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Barry Moore

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Is English language training worth the investment?

As companies plan their annual budgets, they are faced with the question of how much to invest in the professional development of their employees. In Latin America, this most definitely includes English language training. But is this type of expenditure worth it? Are companies really seeing a return on their investment? Studies are now showing that English training indeed brings a variety of benefits to companies and that those who are willing to make the investment are reaping the rewards.

Expansion into the Global Economy

The most obvious benefit is the ability to do business outside of Latin America in the English-speaking world. There are approximately 1.5 billion English speakers on the planet, and it is either the official or the primary language in more than 50 countries. Latin American companies that are exporting agricultural products or natural resources and wish to expand into international markets will surely find it much easier to contact new clients and close deals with an English-speaking sales staff. Without effective communication in the world’s business language, expansion is next to impossible.

In addition, these same companies often import machinery, equipment or vehicles from English–speaking countries, making it necessary to have staff members who can communicate in English in order to properly research the types of equipment they are interested in and then make these types of transactions. Whenever maintenance or repairs are required for large types of equipment and machinery, usually an English-speaking engineer must travel to the country for inspection and repair. Communication in English is required by someone in the company to speak with the engineer and understand not only what the problems are, but what steps must be taken to fix them.

Cost Reduction and Increased Company Efficiency

In addition to the benefit of business growth, studies suggest that knowledge of English among employees reduces costs. Many multinational companies with offices in Latin America use English as their official corporate language. Even organizations that are based in non-English-speaking countries like Italy, France, Germany and Japan have adopted English as their official language. Company-wide notices, online forums and platforms are solely written in English. Employees with no understanding of English waste lots of time asking coworkers to translate for them. One study of 400 companies found that the cost of miscommunication was close to $62 million per year, or $624 per employee. A greater understanding of English among all employees will prevent these huge losses. High-level managers will no longer have to spend time translating company literature and can focus on running a more efficient company.

Furthermore, regional managers of multinational companies operating in Latin America largely depend on English speakers on staff to prepare and present financial information. Business activities must be reported in English both orally and in writing. Weekly conference calls between local and regional managers are commonplace, and it is crucial that they explain local laws and practices to ensure that the company remains in compliance with these regulations and avoids hefty fines.

Improved Employee Retention

Another reason to invest in English training is to avoid the high cost of employee turnover. In recent years, many organizations have generally increased their recruitment efforts and, according to a study carried out by Willis Towers Watson, 25% of employees are at a high risk of leaving their companies. This study indicates that over half of the companies around the world have struggled to keep some of their top performers on staff as they look to further their careers. If there is no career advancement in sight, it is only natural that an employee will look for opportunities with another organization. These days, employees generally feel that they will be able to find an equal or better job within a short period of time. It is up to the company to show their employees their worth, and investing in professional development is key to demonstrating to employees that they can indeed further their careers without changing companies. Investing in the professional skills of employees has proven to keep employees with the company. When an employee feels valued, their work performance tends to improve as well.

Most Latin American companies are well aware of the benefits that English training can bring, and have already begun this process. Those that are still considering this type of investment are losing valuable time, losing out on increased profit margins, and losing some of their top employees. There’s no time like the present to make an investment that has proven to be well worth it.

It’s no secret that English has become the world’s business language. As Latin America integrates into the global economy, the need for companies to hire proficient English speakers has become the norm. It is estimated that nearly 80% of jobs require a working knowledge of the language, but with only 20% of professionals being proficient in English, many companies struggle to fill their recruiting needs. While governments in all Latin American countries have launched programs to improve English in public schools, multinational companies are investing in English training to try to fill in the language gaps among their employees. Companies that have bilingual staff members have found it critical to the success of their business operations.

The general manager of a South American branch of a huge European electronic services company pointed out that the sole reason his branch has retained a large contract is due to his bilingual staff. When an engineer from the US or Europe comes to inspect faulty equipment, an English speaker on his staff is required to translate between the client needing the repair and the engineer. Without this benefit, the client would surely look for another provider and his company would stand to lose millions.

Poor communication between a company and its clients can devastate its bottom line; however, language barriers within a company can be just as harmful. Foreign companies establishing a presence in Latin America largely depend on the local Spanish-speaking workforce to perform their legal, accounting and administrative requirements. Local laws and practices must be successfully communicated to upper management in English. Companies incur significant additional costs by not employing people who can effectively communicate in English, and in some cases, this has even led to legal actions being taken against the company due to language misunderstandings.

The Enormous Cost of Miscommunication

But what is the real cost of ineffective communication? Research suggests that it is staggering.

A study commissioned by Cognisco, a leading intelligent employee assessment specialist, concluded that miscommunication costs businesses in the US and UK $37 billion annually. Over 400 companies were surveyed, and those with at least 100,000 employees were losing an average of $62 million per year due to poor communication- equating to an average loss of $624 per employee. These losses were attributed to errors in misunderstanding company policies, business processes, job functions, or a combination of all three. Another study showed that smaller companies with an average of 100 employees are losing up to $420,000 per year due to poor communication.

Meanwhile, findings by Watson Wyatt Worldwide, a leading global professional services company, showed that companies with ighly effective communication practices had a 47% higher total return to shareholderscompared to companies with less effective communication practices.

It’s indisputable that a lack of effective communication directly impacts the financial results of a company, and factoring in a language barrier only increases miscommunication and losses.

The Struggle to Find English-Proficient Employees

The international business community is well aware of the importance of English for success in the global economy, and many of them have even mandated English as their official language. In a study conducted in 2014 in thirteen countries, including three of the largest countries in Latin America, 87% of the senior human recourses managers considered English to be of vital importance to their employees, while stating that the importance will only increase in the coming years.

Recognizing this, countries all over Latin America are making it a priority to expand their English programs in schools and to train more English teachers. While these efforts have improved the basic English level of the Latin American workforce, they have still fallen short of meeting their objectives. In fact, according to the EF English Proficiency Index, only two Latin American countries (Argentina and the Dominican Republic) have a medium to high English proficiency level, while the remaining countries show low to extremely low levels. Companies are resorting to both online and traditional English training courses for their employees, with varying degrees of success. Digital programs are widely available and, according to one study, the use of these products has increased 13.7% annually across Latin America. Other companies prefer the traditional English classroom approach and enjoy the benefits associated with on-site language trainers. Whichever method they use, companies are beginning to recognize the critical importance of investing in English language training for their personnel.

Although financial losses can be difficult to calculate, one thing is certain: a company without a bilingual staff will fail to compete in the global marketplace. English is the official language of 53 countries, and the predominant language for all technical industries. Having bilingual employees has gone beyond the point of providing a company with a competitive advantage to the point of undeniable necessity.

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