Transcription services thrive on creating digital trails from the spoken word. They perform an invaluable service, especially in fields such as legal, medical and government business. And there’s big money involved in the business of transcribing. But, while leading industry players with deep pockets spend millions of dollars on building and maintaining a favorable public image, the industry harbors some dark secrets.
Let’s take a closer look at the numbers involved, and how the freelancing and outsourced transcribers seem to get the short end of the deal.
In 2019, the U.S. transcription industry had a market size of roughly US$ 19.8 billion. Over the next seven years (through to 2027), the industry is set to explode in growth at a compound annual growth rate of 6.1%. Given that most global economies will see stagnant, if not declining growth, it’s fair to say that the transcription business is a lucrative one to be in these days.
A poster-child for the industry is Rev.com, a San Francisco and Austin-based transcription company established in 2010. It counts amongst its distinguished client’s multi-nationals and giant corporations like Amazon and Microsoft. In 2019, the company earned the prestigious PCMag’s Editor’s Choice award. So beloved is the name on Wall Street that a few years ago it closed a $4.5 million dollar funding through private investors that included the likes of Craig Sherman, the former COO of Ancestry.com. A look at the company’s finances offers us an atypical view of how the industry works.
So, how do transcription companies make money? Well, like many of their industry peers, they focus on a few niche markets – in Rev’s case, that’s audio transcription and translations (most companies offer variations of these services). It charges its clients a minimum of $1.25 per minute of transcription for “standard” (not urgent/rush) service. Assuming we use those numbers to represent how the industry works, let’s do the math.
According to the company’s website, Rev has a network of 15,000 freelancers and transcribers. To do the math, we’ll wrap those statistic around with some other general assumptions about the industry:
Because the industry thrives on virtual workers, these individuals are accessible 24x7. However, we’ll make an allowance and assume just 75% of that time is productive (making adjustments for breaks, shift changes, setting-up and signing-in/out etc.). Based on these assumptions, a transcription company might bill approximately 6.75 million hours a month.
A typical transcriber might earn between $0.40 and 0.45 cents – depending on the experience, accuracy and level of complexity of the gig he/she is working on. For the purpose of this exercise, we’ll assume a company pays its transcribers the maximum rate ($0.45) for their services.
So, what would that mean for the numbers?
Based on this hypothetical scenario, a company billing 6.75 million hours a month might earn over $500 million for the services it provides to its clients. In return, the transcribers who make that billing possible receive just over $180 million for their services. That’s a nice juicy 64% return on investment (ROI) for the transcription company!
THE DARKER SIDE
It’s one thing for a service provider to pay pittance to their transcribers; most of whom work remotely as gig workers, and don’t receive company benefits. Nor are they covered by a pension plan or receive paid time off. However, many industry players exercise almost total impunity when setting (and revising – downwards!) their rate of compensation to transcribers.
As some industry players did, slashing the average take-home rate by 0.15 cents, from .45 to .30 per minute – a more than 33% reduction – improves the company’s ROI from 64% to 76%. Not a bad move – for the company executives and shareholders. But not so good for the outsourced transcribers that work tirelessly behind the scenes.
There is a bright side to this story as we did find Transcription Outsourcing, LLC in Denver that does pay their people well for the work they do. In fact they pay their US based team members over 2 times more than what Rev does per minute, starting them at 85 cents per minute, and you can apply for a transcription job online with them pretty easily. Medical transcription companies almost always pay by the line to their outsourced transcribers, and according to the industry standards, people, on average, speak at a rate of 8-12 lines per minute.
If you want to avoid the transcription companies that don’t pay well or may not have their transcriptionist’s best interests at heart check out the article 5 Warning Signs of a Rogue Transcription Agency.
So, let’s assess what that means for the earning power of medical transcribers:
Assuming that a client speaks at the lower lines per minute (8 LPM) and the average (8 + 12 divided by 2) 10LPM, and accounting for pauses, “humms” and “ahaas”, a transcriber might expect to earn anywhere between $215 and $384 a day for transcribing between 3,072 and 3,840 lines of extremely complex legal jargon, commentary and narrations. That’s when they work through a grilling 8-hour day (adjusted to 6.4-hours). But here’s the dark side to the industry:
- Most transcribers won’t work a full day – so a 50% work-day reduces that payout to $107.5 and $192
- Many industry players penalize transcribers for errors and omissions in their transcriptions. These penalties may manifest themselves as rate reductions, or as charges for third-party quality assurance on the transcribers work
EXPLOITATION AT ITS BEST
Unfortunately, that’s the sad reality of working as a transcriber within a multi-billion-dollar industry. But these professionals are subject to even worse mental strain. Professionals working in the industry often complain of going through extremely stressful periods – having transcribed hours of police recording, horrific child abuse and graphic medical procedures and testimony.
Even as they battle their demons alone (most outsourced transcription services don’t offer their employees much needed counselling services, medical benefits or paid stress leave), they don’t receive the appreciation they deserve. It’s high-time that those in positions of power take note and cut their transcribers a break. Paying them a fair rate for their services would be a great start.