Translation projects come in all sizes and varieties and in an ideal world, project managers could execute their wildest, most ambitious project dreams without ever having to worry about the bottom line. But the truth is project management constitutes the backbone of every translation company, and that’s why it is essential to know what’s the real price tag behind a translation project. So while in our previous blog post we have tried to estimate the duration of a project, in this entry we try to calculate the hourly cost associated with project management.
We would like to clarify from the get-go that this article is not meant to question the value that project managers bring to language service providers, but to challenge how to best allocate their efforts.
The hourly project management cost of a PM
While most translation companies measure the cost of translators on a per-project basis, relatively few do the same with the cost associated to project management. Yet, this is a significant administration and overhead as shown on this graphic from CSA Research recently published by Libor Safar:
- Duration - the amount of time - it takes to manage the project
- The hourly cost of a project manager.
Research methodology
To carry out the following demonstration, we’ve used the following sources:
- Average annual hours actually worked by a worker, which are provided by the OECD. Actual hours worked include regular work hours and exclude time not worked due to annual public holidays, annual paid leave, own illness, injury and temporary disability, maternity leave, parental leave, schooling or training, slack work for technical or economic reasons, strike or labor dispute, bad weather, compensation leave, and other reasons. Mexicans work the longest hours at an average of 2317 hours per year. On the other side of the spectrum, Danish workers put in a comparatively meager 1380 hours per year.
- The salaries for project managers come from the industry’s salary report by Adaptive Globalization. We have taken the cost of a junior PM / PM assistant from page 20, which is the lowest salary category on the report.
- Salaries are gross, and taxes to be paid on gross salaries by the employer can vary greatly. Fortunately, the OECD also has comparable data on the Average rate of employer’s social security contributions. In this research, we have taken into account the taxation for a single person at 100% average salary.
A junior project manager’s cost per hour to the employer
| Country | Hours worked | Max. annual salary | Min. annual salary | Employer’s tax % | Cost per hour based on minimum salary |
|---|---|---|---|---|---|
Poland |
1,806 |
€18,000 |
€15,000 |
16.43 |
9.67 |
Ireland |
1,772 |
€30,000 |
€22,000 |
11.05 |
13.79 |
Spain |
1,686 |
€24,000 |
€18,000 |
29.9 |
13.87 |
United Kingdom |
1,538 |
€29,000 |
€21,000 |
10.9 |
15.14 |
Italy |
1,718 |
€25,000 |
€20,000 |
31.58 |
15.32 |
Denmark |
1,380 |
€27,000 |
€23,000 |
0.00 |
16.67 |
Netherlands |
1,434 |
€30,000 |
€22,000 |
12.11 |
17.2 |
Japan |
1,644 |
€34,000 |
€28,600 |
15.36 |
20.07 |
Sweden |
1,452 |
€27,000 |
€23,000 |
31.42 |
20.82 |
Belgium |
1,583 |
€32,000 |
€26,000 |
27.10 |
20.87 |
France |
1,505 |
€30,000 |
€24,000 |
36.27 |
21.73 |
Austria |
1,501 |
€32,000 |
€26,000 |
28.06 |
22.18 |
Germany |
1,386 |
€32,000 |
€26,000 |
19.88 |
22.49 |
United States |
1,779 |
€45,000 |
€37,000 |
8.18 |
22.5 |
Switzerland |
1,557 |
€55,000 |
€41,000 |
6.38 |
28.01 |
Unfortunately, we don’t have the data set for many other locations where language service providers are currently outsourcing project management efforts such as Argentina, China, India, Ukraine, Belarus, or Moldova.
We do have some information about China’s cost ranges, and the salary is between €13,800 and €19,000 per year, which is similar to Poland.
US and German project managers earn 232% of what Polish PMs get while Swiss PMs earn 289% of that.
What else needs to be taken into account?
The cost of a project manager is not only made up of the salary. Here are some important considerations:
Onboarding costs
As it happens with any other skilled job, it takes time to train a project manager. In most translation companies, onboarding programs last around two weeks (80 hours), and, on average, that PM stays in the company for about 2 years. If you factor in the training costs which include the new employee and the trainer (most likely a Senior PM), the total cost of the employee increases around 15% annually.
