Partner Article

Lacking language proficiency impacting business profitability and growth

Nearly half of executives admit that communication misunderstandings have resulted in significant financial losses for their company, and obstructed major international business deals.

A report from the Economist Intelligence Unit (EIU), commissioned by corporate language training provider Education First, assesses the role that cross-border communication and collaboration play in the success or failure of companies with ambitions to grow overseas.

572 executives from across the world, from companies such as Scania and Balfour Beatty, were surveyed through a series of in-depth interviews.

Two thirds of those surveyed think differences in language and culture have made it difficult to gain a foothold in foreign markets, and an overwhelming majority of executives believe that if cross-border communication were to improve at their company, profits, revenue and market share would increase significantly.

Despite these findings, almost half said their companies do not offer enough training to hone their employees’ language and communication skills.

40% believed there was not enough emphasis placed on recruiting or selecting people who are suited to cross-cultural environments.

Commenting on the findings, Andy Bailey, Chief Marketing Officer, EF Corporate Language Learning Solutions said: “The boundaries between old and new economies are increasingly blurred, and those same economies are evermore entwined and interdependent.

“Today’s businesses leaders need to ensure their employees are equipped with the right skills to communicate across borders effectively and efficiently.

“Newer economies will fail on their internationalization plans, and older economies, who are already struggling, will find it almost impossible to regain their competitive foothold if businesses do not devote the appropriate time and resources into improving the international language skills of their key staff. It has never been so critical as it is today”.

The majority of executives also emphasised the need for their employees to be proficient in English in order to compete on a global scale.

68% think their employees need to know English, followed by Mandarin at 8%, and Spanish at 6%.

The greatest gap between current usage and the desired level of proficiency in English was China, and the report suggests this demonstrates the country’s increasingly external-facing business outlook.

This was posted in Bdaily's Members' News section by Tom Keighley .