The interpreting market is a diverse and complex sector within the language industry. There are different modes — consecutive, simultaneous, and whispered interpreting — and different modalities, i.e. onsite, over-the-phone (OPI), and video-remote interpreting (VRI). There are different types of interpreting, like medical, legal, community, and conference interpreting and all of them come with their own requirements.
A lot has happened on the interpreting market in the last few years. On the one hand, interpreting has become more significant and scalable, but there has also been a lot of turmoil and change.
We took this as an incentive to take a closer look at the individual interpreting markets in a number of countries across the globe.
We invested hundreds of hours of research into this project. We conducted more than 20 briefings with in-country experts, ranging from Language Service Providers (LSPs) to associations to interpreters. In addition, we consulted online resources such as websites from governments, associations, and annual reports from large providers.
We wanted to find out how different interpreting markets are run, what is going well, what is not going so well and identify trends, gaps, opportunities to essentially bring some method to the madness.
The 12 countries we examined were the US, the UK, the Netherlands, Australia, Canada, Spain, Belgium, Russia, Denmark, Sweden, Norway, and Finland.
In the overwhelming majority of countries, the public sector makes up the largest portion of the market. The exception here is the United States. This is because in the US, the healthcare market is the largest sector but unlike in other countries healthcare is not part of the public sector.
In the split between onsite and remote, the below graph illustrates that in most countries the market for onsite is still the largest one. However, all four Nordic markets and Canada have a considerable remote market. The clear frontrunner for remote interpreting are the Netherlands. It is worth noting that 80% of the market in the Netherlands falls into the public sector, and 80 percent of the market is remote interpreting. Countries looking to move more towards remote interpreting, should take a closer look at the Dutch market.
We have identified four main sectors for interpreting and while most countries require interpreting services across all of these, the below graph highlights which ones are most dominant in which country.
For some markets the results were quite clear from the beginning, e.g. that medical interpreting is the dominant sector in the US and that courts/legal/police is the dominant sector in the UK. However, there were a few surprising findings:
We also assessed the level of availability of interpreter certifications per country. In the below overview, the batteries indicate the level of availability per country:
When it comes to certifications, it is important to keep in mind that:
There are essentially three main reasons why interpreting services are being provided.
In many countries, it is a civil right for people to have access to an interpreter in public settings, in courts, and in healthcare. This is true for most countries we examined. It is also worth pointing out that in Sweden it is even a mutual right, which means that in the hospital it’s not only the patients who have the right to an interpreter but also the hospital staff.
In addition, in most countries it is a legal requirement for interpreters to be present during court hearings – particularly in criminal proceedings – and sometimes also in other official matters like immigration and healthcare. In multilingual countries like Belgium, Canada, and Finland, it is also mandatory to have interpreting services for all official matters in the parliament – at least on the federal/national level.
Then there is the business side, where companies use interpreting to increase their revenue by offering services in multiple languages. This is true for all countries, but particularly for Russia and the US.
The interpreting market in every country essentially stands on four pillars:
There are four groups of end users:
In the majority of countries, the first two groups are the main end users of interpreting services.
The exception to this rule are Belgium and Russia. This does not mean that there is no demand for this demographic in Belgium and Russia but it is not the largest group in these two countries.
The next group are Members of Parliament (MEPs), e.g. in Canada, Belgium, and Finland, as well as business people. We have put these two groups together, as they both fall into the category of conference interpreting.
The last group then are tourists, although they generally make up a very small percentage. That being said, the percentage for this group is a little bit higher in the US, Australia, and in Spain.
In most countries, the government is the largest buyer of interpreting services because as illustrated earlier, the public sector is the dominant market in most countries, with the exception of the US.
The second largest buyers then are private businesses, such as companies, lawyers, banks, insurances, and in the US also hospitals. We loosely grouped these under “corporate”.
The third and by far the smallest category are individuals. It is very uncommon for individuals to purchase interpreting services directly, as it is usually the institutions that serve the customers that are the ones that pay. However, there are three countries that have an exception to this rule:
The third pillar is the provider.
In most countries, LSPs are the largest providers of interpreting services.
This is closely followed professional individual interpreters who have their own direct clients.
