Evaluating the ROI of Cross-Cultural Training

Categories: Diversity & Inclusion, Global Leadership, Global Mindset

In a study involving 11,500 business leaders, the Corporate Leadership Council discovered the absence of cross-cultural skills as an impediment to both individual leaders and their companies. Leaders who had low intercultural skill rates were less likely to be identified as a high-performing leader on a global scale as their counterparts who had higher skill rates. Cross-cultural training can help leaders and companies overcome the obstacles created by a lack of knowledge of how other cultures tackle tasks.

Advantages of Cultural Training for Businesses

Cultural training provides advantages for organizations as well as individuals. When an organization has an effective cultural training program in place, they are better able to:

Keep Up with Shifts

The 2013 Depth Index of Globalization revealed there has been a large shift in the world’s output. Instead of being driven by advanced countries, output has shifted to emerging economies. In terms of purchasing power parity (PPP), the share of the world’s GDP contributed by emerging economies rose from 37 percent in 2000 to 50 percent in 2012.

Between 2008 and 2012, emerging economies were responsible for the majority of the world’s economic growth at 74 percent of PPP. Cross-cultural training can help multinational corporations catch and keep up with this trend by giving their employees the cultural competency they will need to complete international assignments and help their employers expand their businesses.

Acquire Future Work Skills

As corporations increasingly operate across borders, they require employees to have the skills necessary for them to succeed in foreign locations. By 2020, one of the most sought-after skills an individual can have will be cross-cultural competency. According to the University of Phoenix Research Institute’s Future Work Skills 2020,

“Successful employees within … diverse teams need to be able to identify and communicate points of connection (shared goals, priorities, values) that transcend their differences and enable them to build relationships and to work together effectively.”    

By implementing an intercultural training program now, companies can develop a generation of employees who have the cross-cultural competency necessary to help their employers be successful in new, developing or established markets ahead of the curve.

Realign Talent

The current, increasingly globalized business environment requires multinational corporations to have a flexible workforce, one that is capable of working with employees from other countries, regardless of whether they are working with their counterparts face to face or virtually. Cross-cultural training provides employees with the awareness and appreciation of other cultures as well as skills needed to effectively collaborate with diverse individuals, which in turn will ensure an organization’s global talent is aligned with the global environment.

Develop a Global Workforce

As organizations continue to expand their operations throughout the world, they tend to struggle with how to transition from a “local” to a “global” talent model. In the past, many organizations believed simply bringing the talent from headquarters to their new global offices would ensure success.

The most successful organizations leverage existing global talent in the areas they have expanded their operations. Cross-cultural training can help new market leaders effectively manage their global workforce on both a local and global level to better manage risk, increase sales, reduce expense and respond to changes in the market quickly.

The Role Intercultural Training Plays in the Success of International Assignments

Just as intercultural training can yield benefits for individual workers and their employers, it can also produce positive results for international assignments. With intercultural training, global assignments have a better chance of:

Averting Failure

While there is no way to guarantee a given international assignment will be successful, companies can take proactive steps to increase the likelihood a cross-border project will yield positive results. With cross-cultural training, employees on assignment will learn the practices and core values that are considered the norm in their new location. By adopting these practices, employees can better adapt to a foreign country, which leads to better business results.

Cultural training can also teach employees how people in the new location expect to be communicated with, in both professional and personal settings. By providing ongoing culture training and awareness, employees will find it easier to forge strong working relationships, increasing the likelihood their international assignments will be successful.

Improving Assignee Adjustment

Intercultural training can help increase a company’s assignee adjustment rate to their new country because it prepares employees and their families for living in a new location. Employees and their families get the tools they will need to adjust, such as understanding language & communication styles, adjusting to new routines, and creating an action plan for successful adjustment. Cross-cultural training is critical because a person’s ability to adjust to a new work environment has a positive relationship with the individual’s job performance and a negative relationship with early return rates.

Providing Social Support

One of the top reasons for assignment failure is spousal dissatisfaction. Non-employee spouses typically engage with the local population and culture directly and need social support to do so successfully. Cultural training helps employees and their family members understand the social norms in the country they will be moving to by sharing foundational information about living in their new culture.

Additionally, cultural training can provide advice on how to create a network of social contacts. The support of strong social contacts is necessary for the employee and their spouses and children to adapt to their new environment.

