If you want to inspire fierce emotions in a group of translators, ask this question: is it better to bill by the word, by the hour, or by the project, and is the per-word pricing model on its way out?
Per-word pricing has historically been the norm in our profession. Per-word pricing has a few advantages:
-As long as the source document is countable, everyone knows up front exactly how much the translation will cost
-Faster translators earn more per hour, which encourages specialization, efficiency, and appropriate use of technology (and, perhaps, excessive speed, but that’s a different issue)
-The quoting process is very simple. How many words? OK, here’s your price. Done.
This model also has disadvantages:
-It positions translators as “piece workers,” rather than consultant-level professional service providers
-It opens the door to nickel-and-diming. I once had a potential client ask if I charged “for the little words.” (Only if you want them translated!). Translators who bill by the line or character may be subject to even more minutiae, such as whether the character count includes spaces
-It can lead to haggling over seemingly-tiny amounts of money that add up over time. If you translate 500,000 words a year–not atypical for a full-timer–a one-cent difference adds up to $5,000 over the course of the year
Per-hour pricing is more the norm in many other professional service jobs. My accountant, attorney, and web designer all charge by the hour. The issue is this: for whatever reason, many translation clients are resistant to paying an hourly rate that is the equivalent of the per-word rates they’re already paying. This is true of many of my agency clients: I earn, say, $75 “an hour” when translating for them by the word, but they offer, say, $40 an hour for editing–meaning that I only work for them when paid by the word.
At the risk of over-analyzing, this phenomenon has a domino effect. Because editing (for agency clients) is typically paid per hour, at a rate that is lower, and sometimes much lower, than the “hourly rate” that translators earn when paid by the word, many experienced translators avoid editing. Meaning that newer, less experienced translators are often brought on board as editors, which may or may not be a good idea.
Hourly billing also removes some of the incentives associated with per-word billing: there’s actually a disincentive to increase your speed by specializing, if that means that you do the same amount of work in less time.
My favorite way to bill is by the project. I do this with many direct clients. I feel that:
-It gives the client one number to focus on. How much is this going to cost? While…
-I can tweak the per-word rate a bit, to reflect the deadline, file format, research time, etc. without haggling with the client about this
Readers, any thoughts on this? Have you moved away from per-word pricing and toward something else? I ran this post in my newsletter and got some interesting answers, so I’m interested to hear what you have to say.
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I’m following a combined approach: I bill by the word (if possible) but I keep track of my effective hourly rate in my own spreadsheets. This way, the client benefits from the advantages you mentioned and will know upfront how much it’ll cost. No surprises, and no concerns that the translator will intentionally take her time to bill a few extra hours. However, I also benefit from the insights that the hourly rates provide. For example, a client might be willing to pay a higher rate per word, and you might instinctively think, “great!” — but it might turn out that their projects are always so time-consuming that you end up earning only half of what you want to earn per hour. This approach also helps avoid the problem of haggling you mentioned (at least to a certain extent), because what matters to me is how much an hour of my time is worth. A client might think they’re saving a few bucks for a small discount on fuzzy matches and feel good about it. But they won’t notice when my effective hourly rate is higher than my stated hourly rate, and I’ll never have to argue with them about that. At the end of the day, things even out.
I’ve also noticed the phenomenon you mentioned that clients refuse to pay my hourly rate (for non-translation tasks) even though they already pay that same rate (or more) when being billed by the word. I’m making it a habit to let clients know in my proposals how many words I translate per hour on average, so they’ll see that my rates per word and per hour are aligned. Sometimes, it helps. Other times, clients seem to be unable to understand basic math… ¯\_(ツ)_/¯
Thanks, Simone! Always good to get validation that other people experience the same situations! And your idea of tracking the effective hourly rate (which I don’t do, but I should) is excellent. Thanks for your comment.
The “little words” question cracked me up! Can you charge more for “big words?”
