The other day, I was talking to a freelance friend who was enthusiastic about AI, to say the least: “Since I started using AI, I’ve increased my productivity by 20%”. It’s a phrase I often see on LinkedIn, sometimes with figures as high as 30, 40, or even 50%. Since the people who write such things are not close to me, I refrain from commenting, but here, faced with someone I know, I took the time to ask the questions that often bother me.
In short:
- Productivity gains, measured by faster delivery, are more easily observable in a freelancer than in a company, where they are often diluted by internal processes.
- For a freelancer billing by the hour, increased productivity can lead to a drop in income, unless offset by more billable assignments.
- Flat-rate or value-based billing allows productivity gains to be better converted into revenue, provided that demand keeps pace.
- A freelancer’s income depends on the size of the market, their commercial capacity, and the value perceived by the client, regardless of their productivity.
- Productivity is not a guarantee of income but a potential resource that can translate into greater comfort, free time, or room to grow.
How do you measure productivity gains?
The first question was simple: how do you measure this famous 20%? He replied, “I deliver my work 20% faster”.
An excellent answer, because ultimately what matters is not the time saved on each individual task, but the time between the order and delivery. This touches on the concept of flow work, which I found very interesting when I studied Moderna’s practices: shortening the entire cycle, not just the intermediate steps (Thinking of work as a flow: appealing, but is it realistic?).
A freelancer can answer this quite directly, because in their case, from start to finish, the entire process is controlled by a single person who generally has a single job and is only accountable to themselves. In a company, it’s different: between the initial request and the final delivery, there are often several people involved, each with their own constraints, processes, and approvals. The local productivity gains of an individual or a team are diluted, and sometimes the system is blocked by one person who acts as a bottleneck and cancels out all or part of the gains made elsewhere (AI in the workplace: going beyond augmentation to actually transform). But I’ll come back to that in another article.
The real question remains that of revenue
Let’s go back to my freelancer. After his initial response, I asked him a second question, which I found more interesting: does this 20% increase in productivity translate into a 20% increase in income? He smiled, a little embarrassed, and said, “No. Well, maybe a little, but it’s not significant”. And guess what? This answer didn’t surprise me.
In a large business, we already know that individual productivity gains do not add up to a collective gain. Between bottlenecks, organizational inertia, cross-functional friction, and redistribution, the value created by a more efficient employee is often lost along the way. But for a freelancer, you’d think it would be simpler: they’re 20% more productive, so they earn 20% more income. But in reality, it never works that way.
When billing by time spent, being more productive can mean losing money
The first reason has to do with the billing method. Let’s take a consultant who charges $1,000 per day and estimates that a project will take ten days. With AI, they gain 20% in productivity and complete the work in eight days. His client will be delighted because they will pay for eight days instead of ten, meaning the consultant has lost $2,000.
Now let’s imagine his entire year. Before AI, he did ten ten-day assignments, which amounted to 100 billable days and $100,000 in revenue. After AI, the same ten assignments only bring him $80,000. To get back to $100,000, he would need to find two additional assignments, which would require a well-filled order book and a certain amount of commercial acumen. Without this, his increased productivity would actually result in a net loss.
And even if he had such a large pipeline that he previously billed every day of the year, well then…he will also bill every day of the year. In this case, his annual income will be the same but achieved with more clients than before.
In other words, he will not earn more money thanks to his productivity gains, and instead of earning 20% more, it is the client who will benefit by paying 20% less.
If he cannot increase his prices, the only way for the consultant to increase his income is to increase the number of billable days, which was just as valid before, when he did not use any technology to become more productive.
Advantages of flat rates and value
The situation changes with flat-rate or value-based billing. Let’s imagine a graphic designer who sells a logo for $1,000, regardless of the time required. Before AI, it took him one day to deliver. But with his new tools, it takes him twice as long. If demand remains unchanged, his income stays the same because each logo is still worth $1,000. But if they find a second client to serve at the same time, they go from $1,000 to $2,000 per day.
