Poor Foreign Language Skills Cost SMEs Billions says FPB

The Forum of Private Business is warning that poor foreign language skills cost British businesses £21 billion per year, leaving them behind large companies which are increasingly investing in multilingual staff.

Cardiff University’s 2007 ‘Costing Babel’ research (PDF) revealed that UK businesses miss out on £21 billion annually in lost contracts.

It followed an earlier study showing that the demand for non-English language skills in large European companies is greater than the demand for English – often seen by UK SMEs as the international ‘lingua franca’ of business.

The 2006 ELAN Project survey, which emerged from the European Commission’s 2000 Lisbon strategy to stimulate economic growth and employment, said there was evidence of ‘Anglophone complacency’ within small firms.

The report highlighted the importance of language skills, as well as an awareness of cultural differences, to export success.

Four elements of language management were found to be associated with successful export performance: having a language strategy, appointing native speakers, recruiting staff with language skills and using professionally qualified translators or interpreters.

An SME investing in these four elements was calculated to achieve an export sales proportion 44.5% higher than one without these investments.

The not-for-profit Forum has responded by launching a new language service for SMEs in conjunction with Peak Translations.

Forum members will gain preferential access to Peak Translation’s services.

Expert translators in all major languages with experience in a wide range of industries will be on hand to help translate tenders, contracts, manuals, corporate literature and websites, localised to suit specific markets, and provide face-to-face and telephone interpreting services.

“Export markets can be extremely lucrative for British businesses but too few are trading internationally at present or exploring it as an option,”

said the Forum’s Chief Executive Phil Orford.

“The Government is working to address this, for example by expanding the export credit guarantee scheme and laudably championing British businesses overseas, but there remain significant practical cultural and language barriers that UK SMEs see as preventing them from embracing export markets.

“The Forum of Private Business provides practical solutions to real business problems, both lobbying for changes to the enterprise environment to help our members grow and become more profitable and providing them with the right tools so they can help themselves. That is why we are delighted to launch this language service.”

Ian Gordon, Managing Director of Peak Translations, said:

“We are delighted to support members of the Forum of Private Business with this initiative and shall enjoy working closely with them to maximise their success.”

In all, 73% of large companies responding to the ELAN survey had an established scheme for recruiting language-skilled employees, while a further 20% said recruiting these workers was common practice.

However, the report found that demand for skills in non-English languages over English was ‘significantly higher’ in these large companies compared to SMEs, which it found lose a ‘significant amount’ of business as a result, hindering both their existing and future export plans.

Many respondents viewed English as a key language for gaining access to export markets as a lingua franca for international business. However, the survey found that, while English might be used for initial market entry, the picture is far more complex and geographically variable. For example French is commonly used in trade negotiations in Africa and Spanish in Latin America.

Forum member Matt Hardman, of the Bacon Factory Ltd in Bury, Greater Manchester, has experienced a number of language barriers when exporting his range of bacon products

Mr Hardman said:

“We have used web-based translation services in the past and they are often littered with errors.”

“On one occasion when translating ingredients from English to French the service suggested ‘preservatives’ be translated into French as ‘preservatifs’. Luckily, even with my poor grasp of the French language I knew that was the translation for condoms.”

In 2010 the Forum’s own research on export barriers found that 27% of non-exporters considering international trade in the future found a lack of language skills to be a major barrier.

For more information about the Forum’s language service and other member benefits available as part of the organisation’s Development Director and HR Director business support solutions call 0845 612 6266 or visit www.fpb.org

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