Business English Resource

Jun 22, 2016

Business English: The Importance of English in the Workplace

English is the global language. It may not be spoken natively by most people (Mandarin and Spanish top the list), but it is indisputably the language spoken most widely in business.

Successful business is all about communication. When communication takes place across borders, having a language in common is essential – and that language is increasingly becoming English.


Business_Resource_1.jpgImportance of English in Developing Countries

English is important for businesses across the world, but especially in developing countries. An article in The Guardian references a study from 2011 that focused on the impact for individuals of learning English in developing countries. This was the first research into the specific benefits of English in developing countries, and it focused on Pakistan, Rwanda, Bangladesh, Cameroon and Nigeria.

The results suggested that speaking English could boost earning power by 25%. The study also suggested that even a slightly higher level of English-speaking skills led to more investment from the UK and the USA, and that investment in Pakistan, Bangladesh and Nigeria from English-speaking countries was between 33% and 41% of their total FDI.


English Is Still More Important than Mandarin

These days, there is a lot of talk about Mandarin due to China’s unstoppable growth and its huge population. However, this Forbes article looked at a study from EF Education First that suggested Mandarin is not going to take over English as the language of business any time soon.

It instead suggests that English will become less of an elite skill and more of a basic skill that everyone will need.


Global Businesses Need English

Many businesses use English as their official language, even when their headquarters are outside of the country. The Harvard Business Review looked at this issue, and suggested that many multinational companies like Renault, Airbus and Samsung now have English as their official language in a bid to improve communication and boost performance across their businesses.

It highlights the case of Rakuten, a large online marketplace in Japan. In March 2010, the CEO, Hiroshi Mikitani, changed the official language of business to English in order to expand outside of Japan. It changed everything to English, even the lunch menus, and employees who could not improve their English in two years were threatened with dismissal. Other companies in Japan reacted negatively, but the move is already being seen as a success.

So why are companies doing this?

  • Companies need to buy and sell across borders
  • They need to communicate with customers and suppliers across the world
  • Not having the language skills limits their growth
  • Failing to speak English puts them at a disadvantage to competitors

Many large companies also have employees in numerous countries, and communication between employees can suffer when they do not share a common language. Ensuring that they all speak English improves efficiency levels across the company.

Having a common language also helps with negotiations surrounding mergers and acquisitions. These are very complex even in a single language, but when different languages are spoken they become much more complicated.


Where Is Business English Spoken Most?

In 2012, Forbes reported on the GlobalEnglish survey produced for its Business English Index, which looked at the countries with the highest level of business English for non-native speakers.

It found that The Philippines has become the major call centre hub, overtaking India, largely because of its higher English proficiency level (it scored 7 over India's 5.57). It also performed much better than China (4.4), Russia (3.6) and Brazil (2.95).

Mahesh Ram, the CEO of GlobalEnglish, said that the shortage of talent "has become a high performance dilemma for individual companies, and even countries.”


The Costs of Lacking Business English Skills

There is a huge need for business English around the globe, and the costs of not having the adequate level of proficiency can be serious for businesses.

According to Pearson English in new research, the lack of language skills is costing hundreds of thousands of hours to businesses each year. It suggests that businesses need to invest in improving their employees' skills in order to make productivity savings and higher returns.

English improvements can boost productivity for businesses, and the research suggests that companies could gain as much as a full working week per year for each employee if they improved their level of English. It also claimed that the companies that communicate effectively have a 47% higher return to shareholders over five years.

Despite this, 92% of employees said that English is important for them to progress in their careers, but just 7% claimed to be able to communicate effectively when it comes to holding conversations, sending emails and taking part in meetings.

It is therefore clear that, despite the costs of failing to improve English-speaking levels, global businesses need to be doing a lot more.


English Proficiency Affects Fortunes

Research by Education First that was released in November 2015 painted a very clear picture of exactly how much international businesses can be affected by a lack of English skills in the workplace.

English is the dominant language of businesses for companies around the globe, and the report, entitled 'The English Margin', surveyed managers and directors from countries all over the world including China, Italy, Russia, Brazil and others.

One of the most important findings was that 88% of international companies would consider paying more for a service or product if the company supplying it had a high level of English proficiency, and that they would be willing to pay 16% more on average.

Better English also leads to better relations with suppliers, and over 4 in 5 companies stated they would consider replacing a supply chain partner if they had poor English proficiency, and 35% said they saw organisations with bad business English as unprofessional.

This clearly shows how important having English skills is for suppliers, who are almost certainly hurting their chances of winning customers by not having adequate levels of English. In fact, 60% of respondents had already missed out on opportunities because of their lack of English skills in the organisation.

But it also shows that any business lacking English skills could be hurting its brand image.

It also found that business leaders think staff dealing with clients and suppliers could increase revenue by 31% over five years with a higher level of English proficiency.

But how much is better English worth to companies? The research found that an employee with full proficiency in English can add $128,000 to a business. This impressive figure is due to the increase in international sales, the boost in productivity and the greater efficiency as a result of improved English.


A Lack of English Hurts Businesses

Most businesses would agree with the fact that a higher level of English proficiency in its employees would help the business. But the research clearly shows that the costs of failing to speak better English can be very high.

Overall, greater proficiency in English makes a company more attractive to customers, but it also boosts productivity and revenues, making it more essential than ever.



Problems Associated with Language Barriers

Language barriers can become a problem in the workplace. Where language barriers exist, there are steps that businesses can take to break them down, including translating documents and using the services of interpreters.

However, the most important focus should be on improving the language skills of all of the employees so that they can all converse in the same language – and in most cases, this means English.


