Introducing… The “Frustration Fee”
If you notice your costs increasing every time you outsource the same type of projects to the same type of service providers, you might be experiencing what some call an “accommodation fee” rather than a simple increase in wages. This fee, better known in some circles as a “frustration fee,” is a reactionary and/or portended cost designed to compensate time and effort put into accommodating frustrating demands(example).
What’s particularly aggravating about this cost is the fact that frustrating’s meaning is open to interpretation. What’s frustrating to one service provider could be the norm to another, ultimately making its justification a rather frustrating experience unto itself.
Here’s how you can minimize this cost, and make sure all funds pay for product- or service- specific tasks instead of emotion.
First, Understand the Reasons
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A Good Read: Water Off a Duck’s Back: How to Deal With Frustrating Situations, Awkward, Exasperating or Manipulative People, and Keep Smiling(link) |
Causes vary, but frustration fees are generally used to compensate things like unreasonable deadlines, poor communication, and/or potential scope creep. Anything that might disrupt what would otherwise be a smooth working process, in fact, could be interpreted as ‘frustrating,’ and thus incite experienced providers (who can acutely smell disruptive work issues a-mile-away(describe how they can do this)) to impose this type of fee.
You might also be subject to such fees if you’re thinking about contracting with a previous provider, and your last experience with that provider didn’t go as smoothly as you hoped it would. A previous provider’s lingering anger over a project-gone-bad, for instance, or even just worry or fear that your project will be as rocky as it was before may be reason enough for that provider to demand a frustration fee.
Next, Apply the Remedy
Lacking the necessary ‘indemnify-from-frustration clause,’ diligently followed outsourcing contracts are your best protection against these types of fees. When that isn’t possible, such as when unexpected requirements erupt, you can investigate the most appropriate and beneficial way to add those requirements.
Incentives may include additional compensation or a longer deadline, perhaps even an impressive bonus. Whatever your offer, you’ll need investigate opportunities with your provider.
Assuming you’ll know how long it will take, how easy it will be, or how much it will cost to implement additional requirements on your own is not only presumptuous, it’s frustrating to the service provider, and consequently, the reason why your hourly costs may increase over time.
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