Trends in Telephone Interpreting

Trends in Telephone Interpreting The Current Market Dynamics of Over-the-Phone Interpretation By Nataly Kelly and Vijayalaxmi Hegde

Trends in Telephone Interpreting By Nataly Kelly and Vijayalaxmi Hegde ISBN 978-0-9834358-6-0 Copyright 2011 by Common Sense Advisory, Inc., Lowell, Massachusetts, United States of America. Published by: Common Sense Advisory, Inc. 100 Merrimack Street Suite 301 Lowell, MA 01852-1708 USA +1.978.275.0500 info@commonsenseadvisory.com www.commonsenseadvisory.com No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Permission requests should be addressed to the Permissions Department, Common Sense Advisory, Inc., Suite 301, 100 Merrimack Street, Lowell, MA 01852-1708, +1.978.275.0500, E-Mail: info@commonsenseadvisory.com. See www.commonsenseadvisory.com/en/citationpolicy.html for usage guidelines. Trademarks: Common Sense Advisory, Global Watchtower, Global DataSet, DataPoint, Globa Vista, Quick Take, and Technical Take are trademarks of Common Sense Advisory, Inc. All other trademarks are the property of their respective owners. Information is based on the best available resources at the time of analysis. Opinions reflect the best judgment of Common Sense Advisory s analysts at the time, and are subject to change.

Trends in Telephone Interpreting i Table of Contents Topic... 1 Why We Researched Telephone Interpreting Trends... 1 Past Research on This Topic... 1 Findings... 2 About Our Survey Participants... 2 Demand for TI Grew throughout the Recession... 3 Buyers Report High Rates of Customers with Limited English... 5 How Buyers Manage Their TI Vendors... 7 Trends in Outsourcing Telephone Interpreting... 9 Spanish Costs Less; Buyers Pay More... 13 Most Buyers Do Not Expect Significant Price Decreases... 15 Summary of Findings on Telephone Interpreting Trends... 19 Analysis... 21 A Mostly Sunny Outlook, with a Few Clouds in Sight... 21 Customers Complain that Providers Lack Quality... 21 High Satisfaction Rates Mean Tough Competition... 22 Competing on Quality Is Tricky but Not Impossible... 23 Develop a Quality Feedback Mechanism... 23 Reconsider the Meaning of Interpreter Qualifications... 23 Actually Strive to Improve Quality... 24 Implications... 25 The Race to Become the First Tech-Savvy TI Company... 25 A Social Network for Interpreters... 25 Change Might Be Scary, but It s Inevitable... 26 Let Your Customers Tell You What Quality Means... 26 About Common Sense Advisory... 27 Future Research... 27 Applied Research and Advisory Services... 27 Tables Table 1: Industry Sectors of TI Buyer Respondents... 2 Table 2: Monthly TI Usage of Survey Respondents... 3 Table 3: Respondent Role in Purchasing Telephone Interpreting... 3 Table 4: Demand for TI Services Grew from 2007 to 2010... 4 Table 5: Buyers Expect Demand to Keep Growing from 2011 to 2013... 5 Table 6: Percentage of Customers with Limited English Proficiency... 5 Table 7: Spanish TI Usage among Buyers... 6 Table 8: Meeting Spanish Interpretation Needs over the Next Five Years... 7 Table 9: Buyer Views on Using One vs. Many TI Vendors... 7 Table 10: Number of Years with Primary Telephone Interpreting Vendor... 8 Table 11: Level of Satisfaction with Primary Telephone Interpreting Vendor... 8 Table 12: Procurement of Non-Spanish Telephone Interpreting Services... 9 Copyright 2011 by Common Sense Advisory, Inc.

