Practical tips to help you resolve the dilemma When you have set up a translation agency you are not likely to bother about hiring staff at first, as you will have to invest all of your energy and effort in putting in place effective mechanisms to attract clients. In the beginning, therefore, the focus will be on Marketing & Sales rather than on the actual translation work. However, as orders start coming in – which they will once paper and online tools are operational – you may soon find that you run out of capacity, especially if you do the translating yourself as well as the marketing. Unless you firmly intend to remain a one-man business, your well-run and ambitious translation agency will inevitably face the dilemma of expansion, usually within a year.Perhaps the best thing about working with freelancers is that you owe them nothing outside the remuneration for the work they do for you. There is a direct, one-to-one relationship between what they give you and what you pay them in return. Your freelancers are themselves responsible for tax, social security contributions, insurance and the like and will offer their services at a “clean” rate that provides immediate insight into the margin on any specific order you place with them.
In the case of permanent staff, this is very different. What you pay an experienced internal translator is an agreed salary which is not principally intended to be cost-effective, but to prevent him or her from moving on to a competitor. Before taking on a translator for a permanent position you will obviously have made some calculations as to their profitability, but the fact remains that internal staff constitute a permanent cost item that is not balanced by proportionate revenues the way freelancers are. When business is slow, your in-house translators may in fact yield less than what they cost in terms of salary. The reverse side of this coin, of course, is that in busy times your translators may well generate far more than what they cost – although this significant benefit may be undone by the lack of an incentive on your translator to produce more than agreed daily or weekly outputs.
Another very important benefit of freelancers is that you have very few legal obligations towards them, other than paying them for their specific deliverables. If the translation is not satisfactory, you can simply decide not to engage that particular freelancer any more. Once your translation business is up and running and advertised online, there will be a constant flow of freelancers offering their services to your company. This means that it will not generally prove very difficult to find freelancers to replace those you have decided not to work with any more. On the other hand, if you are happy with freelance providers of translation services and outsource significant volumes of work to them, they will appreciate the relative certainty you offer them. This provides you with an excellent opportunity to build up a steady working relationship with freelancers the way you would with your in-house staff, but without the mutual obligations that come with an employment contract.
In this respect, too, in-house translators compare unfavourably with freelancers. Once you have taken on a translator as a member of your permanent staff, it may prove very difficult to cancel their employment contract, for example if their translations prove to be substandard. In addition to that, even if you do eventually manage to terminate the contract this is bound to be preceded by a difficult period marred by mutual mistrust and disappointment, which may depress the overall atmosphere at your company.
Having said that, there are also good arguments in favour of hiring internal staff. Flexibility is one. Even if your internal translators work on scheduled projects, they can be expected to take on small incidental translation work for your clients that you would not usually want to bother your freelancers with. This is an important benefit, because your ability to deal effectively with ad hoc requests from your regular clients is one of the principal criteria by which they will judge the quality of your organisation. Clients really value suppliers that can respond effectively to their own inadvertent changes in production schedules, for example. You will need internal human resources to be able to provide that type of flexibility.
Another reason to prefer internal staff to freelancers is the relative dependability of the former as a business resource. Their permanent availability offers a range of important benefits, such as guaranteed capacity, helpdesk resources, and the possibility to assign specific translators to specific clients, which will enhance the quality of the translations in terms of consistency in style and terminology. To a certain extent, a permanent relationship with freelancers offers similar possibilities, but there is no guarantee that your preferred freelancer is available the moment you need him or her, and, overall, communication with freelancers is less efficient and more time-intensive than with your own employees.
In terms of recruitment, freelancers and in-house translators pose very different challenges on the business owner. Both will obviously need to be vetted extensively before they can be considered for a job or a position, but overall the selection process is far more critical in the case of permanent staff, considering your legal obligations towards them. In this sense, freelancers are more suitable subjects for a trial and error process, as they are easier to dismiss and easier to replace. In addition, freelancers are far less scarce. While it may be relatively easy to find translators in your country who are native speakers of, or have an excellent passive understanding of, the world’s principal languages (a clear prerequisite for most internal positions), more outlandish language combinations can usually only be arranged in a freelance relationship.
In all, it is safe to conclude that at a translation agency the balance does not tilt toward either freelancers or in-house staff, as each offer specific benefits and drawbacks. As for costs, the two options may, in the final analysis, prove to be fairly similar – unless you are prepared to work with extremely cheap freelancers or offer exorbitant salaries. In terms of administrative hassle and legal obligations, the freelance relationship is definitely the preferred option, but the disadvantage of internal translators in this regard is outweighed by the benefits they offer in terms of guaranteed availability, flexible deployment and the development of skills oriented towards specific clients.
 For further information about setting up a successful translation agency, see the article entitled ‘Tips to help you start your own all-round translation business’.
 Of course, depending on local regulations you will have to make sure that this is in fact the case. In many jurisdictions the tax authorities issue statements attesting to the independent status of a freelancer as a self-employed person. Before working with a new freelancer it is wise to ask them to produce such a statement, in order to rule out your liability for their social security payments.
 This shows the importance of a strict and thorough selection procedure.
 For example, for an agency based in the Netherlands it would be virtually impossible to find an in-house Chinese-German translator, even if it were commercially viable to offer such a post. Compare this with Internet-based communities of freelance translators such as the Translators’ Cafe, where it is very easy to scout for talent in unusual language combinations.
The principal question, then, is whether to hire permanent staff or operate a network of independent freelance translators. This article sets out to explore the advantages and disadvantages of either choice to help you make an informed decision.