Even if we know that there are other costs associated with attrition rates – which are especially high among junior PMs – we will not take that into account for the purpose of this demonstration.
Let’s take the following example
A Polish project manager works 1806 hours per year and earns €16,500, but costs €19,210 due to the employer’s contribution.
When we factor in onboarding costs, we need to consider 160 hours of training (80 hours by the trainee and 80 hours for the trainer). Now if we assume that PM stays in the company for 2 years, the end result is 1726 hours yearly (1806h – 80h = 1726h).
Instead of costing €9.67 per hour, which is the average indicated in our reference table, it ends up costing the translation company 15% more (€19.210 / 1,726h = €11.63).
Management costs
A thorough calculation should also take into account the cost of managing talents. Junior project managers report to more senior project managers or production managers. So let’s say the person in charge of our new PM only spends 5% of their time on management-related tasks. For the purpose of this calculation, we will also assume the manager is paid as much as the junior — although that’s unlikely.
If we come back to the example of the Polish PM who worked 1726 hours annually, we should add another 86 hours of work that are spent with the manager. And the same goes for the manager’s annual calculation.
In other words, the cost of this new PM also incurs the cost of the manager, so we are at 1726h – 86h (for the employee) – 86h (for the manager) = 1554 h.
€19,210 / 1,554h = €12.36 euro, which is 27% more than the original €9.67 in the table.
Costs of equipment and software
To carry out their task, project managers need a computer equipped with multiple software licenses. Let’s imagine the translation company uses Protemos, which is a rather accessible platform — €41 or USD 50 monthly. Then, we should factor in the costs associated with Microsoft Windows, Office, or Google Suite as well as computer-assisted translation tools. Overall, we could estimate this project manager will carry at least €60 of costs associated with software platforms.
But that’s not it. Most PMs use computers with two screens which are worth on average €900 euros and last for about 3 years — €25 extra monthly. Finally, we should also consider the office (oh, the good old time) rent. According to this article, a person occupies 7 m2. If we multiply that by 15, which is the average m2 price in Wrocław, we get an estimate of €105 per month.
All in all, the calculation of the cost of equipment and software includes:
- €60 for licenses
- €25 for computer
- €105 for office space
This accounts for €190 monthly or €2,280 annually. In the end, the total PM costs go from €19,210 to €21,490 euros even if the number of hours remains 1554.
The average hourly cost is now €13.82, 43% more than the €9.67 in the table.
As a first conclusion, we can say that the cost of a productive hour is 43% more expensive than the cost of a regular hour.
| Country | Hours worked | Max. annual salary in euro | Min. annual salary in euro | Employer’s tax % | Cost per hour based on minimum salary | # of useful hours without 80 hours training, 2 year attrition | # of useful hours without 5% management time | Cost per useful hours | Hourly cost with equipment included (fixed cost of 2280 euros/year) | How much more does a productive hour cost than just a regular hour on salary | Proportion of added cost over gross salary (useful hours x hourly cost with equipment / average annual salary) |
|---|---|---|---|---|---|---|---|---|---|---|---|
Poland |
1 806 |
€18,000 |
€15,000 |
16.43 |
9.67 |
1 726 |
1553,4 |
12,37 |
13,83 |
43% |
30,2% |
Ireland |
1 772 |
€30,000 |
€22,000 |
