Until a few weeks ago, the most popular post on this blog was one that I wrote a long time ago on charging by the word versus charging by the hour (it’s since been eclipsed by a recent post on using a sample translation as a sales pitch). This is a topic I think about a lot, and this morning while listening to NPR’s Morning Edition, I made a connection (admittedly this was before I had any coffee, so it may be an erroneous connection…) between the current health care reform debate and translation pricing.
Linda Wertheimer talked to Mayo Clinic President Dr. Denis Cortese about the Mayo Clinic’s model of providing high-quality care at a manageable cost, largely by putting its physicians on salary. As compared to the fee-for-service model that exists elsewhere, the Mayo Clinic believes that physicians are/should be paid to keep patients healthy, rather than just for treating them when they’re sick. Whether or not we agree with this model, its basis appears valid: in the normal system, if I go to the doctor for my sore shoulder and she decides I need rotator cuff repair surgery, she makes a lot of money; if she tells me to stretch and take ibuprofen, she makes only what I pay for the office visit. Under the Mayo model, the doctor earns the same amount no matter what treatment she prescribes.
So, what about this is applicable to translation? It seems to me (and feel free to disagree) that I am inclined to work more carefully when I get paid by the hour. I know that if I spend two hours reading reference documents that will result in a better translation, I get paid for that time. If it takes an inordinately long time to find just the right word, that’s OK. Whereas when I’m getting paid by the word, the actions mentioned above are essentially off the clock.
I’ve partially solved this problem by raising my per-word rates to the point where I can afford to do off the clock work and still make a healthy hourly rate. However, the problem in our industry (which Dr. Cortese addressed as it relates to medicine) seems to be that many clients want to pay a lower hourly rate than what they effectively pay when the translator charges by the word. Let’s say that I produce about 500 finished words per hour on average, and that my clients pay 15-20 cents per word. Right now, I would say that although my clients are effectively paying $75-$100 an hour, they would balk at that number if I listed it as my hourly rate. In the NPR interview, when Linda Wertheimer asked Dr. Cortese how Mayo retains physicians when they are paid a fixed salary, his answer was that Mayo’s salaries are competitive with what physicians make in the fee-for-service model, and that its physician turnover rate is less than 2% per year. So, it seems that the missing link in our industry is that competitive hourly rate, which leaves most of us charging by the word. Thoughts?
Hi Corinne
I think this is an interesting point, and a great link given it was made pre-coffee đ
My take on charging generally is that I will chop it up whatever way the client wants, once I am meeting a defined (generally for internal use only) hourly rate. This includes all the factors you mention above, but also my perception of the value of the service I am providing. Given there are so many factors involved in preparing a quote, this would not necessarily be the same rate I would quote if someone asked for an hourly rate on a job… So I don’t really mind what way I quote to a client as I have my own personal hourly-rate benchmark.
It seems to me that clients want to pay less full stop. That’s fair enough, I’d be no different if the shoe was on the other foot. It’s when translators allow clients to pay less that the problem starts, in my view.
Look forward to hearing other translators chip in on this.
Hi Corinne,
Although charging by the hour seems fairer in that it compensates the translator for time spent researching terminology, and so on, I’ve always disliked it. I worry that if I bill for too many hours, clients will think I’m trying to gouge them; and conversely, if I bill for only a couple of hours, they may think I’ve rushed the job and not given their text the attention it deserves.
What’s more, hourly billing penalizes translators if they become faster as they gain more experience.
The problem with both time- and word-based billing is that it encourages the perception of translation as a commodity rather than a service. While I generally have to stick with the word-based pricing model when working with agencies, with direct clients I’m trying to move towards project pricing.
This of course means that, before quoting, I have to see the full text (which I always ask to do anyway) and obtain various pieces of information from the client: Who is the target audience? What do you hope to accomplish with this translation? and so on.
Inspired by what I learned at a copywriting workshop last weekend, I’m planning to draw up a briefing sheet containing three or four such questions that I can email to clients requesting a quote. In my quote, I’ll then set out exactly what I’m going to do for the client and how much it will cost altogether.
Of course, I’ll probably still use the number of words and the time I am likely to spend on the job as factors in calculating my project price, but I think my target earnings per hour are entirely my business and not something to be shared with clients. I want the client’s perception to be, “That’s a fair price to pay for a service that’s likely to generate us $xxx in increased sales,” rather than “That’s a lot of money for a couple of pages that shouldn’t take more than a couple of hours.”
I totally agree with Tom’s statement
In my mind, it’s not about how you charge but what you charge for. If you can help the client see the value in you spending extra time on research or QA, it doesn’t matter how you charge. On the other hand, if the client doesn’t appreciate the value/quality of your work, I don’t think that moving to an hourly rate will help.
I’ve been a full-time freelance translator for 10 years. In complete honesty, when I’m asked to charge by the hour I have a standard hourly rate ($35-$45/hour depending). But I figure out the number of hours to bill by:
1. counting the total words in the finished translation
2. multiplying by my per word rate (say $0.15/word)
3. dividing by my hourly rate
This makes it so that my hourly rate comes out exactly the same as my per word rate. And I don’t have to keep looking at the clock all the time and recording how long I spent getting a cup of coffee or whatever.
I’m a good translator. And often a very fast translator. As long as the product is good, it’s not really anyone’s business how fast.
I do sometimes have to sit on a completed job for a few hours so that if I’m billing for 6 hours, 6 hours has actually elapsed. Which is silly. But what the hey.
On those rare occasions when I bill a translation by the hour, I have sometimes followed a method similar to what Rama Lama describes. In a daily workflow often punctuated by frequent interruptions from client phone calls and e-mail requests, there is often no other reasonable way to “track” things, despite all the lovely stopwatch features of some of the sillier time management tools available. Since I still track time on many jobs (including those not interrupted) and calculate an “effective hourly rate”, I’m sure that the calculation is also reasonable.
However, in general I am moving more toward the model Tom describes. Partly because many customers just want a figure for their budgets and want to know what they are getting for the money and partly because I have grown tired of secretaries calling up to tell me that their calculation of a line price on a 700 line job differs from my calculation by one line, and I have to explain the usual practice of rounding up in Germany. Or dealing with questions regarding charges for time spent with a mountain of reference material containing “binding” terminology not available in an organized list. A fixed price with a description of the service focuses the discussion nicely: is this good value or not? Even an agency can see at a glance if their margins make the offer attractive or not.
In general, it is not possible to charge enough per hour to make as much as I can by the word.
My per word rate takes into account a certain amount of research time.
If I am fast because I have a lot of experience in that area, it doesn’t follow that I should be paid less because my experience allowed me to do it quickly.
On the other hand, if I have to spend a lot of time researching an area because I’m less experienced in it, it shouldn’t be on the back of the client either, unless it was something truly weird. The research that costs me more time on that job is likely to benefit me in the future when I encounter it in another job.
Joan
Interesting discussion. I also really enjoyed that NPR segment, Corinne. Of course, I am a huge NPR fan! We traditionally charge by the word, with the main advantage being that the client will know ahead of time how much the project is going to cost. If the roles were inversed, I’d want that, too. However, we’ve heard from other translators that they enjoy charging by the hour because it makes the work seem less menial to them — i.e., getting compensated for their massive experience and their time rather than for a smal unit, analogous to what other professionals, such as lawers and accountants, charge. It’s an interesting point, and perhaps we’ll look into creating some hybrid models like the ones discussed by clients.
I meant to say “..the ones discussed by our colleagues in this conversation.”