Insight from CEOs at Leading LSPs

Forces That Will Shape the Future of LSPs

This is the 7th installment of CSA Research’s CEO insights, featuring advice and forward-looking statements from leading global executives at LSPs.

In their own words, these CEOs, who are also members of CSA Research Leadership Councils, give their latest thoughts on the forces that will shape the future of LSPs in 2023 and beyond.

We started compiling their insights in 2020—first on a quarterly basis and now bi-annually. We are grateful to them for continuing to share their advice and experiences with the industry. 

As diversity accelerates, America will become “majority minority” by 2045 and the second-largest Spanish-speaking nation 10 years after that. The demand for quality interpretation and translation in all languages will only grow – and grow quickly – in 2023 and beyond. The ability to scale – and scale quickly – will be the critical skill that defines language service providers.<
This might be difficult news for some LSPs, as scale and investment go hand in hand. Unpredictability is the new normal. A given LSP may be up and running most of the time. But what happens in the event of a widespread health crisis, cyberattack, cataclysmic weather event, or simply an emergency closer to home? This is when scale and multiple levels of redundancy are required, and those that have invested and planned will thrive. The pace at which our world is changing continues to accelerate. Only those who invest in securing their infrastructure, processes, and people will be best poised to succeed.

January 2023

 Read July 2022 Statement

Read January 2022 statement 

Read July 2021 statement

Read January 2021 statement

Read 2020 statement

The year 2022 has ended and represents a major milestone for the Acolad group. We’ve reached a stage where most of the work has been done in terms of aligning the organization and its processes according to our post-integration plan. Although we obviously never lost the focus on the customer, the teams are now better equipped than ever to excel in selling and delivering quality services. We’ve also significantly progressed on harmonizing our technology platform and tackled key functionality of our roadmap in the area of connectivity, shifting from fragmentation to continuity, as well as AI automation. The AI and MT teams have benefitted from the merge with Ubiqus. Besides the aspects of tech innovation, this drives a lot of change in terms of human-machine interaction and synergies.

While we saw many industries and geographies grow our business, the impact of inflation and geopolitical instability caused some segments to slow down as well. In this challenging environment, many of our customers have been looking for stronger partnerships and our involvement in streamlining localization and content management processes. These organizations have largely switched from just buying the cheapest possible to getting the best value for money. Engagement models and Service Level Agreements have gotten more complex with increased KPI reporting requirements. A key trend has also been the increased attention to our ESG (Environment, Social and Governance) and CSR (Corporate Social Responsibility) framework and policies as clients integrate us into their ecosystem.

On the Human Resources front the battle for talent continued and mobilized more internal and external recruiters. Our office landscape has gradually been adapted and our teams have been finding a renewed balance in terms of physical presence. Reconciling increasingly senior employees as well as Gen Z interests keeps HR leaders on their toes, the objective still being to provide agile workplaces and facilities that cater for learning, collaboration, and communication.

The sales organization has enjoyed being back out there, meeting customers and prospects, as well as attending physical events and conferences. The legal and marketing team has in the meantime successfully rebranded most of our companies to Acolad and has its digital marketing operations up and running across all our market audiences.

More than ever adapting to change while keeping an aligned team focusing on our true mission.

January 2023

Read July 2022 statement  

Read January 2022 starement 

Read July 2021 statement

Read January 2021 statement

Years ago, not many knew the meaning of natural language processing. Now the shape of the future for all of us will be influenced by the ChatGPT ark of adoption. Stephen Hawking once said, “For millions of years mankind lived just like the animals, and then something happened which unleashed the power of our imagination. We learned to talk…” Well now the machine itself is learning to talk - for itself, for us, and for any number of applications. What does the future hold: ChatGPT post editing.

January 2023

Read July 2022 statement

Read January 2022 statement

Read July 2021 Statement

                                                                                                                               Read January 2021 Statement

                                                                                                                               Read 2020 Statement 

The world is changing faster than ever before. With rapidly changing demographics, an unprecedented global network with billions of people hyper-connected to each other and amazing technology advances in the pipeline, we can expect a huge transformation in our society in the next decade.

Apart from the predictable changes within our sector deriving from migratory flows, the technological revolution will undoubtedly shape the future of LSPs in the coming years, not only due to the innovations adopted by consumers and therefore by the scope of services we provide to clients, but also in the way in which we integrate technology into our processes. Vendors will have to adapt their services with the eruption of new technologies, but they will continue to be important within the value chain.

