The importance of speaking multiple languages in Business

Posted On 31/10/2022

People say that business is all about relationships, but the truth is that business is really all about communication. Communication is key to virtually every aspect of business—from acquiring and retaining customers to improving employee engagement and performance. At the most fundamental level, business can’t happen without communication. This is even more true in the era of globalisation. As geographic borders become porous and the world flattens, effective communication with customers, employees, partners, suppliers, and other stakeholders across the globe becomes essential to successfully running a company.

A simplistic approach to this issue (and one adopted by some less-progressive companies) is to assume that everyone will speak English, including all potential customers and employees. After all, English is the lingua franca of much of the world, and the language you happen to be reading this article in. Yet given the accelerating pace of globalisation, and the rising influence of many non-English-speaking countries, the flaws in this thinking start to show.

Companies that operate solely in English will miss opportunities to capitalise on the explosive growth in developing and untapped markets at home and abroad. These companies also run the risk of misunderstandings with customers, and with members of an increasingly global workforce. Worse, they now find themselves competing against upstarts from emerging countries that already operate in their home market’s preferred language—and are pretty good at English, too.

Although the combination of business functions and processes impacted by improved communication may vary from company to company, we have seen language skills consistently deliver tangible business value and results for organizations that invest in language training.

A recent research we’ve conducted found that 96 percent of respondents thought language skills are either “very important” or “somewhat important” for professional success in the current business environment.

The “Five Pillars” Of Business Optimisation

Companies that invest in employee language-training programs generally see improvements in employee productivity and business performance across five key business areas: market expansion, customer service, workforce development, workplace safety, and productivity and collaboration.

1. Market Expansion

One of the biggest business advantages of a workforce that can effectively communicate in more than one language is the ability to reach new markets—both at home and abroad.

On the international side, growth opportunities in emerging markets far outnumber those in developed economies. Over the next few years, roughly 70 percent of world growth will come from emerging markets, with China and India alone accounting for 40 percent of that growth. By 2025, annual consumption in emerging markets is projected to hit £30 trillion.

Among respondents, 71 percent said they plan to grow the business in countries or market segments that speak a different language than the one they currently use for daily operations. Without a workforce able to speak the languages of those countries or segments, these potential new customers are effectively out of reach.

Which languages are going to be important? Among survey results, there’s a clear shift away from English, German, and French, which respondents think will be less commonly used by their employees in five years. By comparison, Spanish, Mandarin, Portuguese, and Hindi are all projected to increase in relevance over the same time period, and become more important for employees.

A common question about equipping existing employees with language skills to expand the business in growing, lucrative markets is “Can’t companies just hire people who already speak the target languages?” In some cases, they can. But recruiting skilled and experienced talent is already extremely challenging, and adding a language requirement effectively raises the degree of difficulty.

Companies can also bring in talent from target markets, but that carries another set of challenges—such as persuading promising foreign executives to move to your country (along with their families, a potentially expensive and uncertain endeavour). Cost is another factor. “The expense of recruiting these people, moving them to the target market, and getting them set up with their families in a new location can be significant.” In many situations, if the right executives are already in place, and language is the one thing they’re missing, it’s far easier to add that component than to search for new talent.

Fundamentally, language skills are critical to building relationships and helping the business succeed in rapidly growing markets and segments at home and abroad. They turn barriers into bridges.

2. Customer Service

The second pillar of business optimisation through language training is the way language skills enhance customer service. Companies that seek to improve service and support for their increasingly multicultural and international customers need to engage them in their preferred language.

There is a wealth of data showing that investments to improve customer service pay off. For example, a study recently published found that a 5 percent improvement in customer retention rates can increase profits by more than 25 percent. Another study found that a 1 percent reduction in customer-service issues could generate an additional £40 million in profit for a medium-sized company over five years.

Increasingly, language training is one option for driving such customer-service improvements, as reflected in our survey data. Among respondents, 89 percent said they felt that customer satisfaction and loyalty would increase if employees could serve and support customers in their native languages.

To be clear, fluency isn’t the real goal. It’s proficiency, the ability to engage in common, everyday conversations or handle basic interactions that require only limited vocabulary. (And it doesn’t take much: One study found that the most common 1,000 words in any language make up about 85 percent of all conversations.) Most customers are not interested in a deep, philosophical discussion; they merely want help with a basic transaction, and in many cases they’re flattered that a company employee took the time and effort to be able to speak to them in their own language.