Let’s extend this reasoning over a year. A graphic designer who produced 120 logos per year for $120,000 in revenue can, with 50% more productivity, deliver 180. If demand keeps up, his income automatically goes up to $180,000. The difference with the consultant who gets paid by the hour is clear: he never loses out on a given job, and he can turn his free time into extra income. But the market still has to be there, and he has to be able to find it.
Limitations always come down to the market and perceived value
Behind these scenarios lies the root of the problem, namely that the productivity of a freelancer (or a business, for that matter) is constrained by factors beyond their control. The size of their market determines how many customers they can serve, and even the best tools won’t make a difference if demand doesn’t increase. Their commercial capacity sets their horizon: freeing up time is pointless if that time remains empty due to a lack of new contracts.
Finally, the value perceived by the customer plays a key role. If they charge by the hour, they can decide to bill for 10 days’ work while only working 8, but as soon as their competitors with the same tools pass on their productivity gains to their prices, they will find themselves out of the market unless their customers consider that the quality of their work justifies paying more.
In many cases, productivity translates into comfort rather than money
This does not mean that productivity gains are useless. We have already seen that the first to benefit is the customer, who, depending on the case, will pay less or receive faster delivery, but I am not sure that this solves the income problems of our self-employed worker. Especially since it’s a fragile competitive advantage because his competitors will surely do the same thing.
But for him, they translate differently. The consultant who completes an assignment in eight days instead of ten can spend two days prospecting, meeting future clients, and training on new topics. The graphic designer who reduces their creation time can invest the energy saved in the quality of the final product and build a reputation that will allow them to maintain their prices in the face of competition. And those who choose not to fill their freed-up time can simply breathe easier, reduce their mental load, and give themselves the opportunity to think about the long term.
Productivity is not a guarantee of income
Let’s be clear. For a freelancer, a 20% increase in productivity does not mean a 20% increase in income. For a business, we will see later that this is quite obvious, but for this type of person, it might seem plausible because they are the only player in their workflow. However, in reality, this does not work either.
In some cases, particularly when billing is by the hour, this can even result in a loss of income. In others, such as flat-rate or value-based billing, it opens up potential, but this only materializes if the professional is able to find more clients and fill the time freed up.
Productivity is therefore a kind of raw material that is indeed valuable but is not income in itself. It only becomes a lever for income if it is accompanied by an appropriate commercial strategy, the ability to differentiate oneself, and, sometimes, a change in business model. Otherwise, it translates into comfort, time saved, and peace of mind.
That’s already a lot, but it shouldn’t be confused with mechanical revenue growth.
The next time you read on LinkedIn that a freelancer has increased their productivity by 30% thanks to AI, ask yourself this question: have they really increased their income by 30%? Nine times out of ten, the answer is no. And that’s normal.
Bottom Line
Ultimately, productivity is an attractive but incomplete promise. For a freelancer, producing more quickly does not mean earning more; it simply means having the capacity to do so. Additional income only comes if the market follows, if there is a demand for the time freed up, and if the value perceived by the customer justifies stable or higher prices. Otherwise, productivity translates into comfort, quality of life, and mental space to think and plan ahead. That’s already a lot, but we must stop confusing this improvement with automatic enrichment.
The truth is that time saved is not always money saved. For a freelancer, it is only income if there is demand to fill the freed-up time. The rest is just a bonus. And that’s great news, as long as we don’t kid ourselves.
Image credit: Image generated by artificial intelligence via ChatGPT (OpenAI)
Related articles:
The numbers we overlook when reinventing work
People Centric Operations 2.0: how AI is reinventing knowledge work at scale
Thinking of work as a flow: appealing, but is it realistic?
I’m more productive when I get rid of the tools I use
Is multitasking dangerous or a myth ?
Better collaboration does not mean better results for the organization