The third category are in-house agencies. It is not uncommon for government entities to have their own interpreting staff. For example, in the Netherlands 50 percent of the interpreting requirements are currently being handled by in-house government agencies, although this is about to change as the government plans to tender all business over the next two years. Also, in the US, many hospitals have staff interpreters for the most common languages.
The last category are volunteers, which can actually be split into two sub-categories:
The government is the fourth pillar and plays a huge role across all interpreting markets. Not only because it defines language access rights, how the country is run, and who receives funding, but also by deciding how government contracts are structured. This can vary from country to country – and sometimes from contract to contract. We have identified five different types of contracts across the globe:
There are three key influencers for interpreting.
The interpreting services in every country are highly influenced by who needs the service and in what kind of situation. This is driven by the level of immigration, the country’s international relations and the economy.
The government has a huge influence on the interpreting market in every nation. First of all because the government is responsible for passing language access laws. This can be influenced by whether the country has a history of multilingualism and also by the level of immigration.
It is also the government that decides how the country is run. Is the country split into regions or states? Who has what responsibility? All of this influences interpreting services.
Last but not least, the level of funding the government invests into interpreting services has a big impact on the market.
Geography is a factor for interpreting markets. If there are vast distances between cities and regions, or lots of remote villages, it will be harder to get interpreters to assignments. This could on the other hand be a driver for remote interpreting. It also matters if a country has certain interpreting hubs, like for example in Belgium where the market centres around Brussels. These hubs then dominate the market and set rates and standards.
The technological infrastructure also plays a big role. How solid the internet connection in public places and remote regions is, can either be a driver or a blocker for remote solutions.
We looked into Belgium, Finland, and Canada, which are all countries that have more than one official language and found the following:
The country’s multilingualism mainly affects government interpreting, where is it mandatory to have interpreting for all official languages. It does, however, not affect community interpreting because there is a real separation between the different language regions. Due to the country’s history, French speakers for example have no rights to receive services in their language in the Dutch region and vice versa.
In Finland, bilingualism also mainly affects government interpreting but not community interpreting. Swedish speakers have the right to receive services in Swedish but there is no interpreting required for this.
In Canada, the country’s bilingualism affects interpreting more than in Belgium and in Finland but it is also mainly required for conferences and official government business. This is again because the different language regions are quite separate from one another.
We also assessed what drives pricing in the interpreting market.
Mode and Modality: There can be different prices depending on mode (consecutive, simultaneous, whispered) and modality (onsite, OPI, VRI).
Language rarity: The rarer a language, the higher the rate as there will be fewer interpreters who can fill assignments.
Specialization: Interpreters often require special certifications for court or medical interpreting. As this is an add-on to any basic certification, rates tend to be higher for interpreters with these kinds of specializations.
Geographical location: If the assignment is located in an interpreting hub, like Brussels, rates will be different than in more remote locations.
Government budget: The more government funding, the higher rates and margins tend to be.
Throughout our research, we identified three main challenges that stood out across the board.
While the demand for interpreting services is increasing due to globalization, immigration, the ongoing refugee crisis and also an aging population – which in general affects health services and therefore also medical interpreting – government budgets are continuously being cut.
This means that particularly in the public sector, price pressure is high. In most countries, LSPs are responding to this pressure with a price battle – because more often than not, the cheapest wins. This is slowly but surely becoming a race to the bottom.
While this might still work out for a while, this is not a sustainable situation and in some countries the knock-on effects can already be felt.
Which brings us to the second challenge…
… a scarcity of interpreters.
Given that in some countries, community interpreters earn only slightly more than the minimum wage, some have started to move on to better paid and less stressful professions.
Adding to this is that most countries only provide accreditation tests for the most common languages. When a new language enters the market (e.g. through immigration), it might take up to a year before accreditation materials are available – but of course in the meantime the demand already has to be supplied.
The knock-on effect is that LSPs have to increasingly use untrained people. In medical and court interpreting, this can potentially be a high risk for the buyer. It also means that LSPs are then often left with taking on the training burden themselves, which requires extra resources and significantly reduces the Return on Investment.
And while it might be alright to use someone who is “just” bilingual for simple assignments, LSPs and buyers should make sure to have the right interpreter for the job for anything more high-stakes.