ii Trends in Telephone Interpreting Table 13: Internal Staffing of Language Resources... 9 Table 14: Estimated Replacement of Face-to-Face Interpreting by TI... 10 Table 15: Buyers Reasons for Outsourcing TI Services... 10 Table 16: Non- Buyers Reasons for Outsourcing TI Services... 11 Table 17: Vendor Selection Criteria for Buyers... 11 Table 18: Vendor Selection Criteria for Non- Buyers... 12 Table 19: Vendor Selection Criteria Vary by Industry... 12 Table 20: Buyers Report Numerous Challenges with TI Providers... 13 Table 21: Current Per-Minute Rates for Spanish... 14 Table 22: Current Per-Minute Rates for Other Languages... 14 Table 23: Projected Per-Minute Rates for Spanish... 15 Table 24: Projected Per-Minute Rates for Other Languages... 15 Table 25: Percentage Reduction in Per-Minute Rate Required to Switch Providers... 16 Table 26: Other Language Services Used by TI Buyers... 17 Table 27: Other Language Services Used by Non- TI Buyers... 17 Table 28: Likelihood of Reducing Telephone Interpreting with Other Technologies. 18 Table 29: Use of Call Center Services for English Call Volumes... 18 Table 30: Use of Call Center Services for Spanish Call Volumes... 18 Table 31: Many Buyers Demonstrate Willingness to Change Providers... 19 Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 1 Topic Why We Researched Telephone Interpreting Trends The telephone interpreting (TI) market makes up an estimated US$994.18 million worldwide in 2011, or 3.40% of the total language services market, up from 3.26% in 2010 (see The Language Services Market: 2011, May11). In essence, the telephone interpreting sector is growing and making up a larger share of the total language services market than in the past. It s also attracting attention from language service providers. Yet, on the global map of language services, telephone interpreting is an island with relatively few inhabitants. While thousands of companies sell over-thephone interpreting services, fewer than two dozen firms worldwide earn more than US$1 million from TI. Most of these companies are based in the United States, where the bulk of the global demand is concentrated. While there are companies with significant contracts in places like the United Kingdom, Sweden, Australia, and the Netherlands, the market is most mature in North America, where the services have evolved over the past few decades. In this report, we concentrate on the North American market with a strong focus on the United States. In other markets, large contracts are typically limited to government tenders, so the ways those markets behave are somewhat different from those in the U.S., where an array of commercial businesses purchase TI in order to sell their goods and services to large non-english-speaking segments of society. However, companies based outside the United States can obtain valuable findings about the directions in which commercial TI buyers are headed as the U.S. market continues to mature. Past Research on This Topic This report examines many of the issues we first raised in our reports on purchasing practices and the outlook for the supply side of the market (see TI Supply-Side Outlook, Sep09, and Telephone Interpretation Procurement, Jun09). We also provide updated information on both the demand and supply sides of the market (see Telephone Interpretation: The Supply Side, Jun08, and Telephone Interpretation: The Demand Side, May08). Copyright 2011 by Common Sense Advisory, Inc.

