Lately it seems that many freelancers are considering lowering their rates because of the worldwide economic downturn. In most cases, I think that lowering your rates is an unwise business decision that devalues not only your own work, but the work of other translators as well. In addition, I really believe, based on my own experience and that of other translators, that the market for high-quality translation services is still very strong. However, I’ve recently spoken with a couple of people who have lowered their rates and feel good about the decision, so I think it’s worth looking at the why/why not equation that’s at work.
First, before you make any rate-related decisions, force yourself to look at some objective data. Are you really experiencing more “work drought” periods than last year, or does it just feel that way because the economic news is so bad? How much money have you earned as compared to the same time last year? How do your existing rates compare to what other translators in your language combination charge (you can get some information about this from the ATA compensation survey or from online rates surveys)? Are your clients asking for rate cuts, or are you just assuming that your rates are too high? Do you have a track record of attracting clients at your current rates, or are your rates set too high for your level of experience or for your language combination?
Because I am really not in favor of lowering rates, let’s talk about the disadvantages of lowering your rates. Most importantly, I think that if you look for work that pays less than what you’re currently charging, you’re bound to find it. Then, you’ll be overloaded with low-paying work and you’ll be unable to take on higher-paying work when it inevitably comes in. In addition, you really want to avoid the low rate treadmill: when you charge low rates, you have to work more, which can harm the quality of your work and your enthusiasm for doing the work, but you quickly get into a situation where you really have no choice except to work very long hours because your rates are so low. If your rates are high (not ridiculously high, but high enough that you have a built-in safety margin), a few days without work isn’t a crisis, and can even be a welcome chance to catch up on your accounting, spruce up your website or update your online profiles. If you’re working for low pay, you can’t afford the luxury of even a day without work.
In addition, I just think it’s very hard to put a positive spin on telling your clients that you’re willing to work for less than you’ve been charging. No matter how you couch it, it’s hard to avoid sounding as if you’ve realized that your work is worth less than what you’ve been charging, and that’s just about the worst impression you can give to a client.
On the other hand, you have to eat, right? Especially if you’re single/the family breadwinner/have little or no savings cushion, there comes a point where low-paying work is better than no work. In addition, there are translators whose rates are optimistic given their level of experience, specializations and/or language combination. So, if you decide that you really have no choice other than to cut your rates, try to do it as pragmatically as possible. Rather than a generic “You’re right, I’m not worth it! Whatever you want to pay me is fine…” e-mail to your clients, think about how to cut your per-word rate but maintain as high an hourly rate as possible. If you have a client who sends you easy work (very little to look up, doesn’t require complex formatting, client is painless to work with, etc.), offer them the lower rate first. See if clients will take on some of the time-consuming aspects of your work (such as formatting or PDF conversions) so that you can concentrate on the translation.
So far, my work volume and rates are both higher than they were last year; I say this not to brag about my business, but to say that the bottom certainly hasn’t fallen out of the translation industry. At the same time, I think that if I were faced with a shortage of work at my current rates, I would rather work 20% less than charge 20% less, then use the extra time to market to higher-paying clients, work on some non-paying projects or just have more leisure time and enjoy it. Before you surrender and lower your rates, it’s also important to be honest with yourself about your marketing efforts. If you haven’t sent out a resumé in five years, that’s a better starting point than cutting your rates with your existing clients.
In recent conversations with agency principals, I have been told fairly consistently than overall business volumes have declined, particularly for translations into languages other than English. Even the translations into English (from German, etc.) appear to have decreased in volume, but whether this is felt by an individual translator will probably depend on the agency’s approach to business and how well the translator fits that approach.
A high quality translator working for an agency with a business model based more on price than quality may suffer a loss of business as the work gets shifted to cheaper labor (at least until the end clients start screaming). The same translator working for another agency might experience a significant increase as the agency takes what little work it has and sends it to the best people in order to keep end clients by emphasizing quality. I see a lot of this latter phenomenon lately, as well as numerous requests for translations which are part of acquisition efforts and “simply can’t be trusted” (not my words) to others.
How should all this affect pricing strategies and business policies? I’m with you, Corinne, in that I would rather work 30% less than cut my rates by 10%. If the bottom starts falling out of my business, there are enough areas that I am aware of that could use attention that I will focus on building things up by addressing these before I’ll think about rate changes. There is much I could do for active acquisition, upgrading my web presence, etc. Heck, I could even print some business cards for the first time in nearly 20 years or join a local business club to network. How original 🙂 It’s easy to become lazy when the work floods in during “good” times, and I’m not immune to that. But I try to stay aware of the slack and keep plans in mind for what to do if it begins to affect my business.
Another thing I am trying to do more as I find out how some customers are struggling is to talk to them and find out how we might cooperate better to support them. Sometimes there are little changes in processes or deliverables that might make just the necessary difference with a customer. It might be something like more open sharing of terminology resources or a documented workflow. Be creative before you start looking at rate cuts. Learn to negotiate better now if it isn’t your strength. You’ll get far more out of that than any additional diploma or certification!
An excellent post, Corinne, and great comments too. Lowering rates should be a very very very last resort after trying every other mean of finding clients willing to pay the rate you want.
This post should be made into poster size and placed on the wall of every freelance translator’s office! Excellent advice as always, thank you.
Excellent post and great blog overall! I have a blog on translation as well, but it’s in Portuguese. My latest post was about the effects of the economic crisis on the translation industry. I’ll update it just to add a reference to these concise and right on-the-mark considerations.
My own experience, working for the Latin-American market, so far is the same as yours: I am never a day without work, been having lots of demand from regular and new clients alike, and I am not even considering lowering my rates (in fact, it’s about time I increase them a little bit in order to be more selective, as I’m regularly overwhelmed).
