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 highly 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.