2 Trends in Telephone Interpreting Findings In February 2010, we conducted a survey of individuals in charge of purchasing telephone interpreting services at 192 organizations throughout North America to learn more about their usage criteria, procurement characteristics, and vendor selection processes. We asked about purchasing trends from 2007 to 2010 and about planned activities through 2013. Even though we collected this data for other studies on the interpreting market, we decided that it would be useful and relevant to analyze the information separately for purposes of this report. About Our Survey Participants Out of the 192 buyer organizations that responded to our survey on telephone interpreting (TI) trends, more than half (58.3%) worked within the healthcare field (see Table 1). In other words, the findings we share represent survey responses from 112 buyers in the healthcare sector and 80 buyers in other areas like social and government services, public safety, and legal services. Industry Sector Percent of Sample Respondents Health care 58.3% 112 Social and government services 13.5% 26 Public safety 6.3% 12 Legal services 6.3% 12 Insurance 3.1% 6 Financial 3.1% 6 Telecommunications 3.1% 6 Utilities 0.5% 1 Other 4.7% 9 Table 1: Industry Sectors of TI Buyer Respondents Because so many of the respondents worked in the healthcare industry, we grouped the respondents into healthcare buyers and non-healthcare buyers. We asked buyers how many minutes per month (MPM) of telephone interpreting they used at their organizations (see Table 2). Reflecting the nature of the market itself, in which few large accounts exist, most organizations that responded to our survey were small accounts that use fewer than 5,000 minutes per month. Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 3 Monthly TI Usage of Survey Respondents (Minutes per Month) Non- Less than 1,000 26.3% 40.4% 1,001-5,000 35.4% 28.8% 5,001-10,000 10.1% 15.4% 10,001-25,000 20.2% 9.6% 25,001-50,000 3.0% 3.8% 50,001-100,000 4.0% 0.0% More than 100,000 1.0% 1.9% Table 2: Monthly TI Usage of Survey Respondents When we asked about authority for making purchasing decisions, we noticed some slight differences between the two respondent groups. In the healthcare sector, the largest group of respondents (41.1%) said that they belonged to a team of individuals that collectively makes the decisions for telephone interpreting purchases at their organizations. However, in non-healthcare accounts, the most common situation was for the respondents to report to someone else who had the final say (see Table 3). Respondent Role in Purchasing Telephone Interpreting Non- I have the final say on all decisions for my organization. 18.8% 5.8% I report to someone who has the final say. 24.1% 33.3% I am part of a team that has the final say. 41.1% 24.6% I do not participate in the decision-making process. 15.2% 33.3% Other 0.9% 2.9% Table 3: Respondent Role in Purchasing Telephone Interpreting Demand for TI Grew throughout the Recession Nearly all organizations reported that their telephone interpreting usage had been growing over the past few years, even though this survey ran during the height of a period of global economic downturn, and we specifically asked about the periods from February 2007 through February 2010. Copyright 2011 by Common Sense Advisory, Inc.

4 Trends in Telephone Interpreting During that time period, less than 5% of respondents from each group said that their TI usage had decreased. The vast majority reported increases, with the most popular increase in the range of 6 to 10% per year (see Table 4). These findings mirror the results of our market sizing exercises for the language services industry, which also showed strong growth rates for language service providers (LSPs) in general, as well as TI companies (see The Language Services Market: 2011, May11). Buyer-Reported Growth in Demand for TI Services From 2007 to 2010 Health Care Non- 1-5% per year 19.2% 30.8% 6-10% per year 22.2% 17.3% 11-15% per year 11.1% 3.8% 16-20% per year 2.0% 3.8% 21-25% per year 4.0% 0.0% 26-30% per year 4.0% 1.9% 31-40% per year 2.0% 0.0% 41-50% per year 3.0% 1.9% More than 50% per year 2.0% 1.9% I don't know the number, but it has been growing. 22.2% 28.8% I don't know the number, but it has stayed the same. 4.0% 5.8% I don't know the number, but it has been decreasing. 4.0% 3.8% Table 4: Demand for TI Services Grew from 2007 to 2010 When we asked respondents about the projected rate of growth in their TI usage for the next three years, the largest group of respondents estimated that it would grow within that same range of 6 to 10% per year (see Table 5). Very few people expected the growth in demand for services would slow down. The results for both healthcare and non-healthcare buyers were quite consistent. Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 5 Anticipated Growth in Demand for TI Services From 2011 to 2013 Non- 1-5% per year 19.2% 30.8% 6-10% per year 27.3% 19.2% 11-15% per year 17.2% 13.5% 16-20% per year 7.1% 7.7% 21-25% per year 6.1% 7.7% 26-30% per year 4.0% 7.7% 31-40% per year 4.0% 1.9% 41-50% per year 2.0% 3.8% More than 50% per year 3.0% 0.0% It will stay the same. 6.1% 7.7% It will decline. 4.0% 0.0% Table 5: Buyers Expect Demand to Keep Growing from 2011 to 2013 Buyers Report High Rates of Customers with Limited English Buyer respondents showed significant diversity in their concentrations of limited English proficient (LEP) customers and patients (see Table 6). More than a third of each group claimed that LEP individuals made up less than 10% of their total population. However, another large contingent (29.5% of healthcare buyers and 34.8% of non-healthcare buyers) said that between 11 and 25% of their patients had limited proficiency in English. Worth noting is that 15.2% of healthcare respondents and 15.9% of non-healthcare buyers claimed that LEP patients made up more than half of their total customer or patient population. Percentage of Patients/Customers with Limited English Proficiency Non- Less than 10% 39.3% 34.8% 11-25% 29.5% 34.8% 26-50% 16.1% 14.5% 51-75% 8.9% 7.2% 76-100% 6.3% 8.7% Table 6: Percentage of Customers with Limited English Proficiency Copyright 2011 by Common Sense Advisory, Inc.

6 Trends in Telephone Interpreting Buyers also showed quite a bit of variation with regard to their needs for Spanish telephone interpreting services. One large group of respondents (24.2%) said that Spanish made up 90% or more of their TI needs, followed by those who said it accounted for 80 to 89% of total usage (23.2%). However, the largest continent of respondents (27.3%) said that Spanish represented less than 50% of their TI needs (see Table 7). Spanish as a Percentage of Total Call Volumes Non- 90% or more 24.2% 28.8% 80-89% 23.2% 21.2% 70-79% 8.1% 5.8% 60-69% 4.0% 9.6% 50-59% 13.1% 5.8% Less than 50% 27.3% 28.8% Table 7: Spanish TI Usage among Buyers Because Spanish is typically the language of highest demand for TI consumers in North America, one common misconception is that perhaps the demand for Spanish can be fully met by hiring Spanish-speaking staff members. In fact, Spanish typically accounts for 70% or more of the usage for typical accounts in the United States. Still, bringing more Spanish work in-house is usually an option, so we also asked buyers about their intentions to do this (see Table 8). For non-healthcare and healthcare buyers alike, the largest groups stated that they did not expect to see any major changes in how they meet Spanish TI needs. In fact, for non-healthcare buyers, nearly half said that they believed their Spanish and non-spanish needs would remain constant. Large numbers of nonhealthcare buyers (41.9%) planned to continue outsourcing more, most, or all of their Spanish interpretation needs. However, a large percentage of healthcare buyers (23.2%) said that they intended to bring most or all of their Spanish interpreting needs in-house over the next five years. Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 7 Meeting Spanish Interpretation Needs over the Next Five Years Non- We will bring most/all Spanish interpretation needs in house. We will bring a greater portion of our Spanish interpretation needs in house. We will outsource a greater portion of our Spanish interpretation needs. We will outsource most/all of our Spanish interpretation needs. The balance between outsourcing and in-house provision of Spanish interpretation will remain relatively constant over the next five years. 23.2% 15.4% 30.3% 15.4% 6.1% 11.5% 8.1% 15.4% 32.3% 42.3% Table 8: Meeting Spanish Interpretation Needs over the Next Five Years How Buyers Manage Their TI Vendors When we asked about views toward working with multiple vendors or just one, we found that the majority of healthcare organizations felt that sticking with just one vendor was very important. Only a slim minority did not think it was that important to stick with just one vendor (see Table 9). Importance of Using One Telephone Interpreting Vendor as Opposed to Several Non- Very important 60.6% 46.2% Somewhat important 27.3% 40.4% Not that important 7.1% 5.8% Not at all important 5.1% 7.7% Table 9: Buyer Views on Using One vs. Many TI Vendors We also inquired about the number of years each company had been working with its primary TI vendor. We first asked respondents to select the vendor from a list of the largest suppliers, and then to tell us how many years they had been working with them. Long relationships were quite common among healthcare buyers, with more than half of the sample (59.5%) stating that they had been working with the same primary vendor for four years or more (see Table 10). Non-healthcare buyers did not report such long relationships, with large amounts (28.2%) stating that they had been with their vendor for only one to two years. Copyright 2011 by Common Sense Advisory, Inc.