The translation market is undergoing significant changes, increasingly as a result of the evolution of technology. As Machine Translation, AI, and Speech Translation evolve and grow in volume, we will see new tech firms vying to break into the language space and altering the competitive landscape. It is up to those of us in the translation services industry to take command of this disruptive situation and lead the change, providing our know-how to the industry.

  January 2023

Read July 2022 statement

Read January 2022 statement

Read July 2021 statement

Read January 2021 statement

Read 2020 statement

Turbulent markets, looming economic slowdown, energy crisis…  We face significant challenges and running a company in 2023 is not for the faint of heart. Across industries, CEO confidence in growth prospects has dropped significantly, but isn’t it excessive pessimism? Our industry has a history of resilience. At Argos, we choose to take actions to continue spurring growth. 2022 was a banner year, and we are building on our strategy to provide tech-enabled services along the full content lifecycle. We have shifted from 100% focus on localization services in 2020 to business building with new services such as Creative Services, Data for AI and Independent Quality Services, effectively providing solutions from creating content to having it ready for international release. 
Our next “move” is to retain top talent. Keeping our colleagues engaged is a mission-critical priority. Flexibility, fair pay, new opportunities and the ability for our employees to be their best self at work are critical to success.
And, of course, always a balancing act, you always have to evolve the business and its strategy to meet future clients’ needs.

January 2023

Read July 2022 statement 

Read January 2022 statement

Read July 2021 statement

Read January 2021 statement

Read 2020 statement

Forces that will shape the future of LSPs in 2023 and beyond

The end of the year offers an opportunity to look back, cogitate on and differentiate the noise in the industry and business, generally from the signals. While a lot of great things have been happening in our industry, including capital raises, new market entrants, conferences returning onsite, and exciting technology developments, they create a lot of noise. It's imperative for business leaders to stay focused on the signals.

I expect to see the more challenging economic conditions and recession of 2023 play a role in customer spending, decision processes, and investment in the industry. The industry proved quite resilient during the pandemic and bounced back quite nicely. Organizations with solid fundamentals, proper diversification, and wise investment in their talent and infrastructure will be primed for massive growth in the ongoing content boom.

As a result, we will see even more LSPs position themselves as more than just translation or interpreting agencies addressing compliance and security requirements. I expect LSPs to find paths into organizations earlier and position themselves as value-adding outcomes-oriented providers.

The attrition in language talent will be something that LSPs will have to solve as the long-term demand for linguists increases and the sheer volume of communication and amount of communication channels increases. Technology will solve only part of this. The evolution of LSPs will have an outsized role in attracting a new generation of participants to this sector. 
 

January 2023

The evolving market forces of the last few years will accelerate to a point where only agile LSPs, those which are adaptable and innovative, will make significant headway in 2023. Digital transformation, advances in AI, and evolving regulatory environments are creating opportunities for growth, but we also face very real challenges.

Owing to declining service rates, the number of professionals dropping out of the industry is escalating, even as global demand surges. LSPs will need to unify around industry standards, such as translation grades, that create a new framework for pricing and allow for increased compensation for subject matter experts. Demand is surging for languages of limited diffusion.

Forces like conflict, catastrophes, and economic uncertainty shifted the makeup of refugee and migrant populations. Flexibility in the face of shifting demographics has become crucial for meeting demand. Additionally, proposed US civil rights rules enhancing the Affordable Care Act and a heightened focus on DEI is opening opportunities for LSPs to deliver expanded services in both health care and the public sector. This unique blend of opportunity and challenge has made one thing clear: agility will be a key characteristic of successful LSPs in the year ahead.

 January 2023

Read July 2022 statement 

Read January 2022 statement

Read July 2021 statement

Read January 2021 statement

Read 2020 statement

As forecasted, 2023 is going to be challenging for the language industry, affected by economic downturn and growing uncertainty. It is not the first time the global economy is facing a crisis, but it is the first time at this scale. The consequences and slowdown post crisis period will also last for quite some time, the logical business response to this situation is an appropriate strategy implementation, that will be adoptable during a slowdown in market growth. At Janus we plan to pursue the option, that foresees diversification: either entering new vertical or/and geographical markets or adding new services. We have continued geographical expansion in 2022, opening production offices in Albania and Bulgaria, and even now a few more locations are under development and openings will be announced in the coming year. What else to consider in corporate strategy during growing uncertainty and the approaching recession - risk management. As CEO I understand the importance of risk management for business sustainability. 

Our risk management strategy focuses on five key areas:

1. Maintaining and developing key customer relationships
2. Retaining and motivating our staff
3. Managing our supplier relationships
4. Ensuring the stability of our cash flow
5. Maintaining a robust IT infrastructure

These elements form the foundation of our business continuity plan (BCP), which ensures that we are prepared for any potential disruptions and can continue to operate effectively in the face of challenges. At the end I want to say that anyone can steer the ship when the sea is calm, but real leadership is revealed in managing stormy seas!