The Advantages of Cultural Competency

Many multinational companies fail to prioritize the importance of cultural competency until they experience a financial loss that results from one or more of their employees failing to have this knowledge. Companies can minimize or avoid future losses due to a lack of cultural competency by recognizing and adjusting to the cultures that exist in the markets they compete in around the world, beginning at the executive level.

Top executives need to support the development of a culturally competent team of representatives who adopt the best cross-cultural business practices. By achieving cultural competency and preparing their staff to do the same, they can then pursue their own development as global leaders.

The most critical component of a highly effective intercultural training program is the skills being taught are practical, relevant and useable to achieve individual and corporate goals.

How Do Organizations Structure Intercultural Training for Their Own Employees?

The ability to adapt to a host country’s culture is a key component to the success of international assignments.  In addition, domestic workforces are increasingly diverse. For these reasons, employees at home and abroad need to know more about different cultures than just the protocols they should follow in certain situations. They need ongoing cultural training to help them and their employers succeed in today’s globalized business environment.

To implement an effective intercultural training program, business leaders should ensure the program has:

  • Continuity: Cross-cultural training should be structured to provide ongoing learning. The best programs allow continuous learning opportunities during an individual’s assignment or during an employee’s career.
  • Consistent Quality: All of the materials used in every course should consistently meet minimum standards set by the company offering the training to its employees, even if a third party is actually conducting the culture training. This allows for consistent knowledge transfer.
  • Readily Available and Accessible: People should be able to take classes online at their leisure, and they should have the option to attend lessons in classroom settings and virtual environments as often as possible.
  • Adaptability: It is important that training content be consistent, but it is equally important that it can be adapted to address the specific learning requirements of the individuals being instructed. This will ensure that the content can be refocused and applicable to the unique needs of individuals/groups.
  • Quantifiable: Post-course surveys enable companies to measure the effectiveness of their cross-cultural training programs when the surveys are compared with the pre-course questionnaires about class expectations and goals. Measuring the effect that cultural training has on a company’s top and bottom lines, however, is not quite as simple.
  • Appropriate Knowledge / Expertise: Organizations should ensure they rely on the expertise of trained professionals to facilitate the training program.

Training Worth the Investment

According to Volume 14 of the Journal of Asynchronous Learning Networks, “The ability to determine causation with validity and reliability is essential to demonstrating the value of a [training] program.” Even though the cost of cross-cultural training is typically less than 1 percent of the expenses related to international assignments and relocation, many business leaders have difficulty justifying the cost because they don’t know what the return on the additional investment is.

While calculating ROI normally involves solving a relatively easy mathematical equation, the equation becomes more difficult when applied to intercultural training for domestic employees and international assignees for a variety of reasons. Fortunately, many models exist that can be used to calculate the ROI derived from cross-cultural training.

In general, the purpose of cross-cultural training is not to make employees experts about certain cultures and ways of life. Instead, the goal is to provide them with the tools they need to be effective and respectful in the different cultural situations they will experience at work or while abroad and teach them to be effective members of a cross-cultural team.

In his book The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Scott E. Page discusses how groups that include different cultures, perspectives and thought processes produce outcomes that are superior to the results produced by like-minded, less diverse groups. Page’s findings underscore the direct relationship between work performed by diverse groups and the ROI a company can reasonably expect on its investment in cross-cultural training.

Get the Education Your Employees Need

When an individual works with a new culture, the person generally learns by comparing new experiences with their own culture, observing and imitating.

After comparing, observing and imitating, individuals must then make a decision to do one of the following:

  • Do things their way
  • Perform tasks as they are already completed by members of the new culture
  • Create a new, collaborative work style to work effectively in the new culture in order to accomplish their goals

Aperian Global can help ensure your employees make the right choice.

Our goal is simple: to give your employees the tools needed to succeed when working globally – whether that be on assignment or within his/her home office working on or managing a globally dispersed team. It’s important for every employee to have access to this kind of training, regardless of organizational level. Our programs are customized for individual contributors, mid-upper level managers, as well as executives.

In both virtual and face-to-face training, Aperian Global has created learning environments to set your employees up for success. We partner with clients in more than 60 countries and have cross-cultural training programs across all industries.