One of the great things about having a blog is that I get to ask questions that I don’t know the answers to, and then people who are smarter than I am will respond and fill me in. Here’s one that’s frequently asked by students in my online courses, and it honestly puzzles me as much as it puzzles them.
We’re talking agencies here: why are agencies willing to pay a per-word rate that effectively equals a much higher hourly rate than they’re willing to pay? Example: if an agency pays a translator 15 cents a word and that person produces 500 finished words an hour, the translator is effectively earning $75 an hour. But if that same agency contacts that same translator for hourly work (editing, proofreading, etc.), the proposed hourly rate is likely to be much lower (or even much, much lower). I can’t say I understand this myself, other than the fact that when an agency pays per word, its costs are completely fixed, whereas by the hour, they aren’t.
Thoughts? What’s up here?
Perhaps it has something to do with the way the client pays the agency. Or perhaps the agency keeps a bigger cut of payments for editing, etc. I’ve never thought about the discrepancy, but I’ve always appreciated being able to earn more based on how quickly (and accurately, of course) I can translate. It works in the experienced translator’s favor. In fact, maybe that’s the reason – less experienced translators can’t work as quickly and therefore don’t earn as much as experienced translators can. Interesting question.
Often the client requires one review for free, or you end up doing lots of research to find the correct terms. I agree that you can make more money by working per word, but only after you have gained quite a bit of experience and invested good time in making reliable TMs and glossaries. The word rate for editing is often not enough. In fact, less and less so, because many agencies have taken to using their better translators for editing, so they have to correct the mess that the unscrupulous/inexperienced/sloppy/ignorant translator leaves behind (can you tell I am fed up with that practice?!). Ria
Great question. I think $75/hour has a much bigger psychological impact than, say, $0.15/word. Sometimes I suspect some project managers are not comfortable thinking about freelancers making $75/hour, since they are “not” in that zone.
Some other professionals routinely charge base on hour, such as $100-$150 (or higher) for medical writers, or $250/hour for accountants. So I think it is probably also related to what people are used to as “industry standard”.
Because of the “dilemma” you mentioned, I personally rarely work on the “hourly” basis – except when it is absolutely necessary (such as quick review some of my own work, which is not “routine”), or as a favor to otherwise high-paying clients.
Hi Corinne,
my guess will be that all professionals who are paid hourly are stereotyped as expensive professionals (like lawyers, consultants etc..) while the translators have multiple levels of professionalism where there are translators who accept projects that are far less than the standard prices, others are just staggering with their frequent customer and not willing to enter the auction or bids for projects. As you said before during our getting started as a freelance translator there is the Walmart of the translation as well as there is the high niche. Personally I am still floating between the two areas, sometimes I find direct clients who are not hesitant to accept my price no matter what but they are not consistent, while others fishing for the cheapest price in the murky water of the translation market. I hope one day we will have a body that acts on the interest of translators against unfair pricing and poor quality versus good quality.
Corinne, sorry I forgot to post my name,
it is Amal
Hi Corinne,
I agree with Ying Peng on his vision. Being a PM myself (much more than a translator), I’ve been faced with this dilemma often.
Normally the explanation is (numbers below are just illustrative):
– Final client pays 0.20 per word -> Agency cost for Translation+Review can be up to (depends on the company/margin/goal/etc) let’s say 0.14… and no one asks questions: you are in your target margin.)
– Final client pays 55 per hour -> Your cost per hour in theory should be lower than that to accommodate the margin expected. So if you don’t consider the project as a whole, but only look at the hourly rate, questions will be asked: “Why are you not making any margin? Why are you losing money in hourly tasks?”
I believe it’s the wrong approach and a lack of vision (even laziness, or simply lack of project management maturity). Margins should be calculated on a project level and not on each and every unit… but sometimes it’s complicated to see the forest and not only the trees :-).
Victor Alonso Lion
Some good comments! I’ll just add one thing to the mix: when you charge per-word, you don’t get paid anything extra for formatting. More than once, I’ve spent more time — a lot more time — on formatting (of, say, a medical report) than I have on translating it! There’s also the time you spend trying to figure out what-in-the-woody-eyed-world-is-THAT-long-squiggle-supposed-to-say? Ah, well.
My 2 cents: The translator can spend for instance 1 hour to search one word or in order to find the best match for one phrase. So, actually the agency pays the words and does not care if you spend 1 hour for 500 words or 10 hours for the same amount.
