Conference Board: Few U.S. Companies Effectively Address Language Limitations

“The future for many U.S. based companies appears flush with potential employees lacking English language skills,” says Chris Woock, author of the report. “Whether and how companies choose to accommodate these workers could have significant impacts on the sustainability of success. Latest evidence suggests companies could do well to recruit and hire the best available talent, irrespective of their language limitations, and invest in language training.”

Foreign-born Americans comprise more than 10 percent of the population, and roughly 15 percent of the labor force, and half of net labor force increases. More than 50 percent of foreign-born workers are from Latin America. One-quarter are from Asia. Assuming current immigration levels continue, immigrants will account for about half of the growth in America’s working age population between now and 2015, and will account for most of the growth through 2025.

U.S. Census data show that fewer than one in four Mexican-born immigrants speak English well, while only about 40 percent of other Hispanic, Asian, and European (non English-speaking countries) immigrants speak English. With nearly half of all non-English speaking immigrants to the U.S. self-reporting as unable to speak English well, language is proving to be a major barrier to upward mobility.

The Language-Earnings Link

A survey by The Conference Board of senior HR, training and development executives found that 66 percent of companies do not provide English language skills in their training programs. Among this group, more than half said this is because they “have not found a need to warrant such training,” even though more than 80 percent report employing English deficient employees. Some of these companies have found alternative means for accommodating such employees. For example, one in five reported using bilingual supervisors. 

Companies that don’t provide training say they would include English language skills in their training programs if it would result in increased productivity. More than half said that performance gains would drive their inclusion, with 27 percent choosing increased productivity, and 27 percent identifying employee engagement.

In a recent Conference Board report, “Are They Really Ready to Work,” a majority of employers (more than 60 percent) report that “English language” skills are very important for new workforce entrants to be successful. Most studies find a strong, positive relationship between English proficiency and earnings. To the extent that wages can be used to measure productivity, improving language proficiency could result in significant productivity increases. Studies show that immigrant workers who report speaking English “well” or “very well” earn between 5 and 15 percent more than those who report speaking English “not well” or “not at all.”

A lack of English proficiency also can limit promotion opportunities. Companies that provide English language training report that 25 percent of their immigrant workforce have English language skills that would limit their promotion opportunities.

Company Profiles

The Conference Board report examined how two companies are dealing with this issue. At a large manufacturer with more than $5 billion in annual sales and approximately 30,000 employees, language programs have been part of its training options for over a decade. The current language training program runs for 9 weeks, and improves not only language proficiency but interpersonal communications as well. Executives from the company believe the program has a positive impact on the bottom line through increased productivity, safety and enhanced employee satisfaction.

At Ernst & Young, a global professional services firm with 130,000 people in 140 countries, the focus of language training is for two groups. For their operations in English speaking countries, employees seeking language assistance generally are looking for accent reduction, cultural assimilation or increased business vocabulary. In non-English speaking countries, becoming proficient in English opens up opportunities for more rapid advancement and assignment to more prestigious and complex projects.