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What do companies prefer? Freelancers or agencies
Thread poster: Doron Greenspan MITI

Doron Greenspan MITI  Identity Verified
Israel
Local time: 07:27
Member (2005)
English to Hebrew
+ ...
Aug 16, 2008

Here's a question that's been bothering me ever since I started my freelance career. So far I've been doing quite well, so there was no urgent need to dig into that question, but it's August now, so there you are:

I wonder what is your opinion (or knowledge) regarding whether companies prefer to work directly with freelancers, or opt to use agencies.
I'm talking mid-large companies, who have a regular need for translations, not the occasional one-off request.

So far I've been working mostly with agencies, and never really needed to engage in marketing vis a vis companies, but I'm now considering doing a bit of the latter, so wonder whether it's worth it at all.

Thanks for your input into this baffling question.

Doron


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ViktoriaG  Identity Verified
Canada
Local time: 00:27
English to French
+ ...
Market research to target the right client Aug 16, 2008

I don't think it is really a question of preference. It's rather about the fact that the end clients are not well educated on the translation industry, so most of them assume that translation can only be obtained by going through an agency. If you ask them who does most of the translation work in pretty much any country, the typical answer you will get in most cases is in-house translators working in translation agencies. I am pretty sure most of them think that most translators work in-house. They don't know that often, the service they get in an agency can be obtained just as easily directly from the translator, often at a much better price and with a better, more personal service.

What you would need to do to figure out the answer to your question is market research. Large companies who have regular translation needs have a translation department with in-house translators, though they do occasionally buy such services from agencies when they have an overload. Mid-sized companies are good to target because they have a fairly good supply of work, but they are often not large enough to justify the creation of an in-house translation department. However, if you target many smaller companies, you could still get a lot of work - if you have many of them, they add up.

Also, depending on your specialization, you could find small companies with regular work supply who would prefer to work with the same one or two people - these are the people who would go for freelancers, if they knew there are talented, professional individuals out there to do the work. An example of this is smaller law firms.

Research the companies who specialize in an industry you specialize in. Create a list of contacts. Get a paying profile for just a few months in a few of those directory websites and gather contacts. Visit their websites and try to find out how they usually deal with translation work. In time, you will have a nice list of people who would be willing to listen to your pitch. They will not necessarily all become your clients - but you have advantages to sell to them that agencies just aren't in a position to offer them.

But no, I don't think companies prefer agencies to freelancers. There are situations where a company is better off working with an agency (software UI to be localized into 14 languages, complicated DTP work, etc.), but there are also plenty of jobs where they would be better off with a freelancer or with a team of freelancers and an internal project manager. They go to agencies first because they don't realize that there are other ways to get the work done.

[Edited at 2008-08-16 17:05]


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Astrid Elke Witte  Identity Verified
Germany
Local time: 06:27
Member (2002)
German to English
+ ...
One good reason for them to go to an agency Aug 16, 2008

Not all translators are reliable, strange as it may seem. There are translators who simply disappear off the face of the earth and do not deliver. I have personally experienced it as an outsourcer. What the reason for it is I have no idea. However, I can only assume that some freelancers have little business sense or sense of responsibility, whereas an agency is a company and is more likely - from the end client's perspective - to be reliable in its business conduct, including keeping those vital deadlines, and so on.

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ViktoriaG  Identity Verified
Canada
Local time: 00:27
English to French
+ ...
Agree and disagree with Astrid Aug 16, 2008

I just wanted to add a point to what Astrid says.

It is true that there are too many translators who are not serious enough or don't have their act together to be able to provide what the client expects. However, there is an increasing number of agencies who have the same problem.

Access to the market is fairly easy, so many people who were unreliable freelancers eventually create unreliable agencies. I would say that even though what Astrid says is true, the same increasingly applies to agencies.

I don't think that companies who do prefer agencies to freelancers have such a preference out of reliability concerns.


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Hipyan Nopri  Identity Verified
Indonesia
Local time: 11:27
English to Indonesian
+ ...
Number of Language Pair and Formatting Aug 17, 2008

Doron Greenspan MITI wrote:
I wonder what is your opinion (or knowledge) regarding whether companies prefer to work directly with freelancers, or opt to use agencies.

In my opinion, companies will use translation agencies if the translation job involves many language pairs and formatting work. Otherwise, they will use freelance translators.

