Survey Reveals Impact of Covid-19 on Europe’s Language Industry

European Language Industry Survey 2020 on Translation and Localization Business

During the current pandemic, smaller companies tend to be more vulnerable financially, although only a little more than a tenth intend to lay off staff; larger companies report higher growth; and performance is uneven across the mid-size segment. So showed the latest survey on the impact of Covid-19 on Europe’s language industry.

On April 17, 2020, the European Union Association of Translation Companies (EUATC) published the 8th edition of an annual survey run in partnership with ELIA, FIT Europe, GALA, the EMT university network, and the European Commission’s LIND group. Called the “European Language Industry Survey 2020, Before and After Covid-19,” the study gathered data in two tranches: from January 22 to February 22 and from March 23 to April 5.

According to EUATC President Heike Leinhäuser, owner and Managing Director of Germany-based LSP Leinhäuser Language Services, the response rate for the 2020 survey was up from 2019’s: 809 responses to the main survey from 45 countries and 600 responses to the Covid-19 survey directed at language service providers (LSPs; in the survey, LSCs). FIT Europe Chairperson Annette Schiller said their portion of the survey (directed at freelancers and conducted in March and April) “was very high, with 1,036 responses from 29 European countries, and 18 other countries around the world.”

“Small companies appear to be taking the hardest hit. However, only 12% of companies intend to lay off staff” — Heike Leinhäuser, President, EUATC

“The follow-up webinar was over-subscribed with more than 1,000 registering and another 50+ unable to register as the maximum limit of our webinar license had been reached,” Leinhäuser told Slator. The yearly surveys are open to LSPs, buyers, freelancers, training providers, as well as private and public translation departments.

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Business Outlook and Pricing

Leinhäuser said the results show that “small companies appear to be taking the hardest hit. The small companies are often also the most vulnerable from a financial point of view. However, only 12% of companies intend to lay off staff, indicating that the vast majority will hang on in there as long as possible to keep teams intact.”

The study also showed that initial actions taken LSPs mainly had to do with following government-imposed restrictions, focusing on social distancing and remote working measures, but “only a minority of companies were already implementing cost containment measures,” Leinhäuser said. “However, such cost control measures were already on the radar for a majority of the companies that participated. Their main post-Covid concern is boosting sales again to recover lost ground.”

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While larger companies reported higher growth, and mid-size LSPs, uneven performance, growth was unevenly spread across segments even before Covid-19. Market activity expectations still remained positive across all company sizes, despite the general slowdown in business for both LSPs and freelancers in 2019.

The LSPs surveyed tended to be even more slightly optimistic about their own business compared to the market as a whole, and expectations around staff size were in line with this optimism.

The study also revealed that “expectations among independent professionals remain at the same level as 2019 after rate stagnation in 2019; pricing [among LSPs] continued its downward trend; and 37% of translation department respondents expect stable pricing in 2020, but 18% expect further decrease.”

Post-Covid Trends

Regarding which technology engine would power post-Covid recovery, the respondents saw cloud infrastructure (remote user support), workflow and translation / interpreting management, and machine translation as being the most promising.

The strongest trend for all respondent types, post-coronavirus, was MTPE (machine translation post-editing or PEMT), and “price pressure (#2) does not come even close. Strongest newcomer is AI.”

MTPE and automation were the highest priority, with 78% of LSPs saying they “want to start or increase MTPE in 2020.” MTPE was also shown to be the “strongest new service.”

Meanwhile, subcontracting is seen to shift from agencies to individuals, even as “35% of freelancers indicate MT as a stress factor.”

How Freelancers Are Coping

Some of the most noteworthy takeaways from the 2020 EUATC survey have to do with independent professionals (freelancers). For example, the disparity was not very big between those who find their income from freelancing sufficient (59%) against those who do not (41%). And, amid the current health crisis, more than half said they were contacted by clients who wanted to check in on their health and well-being and reassure them of future work. Sadly, an overwhelming majority stated they only have one to three months’ runway on their finances without additional support.

According to FIT Europe’s Schiller, “If we take the Italian example, independent professionals are already two full months into the crisis. Our member associations there report around 60% of members have applied for support, but we have no data on the number of people who have actually received it.”

“The freelance model seems to be difficult to understand for many governments […] we are not confident that support will be applied for or received by the majority” — Annette Schiller, Chairperson, FIT Europe

Schiller also pointed out that “the freelance model seems to be difficult to understand for many governments and the criteria vary widely from one country to another and are extremely confusing. For these reasons, we are not confident that support will be applied for or received by the majority.”

While government initiatives were not tackled in detail by the survey, EUATC’s Leinhäuser said, “None of the 23 national associations belonging to the EUATC are reporting any measures aimed specifically at the language industry. However, a couple are lobbying on behalf of public sector interpreters. For example, the UK’s Association of Translation Companies (ATC) has been lobbying hard for public sector interpreters to be recognized as key workers.

Leinhäuser added that EUATC’s Romanian member, AFIT, is currently “lobbying to have the language industry given special recognition” in new legislation to provide businesses a lifeline via extended payment terms. “Translation and interpreting activities were omitted from the draft legislation,” she said.

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Schiller said that, for its part, FIT Europe has been encouraging member associations to lobby their national governments using information available from other countries so freelance translators and interpreters can receive the same level of aid and protection as other independent professionals. She said, “One very positive outcome here is in Italy. Initially, freelance translators and interpreters were not included in financial support packages in Italy. However, the Greek model, where translators and interpreters are included, was outlined to the Italian authorities during lobbying by FIT Europe member associations and the Italian government then made a decision to adopt a similar model.”