At the end of the day, successful corporations are all about relationships, and that’s linked to the ability to communicate. In that way, language training can clearly help companies deliver consistent and positive experiences to create a loyal, profitable customer base.

3. Workforce Development

Unlike market expansion and customer service, which are outward-facing, the remaining three ways that language skills improve business performance and efficiency are all internally focused. The first of these is workforce development. Language training helps companies improve employee engagement and performance by providing them with opportunities for personal and professional growth, and equipping them with the language skills required to compete successfully in the global economy.

There are two elements at work here. The first is that such investments boost morale and loyalty among employees. One survey found that opportunities for personal growth are the top reason that people took their current job, and also the top reason they’ve stayed—even ahead of salary and work–life balance. And for companies that think these discretionary investments are difficult to justify in a sluggish economy, they should consider the alternative: replacing employees who leave. Estimates put this cost at 50 percent to 150 percent of the person’s annual salary (not to mention the disruption to the business caused by high turnover, or the possibility that you can’t find a replacement who’s as good).

Yet although employee loyalty and morale are significant, there’s a more compelling argument for investing in workforce development—it makes the company more competitive. Exceptional companies not only bring in the best people but consistently look to make them more effective and productive once they’re on board. These companies consider their employees to be a long-term, strategic asset, which they can shape to more directly respond to the changing needs of the company. This investment, in turn, boosts the company’s performance and profitability.

As with the other pillars, there is compelling evidence that devoting financial resources to workforce development generates a positive return on investment. Including all categories of development—not just foreign languages—companies that invest in educating their employees outperform the overall market by more than 45 percent.

Our survey results support this. Companies indicate that they provide professional training to their workers in part because it boosts employee loyalty (12 percent) or boosts morale (18 percent). Yet a far greater percentage—69 percent—provide such training to gain a competitive advantage. They recognise that they need a workforce with the latest skills necessary for their industry.

The world is getting smaller. The notion that you can speak one language and communicate well in business is becoming less true as time passes. Training your workforce and equipping them with multiple languages doesn’t just develop them as people, it increases the productivity of the company as well.

4. Workplace Safety

Although miscommunications and misunderstandings in some contexts can lead to lost revenue opportunities, in other situations they can be deadly. This is especially true in sectors like manufacturing, oil and gas exploration, and construction.

Given these challenges, language training can equip front line staff, managers, and supervisors with the critical communication skills needed to minimise workplace injuries, and reduce costs related to turnover, training, and compliance violations. Our survey results show that some companies already recognise these benefits. Nearly one in three respondents say their companies take active steps through education and training to make sure that managers and line employees speak the same language. (Perhaps more noteworthy is the size of the problem still remaining—48 percent of survey respondents say they still require everyone to speak English at job sites, an increasingly unrealistic expectation.)

As in other functions and areas of the business, employees do not need to be fully fluent in the languages their co-workers speak to be effective. For language skills to positively impact workplace safety, supervisors and front line workers need only develop a basic proficiency in their target language, with both sides meeting in the middle to reduce miscommunications and on-the-job injuries and fatalities.

5. Productivity and Collaboration

Finally, many companies now use language training to help their globally distributed and linguistically diverse employees overcome language barriers to share innovations, insights, and best practices with their co-workers. This kind of collaboration is critical for companies that aspire to operational excellence; however, language differences can significantly hinder it.

A study found clear evidence of how much this impact the business world. According to the study, which looked at 100 companies with more than £500 million in revenue, 67 percent of participants said that miscommunication contributed to inefficiency. Another 46 percent said that miscommunication reduced collaboration among employees, and 42 percent said that it reduced productivity.

Conclusion

In the past, company-based language training was considered a nice perk to provide to employees—a soft benefit HR departments offered for personal improvement. Those days are gone. Globalisation and demographic shifts have reshaped the business landscape, the biggest growth opportunities are now in market segments and countries that are insulated by language barriers. To effectively expand into those markets—and compete for both customers and talent—companies need to speak the language. Language skills are not just nice-to-have benefits, and they are not even competitive differentiators anymore. Speaking the language of your employees, customers, and partners is fundamental to doing business.