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Annual rate adjustment to inflation rate
Thread poster: pietervertaler
pietervertaler
Netherlands
Local time: 19:19
English to Dutch
+ ...
Dec 21, 2009

I'm not aware if this has ever been a topic of discussion on Proz.com before, but I would like to hear people's views on the following.

I haven't raised my rates since I started freelancing a few years back. I did agree to lower my rates, however, but minimally, when asked in reference to last year's economic downturn. As from this year onwards, I'm planning to adjust my rates to keep step with the inflation rate on an annual basis, to make sure that ten years from now I won't have lost half of my purchase power.

However, I'm also aware that many of my colleague translators, many of whom - like myself- are not very well-versed in matters economic and/or financial, may just carry on applying the same rates they applied five years ago. If all freelance translators make an annual inflation rate adjustment standard practice, this would rob clients from their opportunity to force freelancers' rates down by threatening that your services are becoming too expensive and they will look for other "vendors" or "resources" (as I was dehumanised to by a client a while back) if you do not forswear your foolish intentions.

I would suggest everyone - and especially my fellow Dutch translators, to unite in this respect. In the absence of trade unions to fight our battle, we must stand united.

Please let me hear your comments on this. Also, please also let me know if you are planning a rate adjustment - if not, for what reason?

Thanks!

Pieter


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Rifraf
Local time: 19:19
higher rate in bad economic times Dec 21, 2009

pietervertaler wrote:

I would suggest everyone - and especially my fellow Dutch translators, to unite in this respect. In the absence of trade unions to fight our battle, we must stand united.

Please let me hear your comments on this. Also, please also let me know if you are planning a rate adjustment - if not, for what reason?



There are several Dutch trade unions for translators, but of course it's forbidden to make price agreements - in or outside of a union/sector.

In these economic challenged times you can of course raise your rate, but the question you will have to ask yourself is if you then will still be interesting to agencies and end clients? If you think you can "sell" a higher rate, by all means; you should do so!


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Laurent KRAULAND  Identity Verified
France
Local time: 19:19
French to German
+ ...
Adapting to the "recession trend"... Dec 21, 2009

is the worst thing you can do. Outsourcers won't pay you more when things get better. And remember that being told "You are too expensive" often is (when it comes to agencies) a translation of "I was unable to negotiate with the client and am passing my lack of business acumen on to you".

There are a lot of agencies selling translations e.g. at 0.10 euros/word and paying their subcontractors 0.07 euros/word. If you were an agency, what could you do for 0.03 euros/word to add some kind of value to translations sold at that price? From my experience, the answer is pretty clear: not even internal proofreading!

Rifraf wrote:

There are several Dutch trade unions for translators, but of course it's forbidden to make price agreements - in or outside of a union/sector.


Be it the Netherlands or elsewhere, the fact that price agreements are legally forbidden has not so far prevented the formation of implicit "non-aggression pacts" between some actors of the market.

[Edited at 2009-12-21 15:47 GMT]


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Rifraf
Local time: 19:19
better pay in better times Dec 21, 2009

Laurent KRAULAND wrote:
Outsourcers won't pay you more when things get better.


But they certainly won't do business with you if you raise your rates!


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Penelope Ausejo  Identity Verified
Spain
Local time: 19:19
English to Spanish
+ ...
I raised my rates and my volume isn't down Dec 21, 2009

That is not true always.

I raised my rates for all my clients but one during the "crisis" and my volume isn't down...

I was asked by one client to reduce my rate. I answered that I couldn't afford it and he said "Ok". That particular client have sent me as much work as before...


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pietervertaler
Netherlands
Local time: 19:19
English to Dutch
+ ...
TOPIC STARTER
Which crisis? Dec 21, 2009

I totally agree with Laurant...... The crisis has been used to lower rates. I've declined such requests made recently on account of the crisis....truth is: I've never been so busy and Business is going strong as ever....better still than before the crisis. At least I see no difference at all. And jobs are coming in in great numbers, even from clients whose bargaining for lower rates I ignored and declined with contempt. What I meant by my contribution here is nothing more than a correction of, say, 2 per cent, to reflect similar inflation across businesses and society. Don't fool yourself by believing your clients will not do the same to their clients......Besides, the crisis is officially over...

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Laurent KRAULAND  Identity Verified
France
Local time: 19:19
French to German
+ ...
So what? Dec 21, 2009

Rifraf wrote:

Laurent KRAULAND wrote:
Outsourcers won't pay you more when things get better.


But they certainly won't do business with you if you raise your rates!


As Penelope wrote it, this may be true - but only for, let's say, X% of the market. And strictly speaking, there will probably never be any shortage in translators working for the prices I mentioned in my previous post. A common mistake (and I am now speaking on a general level) is to think one can go on working for such prices independently from the type of translation which is needed. No kidding - some middlemen really work on that assumption!

My challenge is to find clients understanding added value and service levels (or educating them about those).

[Edited at 2009-12-21 16:25 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 18:19
Member (2007)
English
+ ...
Agree in theory, but annual is too rigid Dec 21, 2009

pietervertaler wrote:
I'm planning to adjust my rates to keep step with the inflation rate on an annual basis, to make sure that ten years from now I won't have lost half of my purchase power.


I can certainly understand the sentiment, Pieter. However, inflation in Europe in recent years hasn't really been at suitable levels to warrant a rate increase every year. Back in the '70s when we had galloping inflation, yes, I would have applied regular rate increases had I been a freelancer, but I can't be bothered charging rates along the lines of 2008:0.10€ 2009:0.102€ 2010:0.104€.

