GALA Pulse Survey Results - Q2 2020
GALA conducted its second in a series of Pulse Surveys to help our stakeholders understand how the market has changed in the first and second quarters of 2020 as a response to the global pandemic, as well as how industry professionals expect it will take shape in the coming months. Our results reflect a snapshot in time, with input from approximately 250 language service and technology providers. We further segmented this information by self-reported products and services, region, and annual revenue to provide a deeper look into how companies are being affected, as well as their predictions for the next quarter.
Previous three months (Q2)
There was no real change in demand from Q1 to Q2 according to the survey results. Previously, tools and technology development were the most stable services. This quarter, staffing was the only service to surpass the 50% mark in increased demand. Those offering interpreting and translation saw notable declines over the previous period. Latin America experienced the greatest rise in business, with more than half reporting some form of growth and the most stable returns. Last quarter, the Middle East and Africa were hit the hardest, and held that spot into Q2 with only slight variations in demand.
Revenues are less stable than in Q1, with half of respondents reporting decreases - likely as part of the longer-term effects of the global pandemic. Organizations that offer staffing services and multimedia localization saw the greatest income expansion, while interpreting, education, and technology development faced the most reduction. In the previous Pulse Survey update, organizations with an annual revenue of USD $26 million or more were the most resistant to change. However, this quarter even they are reporting 20% more decreases than in Q1. Those in the USD $5-25 million ranges saw the least gains in the past three months.
Respondents were queried about how their specific business operations have been affected, including measures they are taking to either cut costs or scale-up. Generally, reported measures to cut costs were not drastically different than in Q1. Although fewer organizations mentioned freezing hiring and closing offices, more reported making layoffs. A significant number of write-ins noted that in addition to the above cost-cutting options, staff hours are being reduced.
Yet, there is some positive news. Our calculations show that scaling-up measures increased overall by about five percent, and 30% of organizations are still not cutting costs. While one third are not scaling-up during this time, the same proportion are making new hires. Even more companies are adding products and services, and on-boarding new technology.
Next three months (Q3)
Expectations are high going into Q3, with more than two thirds of respondents predicting demand to go up and more than half anticipating an increase in revenue. Regionally, the Americas are most optimistic, assuming a more than 70% rise in demand in the next three months. Companies with a reported annual income of $5-10 million expect demand to drop more than two thirds.
Merely 15% of those who took the survey anticipate revenue decreases in the next three months. Companies offering consulting hope to be the most stable of the services polled, and those providing tools and tech development believe they will be the most positively impacted. Hopes may be high in places like North America, where many are anticipating as much as a 30% boost, but in Europe, the Middle East, and Africa, respondents are much more cautious. Companies with an annual revenue of USD $5-10 million are eager to see an uptick in Q3.
For now, the vast majority of polltakers expect either minor tweaks to their model or no significant business changes in the next 12-18 months. Companies headquartered in Asia and the Middle East, as well as those with an annual revenue of less than USD $1 million plan to stay the course. The largest grossing companies have perhaps already implemented their tweaks in the first two quarters of 2020, because they are reporting similarly.
Optimism has grown in the past few months, with 5% more people reporting a positive mood at their organization overall, and only fraction reporting a pessimistic outlook. Interestingly, we segmented the responses by sector to find that, a few months ago, those in aerospace and defense were the least optimistic. Today, they are on-par with those in the public sector who have decidedly the best outlook. They join the ranks of people who are hoping for an accelerated economic recovery.
2020 has been a landmark year for many industries, and ours is no exception. We have shown a snapshot of the state of our industry, along with segmented data on products and services, region, and annual revenue to aid in assessing where your company might fit in. As the year progresses, GALA will to continue conduct quarterly pulse surveys, and analyze and publish the results.
All responses to this survey were anonymous. The survey was open to both GALA members and non-members alike. Specific number of responses varied per question. Only LSP and language technology company responses were analyzed. Annual revenue (2019) and other demographics were self-reported.