Best Regards

Hipyan


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Henry Hinds  Identity Verified
United States
Local time: 22:27
English to Spanish
+ ...
It's not companies, it's people Aug 17, 2008

In my experience you do not deal with companies, you deal with people. Often the people you deal with are at the bottom levels of the organization, such as secretaries, administrative assistants or line workers in a given department at a certain location. If you are lucky, you may also be known to and have a relationship with the boss of that particular operation. If you are even luckier, you might get referrals to other company departments or locations, or even to other companies.

But in general from what I have seen, our relationships tend to be at the lowest levels of company organizations, and those are the ones to be cultivated. The big boys could nornally care less about who you are or what you do.


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Kevin Fulton
United States
Local time: 00:27
German to English
Agencies have an advantage re: resources / capacity Aug 17, 2008

If you find a corporate client with regular ongoing translation needs, you'll need reliable backup, otherwise both you and your client will be very frustrated.

Unless it specializes in a particular language group, a good agency will have dozens of contacts in most of the major language pairs. If Translator A isn't available, then Translator F or M, etc. might be available. I'd be hard-pressed to come up with more than a half-dozen people in my language pair whom I know personally and whose work I've seen, and whom I might call upon to help out. These people are usually as busy as I am, so I'm not always able to take on large jobs with relatively short delivery times, no matter how reasonable the client's demands may be. When it comes to translations outside my pair, I know even fewer people whose work I could guarantee. The same is true of value-added services, such as DTP. A good agency can almost always find someone to provide these services if they don't already have someone in-house.

At most agencies (in the US, at least), there is always someone to answer the phone and respond to inquiries during normal business hours. That is, vacations are covered. A single-shingle translator is at the mercy of e-mail access, call forwarding or his/her associates to make the sure client receives a response. I know from experience that a direct client will go elsewhere if their normal translator isn't available when needed.

I have a few direct clients who require translations of substantial documents a couple of times/year. For the most part this has worked out. If any of them needed weekly or monthly translations of, say 25K+ word documents, I wouldn't be able to satisfy them, at least not over the long run, if I wanted to maintain quality while retaining the rest of my customer base.


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Doron Greenspan MITI  Identity Verified
Israel
Local time: 07:27
Member (2005)
English to Hebrew
+ ...
TOPIC STARTER
Statistics and trends Aug 17, 2008

Thanks, everyone, for your input.
Victoria, your input is very useful, as always.

I do wonder, though, whether there's some statistical data as to who employs whom.
As a freelancer, I'm quite happy to remain with (the good) agencies, and not bother with direct clients over and above a certain level.

Now it's mostly curiosity that drives me to find out how this works in reality. More interestingly, whether there's a trend in either direction. An interesting topic for a lecture or article.

My gut feeling says yes, there probably is a move toward agencies, which are capable, as you pointed out, of handling multiple languages.

Doron


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Daniel García
English to Spanish
+ ...
Costs (or perceived costs) Aug 17, 2008

If you have to translate a mid-size project, like a computer manual into 10 languages, you need to hire about 30 freelancers (let's say two translators and one reviewer per language) and inhouse project managers to take care of it.

You also would want to manage those freelancers and keep track of their quality, etc.

Your accounting department will get lots of different invoices from 40 people. Your inhouse staff will get questions from all of them as well about the meaning of the source text, etc.

An agency can be useful as a channel. You just give them the source files and get the final translations back.

Because translation is a core business for a translation company, they can probably manage those translations projects more efficiently at a lower cost.

These lower costs are not only because they pay less to freelancers but because they can leverage resources better from across different customers, establish more efficient procedures, etc.

This means that for the final client it should be less expensive to to hire one agency dealing with everything that having the overhead of dealing with 40 (or more different people) or setting up their own house translation department.

They do the same with other non-essential services, like cleaning, for instance, or security.

Whether it is really less expensive or not, I am not sure but everybody in those companies seem to think so.

The same happens in other industries.

Daniel


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xxxNMR
France
Local time: 06:27
French to Dutch
+ ...
Liability reasons, too Aug 18, 2008

Big companies always prefer to deal with companies, because of:
- size (or supposed size, companies are not always aware that some subcontractors are kitchen-table agencies)
- more languages, as indicated above,
- liability and insurance reasons
- legal reasons: in some countries big companies are legally bound to ensure themselves that their subcontractors are other legal entities, duly registered, in good financial health, able to pay their people and their social security costs, and that the money isn't going into a tax evasion structure or another big black hole, if you see what I mean. Don't forget that they have shareholders, financial institutions and the State to ask them what they do with their money.

It is not for financial reasons:

dgmaga wrote:
This means that for the final client it should be less expensive to to hire one agency dealing with everything that having the overhead of dealing with 40 (or more different people) or setting up their own house translation department.

