the urgency and overall quality expected. And finally the total income it would generate.
Then allocate projects to respective freelancers based on the above.
I think it would depend on case to case basis because minimum wage rates are different across the globe based on local rules so definitely worth a try.
Jaagare, are you perhaps confusing wages with fees? As far as I know, the minimum wage applies to employees - people who earn a wage (or a salary). The situation you describe applies to a freelance worker, that is a self-employed person or a contractor. That person will negotiate a fee with the client. The fee might be or might not based on an hourly rate, but either way it’s completely outside the scope of the minimum wage.
Mike
In the recent I had a person working for less than half the rest of my team and completing the tasks just as fast. It was almost scary. They are going to get a raise regardless, but makes me wonder if there are others like this person. Surely there are which of course keeps a lot of pressure on hourly fees charged by developers.
When some people are starting out they have to take a lower hourly rate to compete with the overseas market.
This is why I ALWAYS say, it’s NOT the amount that the freelancer charges that matters, it’s the person’s work ethic, skill set & communication skills that matter to me.
I’ve hired people at $10/hour that did WAY better than people who charged more.
So when ever any egomaniac tries to show off & tell me that they are the best b/c of what they charge, I tell them off. It’s all smoke & a good sales pitch most of the time (not all).
And like jaagare stated, it also depends on how fast they work. Most overseas people don’t understand English let alone what I want, plus they take double, triple & sometimes quadruple the amount of time a sharp English speaking people would take to do the task. Now this isn’t always the case. There are plenty of English speaking people who don’t understand the written word either & lie about their skill set, but that’s a story for another day 
If you found a great person for less, I’d say keep them & hide them away so you don’t lose them, but every so often I’d give them an increase just to make sure they stick around.
HTH
Michelle
Well, it’s a risk to take because when it doesn’t go well it’s a total time waster. But sometimes, taking risk also pays off so it just depends. I think business owners or employers who take huge risks will be more successful in the future. Because they are determined to try anything to make the business work. They do not just think, they DO!
I think what’s important is to be clear what you’re paying for and what you want from it. If they’re only asking for a low wage because they recognise that’s all they are worth, consider whether you want to take them on - you might have work that a low-paid lackey could do perfectly well, in which case it’s all fine - but if you need them to be good then you have to satisfy yourself that they are going to be good - in which case, you need to figure out why they’re prepared to accept a wage well below the market rate. There might be perfectly good reasons for it, but you need to at least check them out. And once they’re working for you, I would say you have a moral obligation to pay them what they are worth, within the framework of what you’re paying other staff.
Obviously different employment laws in different countries may affect things.
I wouldn’t always say that. I’m working with someone it school almost finished with their Master’s degree and worth way more than what they initially offered. I think they just want to build a resume. They are faster than people I’ve paid 5 times this amount, and that is after working with them for almost a month now 5 days per week part time. Now I wouldn’t say it is easy to find such people, but they do exist, and this isn’t the first time I’ve done this.
That’s why I said IF … my whole point was that there are a range of reasons why people might be willing to work for a low wage … some of them should ring alarm bells but others shouldn’t be a problem … that’s what you as the employer need to figure out.