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:

In order to unfold the cost associated with managing a translation project, it’s important to take into consideration two factors:

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.
  • 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

You can horizontally scroll the data table
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.

You can horizontally scroll the data table
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.

You can horizontally scroll the data table
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

Project management