They do the same with other non-essential services, like cleaning, for instance, or security.

Whether it is really less expensive or not, I am not sure but everybody in those companies seem to think so.


A (good) translation agency is far more expensive than an in-house translation dept., essentially because of recruitment and quality assurance procedures. If everything is normal, they are service providers and have to make profits. And they certainly do.

As a freelancer it is nearly impossible to work for a big company. I have one big (international) client, but some years ago the purchasing dept. cleaned the mess and only wanted to work with a very limited number of subcontractors, and I think this is the same in most companies.

For medium- or small-sized companies the problem is not the same.


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N.M. Eklund  Identity Verified
France
Local time: 06:27
Member (2005)
French to English
+ ...
Limitations on large structures Aug 18, 2008

As a freelancer it is nearly impossible to work for a big company. I have one big (international) client, but some years ago the purchasing dept. cleaned the mess and only wanted to work with a very limited number of subcontractors, and I think this is the same in most companies.

This is true.
I work for a couple large companies in France, but my work is done through an agency, or another entity. They never contract out to individual sub-contractors to avoid any possible court action, social security evasion accusations, and to clean up their accounting.

My brother is an IT developper in the US and he had been sub-contracted by a large company for almost a year. Because the IRS is wary of long term subcontracting jobs, he had to convert himself into a company in order to continue working with them.

But if you want to work with these large companies, do some research and find out who are their accepted 'contractor suppliers'.


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redred  Identity Verified
China
Local time: 12:27
English to Chinese
+ ...
different targets Aug 20, 2008

It is true that small and medium size companies like to find freelancer; some people even try to avoid agencies though these firms always rank top in a search page concerning translation.

[Edited at 2008-08-20 07:02]


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Doron Greenspan MITI  Identity Verified
Israel
Local time: 07:27
Member (2005)
English to Hebrew
+ ...
TOPIC STARTER
Why would small/medium companies wish to avoid agencies? Aug 20, 2008

Redred (and other people, of course), I wonder why small/medium companies wish to avoid agencies and go straight to the freelancers.

Are all the previously raised arguments for large companies vis-a-vis agencies not valid for SMBs? Is the higher price charged by the agency (compared with a freelancer, possibly) the only reason?

Doron


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N.M. Eklund  Identity Verified
France
Local time: 06:27
Member (2005)
French to English
+ ...
Big-Middle-Small Aug 20, 2008

I don't think there's a question of the rules being different.
The big companies usually put in place a general policy to be applied for risk management. There's so many people and projects that it's the only way to ensure avoiding problems. This kind of policy is also needed becuase they have to answer to possible share/stockholders.

Medium and small companies can afford to manage their contracts on a more individual basis. By 'afford' I mean that each freelancer's situation is well-known to the company and they can judge the risk in how they choose to use the freelancer.

One of my clients is a Small company (around 60 employees) and I think they prefer negotiating directly with me on the work that I do, rather than contacting some middle person in an agency. I'm able to be more flexible (time, schedule, developping projects) with them and also they can be assured that since I work directly with them, I'll be able to give them the kind of results they expect. The feedback I can give them because of my 'insider knowledge' is also very useful to them.

I don't think they 'avoid' agencies, but since they're used to managing their in-house employees, they may find it easier to have a freelancer that can be managed in a similar way. I've been treated like part of the team at my client's office, and I've been working with them for 5 years.
I think it's just the easiest way for them, especially since I'm a known quantity, whereas with an agency there's a certain probability of the unknown.


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ViktoriaG  Identity Verified
Canada
Local time: 00:27
English to French
+ ...
Smart businesses Aug 20, 2008

Doron Greenspan MITI wrote:

Is the higher price charged by the agency (compared with a freelancer, possibly) the only reason?


Of course not. Smart companies also know that, when you work with a freelancer directly, the turnaround may be shorter, the communication may be better and you are ultimately working with people you know (no going through a lengthy human chain to explain that acronym to a person whose name they don't even know). Most people in most industries, when given a choice, prefer to work with people as opposed to interfaces.

So, as long as the project is not too complicated (easy formatting, no DTP required, only a couple target languages, etc.), many smaller companies prefer to work with freelancers because it is often actually more practical and because they get to work with a person, who almost seems to them like she is part of their team.

I think the overall experience with a freelancer is more pleasant and the only reason I see for a company to pay big bucks to agencies is that their project requires resources a freelancer simply doesn't have.


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