GALA Pulse Survey Results - Q1 2020
GALA conducted its first in a series of Pulse Surveys to help our stakeholders understand how the market has changed in the first quarter 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 as a snapshot in time, with input from more than 300 language service and technology providers. We further segmented some of this information by self-reported products and services, region, and annual revenue to provide a deeper look into if and how certain companies are being affected.
Previous three months
Approximately one third of LSPs have experienced an increased demand for their products and services in the past quarter. Demand for tools and technology development were the most stable products and services among those polled. While not terribly different from the overall poll results above, those offering education, training, and interpreting saw the greatest decrease in both demand and revenue. The Americas experienced the most increase, with about 50% reporting some form of increased demand. While overall less than half of all organizations reported reduced demand, the Middle East and Africa were hit hardest with decreases of 75%.
More than half of respondents reported the same or increased revenue for Q1. Those who offer staffing products and services saw the most increase in revenues. Again, we see variances in regional distribution with the Middle East, Africa, Asia, Oceania, and Europe reporting a 50-60% decrease. The most stable region was Latin America, with 30% reporting approximately the same amount of revenue. Perhaps unsurprisingly, organizations with an annual revenue of USD $26 million or more were the most resistant to change in Q1 2020, and also saw the greatest increase in business demand. However, those with an annual revenue of USD $5-10 million were hit the hardest, reporting a 60% decrease in revenue.
Respondents were queried about how their specific business operations have been affected, including measures they are taking to either cut costs or scale up. Half reported limiting travel expenses for 2020, less than half are freezing hiring, and about a third are freezing pay raises. Though not a cost-cutting measure, a significant number of write-ins added they were applying for governmental assistance as part of a COVID relief package.
However, there is some good news. Approximately 30% are not cutting costs and only a fraction report currently making layoffs. While 40% are choosing not to scale up during this time, just as many are adding new products and services, followed by onboarding new technology. One fifth are making new hires, while still others are looking for acquisitions.
Next three months
Looking ahead, industry professionals are split – approximately the same proportion of respondents expect an increase in demand as those who expect a decrease, whereas the remaining do not predict any change. Regionally, Europeans are the least optimistic, predicting about half of previous demand.
Overall, 40% expect a decrease in revenue in the next three months, one quarter expect revenues to stay the same, and still another 35% predict an increase. Companies offering multimedia localization services are cautiously optimistic that they will see a revenue increase in the next few months, and those in tools and tech development believe they will be the most positively impacted. Expectations are higher in Latin America, the Middle East, and Africa than in other regions of the world. Companies with an annual revenue of USD $1-5 million are the least optimistic, anticipating approximately half of their previous demand and revenue, whereas those with an annual revenue of USD $26 million or more don’t expect to see much change, but look towards an increase in revenue in Q2.
For the time being, the vast majority of respondents expect either minor tweaks to their model or no significant business changes in the next 12-18 months. Companies with an annual revenue of USD $5-10 million expect to implement the most changes.
The current mood at a typical company is optimistic or neutral, with only fraction reporting a pessimistic outlook. Those who offer consulting services report being the most optimistic. Interestingly, when segmented by revenue, the mood shows an arc, with those with an annual revenue under USD $1 million and over USD $26 million as less optimistic than those in-between.
Everyone has been impacted by the pandemic in some form or another in this first part of 2020. However, these results suggest that the language industry was hit differently depending on a series of factors – not all of them negative. We have highlighted a few of those distinctions here, including 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.