Pricing is a delicate topic in the translation industry. As a general rule, translators are averse to discussing their rates, and translator organizations generally avoid publishing data on rates due to concerns that such data may be viewed as price-fixing. The industry standard is to charge by the word, but while this standard is an extremely helpful tool for clients to be able to forecast how much a given project will cost, a one-size-fits-all per-word rate is problematic for those of us who know that not all words are created equal: one word may be translated in a second, while for another hours of research and deliberation may be needed to determine its best equivalent in the target language. Some texts have more of the latter kind of word than others, which is why most translators (myself included) do not publish a “standard” per word rate for all projects and all clients, opting instead to assess each project on a case-by-case basis. We thus tend to speak more of rate “ranges” than specific rates. But for novice translators who want clear advice on what they should be charging for their services, this kind of vagueness can be frustrating. So how can new freelance translators determine what rates they should be charging?
In his presentation at this year’s ATA conference in Chicago, Jonathan Hine spoke of the importance of calculating translation rates based on the expenses and income needs of the translator. Hine proposed an extremely useful, clear and straightforward methodology for determining a minimum per word rate, which basically involves the following three steps:
1. Calculate your annual business expenses plus the earnings you need to make from your business as a translator in order for that business to be viable. The resulting total is what you need to earn in a year to break even.
2. Calculate the total number of hours you could reasonably expect to be able to spend actually translating in a year. It is important when calculating this figure to deduct hours for vacation time and sick days, and hours when you are not actually translating, but doing work that is necessary to maintain your business (quoting and invoicing, promoting your services, writing emails, etc.). These non-translating tasks normally take up to as much as 30%-40% of a translator’s business week.
3. Calculate the average number of words you translate in an hour. This calculation will require the collection of data on your translation projects, keeping track of word volumes and hours spent on each project, and should be subject to ongoing analysis, allowing for the fact that as you become more proficient this hourly average will (or should) increase.
Once you have the results of the above three steps, you can calculate your minimum per word rate using the following formula: Break-evening earnings (1) ÷ [Total translating hours (2) x Average Words per hour (3)] = Minimum per word rate. For example, if you’ve worked out that you need to bring in $80,000 a year to cover business expenses and earn a living, that you can work 1400 translating hours in a year and can translate an average of 400 words an hour (or 560,000 words a year), your minimum or “break-even” per word rate would be 80,000 ÷ 560,000, or a little over 14 cents per word. Of course, obtaining realistic calculations of each of the three figures necessary to determine this minimum rate may be difficult for novice translators, who may have only limited data to draw on, and so the calculation will be subject to constant refining and updating as you gather more data on your productivity. In the meantime, establishing a method for keeping track of that productivity (such as a spreadsheet of your projects, showing word counts and hours worked on each one) would be essential for future reference.
For many freelancers working in other industries, the need to calculate rates based on expenses, expected earnings and productivity may seem blatantly obvious. Yet for translators this approach is actually quite revolutionary, as in the translation industry (or at least, in many sectors of that industry), rates tend to be governed more by market forces than by what translators need to charge to be able to make a living out of their profession. The globalization of the market over the past decade has resulted in extremely fierce competition in the more common language pairs (and particularly between Spanish and English), placing considerable downward pressure on rates, at least in countries like Canada where they have traditionally been higher than the global average. This means that many translators who calculate their minimum per word rate according to the above formula may end up finding they have priced themselves right out of the market, unless they can carve out a niche for themselves in a sector of the industry where their particular skills and expertise are valued more highly than merely securing the cheapest rate.
The above point touches on an issue raised at another of the presentations at this year’s ATA conference: the increasing differentiation between the “bulk” and “boutique” translation markets. I’ll be discussing this issue in a future article on the Forum; in the meantime, I hope my contribution here will be of use to new translators who are facing the conundrum of how to calculate their rates, and the pressure to compete with the cacophony of lowest bidders fighting to win new clients.