And for my blog post I gathered a few opinions and surveys from other blogs and websites, and it seems that overall the translation industry is doing very well despite all the panic. Hope it remains that way.
Have a great day.
Fantastic post Corinne – you really summed it all up.
I’m glad to be able to confirm your experience that the bottom certainly hasn’t fallen out of the translation industry just yet. So definitely, lowering rates really should be a VERY last resort, and only after trying all the great suggestions outlined here and in the comments.
You’ve hit the nail on the head, Corinne!
I particularly like the question you raise about whether people are really experiencing more quiet periods or whether it just feels that way due to the general economic news at the moment: I think that it’s very easy to get swept up in the economic doom and gloom that is currently being churned out by the media so it’s really important to remain objective.
Another consideration, at least for us translators invoicing across national boundaries in Europe, is the dramatic fluctuations in currency exchange rates. My company recently realised that, due to a stregthening Euro, or weaking pound, we had effectively put our rates up by 50% in the space of six months. Nice if you can get away with it, of course, but in the long term there is nothing to be gained by bleeding a client dry. By changing the currency we invoice in, we were able to retain what we wished to invoice, while making life a lot easier for our client. In the short term, we are getting less for what we do, but in the long term, we hope we have stregthened our relationship with the customer.
Great post again, as always! And very apt comments too. As I once replied to a new translator, fresh out of university “think of the mail order industry in France. The key players have been fighting to death on prices, offering up to 70% off. Now customers wait until they have their 70% off coupon before buying…and the industry is laying off people by the hundreds.”
Corinne:
As always, another great post!
I refuse to lower my rates. And like you my overall numbers are up from last year.
However, I work for less clients than I did last year.
And I really think that in these difficult economic times, we, the community of translators as an ensemble, should do all we can to protect our common interests. If I lower my rates, I am not just hurting my business but my colleagues’ business.
Thanks Corinne!
@Mark McLaughlan: For important clients using other currencies, I usually set the rate I want in the local currency and simply live with the fluctuations. This gives the clients a certain predictability, and if things get too bad with the exchange, I can just turn the job down. One British customer understood clearly the loss in value of work she offered and suggested that we bill in euros fter many years of GBP billing, but it’s exactly this considerate, accommodating attitude on her part than will make me insist on sticking to rates in her currency. Like you said, no point in bleeding them dry. Committing to a currency is not the same as a rate cut (even if financially it really is equivalent sometimes) – its strategic dimensions are entirely different.
Great post as always.
I like your euphemism of “optimistic” rates some translators charge based on their experience or quality of their work.
Lowering prices is never the answer. You may profit in the short term with jobs to fill your time, seemingly, but a 10% pay cut to yourself means that you need to translate 10% more words to make the same amount of money as before, so it’s not just a pay cut but an increase in hours. (Assuming you can even fill the extra hours you would need.)
And I agree strong with Marianne and others that lowering rates hurts all other translators, too, which hurts the profession overall. It’s a nonsolution.
The fact is, if someone is lowering rates or considering lowering rates, he or she may need to consider the reality that you can’t stay in business as a translator in a down economy and might need to consider finding other ways to earn money until the economy heats back up again.
Just adding to the general chorus of support. None of my clients have said a peep to me about rate changes, but I don’t work for the massive agencies like thebigword and Transperfect who pay lower rates anyway. I think you’re right that there is not so much pressure a bit higher in the market.
My first quarter income is lower than my usual quarterly number, because I had four deadly quiet weeks mid-Dec – mid-Jan. Things have been brisk since though and the next quarter is starting well.
I haven’t been asked to reduce rates but I haven’t increased them in 5 years either. Like Mark McLaughlan, I’m finding exchange rates are sending everything haywire in any case. Where I have a longstanding agreed rate in SEK or EUR, I’m now earning more in GBP than I was this time last year while clients are still paying the same, and where I have an agreed rate in GBP, the clients are finding me cheaper without me having had to do anything.
Thanks for the outstanding post. I, too, find myself working for less clients but in overall better conditions (rates, deadlines, payment promptness). It could also be that after almost 10 years in the profession I’ve reached a good standing and feel prepared to deal with critical times if need be. Rest, fun and other projects are as high a priority as the translator in me.
I am a Japanese-English translator and I came across your website because I have been frustrated for years with some of the big agencies, notably Transperfect. They are always putting pressure on linguists to cut rates to the bone. My good friend, also a Japanese have an English translator, has long said that he refuses to join the “race to the bottom,” and I agree with him. While I have been unable to raise rates significantly for years, I have not had to discount them very much, either. I would be interested to hear of the experiences of other Japanese-English translators out there. I sure wish that we translators could band together….
TransPerfect is notoriously known as a low-rate, low-quality agency among Japanese-English translators in Japan. TP’s project managers seem to care only for the lowest possible rate for the quickest possible turnaround time, and they certainly do not care for, or they are incapable of discerning, the quality of translation.
Excellent post, thank you!
I’m an English-Hebrew, Hebrew-English translator. Yes, I had more work when my rates were lower. But I had to spend more days and hours a month working. The idea is to work less hours, not more, for the same pay.
As has been said here, once you’ve lowered your prices, it’s difficult to raise them again.
In a pinch, if it’s a customer you trust and want to keep, you can agree on a temporary, small discount. But make it crystal clear that the lower rate will be in effect until such-and-such a date, when you will re-evaluate the situation.
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As a colleague once said on Facebook, if you’re going to earn 300 anyway, it’s better to do 10 pages at 30 per than to do 30 pages at 10 per. Also, post-delivery renegotiation is less likely in the higher segments than the bottom. But the real problem is actually getting access to direct clients in some markets and some pairs. In traditionally agency-dominated and freelance-unfriendly markets it can be a real pain.
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