That’s a valid question and a discussion worth having – thank you, Corinne, for putting it out there 🙂
Per-word rates are a leftover from the time when freelance journalists were commissioned to do a piece of a specific length for publication within a specific space and were paid a fixed sum for their effort. Sadly, and there are people out there who have said it much better than I, nowadays per-word rates have become a means to commoditize translation, and translators should do everything in their power to fight it, because it allows direct comparisons between things that cannot be quantified (skill, experience, knowledge, conscientiousness, attention to detail, professionalism, etc.).
Unfortunately, it has become the industry standard with agencies, as they are the ones who have the most interest in treating translation as a commodity. They are more comfortable knowing in advance how much a certain job will cost, and they have often already negotiated a budget with their client based on the number of words in a project. And since they seldom have the expertise to evaluate the technical or stylistic difficulties of a text, sometimes they find themselves in a position where they have quoted a rate that wouldn’t cover the time of a professional translator and end up finding someone (anyone, doesn’t matter who you are, “just-send-us-your-best-rate”) clueless or unscrupulous enough to accept it.
With direct clients, I never quote per-word rates and they seem to be quite comfortable with that, especially as I am able to give them a more or less accurate estimate of the time a certain job would take me. That’s also because most of them tend to see me as an equal partner, a professional with skills and knowledge that they don’t possess. With agencies, there is much more resistance, but even they (at least the ones that I work with) understand that I cannot accept an editing job on a per-word basis unless I already know the translator.
So in essence, I try to charge by the hour every time I can, trying at the same time to provide an estimate of the total amount.
I hope this helps 🙂
A per Word rate is basically a fixed price job which you can quote with the text unseen. I usually deal with IT companies and in the IT world a fixed price job is very very common. They more or less expect a fixed price job. So when I send a quote (usually through Freelance sites where you do not have the luxury of seeing the text), I quote my per word rate. And it is exactly as one person said. They do not like you to quote €75 per hour because that sounds way up there (believe me it is not, especially not in IT land). So what I am trying to say, a per word rate is a happy medium.
Dear Corinne —
I wrote the book on this, and you included portions of it in yours, but I don’t have anything to add to this excellent discussion, except to note that if we have both our per-word rate(s) and our hourly fees set above our break-even point, we can afford to have a discussion about the difference.
Thanks for posting this.
Jonathan
Since there is no one uniform “translation market,” but rather several varied and dramatically different markets, in my experience a wide-angle lens is required to best capture the reality.
Let’s start with the bulk market.
By far the most significant reason for the per-word model in the agency bulk market is that an hourly rate leaves the agency with an unlimited upside “cost risk.”
Even a good-faith estimate can be overturned by hours actually worked due to ugly surprises in the text, or the need to consult with the client to clarify target market and usage, or discussions with reviewers over terminology or to homogenize style or a dozen other unforeseen requirements.
Since the prevailing model for agencies in the bulk market is to charge clients a fixed, defined fee that has been based on a calculated per-word rate that is transparent to everybody, for better or worse, this exact same “framing” of the rate is extended to the freelancer pool to mitigate “cost risk.”
You can turn this to your advantage in a rather dramatic fashion by using much higher productivity tools such as AVR (automated voice recognition) where a skilled practitioner — this can take decades to master — can produce 1 HU per day (10,000 words) and so your $0.15 rate “translates” into just under $200 an hour for an 8-hour day. You won’t get rich at this rate, but you probably are less likely to complain about making $1,500 a day.
The other way around it is to work for direct clients in high-risk markets that are not as concerned about “cost risk” as they are about “product risk.” By that I mean that the downside risk to their product or reputation from a bad translation dramatically outweighs the “cost risk” of producing the translation itself.
This includes direct client in both the private and public sectors, where the customers do contract on an hourly basis at high hourly rates because the cost of failure of the product is so significant (think millions in an IPO or deep public humiliation with prestige customers or a misunderstanding of the intent of a government with nuclear weapons) that they do not want to risk skimping in any way at all on the research, coordination, review or skill levels of the translators required to mitigate the risk impact to their entire operation.
Choose clients that value protecting “product risk” over “cost risk” and you’ll have gone a long way toward optimizing your customer base.
Agencies base rates on what it would cost to have an inhouse employee do the work. For example, say a Dutch inhouse translator earns 3000 euro per month before taxes for a 40 hour working week. In the Netherlands, with 8% additional ‘holiday money’, 25 vacation days per year, about 7 bank holidays and, for example, 3 sick leave days, that translator would earn 21.60 per hour before taxes, and would cost the agency 1.5-2 times that including social security etc., or 30-40 euro per hour, which is exactly what Dutch agencies are willing to pay their freelancers. Now, based on an average inhouse productivity of 250 words per hour (2000 words per 8-hour working day, ignoring the fact that inhouse translators ‘waste’ a lot of time in meetings etc.), the word rate becomes 30 euro for 250 words, or 0.12 per word.