Language Barriers Affect Productivity

Productivity is one of the main areas of a business that is affected when language barriers are present. If employees find it harder to communicate with one another, this is undoubtedly going to affect their ability to work faster and more accurately.

It could also prevent problems from being communicated properly, leading to more serious problems arising as a result.



Barriers with Lack of English Skills

When English proficiency in the workplace is low, this causes many difficulties for employees. One area where they tend to struggle is in the understanding of idioms, which are phrases that are very difficult to understand for non-English speakers.

To make things more complicated, businesses have many idioms that they use on a daily basis. Native speakers are often unaware of the complexity of these idioms for non-native speakers, and communication problems can arise as a result.

In addition, general business vocabulary is often very different to that used outside of the workplace. Businesses are full of jargon and abbreviations that often make no sense to people outside of the business or industry. For non-native speakers, the challenge of understanding this vocabulary becomes a serious barrier.


Language Barriers Can Result in Loss of Business

As well as the problems inside the business caused by language barriers, the business itself can suffer. If employees are required to communicate with customers and clients in English, they will require a high level of proficiency.

Clients and customers are almost certain to be more comfortable dealing with businesses when they do not have to face the frustration of being misunderstood. If they do not get the level of service they require, they are likely to take their business elsewhere.


Language Learning Is the Answer

While all of these problems can be tackled separately (e.g. by instructing employees to limit their use of jargon), the core problem remains a lack of English proficiency. All of the problems can therefore be solved or at least significantly improved by investing in improving the English level of employees, and specifically the level of business English, including business vocabulary and idioms.



Language Problems for UK Businesses

When it comes to levels of business English, this is primarily a problem in countries where English is not the primary language. But language problems can also become issues for businesses in the UK when it comes to the lack of foreign languages that are spoken in the workplace.


The Lack of Language Skills and the Cost to UK Businesses

Research has suggested that the lack of language skills is costing the UK a phenomenal £48 billion every year, as reported in The Guardian.

Foreign language skills are important for companies that work with other companies around the globe, and the research from the Department of Business, Innovation and Skills (BIS) claims that the lack of language skills is especially bad for exporters.

And while large global companies do not have great difficulty hiring language specialists, smaller firms experience greater difficulties that can prevent them from accessing business opportunities overseas, deterring them from trading across borders.

Another potential cost of a lack of language skills involves legal issues that can result from making mistakes. Complex regulatory issues can cause misunderstandings for businesses that can end up as being very costly.


Companies Demand More Language Skills

It was also reported in the CBI/Pearson Education and Skills Survey 2014

that companies are demanding better language skills in order to break into new markets.

British businesses have a high demand for European languages, but now there is also more demand for languages like Arabic and Mandarin.

Overall, 65% of firms highlighted the need for more foreign language skills, and 41% of businesses said language knowledge is beneficial to them. 28% also believe that better language skills help them to build relations with contacts overseas.


A Barrier to Exports

The lack of language proficiency is particularly problematic when it comes to the area of exports. Another survey from the British Chambers of Commerce found that 62% of companies that do not export and are looking for opportunities abroad see languages as a barrier.

And even when some language is spoken, few business owners would be able to carry out deals in a language other than English.


Not Everyone Speaks English

Because of the prevalence of English as the global business language, there is an assumption among some businesses that they do not need to speak other languages.

However, it is wrong to assume that everyone else speaks English. There are still many companies in countries all over the world where English is not spoken, and UK companies should have speakers of other languages on hand to improve communication and boost opportunities.


Difficulty of Finding Bilingual Employees

But even though most companies want languages and are aware of their importance, many claim that it is very difficult to find UK employees who are bilingual. As a result, they are forced to employ foreign workers even when they would prefer to hire local workers.


The Government Recognises the Problem

The government is also aware of this problem. In a government publication published in May 2014 and commissioned by UK Trade & Investment (UKTI), the problem of language deficiencies was highlighted, recognising the problems caused by a lack of language skills.


Which Languages Does the UK Need?

The British Council also highlights the need for more languages in a report titled 'Languages for the Future'. In this report, it highlights the main languages that the UK needs to learn to be of the largest benefit to its businesses.

It's good to know which are the most useful languages to have because learning languages involves a lot of time and resources to invest in.

The report aimed to find out which languages we should focus on over the next two decades, and it looked at various criteria. It came to the conclusion that the most important 10 languages are:

  • French
  • Spanish
  • German
  • Italian
  • Russian
  • Japanese
  • Turkish
  • Portuguese
  • Arabic
  • Mandarin

It also highlights the fact that 70% of the population of the world does not speak English, and that important emerging economies like Brazil and China have big populations that do not speak English.


The Need to Invest in Languages

Another article in The Guardian highlighted the problems of not speaking a foreign language, as well as the huge benefits for being able to communicate with clients and suppliers overseas.

It claimed that the UK economy loses £50 billion a year in lost contracts due to not having enough language skills, which is a figure quoted by Baroness Coussins, who was the chair of the APPG on modern languages.

It suggests that SMEs should access training for their employees through using online language learning solutions. It also makes the important point that even a few words can be very effective.

For example, when attending a trade show, being able to greet clients in their own language and share a few words can help to get the meeting off to a good start and forge stronger relationships, even if the meeting is then carried out in English.


Businesses Need Languages

Whether it is here in the UK, or in companies around the world, the need for a multilingual workforce has never been greater. But while companies in the UK are certainly affected by not having access to proficient language speakers, the problem is greater for companies in other countries who do not have a high proficiency in English.

The solution for businesses is to invest more in improving the language skills of their employees to ensure that they can improve their communication with countries around the world and increase their opportunities to do business without language barriers getting in the way.


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