The language of international trade
English is, by a huge margin, the preferred language of international business communication. If a Spanish or Italian company wants to do business with a German client or a Chinese supplier, it is almost certain that all parties will reach for their English to get the job done. The dominance of English contract law, even between parties that have no connection with the UK, reinforces the position of English as our global lingua franca.
Which is great for us, being native English speakers! You might expect the UK to use this huge in-built advantage to develop industries that lead the region in international trade. Unfortunately, that is not the case. Our trade-to-GDP ratio is dead last among western European countries: the other major economies of France, Germany, Spain and Italy are all better at international trade than we are. These countries also lead us in a key related metric: in every single other western European country, more of the population can speak a foreign language than in the UK. A mere 34.6% of us are able to hold a conversation in any language other than English. In Switzerland, at the other end of the scale (91.7% of the population being able to speak a foreign language), it has been calculated that linguistic competencies contribute up to 10% of GNP. Even in English-speaking Ireland, 50.9% have a reasonable foreign language capability.
This lack of language skills among the UK workforce is well recognised as a structural issue which needs urgent government attention. However, there is no reason why individual business cannot reap the benefits of improved linguistic competencies, even while the nation as a whole lags behind.
Where’s the ROI?
If your business trades internationally, the chances are that the vast majority of your international clients and suppliers do speak English.
This leads many UK businesses to see corporate language training as not having a good potential ROI. This perception could not be further from the truth: corporate language training delivers an average ROI of 100%.
Tactical benefits
Even if your clients can speak English, do they want to?
The primary tactical benefit of speaking a foreign language does not lie in communicating with international partners who can’t speak English, but those who prefer not to speak English.
Among major UK trading partners, this first language preference is strongest in China, Japan, Korea, France, Spain and Italy. If your company trades with those countries, your commercial partners most likely would prefer to communicate in their own language. Yes, formal meetings, negotiations and contracts must be in English, but what about when you go out for dinner? Or play a round of golf, or go to a football match, or discuss the weather with them around the water cooler? It’s in such social contexts that familiarity and trust are established and deepened: where the wheels of commerce are greased. If your team doesn’t speak Japanese, and your competitor’s does, who is going to have the better client relations?
Lack of language skills have been calculated to cost a massive 3.5% of GDP in lost trade and investment potential – and most of this is due to the lack of first-language socialisation.
Can’t I just hire someone who speaks the language I need?
While it may be possible to hire someone who not only has the range of skills required for your business but also speaks the particular language you need, this isn't a full solution.
Firstly, the positive image impact of having a UK employee who speaks their language should not be underestimated. It demonstrates a great sensitivity to your overseas partners: you have made the effort to develop your language skills to make it easier for them to communicate with you. Hiring a (for example) Spanish speaker does not have the same cultural impact.
Secondly, the cost of an additional hire is almost certainly higher than the cost of training an existing member of staff to a fluent standard in the language concerned. Modern language training methods allow for rapid progress to be made on a flexible schedule, minimising operational disruption.
Language skills as a communication tool
Building the language capacity of a business can be seen as investment in a specific tool, as well as investment in skills. Obtaining this communication tool allows more approaches to be taken when interacting with commercial partners, with commensurate improvements in corporate efficiency and productivity. For export-oriented businesses, an expansion of communication tools bears particular dividends in business development and sales.
Strategic benefits
Companies that prioritise the development of linguistic competencies among their workforce (i.e. individuals’ language skills) benefit from a range of positive second order effects at a strategic level.
Cultural intelligence, which is most easily described as the ability to interpret the behaviour of others in the way it is intended to be, is a standard consequence of learning a language. After all, a language cannot be separated from the culture of the people(s) who use that language – they are two sides of the same coin. Organisations with higher cultural intelligence are considerably more likely to successfully employ value-based selling, which delivers maximum profitability for a given product-market at any given moment in time.
The extent to which the entire organisation is export oriented (meaning how fundamental to its culture and operations establishing international partnerships is) is also highly correlated with linguistic competencies. Export orientation is a cultural concept: for the entire organisation to be appropriately focussed on making international sales, a high degree of strategic alignment is required. Everyone needs to be working towards the same goal and recognise that the decisions they make (whether directly related to overseas clients or not) all relate back to the over-arching objective of selling products and services to overseas clients for a maximum profit. Employees who have acquired language skills are considerably better able to understand how the decisions they make and the actions they take can help achieve strategic export goals, as a consequence of their enhanced cultural intelligence. Such employees working within truly export-oriented organisations also report higher levels of job satisfaction and demonstrate lower turnover rates, reducing HR overheads and the risk of losing staff into whom considerable investment has been made.
The combination of enhanced cultural intelligence with a strong export orientation leads to stronger sales and profitability in businesses trading internationally.
This article was written by Intuition Languages, for more information on how they can help your business:
