This post is for many of our clients that are curious to know on why we charge the rates that we do, some of the points we have mentioned here is for the benefit of our clients that solicit transcription services from us. This document is intended to enhance the knowledge and curiosity of clients on various factors related to our transcription costs.
A client from San Francisco called us a couple of days ago wanting to know our charges for transcribing 140 minutes of audio, on being told that it was $ 1 for a minute of audio, he countered this with an offer of 35 ¢ for a minute of audio and no more.
The Audio: Transcription Ratio
There are quite a few callers on knowing that we charge $ 1 for a minute of audio – counter – “hey that’s $ 60 an hour, isn’t that expensive and unrealistic”, our reply obviously is to the contrary, given the fact that these charges are based on audio time count, it takes a professional transcriber 4 to 5 minutes to transcribe a minute of audio and taking this as a basis, after paying $ 15 an hour to a skilled transcriber, the cost on labor alone cost 25¢ a minute.
Contract Labor As A Solution
The general mark-up on transcription services billed by businesses is thrice the labor costs paid to contract labor which is based on billable hours of effort, this covers marketing and other overheads, plus the profit margins for the company.
Assuming if we work on these lines, the contract rate we will be charged is $ 5 /hour, it should be borne in mind that freelancers do not have the luxury of guaranteed paychecks, and after having invested in equipment and software their anticipated ROI is 3 to 4 times the wages that are paid to full time employees, this compensates more or less for the time lost, when no work comes their way.
The only viable solution thus would be to outsource the service from a country which has skilled labor, and which can be hired for $ 1.25 to $ 2.50 an hour on a full time basis.
Hiring Full-Time Staff -The Resultant Costs
The other viable solution available is to hire full time staff, and keeping costs at a bare minimum, the resultant cost is as follows : – Assuming that 2000 working hours are possible annually, the thumb rule is that businesses generally do not take the entire 2000 hours into account for working out the costs, a round-up of 1400 hours is the bottom line, and with an average 4 minutes of effort it will get us 21,000 audio minutes annually, costing $1 for every minute of audio transcribed.
Analyzing Different Options
Assuming that $ 2/hour is paid as labor cost for a full-time effort, every minute of audio transcribed will cost ¢13.32 @ $ 2/hr à ¢ 3.3 X 4 minutes, and in comparison it will cost ¢ 33.32 if contract labor is hired @ $ 5/hr à ¢ 8.33/minute x 4 minutes. If full time staff is hired and an annual pay of $ 4000 is taken into account, 20,000 minutes will cost 20¢ a minute, under the circumstances when you consider that a full time staffer is capable of 21,000 minutes of transcription effort annually, the disadvantage is that the productivity is dependent on a single source alone, and this may will result in backlogs and turn-around-times may not be possible to maintain.
Outsourced Labor Is The Only Viability
The option of hiring overseas labor is the only viability under the circumstances, this will maintain cost of $ 1/ minute, the other options will necessitate a price hike to possibly $ 1.50 a minute, there are other add-on costs for example take the case of payment processors such as Pay Pal which charges 4% to 6% on every transaction. The base charge of the company is 30¢, plus 2.9% of the transaction value, this adds 59¢ or 5.9% to a $ 10 transaction.This brings us to the logical conclusion that $ 1/minute is barely enough for us to make ends meet without compromising on the professional standards of our service.