The third and possibly biggest challenge and that is that the interpreting market is highly unregulated, which comes with many challenges within itself. For example:
All of these points make the interpreting market very difficult to navigate.
VRI has a number of advantages:
Tap into more resources:
However, despite all these advantages, VRI still only represents less than 10 percent of the markets we examined. This is largely due to two main blockers:
LSPs everywhere are using Interpreter Management Systems (IMS) to automate repetitive tasks and make their workflows more efficient. This is largely – though not only – a response to the price pressure in the public sector. As LSPs are trying to pay their interpreters a fair wage to keep the talent, and margins are dropping, using an IMS is a great way to cut costs.
While an IMS is an investment in itself that a few years ago only the large players could afford, this technology has become affordable so that now even smaller players have access to it and can use it to stay competitive.
This trend is not as wide-spread yet but certainly presents a fantastic opportunity.
In the US, some hospitals use joined networks to share their in-house interpreting staff for OPI and VRI assignments. Whenever interpreters have downtime, they can offer their services to other hospitals in the network. The challenge here is that this is currently still hardware reliant and not cloud-based yet.
In Canada, some LSPs have started to use joined platforms to operate as backend for one another. Whenever one LSP has a language or assignment request they cannot fulfil, one of the other LSPs can provide the service.
By using joined platforms, LSPs can more easily outsource their work and provide a larger portfolio. This makes them more competitive and can potentially even lead to mergers between LSPs in the network.
In Australia, it has been commonplace for a few years now that LSPs pay reduced rates to their interpreters from the second hour onwards. This trend was started by the largest provider ONCALL but everyone else followed. It led to protests by interpreters and was also a real challenge for small and medium-sized providers. A few LSPs, like 2M Language Services and Translationz, have now broken away from this again and are seeing the rewards. While it might sound counterintuitive to pay higher rates, doing so gave these LSPs a competitive advantage as more interpreters wanted to work with them again (in the end everyone uses the same ones), which has in turn led to more growth.
Also in Australia, interpreters joined a trade union not too long ago which lead to certain state governments, e.g. Victoria, injecting more funding into interpreting.
In Canada, the government funding for interpreting is generally quite high and the government has for example invested thousands of dollars into development of interpreter accreditations.
Since July 2016 Norway has made it illegal to use children as interpreters. This is not only a great achievement in terms of respecting child labor laws and protecting children from potential trauma. It is also a win for professional interpreters and LSPs who are competing in the market and defending their value.
In Denmark, the company Tolkegruppen provides psychologist for ad hoc demands of interpreters. A wonderful step towards caring for interpreters’ mental health and keeping the talent.
This section brings us back around to the challenges of price pressure and a scarcity of interpreters in an unregulated market.
Both in the US and in the UK LSPs are struggling to find interpreters and keep the talent because of low rates and challenging working conditions. There is a consensus that interpreters need to have an incentive to stay in the industry. The struggle is similar in Sweden where many interpreters have other day or night jobs to make ends meet.
In Finland, the government wants to see new service providers on the market but the requirements set out in government tenders – especially the infamous Hansel contract – are making this next to impossible. LSPs are for example required to provide customer references, which are hard to come by for someone who hasn’t worked in the market yet.
Belgium is a country that technically holds lots of opportunities given that it is multi-lingual and very international. However, the country is not very entrepreneurial-friendly as it is extremely costly for LSPs to open a local entity. Plus it comes with a lot of bureaucracy and the approval process takes up to two years.
While Canada is overall a quite mature market, hospitals are not obliged to use professional interpreters or any interpreters at all. So there is a large sector that potentially holds a lot more opportunities if the value of interpreting services can be conveyed.
Last but not least, a few examples of what went wrong or is currently posing a threat to different interpreting markets, divided into three categories:
In Denmark, the by far largest contract by the Ministry of Justice (MOJ) is at the time of writing, in 2019, being held by just one single provider — EasyTranslate. Lower rates and new conditions have led to protests and strikes by interpreters and in some cases, trials had to be adjourned because no interpreter was available. In one case, the police even had to let a shoplifter go.
