“We prefer to work with freelancers” is what vendor managers, procurement managers, project managers or production managers usually answer to single language vendor (SLV) representatives offering them language services. But is it a good approach?
The pros and cons of working with freelancers are well known to language service provider (LSP) executives and employees. SLVs are often perceived as a type of freelancer, just bigger and more costly, with no additional value. Is this a correct view of SLVs? Using freelancers for projects has become a habit in the localization industry and is a true driving force behind this business. 500,000 translators in 6,000 languages work hard each day in order to bridge the gap between manufacturers and their clients globally with the help of LSP companies that secure the peace of mind of executives in global markets. But is it really an efficient approach? Are the risks behind sourcing and managing multiple freelancers during complex projects really worth it? Can you afford to ignore the benefits of collaboration with an SLV?
You may say: “I don’t know any of those benefits, unless you consider the higher price a benefit.” But in fact, the benefits of working with an SLV are the same that you offer to your own clients. They are the reasons your clients don’t go to freelancers directly with their tasks, but go to you instead. This is the same added value that you offer your customers when closing a deal: greater control over the process and quality, as well as supplier consolidation that results in cost savings.
Let’s be honest, good freelancers work a lot — nasty people say that poor freelancers work even more because they are popular among LSPs due to the low cost. They work a lot more than eight hours a day and produce much more than the standard turnaround of 2,500 words a day. It’s like a merry-go-round: once you’re on, you can’t hop off or else you lose your clients. The word counts and deadlines piling up each day are not the best environment for proper quality procedures. In most cases, and it is also true for the most experienced and valued linguists, a freelancer finishes a project, delivers it and then starts another project. The project manager is lucky if the translator did an automated spell check. Xbench or QA Distiller? Well, sometimes, when they have less work. How about at least reading their own work in the target language before delivery? Forget it!
That’s where control comes in. Someone has to control the process that freelancers follow and the output they deliver. This is very hard to achieve at multilanguage vendor companies. There are examples of top freelancers who were absolute leaders in their languages when they worked for local translation companies where the quality of their work was controlled, where they received scores and regular feedback. Once they started working for LSPs outside their countries, their quality slowly deteriorated since they received no feedback. Why? Because there was no control over their performance. It’s possible, too, that there was no process at all.
Most companies work with the same pool of freelancers, that’s the truth about the language industry. Apart from proper sourcing (that usually means that one to five translators out of 100 qualify for collaboration; let’s be honest, anything different than that sooner or later leads to disaster) the key is control and a well-defined process of checking the translator’s work, assigning scores and, if need be, applying penalties for poor quality. Even if they wanted to, freelancers cannot check their own work objectively. Having a good SLV on your side means not only access to carefully chosen linguistic resources in numbers that guarantee the proper completion of even the largest or the most complex projects, but also full control over the output. Just like your multilanguage vendor company.
Consolidation and cost
Consolidation and cost go very closely together. You may say: “I have already consolidated the team by removing the weak links with time. This gave me the opportunity to offer greater volumes to a smaller number of linguists and receive discounts from them in return.” Right you are. That’s how it works. But unfortunately, it seems to be the end of possible cost savings. Let’s think whether you could save more. Of course. That’s how consolidation works.
First of all, by hiring an SLV, you instantly consolidate resources. You work with one point of responsibility (usually a dedicated project manager on the SLV side) and have access to dozens or even hundreds of carefully selected and controlled language professionals. A freelancer delivers a project that has not been checked properly to the SLV that works for you? It’s not your problem. This issue will be discovered and eradicated before you receive delivery. If you worked with the freelancer directly, you would have a real problem — freelancers usually don’t have any backup plans in case of failure and accidents happen — and you would lose a lot of time. Time is another factor that is closely connected with consolidation. After all, time is money. But more on that later.
Let’s get back to consolidation and how it can affect your cost. There’s no doubt that consolidation saves money. With several conditions, though. First of all, you need to reduce the headcount. Your freelancers are supported by an army of people on your side: vendor managers, project managers, accounts payable and other staff. When you reduce the number of suppliers, your headcount falls, too. Lower headcount means lower employee cost. Simple.
Second of all, you need to leverage the consolidated spend, which means you have to negotiate lower prices. That’s where we can talk about the perceived and real cost of hiring an SLV versus hiring a freelancer. Of course, SLVs apply margins and of course, freelancers do not. But the truth is that in the reality described at the beginning of this article, the SLV’s margin is probably the lowest possible cost you can pay for your client being happy and not losing them due to the poor performance of a freelancer. The risk in hiring a freelancer is much bigger than the SLV’s margin value. But going back to leveraging the spend, what’s the whole buzz about consolidation? It’s easy: you will receive lower prices from one supplier that receives higher volumes — the same volume that would otherwise be sent to many providers turns into higher volume for that one provider.
Third, you need to reduce the number of tasks, and this is connected to reducing headcount. More suppliers mean more tasks either carried out by your employees or outsourced. For instance, splitting a project into many parts for many freelancers means many tasks, and this needs a lot of time. You can easily cut this cost by sending a project to an SLV. The rates they offer usually have project management fees included; hence you move a big part of this cost to the SLV supplier. An example of lowering the external cost is pending US legislation that would require businesses to file a 1099 form for every provider with whom they spend $600 or more per year. Most businesses will outsource this task and it would be completed for each supplier, using one SLV results in a potential outsourcing cost that is multiple times lower than in the case of multiple providers.
People are accustomed to their professional habits and we don’t want to change something that works, there’s no doubt about it. The question is whether there’s anything that works better. In an ever-changing world, we are challenged to seek new and more efficient solutions each day to meet our objectives. It’s better to foresee the upcoming need for a change and act proactively rather than react to new circumstances. Usually, it is too late then. It is particularly true with the language industry where LSPs need to be very responsive to the quickly changing reality of their clients on the one hand, while on the other hand, the belief that time-proven procedures and solutions will work forever prevents localization service suppliers from taking new, better approaches. With the current business environment and global economic climate, it seems reasonable to change the story from “We prefer to work with freelancers” to “We welcome SLVs,” especially with the machine translation boom and enormous volumes to be processed just around the corner.