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Sep 6, 2009

How low can you go?

Recently a colleague posted the following in a ProZ discussion thread:
... I've been wondering how accurately the "aggregate rate information" at ProZ represents real rates... These are target word rates, but I wonder how much lower actual rates are? I know that I sometimes charge less than my target rate (up to 20% or so) if other conditions of a given assignment make it a good deal overall.
Here we go again. I find the assumption that actual rates are lower to be quite an interesting one, reflecting an interesting mindset. Why should they in fact be lower? "Actual rates" to me reflect those to be had in various market segments, and these tend to be a lot higher than many translators on ProZ assume. Not always, but often enough that I would not make the assumption that actual rates received are lower than the target rate. I myself have a target rate, but given the individual situation of a business transaction I often charge quite a bit above the "target". For me the target reflects an average expectation for an average situation. Just as something may prove simpler and justify a rate cut (like a recent job I did with 53% repetition that I discounted when I wrote the invoice, although my client expected no such break), special complexity (really crappy source scans, difficult texts, extreme amounts of source text errors, dealing with almost anything Swiss, etc.) more than justifies a premium.

The assumption of lower rates isn't entirely daft, however, depending on what exactly you consider the rate to be. With Client A I might charge in full for all source text regardless of any repetitions or TM matches. My effective rate is the same as the simple published rate. For Client B I might have negotiated a reduction in fees for TM matches above 90% if the older material was written by me. In that case, my effective rate is lower, of course, though my earnings for actual effort are most likely not any less. But that is not the writer's point as I understood it.

The assumption that translators will be paid less or should accept less because some sectors of the economy are experiencing difficulty is unfortunate and misguided. Certainly some in our profession are affected, but the challenges faced are very much related to individual situations, business forms and language pairs. Some months ago I had an interesting conversation with an agency owner whom I respect very much, because she has a well-run operation with an emphasis on quality. She complained of a 40% drop in end customer volume, though she was able (at that point) to maintain the rates themselves at previous levels. The primary declines were said to be in minor languages: instead of translating dog food advertising into 15 languages, a client of hers might choose to focus only on 5 target languages and let the Croatians struggle to understand the list of ingredients in Italian or English. Some clients looked for cheaper service elsewhere, but this was less of an issue, because most were too smart to have important marketing materials or technical instructions entrusted to unserious non-professionals willing to take on real jobs for pocket change. Since then a number of my other agency clients have mentioned declines in overall volume, some greater, some less.

Does this affect me? Not really. As another blogging translator (can't remember which - sorry) pointed out recently, agencies have other options to stay afloat, like cutting staff, changing phone plans or moving to less expensive office space. Individual translators have fewer options. The space under my local bridge is already taken up by other hobos, so I prefer to stay in my house. And WLAN in front of a campfire sucks.

But the good translators I know in my language pair are all rather busy. At least they are when I try to refer clients to them, which happens several times a week at least. They might be less busy with particular agencies, but overall they are doing well, and the trend of companies to cut out the middlemen and go directly to a good freelance translator is not hurting them at all. These end customers are more work sometimes, but they pay much better. How much better? One company whose materials I used to translate through an agency approached me a few years after I ended my relationship with the agency because I was deemed "too expensive". I get 58.8% more per line from the direct relationship as well as very generous compensation for revisions, terminology work and other incidentals, and the company is paying a good bit less than the agency charged previously. The project management by the company's employees is better too - questions get answered more quickly without an agency PM sitting on them like a hen on a nest full of eggs.

Better rates like that are actual rates that are part of actual markets. Just like a better rate I might give to a friend who needs a web page translated to sell his puppies or a break I might give to a recent college grad with no job prospects in Germany who has chosen to emigrate to Canada with the clothes on his back. Rather than worry about market generalizations, I think it's more important to look at our own range of services, our personal niche markets (if any), the types of clients we deal with (the BDÜ has 5 categories in its rate survey, but one could just as well define 15 types or more) and research specifics for those markets that we intend to be part of. Anything else is really mental masturbation.

As an example, a young wannabe colleague (recent university grad) posted a note in the German forum of ProZ a few days ago wanting to know (among other things) if 70 euro cents per line is a good rate for EN>DE or FR>DE work. I do know people who have worked for less, but I responded rather bluntly that I would not have gotten out of bed for that 10 years ago, and I certainly would not today. She didn't say what field was involved (since the question was about agency rates that probably isn't terribly relevant), but in the area of banking and finance, for example, I haven't encountered a colleague anyone was willing to recommend who charges less than € 1.60 per line. Most charge well upwards of € 2.00 per line. Plus rush charges and other relevant surcharges, of course. Those too are actual rates.

So rather than obsess about how low one must go - or even how high one can go in a field in which one has no expertise - I'll choose to keep my blinders on and look straight ahead at what is possible and reasonable in my own areas. I talk to a lot of colleagues about a lot of issues, rates included, and even those who are closest in specialties or skills have unique characteristics that affect the rates that they can and should charge for the same service I give. We can give each other advice all week long, but what really matters is how each of us filters that advice and applies it, accepting responsibility and learning from the results. In the long run that will be the difference between success and failure, not what is charged per word today.

6 comments:

  1. Thank you, Kevin, for such an interesting article. It is good to read how other (way more experienced) colleagues cope with this kind of situations.
    Have a great day!

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  2. Hi Kevin,

    Good stuff, as ever.

    To me, the direct client scenario is brilliant because, as you suggest, you are "talking to the organ-grinder and not to the monkey". Questions can be clarified virtually instantaneously and both parties benefit.