Dan Villarreal
Taipei, Taiwan
I know, right? Maybe I should start that as a new pricing strategy: your document was full of big words, so it’s going to be more expensive!
Thanks Corinne. With per-word pricing, the client ends up with decimals in the quoted price. This doesn’t look great. It also educates clients to commoditise the intellectual work we do. A per-hour model doesn’t answer the client’s question of “how much will it cost” – they often need a figure to stick in their Excel file for the accounting department. Per-project pricing provides a fixed cost, avoids haggling, and gives us a bit of breathing space to cover extra costs such as formatting, terminology search etc. However, you need to make a good judgement on how long the job is going to take; if you get it wrong then that’s too bad. I’m all for per-project pricing (I only work with direct clients though).
Best wishes
Mark – France
Thanks, Mark! Thanks for that thumbs-up for per-project pricing, and I totally agree with your point about “breathing space.” As you noted, my direct clients are very receptive to per-project; agencies less so. Thanks for your comment!
Hi all! Loved the idea about the “little words” as well! :-)) When I work for agencies (in Germany) I usually bill them by the “Normzeile” in the target language, 1 “Normzeile” being 55 characters including the spaces. I kind of like this approach, because – as has been said – you know beforehand how much a translation will be worth circa (I never know exactly, because the payment is not based on the source document). Being an English to German translator that’s kind of neat, because the German version usually will be a bit longer 🙂 When I work for other clients, however, I usually bill them by the hour, even for translation jobs. I believe that’s mainly because they do not deal with translations on a daily basis and so are less familiar with the idea of payment by “Normzeile” or word.
Thanks, Kerstin! That’s really interesting about the “Normzeile.” And also interesting that you’ve had success with hourly billing for clients who aren’t “typical” translation clients. Thanks for your comment!
I wonder whether anyone else has heard this tale, a kind of urban translation legend regarding the “little words” that I heard about a decade or so ago.
A translation client contacts a translator and tells her, “We have a project, but don’t want to pay for repetitions, specifically the repetitions of definite and indefinite articles. It’s just not right for you translators to pad your invoices with such insignificant repetitions; repetitions are of no value to you or to me.” The translator advises the client that those articles are, in fact, the only kind of articles accounted for in her invoices. She goes on and tries to explain, “I am a professional and my rate accounts not only for the word count, but also for my time and for my expertise required to perform the translation. I have to do a bit of research, and that needs to be compe …” But the client cuts her off and becomes somewhat indignant. He presses the translator a bit harder, repeating his stance. The translator, fed up and somewhat tired of the repetitious impertinence, finally concedes to the client’s demands saying, “Alright, since you don’t want to pay for them, I won’t include any definite or indefinite articles in your translation.”
The client, quite pleased with himself, agrees and gives the translator the project. The translator gets to work. And when she finishes the translation, she saves the translation as a separate file, so that she has two separate files, opens one, and commences two global search & replace actions. First, she searches for all the definite and indefinite articles and replaces them each with an empty space. Second, she searches for all the double empty spaces and replaces them each with a single space.
She then delivers the translation to the client. The client opens the file and realizes the translation doesn’t contain any definite or indefinite articles. He is quite upset, because he needed the translation right away, and calls the translator to complain. The translator quietly explains, “I told you I wouldn’t be including any definite or indefinite articles in your translation, because you didn’t want to pay for them. What is more, you didn’t let me finish what I was going to say. In a fit of irony, you repeated your stance over and over again that repetitions are of no value to you or to me.”
“But I don’t know where they all go, and even if I did, that would take me forever,” responds the client. And the translator says, “Now you see why I charge not only for the word count. but also for my time and expertise and why I expect to be compensated accordingly.”
I don’t remember how or whether the tale is supposed to go on, but the point is clear enough: translation is not about words, it’s about rendering a service, and the little things are just as important as everything else, if one wants to understand the services rendered.
Thanks, Peter! Great story!