11.05 |
13.79 |
1 692 |
1522,8 |
18,96 |
20,46 |
48% |
19,83% |
Spain |
1 686 |
€24,000 |
€18,000 |
29.9 |
13.87 |
1 606 |
1445,4 |
18,87 |
20,45 |
47% |
40,75% |
United Kingdom |
1 538 |
€29,000 |
€21,000 |
10.9 |
15.14 |
1 458 |
1312,2 |
21,13 |
22,87 |
51% |
20,04% |
Italy |
1 718 |
€25,000 |
€20,000 |
31.58 |
15.32 |
1 638 |
1474,02 |
20,08 |
21,63 |
41% |
41,7% |
Denmark |
1 380 |
€27,000 |
€23,000 |
0.00 |
16.67 |
1 300 |
1170 |
21,37 |
23,32 |
40% |
9,14% |
Netherlands |
1 434 |
€30,000 |
€22,000 |
12.11 |
17.2 |
1 354 |
1218,6 |
23,92 |
25,79 |
50% |
20,88% |
Japan |
1 644 |
€34,000 |
€28,600 |
15.36 |
20.07 |
1 564 |
1407,6 |
25,65 |
27,27 |
36% |
22,64% |
Sweden |
1 452 |
€27,000 |
€23,000 |
31.42 |
20.82 |
1 372 |
1234,8 |
26,61 |
28,45 |
37% |
40,52% |
Belgium |
1 583 |
€32,000 |
€26,000 |
27.10 |
20.87 |
1 503 |
1352,7 |
27,25 |
28,93 |
39% |
34,94% |
France |
1 505 |
€30,000 |
€24,000 |
36.27 |
21.73 |
1 425 |
1282,5 |
28,69 |
30,47 |
40% |
44,73% |
Austria |
1 501 |
€32,000 |
€26,000 |
28.06 |
22.18 |
1 421 |
1278,9 |
29,04 |
30,82 |
39% |
35,92% |
Germany |
1 386 |
€32,000 |
€26,000 |
19.88 |
22.49 |
1 306 |
1175,49 |
29,57 |
31,51 |
40% |
27,72% |
United States |
1 779 |
€45,000 |
€37,000 |
8.18 |
22.5 |
1 699 |
1529,1 |
29,01 |
30,5 |
36% |
13,75% |
Switzerland |
1 557 |
€55,000 |
€41,000 |
6.38 |
28.01 |
1 477 |
1329,21 |
38,41 |
40,13 |
43% |
11,13% |
In this new table, we can appreciate that in countries with higher working hours, the total cost for the project manager is not increasing as much as in countries with many holidays.
For further comparisons, we recommend using the hourly cost with equipment included values, even if the differences in office rental prices have not been considered in this calculation.
Always remember that this still remains an estimation, and you could use the presented methodology to analyze in-depth your own cost structure. In our calculation, we’ve included an affordable project management system, therefore that cost will be higher if you are using a more expensive platform or if you have created your own, because you should factor in the software development and maintenance costs into the equation.
It would be interesting to see how countries like Argentina, China, or India fare against Poland.
What’s your project’s real price tag?
To fully understand this final section, we recommend reading our previous entry where we attempt to find out how long it takes to manage a translation project.
In the first two tables, we have presented a project manager’s costs on a yearly and hourly basis. In this final table, we will see how much it costs to manage a project, if the project takes 10, 15, or 20 minutes.
- A 10-minute project is a simple project into one target language
- A 15-minute project can be the same project with 4 target languages
- A 20-minute project can be the same project with 10 target languages or a bigger project where file download/upload and analysis creation takes more time.
| Country | The hourly total cost of a PM | PM cost of a 10-minute project | PM cost of a 15-minute project | PM cost of a 20-minute project |
|---|---|---|---|---|
Poland |
13.83 |
2.31 |
3.46 |
4.61 |
Ireland |
20.46 |
3.41 |
5.12 |
6.82 |
Spain |
20.45 |
3.41 |
5.11 |
6.82 |
United Kingdom |
22.87 |
3.81 |
5.72 |
7.62 |
Italy |
21.63 |
3.61 |
5.41 |
7.21 |
Denmark |
23.32 |
3.89 |
5.83 |
7.77 |
Netherlands |
25.79 |
4.3 |
6.45 |
8.6 |
Japan |
27.27 |
4.55 |
6.82 |
9.09 |
Sweden |
28.45 |
4.74 |
7.11 |
9.48 |
Belgium |
28.93 |
4.82 |
7.23 |
9.64 |
France |
30.47 |
5.08 |
7.62 |
10.16 |
Austria |
30.82 |
5.14 |
7.71 |
10.27 |
Germany |
31.51 |
5.25 |
7.88 |
10.5 |
United States |
30.5 |
5.08 |
7.63 |
10.17 |
Switzerland |
40.13 |
6.69 |
10.03 |
13.38 |