I would rather go for increasing my rates as and when I get new clients, and only raising rates for established clients when I feel a nice round increase is justifiable.


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Laurent KRAULAND  Identity Verified
France
Local time: 19:19
French to German
+ ...
Psychological barrier Dec 21, 2009

pietervertaler wrote:
What I meant by my contribution here is nothing more than a correction of, say, 2 per cent, to reflect similar inflation across businesses and society. Don't fool yourself by believing your clients will not do the same to their clients......Besides, the crisis is officially over...


For some clients (no distinction between direct ones and agencies!), there is a psychological barrier, which is about 0.10 X (currency doesn't matter either) per word, meaning they won't pay any translator more than 0.09 X in any case.
Strangely enough, this 0.10 X barrier also exists for many colleagues, in the sense that they think it is the lowest of lows they can accept...


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MariusV  Identity Verified
Lithuania
Local time: 20:19
English to Lithuanian
+ ...
crisis has nothing to do there Dec 23, 2009

I would like to express a different approach - the rate you get is the rate you are actually worth to get. And crisis or boom - does not matter. I think it is the matter of correct self marketing and more exactly - the right approach to finding your "own" market segment. Lowering down the rates, proposing discounts, etc. will not be a panaceia for the situation "damn, I do not have work, what shall I do?" Maybe it is a hard time and no one simply has the job for you for whatever rate (big or small), mabe at this moment there is no one whom you could offer your discounts?. And there are types (segments) of clients who will never bother for 0.01 or 0.02 EUR per word difference if something other than rates are their interest Nr. 1. And there are clients (esp. those cheap agencies) which will always try to underpay. And this "economic slow down, please do smth cheaper for us" is just a simple trick...

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PCovs
Denmark
Local time: 19:19
Member (2003)
English to Danish
+ ...
Agree with Sheila - and 'Crisis? What crisis?' Dec 23, 2009

I adjust my rates somewhat similarly to what Sheila does - with new clients and when warranted with older clients. I think this works really well, and it has been readily accepted by all clients so far.

As to this lowering of rates - so many agencies try to yell 'crisis' and 'cut rates drastically' in the same sentence to their translators using a frantic tone of voice, but I have not once had to do this, and I still get the same amount (if not more) of work from each of these clients.

Yesterday, however, I received a 'Christmas greeting' from an old client, who has not been sending me much work for around 2 years now (really small amounts), and this client tells me that I need to cut my rates with them by some 30% plus. This must be the steepest rate cut I have ever been asked to make, and obviously I refused, politely, explaining that there is no crisis in our business, and that the costs of living has gone up for me, so I would rather have to up my rates than lower them.

This client has experienced difficulties paying on time during this past year, even though my rates with them are definitely on the low side to begin with, so I am really not unhappy to see them go.
It seems to me that this agency has been just so hungry (perhaps because of the cash flow problem) that it has agreed to cut the rates drastically believing in these 'crisis' tales. I am afraid that this agency has signed it's own death warrant by doing so, but perhaps I will be proven wrong!?


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Samuel Murray  Identity Verified
Netherlands
Local time: 19:19
Member (2006)
English to Afrikaans
+ ...
Whose inflation rate? Dec 23, 2009

pietervertaler wrote:
As from this year onwards, I'm planning to adjust my rates to keep step with the inflation rate on an annual basis, to make sure that ten years from now I won't have lost half of my purchase power.


Inflation rates are different in different countries, and what might seem perfectly reasonable to you may seem like an unreasonable rate hike to your client. My own country's inflation rate was more than 10% annually for the past decade (and we think it is normal), but I'm sure my Dutch clients would have turned away from me a long time ago if I had raised my rate by 10% each year for the past decade.

I would suggest everyone - and especially my fellow Dutch translators, to unite in this respect.


Wasn't the Dutch inflation rate -0.04% this year?


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Wolfgang Jörissen  Identity Verified
Belize
Member
Dutch to German
+ ...
Trade unions?? Dec 23, 2009

Rifraf wrote:
There are several Dutch trade unions for translators, but of course it's forbidden to make price agreements - in or outside of a union/sector.


Never heard of such. If it is organisations as the NGTV you are talking about, these are definitely not trade unions.


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pietervertaler
Netherlands
Local time: 19:19
English to Dutch
+ ...
TOPIC STARTER
Our inflation rate of course! Dec 23, 2009

[quoteWasn't the Dutch inflation rate -0.04% this year?
[/quote]

Dutch inflation for 2010 against 2009 has been rated to appr. 1 per cent. Thank God for the economic savants in my circle of friends, one of whom pointed out to me that if inflation is 1 per cent, one should increase one's income by 2 in order to keep the same level of purchase power. PCovs and Samuel Murray are both right in pointing out the local differences. That's exactly why Danish and Dutch translators, at least when they are tax-payers in their respective countries - are very much in the right to insist on increasing their rates by following the increased cost of living in their already expensive countries, Denmark even more so than the Netherlands. When one's rate is 0.10 cents per word, it means one ends up with slightly over half - or even less depending on one's annual profits/income. I believe that small incremental increases in steps of say 2 per cent, are more acceptable to clients than a sudden raise by ten per cent. It's also less defendable to suddenly decide one's rates should go up by ten per cent when the year before one seemed perfectly happy still with a much lower rate. And most of all: wages of "normal" employees are keeping step with inflation - so why shouldn't our income as well?


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LegalTransform  Identity Verified
United States
Local time: 13:19
Member (2002)
Spanish to English
+ ...
Annual increase Dec 24, 2009

I charged .10 back in 1993. If I increased my rate just .01 per year, I should now be charging .27 per word.

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