The situation in Denmark brings back memories of the MOJ contract in the UK a few years ago. After centralization, Applied Language Solutions (ALS) was awarded the contract as the single provider but could then not deliver. ALS was subsequently acquired by Capita Translation and Interpreting, who also took over the MOJ contract. Over the course of the five-year contract 2,600 court cases had to be adjourned because interpreters did not show up.
The MOJ contract in the UK has since been divided into four lots, of which thebigword has won the interpreting lot.
In the US, Trump administration has proposed to replace court interpreters with pre-recorded videos as the main means of informing immigrants facing deportation of their rights. It is intended as a cost-saving measure and if implemented, would pose a significant threat to court interpreting in the US.
Also in the US, the California State Senate has passed a new bill to protect workers in the gig-economy by requiring employers to grant them full employee status. While this is a great step for actual gig-workers, translators and interpreters also fall under the so-called AB5 law. As most translators and interpreters are established entrepreneurs that work for many clients, this law is threatening the livelihood of both translators, interpreters, and the LSPs that work with them.
In Denmark, there is a new law in place that states that people only have the right to an interpreter for the first two years of living in the country. After that, people have to organize and pay for their own interpreters, which ultimately encourages the use of volunteers and children as interpreters. A similar law is currently being discussed in Sweden.
There have been a number of large scale payment disputes between interpreters and the ones who hire them.
In Australia, for example, interpreters went on strike after VITS LanguageLoop kept the extra funding they received from the government for themselves, without transferring anything onto the interpreters.
A few years ago, Canadian provider Abel Translations was sued and taken to court because they did not pay their interpreters. Something similar happened in Belgium, when a while back a number of court interpreters were not getting paid. In the end, the interpreters had to go to court to get paid by the courts.
In every country, the level of centralization of government contracts has a huge impact on the interpreting market. After examining the different situations in the 12 countries, we found that there is a Centralization Goldilocks Zone in which the markets flourish best.
In countries with low government centralization, the market tends to be messy, for both the provider and the buyer. There are lots of small players and individual interpreters that compete for a myriad of small contracts and individual assignments. For both the buyer and the provider this usually means that a lot of time is wasted on the procurement process and there is usually an overload of bureaucracy. In these markets, we won’t see many large players because it is much harder for an LSP to make significant profits. Examples of this are countries like Germany, France, Italy, and Belgium.
In countries with high government centralization, usually one or two large players occupy the majority of the market. While this significantly reduces the time spent on procurement, it also means that these one or two large players are in a monopoly position. This poses a number of risks that can have a negative knock-on effect:
This means there is a healthy level of competition and opportunity for growth. It also reduces the risk for government buyers as there are enough providers to supply the demand without the risk of creating a monopoly position.
Examples of this can be found in Australia, the US, Canada, and the UK.
We also assessed the different types of government contracts to see which one works best.
This type of contract really only works when there are enough medium-sized contracts in the market to allow for a healthy level of competition. In this scenario, everyone gets a piece of the pie and there is room for growth. However, if the single provider system is applied to only a few large contracts, it creates a monopoly position and the market can become stagnant. It also creates a high risk for the buyer if the chosen provider cannot deliver.
The problem with contracts that use a fixed ranking is that all LSPs take from the same pool of interpreters. This means that if the primary provider — who is usually the largest one — cannot fill an assignment, why would the second or third on the list be able to?
The idea of having a dynamic ranking with a revision every six months sounds good. However, the reality is that no matter what, the ranking never changes, rendering the system useless.
The framework system from the UK has the upside that it also gives smaller players a chance. However, the system is extremely messy. There is a large number of buyers and no central buyer. There are, for example 40 to 50 different healthcare contracts and 16 different police contracts that are all tendered under different frameworks. This makes it very complex for both the buyer and the provider.
Awarding a contract to a panel of providers without choosing a primary provider, is the contract type that holds most opportunities. Giving every provider on the panel equal access to clients, makes for a very dynamic market that gives more players a chance. Having to compete for theoretically every assignment guarantees a healthy level of competition.
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We recently conducted a large study for which we examined the interpreting markets in 12 countries. We assessed how the interpreting markets are run, what trends, challenges and opportunities stand out, and what drives interpreting - including pricing. Based on our research, we identified five factors that drive pricing in interpreting.