(I moved from my mobile phone to my PC now, so that I can elaborate a bit more – and am trying to log out from my WordPress account so that my real name is shown, hope it works.)
I was a PM for an agency in the 1990s, and this is actually how agency owners thought. This is how they caculated rates for freelancers.
The agency, and some others in Europe, had been working for some of the big names in the localisation industry – Microsoft, Oracle, etc., since the time they localised only for FIGS, Dutch and the Nordic languages. Quotes to the client were based on those calculated rates (a bit lower at the time, of course) plus a certain margin, I don’t remember how much. Our clients became used to those rates and used them as a standard for other languages as well. Being the big players that they are, they enforced the rates on all translation agencies, including those that would later become the large multinational agencies such as Lionbridge. Those then quoted “Microsoft rates” to other clients as well, because those rates had become the standard. And so on.
The error that was made from the start is that unproductive hours were not taken into account. 30 Euro (or whatever it was in the early 1990s) may be wat an inhouse translator costs per hour, but that is including all unproductive time. If all hours spent in meetings, chatting with colleagues, waiting for new assignments, lost on hardware/software downtime etc. is taken into account, the costs per hour go up significantly. But that is not what agency owners chose to see back then…
Simple supply and demand. Translation is a scarcer skill than proofreading or editing, because it requires higher-level bilingual skills, Proofreading can often be done by someone who is monolingual, and therefore available in greater supply. For this reason, I try to spend as much of my time as possible translating, and minimize proofreading, editing and QC.
Hi, Terry,
I don’t agree with the fact that editing, proofreading, QC are kind of less demanding or require less-qualified linguists to do these. I am a translator and interpreter and 90% of my working hours are spent in the fields of editing/proof-reading/QA. From my experience, I can truly assert that being monolingual would not let me do this job with as high a quality as I am able to provide being proficient in both, source and target. Knowledge of their own target language (in my case, Spanish) is, of course, a must for reviewers. But deep knowledge of source (IMC, English) is something I could not do without, unless the client (and myself!) did not really care whether the text reads accurate, but just “nice”, cohesive and spontaneous in target. Perhaps I’d spend less hours editing if I were monolingual and the only demands that were placed on me were to edit stylistic features, a couple of spelling mistakes and blank spaces. But that’s not what it usually takes to review a translation, is it?
Editing translated text is not the same as editing an “original”. The way I take my job, you have to be constantly moving from source to target and viceversa—your eye becomes sort of like Harry Potter’s “Mad-Eye” Moody’s, so there’s no way I could blindly forget about my English and stick to my native Spanish: being monolingual would imply missing several errors concerning accuracy (not just in figures and metrics, but also meaning) and grammar (e.g., some very bad translations mirror source structures so much that their text becomes unintelligible in Spanish, so how would I be 100% sure of how to rephrase this if I couldn’t read any English or my English were, say, tolerably good?).
Thanks Corinne for raising this wide range of issues!
A million years ago, a client asked how much I would charge and I said X# of cents per word. A long pause. Then: our Accounting Department can’t pay that way–can you give us an hourly rate?
So I quoted an hourly rate like an interpreter and that was cool with them. No problem. On my end, I worked quickly and gave them honest billing and I’m sure it showed–the bill wasn’t $X/hour x Y hours = the price of a Porsche and thank you very much!
🙂
That’s just one example; maybe others have had similar experiences–simply that the client’s big bureaucratic organization doesn’t work well with piece rates or whatever you call cost per word.
Best regards,
Dan Villarreal
Taipei, Taiwan
It’s all very simple math. Most translation firms charge clients by the word for 2 reasons:
1) They can easily count the correct number of words in a document.
2) Since they are charging by the word, they know the exact cost of the translation portion of the job.
The hourly portion of a translation, includes proof reading, document manipulation and formatting, is not so different. All of these processes have a wide variance in the amount of time required to do that specific task with those specific documents. Think about it, a simple word doc with 50 words is easy to proof and format. But what happens when that doc has images containing text that have to be replaced. What happens when that’s a CAD file with 50 words and it needs to be formatted? All in all, it’s easier for the translation firm to pay by the hour. Because again, it’s a pass through cost. So they know they are still going to make money on a project.
Scott.