The average daily rate, more simply TJM, is used by freelance developers, but also by digital service companies (ESN) , formerly computer engineering service companies (SSII).
It represents the amount that the customer will have to pay for a day of service.A distinction is made between the average daily rate and the flat rate, which represents a fixed price for a service or a whole set of services.
An ESN or a freelancer, practicing a TJM, invoices in time/man spent (unit of measurement based on the service provider’s work for one day), and this, without taking into account the rate of progress of the service (whether it is completed or not).
It is also possible to break down the average daily rate into hours or half-days.
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The TJM in IT can be quite similar, but it is normal that they evolve according to the type of service, the qualification of the service provider, the fact that he is freelance or affiliated with a structure…
On the other hand, as mentioned previously, the fixed price is the fixed price of a well-defined project. There is then an agreement between the two parties on specific results that will be evaluated.
It can be quite tricky to correctly estimate it (the package price), because the needs of a project can change along the way. As a result, ESNs and freelancers tend to favor the TJM.
TJM and THM
For a consultant affiliated with an ESN, we generally speak of TJM, fixed by the care of the company.
In addition, it may be interesting for a freelancer wishing to position himself correctly on the market to define an ADR, but also an average hourly rate (THM).
He may choose to invoice his service based on one or the other depending on the nature of his mission.
He will then prefer to practice a TJM for long-term missions which can take several weeks or several months, and a THM for short missions of a few hours during the week for example.
Depending on the customer profile
Freelancers adjust their prices slightly according to client profiles.
For example, large companies usually have pre-established salary grids that do not change, but with these structures, the freelancer benefits from security.
On the other hand, with smaller entities, it is possible to open negotiations, although the rates are generally lower.
Depending on the duration of the mission
The shorter the duration of his mission, the more it is possible for a freelancer to increase his rates, especially if it is part-time.
But if he lands a long-term assignment, lasting more than a year for example, he can lower his TJM in return for the guaranteed visibility and safety.
Estimation platforms
Developers can reference multiple TJM compute platforms to align with their peers.
Some are better known than others and more popular with freelance developers, they will allow you to have TJM closer to reality.