8 Trends in Telephone Interpreting Number of Years with Primary Telephone Interpreting Vendor Non- Less than 1 year 11.0% 12.8% 1-2 years 13.4% 28.2% 2-3 years 17.1% 15.4% 4-5 years 25.6% 15.4% 6 years or more 32.9% 28.2% Table 10: Number of Years with Primary Telephone Interpreting Vendor When we asked healthcare buyers about levels of satisfaction with their vendors, the vast majority (92.7%) said that they were very satisfied or satisfied (see Table 11). Levels of satisfaction were less impressive for non-healthcare buyers, with just a little over a quarter (28.2%) stating that they were very satisfied. Level of Satisfaction with Primary Telephone Interpreting Vendor Non- Very satisfied 50.0% 28.2% Satisfied 42.7% 64.1% Unsatisfied 4.9% 2.6% Very unsatisfied 2.4% 5.1% Table 11: Level of Satisfaction with Primary Telephone Interpreting Vendor We asked buyers how they purchased non-spanish TI services from their primary vendor. The majority (51.2%) said that they used their primary vendor for all non-spanish interpretation needs. Another large group (46.3%) stated that they used the vendor for non-spanish support only when they could not meet the needs in-house. Only a minority (two respondents) said they used their primary vendor exclusively for Spanish interpreting services (see Table 12). However, for non-healthcare buyers, it was more common to use vendors for Spanish. More than one in 10 buyers (15.4%) stated that they used a vendor for Spanish only. Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 9 Procurement of Non-Spanish Telephone Interpreting Services from Primary Vendor Non- We use this provider for all non-spanish interpretation. We use this provider for non-spanish overflow interpretation volume (in addition to internal capabilities face to face or internal call centers). We do not use this provider for non-spanish (we use this provider only for Spanish interpretation). 51.2% 51.3% 46.3% 33.3% 2.4% 15.4% Table 12: Procurement of Non-Spanish Telephone Interpreting Services We questioned respondents about the sizes of their internal language support teams. For healthcare buyers, about half of the representatives said that they had bilingual staff in place for Spanish and other languages (48.3%). Non-healthcare organizations were even more likely to have a multilingual workforce, with 60.4% claiming to have employees who spoke Spanish and other languages (see Table 13). buyers were more likely to suffer from a lack of bilingual staff, with more than a quarter (27.6%) claiming to have none. For non-healthcare buyers, the likelihood of a company having no bilingual staff was much lower. Internal Staffing of Language Resources For Spanish only For Spanish + other languages None Bilingual staff 24.1% 48.3% 27.6% Face-to-face interpreters 31.0% 47.1% 21.8% Telephone interpreters 19.5% 51.7% 28.7% Non- Bilingual staff 30.2% 60.4% 9.3% Face-to-face interpreters 13.9% 48.8% 37.2% Telephone interpreters 11.6% 55.8% 32.5% Table 13: Internal Staffing of Language Resources Trends in Outsourcing Telephone Interpreting One common question from TI suppliers is how much potential demand exists in the market in other words, how much revenue from other types of interpreting could be replaced by TI. In order to get a sense of buyers views on this matter, we asked them to estimate how much of their face-to-face interpreting could potentially be replaced by telephone interpreting. Copyright 2011 by Common Sense Advisory, Inc.

