Foreign language ability may be the final barrier to global corporate expansion. Whether companies partner with international firms, open offices abroad or simply strive to meet the needs of a diverse customer base, their ability to communicate in multiple languages is becoming a strategic business imperative.
And some companies are willing to spend serious money to make sure it happens.
When the Japanese firm SoftBank Mobile Corp. purchased a 70 percent share in the U.S.-based firm Sprint Nextel Corp. earlier this year, the company's executives offered employees 1 million yen, about $9,800, if they could score 900 points or better on the international Test of English for International Communication, or TOEIC, Any score over 800 is considered "advanced proficiency."
While offering such lucrative incentives is uncommon, many global companies are embracing language training as a key talent management initiative as they attempt to expand their international reach.
"Growth in corporate language training is the biggest trend we've seen in the last three years," says Chuck Frydenborg, senior director of corporate sales in North America for Rosetta Stone, a global language learning software company. In 2009, Rosetta Stone's corporate clients were limited to a small percentage of Fortune 1000 companies, but today it's one of the company's fastest growing segments. "Any company doing more than $1 billion in revenue is starting to see language learning as a serious business value."
Nissan Motor Co. has been offering language training to its employees for years because the company recognizes the value of cross-cultural training and skill sets, says David Oberstaedt, senior manager in talent management for Nissan North America Inc.
"The automotive industry continues to evolve globally, and we need to be able to move the internal expertise we have to the areas of the world where it is needed," he says. "When we make strategic hires, we are always thinking about whether that person can take on global assignments. Foreign language ability is a part of that."
The global automotive firm is headquartered in Kanagawa, Japan, but has U.S. headquarters in Franklin, Tennessee, and has deemed English as its official corporate language. As a result, English language training is especially vital for Japanese managers who want to move up in the company. "A certain level of English language proficiency is required for any management promotion," says Chika Tsuda, manager in the training department at Nissan in Yokohama, Japan. "And if they want to be considered for a position in the U.S., they must achieve at least a 500 on the TOEIC," which is an intermediate rating.
But English isn't the only language being offered. The company provides a variety of optional online language training programs to all of its global employees and their families, including Livemocha, an online language-learning site. Nissan also provides one-on-one training to any employee preparing to take an assignment in another country with follow-up courses and tutoring once they arrive on-site.
"Even though we always do business in English, we encourage our people to be conversational in the language of that country, so they can communicate with their staff," Tsuda says.
Nissan also tracks self-reported language proficiency in employee profiles as part of its SuccessFactors Inc. performance management software program to identify potential candidates for overseas assignments.
Investing in language training benefits employees as they transition into expat assignments and helps to create a more global corporate culture, which is key for multinational organizations looking to gain an edge in new markets.
Yet many companies fail to take a proactive approach to language training as part of their global strategies, and that can make expansion efforts much more challenging, says Julia Bonnheim, director of marketing for Livemocha. "We have a lot of companies that come to us after the fact," she says. These businesses set up global partnerships and build factories or offices in other countries only to realize later that their leaders can't communicate with the new teams.
For example, a client recently reached out to Rosetta Stone only after completing a huge expansion in Brazil. "They were so focused on translating corporate material to Portuguese; they never stopped to think about how the management of this office would work," she says. "they never dealt with the language training side of the project."
Such oversight reduces the productivity of employees, creates on the job confusion, and shows a level of disrespect for employees in the new workplace.
"It's a common disconnect," says Duane March, a language trainer for Mindstorm Group, a training company in Mannheim, Germany. "Companies always talk about how important communication is, but they don't treat it that way."
If a company wants an employee to achieve a level of language proficiency, it needs to give them the time and tools to hone that craft before moving them to that new work environment. They also need to recognize that, for a while, that employee will be less productive as they learn their new language, March says. "It's not a matter of whether they will be less productive, it's a matter of scheduling it," he says. "It can either happen before they move into their new role or after they arrive."
Training managers should also consider offering courses that are relevant to their industry, and setting expectations for progress to speed the language learning process. It's not enough to give employees access to a self-paced program and assume they will learn on their own, March says. Companies need to track employees' progress and provide ongoing engagement or the learning won't stick.
"If you don't have an opportunity to use a new language, the value disappears within weeks," he says. "So if you are going to spend the money to train employees, make sure they are able to use it on the job."
Sarah Fister Gale is a writer based in the Chicago area. Comment below or email email@example.com. Follow Workforce on Twitter at @workforcenews.