    The other thing is that once you have developed a good friendly working relationship and they say "it's urgent", you can ask "why"?

    If they need something for a meeting tomorrow, then fine. If it's for a meeting later next week, then it will be done in good time.

    I have one case where I think I have in fact got them trained up now, as they will say "It's urgent because..."

    These guys prefer to stick with me because of the experience and knowledge we have gathered together and if I am away, they use an agency as a default. I charge them what I deem to be a realistic rate for both parties (and low it ain't), but I have now found what the agency charges them.

    Cheers,
    Chris

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  3. @Chris: "Danke für die Blumen" as the German's say. Your "organ grinder / monkey" comment is certainly applicable in many cases, though not all. It depends a lot on the qualifications of the agency PM one works with and the agency's approach to projects. One customer of mine in DDorf has a brilliant lady engineer as a PM who understands far more about the source documents than the monkeys (usually at Siemens) who wrote them. I'll prefer to work with someone like her any day: what is important to me is a well-managed project.

    Realistically, however, although the bulk of my business continues to run via agencies (because I have limited time and patience for PM tasks - I think of them as my unpaid staff who shield me most of the time so I can get the real work done), quite honestly most of the individual jobs really don't need an agency in any way. A good agency is useful when you are dealing with multilingual projects involving complexity for which there is no in-house competence. Some of my agencies do this rather well, and when some prospect calls with a brochure that needs to be translated from German to English and from there into 14 languages, I try to steer the inquiry to one of my partners who can handle that well. Like you, I'm really not interested in stepping in the subcontracting cow patty. (All those who bombard me every week with offers of cheap translation services, please take note of that. I don't subcontract, and if I were to do so, I would not look for cheap, I would look for good. If I don't know your work intimately, you are not on the list for subcontracting or recommendations and never will be. If I haven't mastered your language, I will never know your work.)

    Definitions of "urgent" are quite variable, and I am often pleased by what direct clients consider urgent. A few pages by the end of the following week is often offered apologetically as if such a short deadline were an imposition. Despite our awful workload, we can generally accommodate such requests. If there really is an urgent overnight need, it is usually well justified. With some agencies I often have the impression that the deadlines are set more as a matter of racing the competition, not because the customer really needs the document by the stated deadline. Or the PM doesn't do a really good job of finding out the customer's schedule. I've lost track of the number of times that I have sent clarification requests only to find out that the end customer will be back from vacation two weeks after the job is due. That is not amusing.

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  4. @Kevin:
    "the bulk of my business continues to run via agencies (because I have limited time and patience for PM tasks - I think of them as my unpaid staff who shield me most of the time so I can get the real work done"
    (Emphasis added by me)

    We're not unpaid, really. In point of fact, the lower rates you charge us in contrast to your direct clients basically comprise a salary for our efforts to make your work easier and ensure a smooth project flow.

    I wish every translator realized this. Then maybe translators would understand it's not worth paying salaries to people whose services are less than satisfactory and, conversely, that using a good agency can be a sound investment (which seems to be your stated preference.)

    All the best,
    Ben

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  5. @Ben: You're right, of course. "Unpaid" is a poor choice of words. What I meant was that I am not responsible for your staff salaries as I am for my partner's assistant or others in the past. I have the pleasure of your service as a project manager, reviewer, etc., and you do me the favor of handling the collections from the end customer and getting my questions answered. In the years we have worked together, your team has always done its part, making your shop a textbook example of how I think a good small agency should operate.

    As for the salaried staff for end customers handling translations, the quality of those relations depend on many factors. If the boss's speech at the next trade show needs translating, in most cases it works out perfectly well for her secretary to skip the middleman and go directly to a good freelance translator. However, I think there are far too many cases where the clients don't know what good is or don't have time to handle screening or are simply not capable of managing complex projects effectively (here I am thinking of a direct client who insists on disastrous management of 20+ languages in Excel sheets, all handled by a young monolingual purchasing agent - oh yes, with lots of DTP formats as targets too). In these cases a good agency is a godsend to a company.

    The most effective direct client relations I see are where there are trained, dedicated staff acting as an "internal agency". These people are particularly good at responding to terminology issues and extracting needed information from the departments that send them translation requests. I have several direct clients like this, and I love them, would welcome more in fact. But from a workflow standpoint, there is little to distinguish them from an external agency like yours.

    What I do not particularly like is what you and I would probably refer to as "Umtüter", those who simply act as intermediaries but have no QA value to add. If the project management is still good and answers are obtained quickly when I have questions I don't mind really, but there are some who think passing on questions will make them look less competent, and they send me "helpful" little hints that are seldom of use in the hopes that the questions will go away. In the end that just delays matters or forces me to deliver what I consider to be an unfinished translation with a list of "issues".

    With the average direct client (company), there is often a lot of education effort involved, particularly at the beginning of a relationship. If the projects are one-off jobs, it is often doubtful that the higher rates cover the additional effort. I might need an hour to explain to a graphic artist how I can work directly with his DTP format if he handles certain preparation steps properly. Then I might have to spend another hour explaining it to his boss. When this goes on all the time, a 50 to 100% premium quickly works out to something close to the rate I would charge an agency which handles those conversations for me. The real solution, of course, is to charge a consulting fee for the time spent in explanation and preparation, because the client can benefit from that knowledge when working with any language service provider.

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  6. Really interesting stuff Kevin - and I'm right with you on the ProZ issue. I was asked to moderate recently but it's not a gig for me (I can see why now). I was usually the kid getting caned by the principal, not the one giving the caning! Still, like you said, the small amount of good stuff does balance the negative stuff and corporate nonsense.

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