10 Trends in Telephone Interpreting In both groups, we found that about one-third of respondents stated that none of their face-to-face interpreting could be replaced by telephone interpreting (see Table 14). Among non-healthcare buyers, a large percentage (20.9%) stated that they did not use face-to-face interpreting at all. An equal amount believed that 10 to 20% of their in-person interpreting volumes could be replaced by TI. Estimated Replacement of Face-to-Face Interpreting by Telephone Interpreting Non- None 33.3% 30.2% 0-10% 24.1% 11.6% 11-20% 12.6% 20.9% 21-30% 12.6% 7.0% 31-40% 4.6% 4.7% 41-50% 0.0% 4.7% More than 50% 4.6% 0.0% Does not apply. We do not use face-to-face interpreting. 8.0% 20.9% Table 14: Estimated Replacement of Face-to-Face Interpreting by TI In the healthcare sector, nearly everyone agreed that the reasons they outsourced TI services were legislation, liability, and risks (see Table 15). However, outside of the healthcare sector, the reasons for outsourcing were not only legislative, but an inability to recruit sufficient bilinguals to satisfy the demand for interpreting services internally (see Table 16). Reasons for Outsourcing Telephone Interpreting Legislation requires that we provide interpretation services. Strongly Agree Agree Disagree Strongly Disagree 52.8% 33.3% 8.0% 5.7% It reduces our liability and risk. 49.4% 35.6% 9.1% 5.7% We primarily use telephone interpreting for Spanish overflow and for almost all other languages. Telephone interpreting is not a core competency of ours. It is generally less expensive to outsource than to provide it ourselves through face-to-face interpreting or through bilingual call centers. We cannot recruit enough bilingual staff to handle the volumes ourselves. Table 15: Buyers Reasons for Outsourcing TI Services 40.2% 28.7% 22.9% 8.0% 24.1% 24.1% 29.8% 21.8% 18.3% 31.0% 21.8% 28.7% 28.7% 27.5% 24.1% 19.5% Copyright 2011 by Common Sense Advisory, Inc.

Trends in Telephone Interpreting 11 Reasons for Outsourcing Telephone Interpreting Legislation requires that we provide interpretation services. Strongly Agree Agree Disagree Strongly Disagree 44.1% 25.5% 16.2% 13.9% It reduces our liability and risk. 27.9% 25.5% 27.9% 18.6% We primarily use telephone interpreting for Spanish overflow and for almost all other languages. Telephone interpreting is not a core competency of ours. It is generally less expensive to outsource than to provide it ourselves through face-to-face interpreting or through bilingual call centers. We cannot recruit enough bilingual staff to handle the volumes ourselves. Table 16: Non- Buyers Reasons for Outsourcing TI Services 27.9% 39.5% 23.2% 9.3% 27.9% 39.5% 20.9% 11.6% 25.5% 46.5% 25.5% 2.3% 41.8% 44.1% 6.9% 6.9% and non-healthcare buyers reasons for outsourcing TI services were different, and so were their selection criteria. We asked respondents to rank a list of criteria to identify which factors were most important to them, from most to least important. This enabled us to compute an average rating for each characteristic (see Tables 17 and 18). Consideration Most Important Second Most Important Third Most Important Fourth Most Important Fifth Most Important Rating Average Interpreter Qualifications 74.6% 15.1% 5.7% 2.5% 1.2% 4.59 Connection Speed 1.8% 41.5% 35.8% 11.3% 9.4% 3.15 Price 9.8% 35.2% 29.5% 15.4% 9.8% 3.20 Customer Service 12.2% 6.1% 30.6% 32.6% 18.3% 2.61 Number of Languages 6.6% 23.3% 18.3% 26.6% 25.0% 2.60 Industry Expertise 10.5% 15.7% 0.0% 21.0% 52.6% 2.11 Supplier Financial Health 50.0% 0.0% 0.0% 50.0% 0.0% 3.50 Referrals / References 0.0% 0.0% 25.0% 25.0% 50.0% 1.75 Location of Interpreters 0.0% 0.0% 28.5% 28.5% 42.8% 1.86 Performance Guarantees 4.1% 8.3% 16.6% 50.0% 20.8% 2.25 Reporting Tools 3.5% 3.5% 3.5% 25.0% 64.2% 1.57 History/Relationship with Provider 0.0% 0.0% 21.4% 28.5% 50.0% 1.71 Table 17: Vendor Selection Criteria for Buyers Copyright 2011 by Common Sense Advisory, Inc.