  January 2023

Read July 2022 statement 

Read January 2022 statement

Read July 2021 statement

Read January 2021 statement

Read 2020 statement

Being tested by enormous challenges in quick succession — a pandemic, inflationary pressures, and geopolitical tensions — one can say that the past years offered good opportunities to further build up economic resilience and organizational flexibility for whatever is to come next.

Despite all the economic challenges, we have continued to invest in our sustainable growth by pushing our digital transformation, expanding our service portfolio, and putting the customers’ needs at the centre of all decisions. Looking back at 2022 we focused on integration and on our groupwide corporate culture.

While onboarding our new shareholder Blue Cap we also integrated our newest acquisition Micado Innovation, focusing on collaboration and communication. Although one would think that after more than 2 years the working world has adjusted to hybrid working, in my opinion it is still a work in progress in terms of corporate culture. It also seems that, despite economic uncertainties, the challenge to find and retain talent, considering big trends like ‘New Work’, will stay as part of the new normal. That’s why in 2022 recruitment, talent retention and talent development, basically the investment in our human capital, was another priority and will stay as such in 2023. For the year to come, environmental issues and corporate social responsibility will get more of our attention.

Our goal is to create sustained outcomes that drive value and fuel growth, while strengthening our environment and societies. Overall, I remain cautiously optimistic that having mastered the headwinds of the past years, 2023 will bring new opportunities for long-term growth.

January 2023 

Read July 2022 statement

Read January 2021 statement

Read 2020 statement

If we distinguish between internal forces (organizational, labor, profitability, ownership, and capital...) and external forces (the market, customers, suppliers, socio-economic and sustainability context, legislation, and the possible fragmentation of globalization and the internet) that will influence the evolution of LSPs in 2023 and beyond, we realize that there are 3 common aspects that are likely to shape the future of our industry: From the technology point of view, the consolidation of digital transformation, including process automation, QA, Machine Translation, and other applications of new technologies and Artificial Intelligence. From the human/team viewpoint, the attraction and development of talent, improvements in the organization of work, the improvement and viability of outsourcing (both for LSPs and for external collaborators themselves), and training in transformation processes.

From the business perspective, the offer of services and solutions that combine technology and the human factor in the best possible way, the offer of value-added services and the complementation of services and solutions with other related ones (data, digital marketing, multilingual solutions applied to different business processes, etc.), sustainability, and compliance. The form that each LSP will finally take will depend on its evolution in recent years and on the decisions taken now and in the near future.

  January 2023

Read July 2022 statement

Read January 2022 statement

Read July 2021 statement

A cost-of-living crisis, tightening financial conditions across the globe, Russia's invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook for 2023 and beyond.

The language service industry often finds itself somewhat insulated from economic shifts (given its central role in facilitating the globalization of business), however caution is justified when faced with the looming cloud of recession. While the forces currently shaping the LSP landscape may seem limiting – they can, if harnessed correctly, be just the opposite: a set of tools for moving into the future confidently and successfully. For example, the effect of inflation on the cost of human talent could be approached as a further squeeze on a sector that is already squeezed financially. Or it could be taken as an opportunity to show your best people how much you value them, and an impetus to further explore how technology such as artificial intelligence tools can help humans to produce their best work.

The seller’s market for business development talent could be yet another obstacle on the path to growth. Or you could welcome the fact that this means anyone you hire is choosing your company over the many others clamoring for their attention, and that being a “Great Place to Work” means something to them. You can view offshoring purely as a means to cut costs. Or you could embrace it as a way to create a genuinely diverse, international team of equals. As the saying goes, necessity is the mother of invention. The future of LSPs will be determined by those of us willing to take the conditions we are presented with, and use them to invent a better, smarter, more human way forward, through 2023 and far beyond.

January 2023

Read July 2022 statement​

Read January 2022 statement

In Q4 2022, our overall demand for translation and localization services remained steady. The strong backwind for French Canadian translations somewhat compensated for the slowing release of big multilingual projects in the media and tech sectors.

This shows that our industry is again well positioned to show some resilience in case of recession. For 2023, we still have low double-digit growth expectations. Therefore, we will need to find ways to expand in new markets, verticals, or service offerings while being cautious in terms of expenses. In the current landscape, maintaining strong bonds with clients is more important than ever and a lot of our 2023 Q1 efforts are going in that direction.

January 2023 

Read July 2022 statement

Read January 2022 statement