A bit of background for this: I used to teach professional and technical writing to international students in an American university, and resume creation was one of the key aspects of this class. We talked about this a lot, and what follows is generally what I taught in that class.
First, you're absolutely correct that there are multiple aspects to language, and the more you do on your resume to break these elements out, the better. Discussing language proficiency in terms of reading, writing, and speaking would be completely adequate; listening is a bonus, and more difficult to quantify (and quite frankly, it's not been my experience that companies, rather than academic institutions, understand what a proficiency measurement in "listening" really means).
So let's look at how to describe language proficiency in terms of reading, writing, and speaking. If you can claim native language proficiency in one or more aspects of one or more languages (that's quite possible), that's a commonly-understood term. After that, as you note, it gets a little fuzzy.
Describing proficiency in terms of years of use (as one of your examples) is not terribly useful at all. For instance, let's say for the sake of argument, that I studied French in college for 4 years. If you dropped me in the middle of France, I wouldn't do all that well. I could probably buy some wine and cheese. But if one of my mythical classmates went to France after one year of college classes, was immersed in the culture, and lived there for several months with nothing to do but work with the language, their 1.5 years with the language would be significantly more attractive to an employer than my 4. So, numbers are out.
That leaves general terms like fluent, proficient, competent, and a host of others, as you note. There are several tests and frameworks of language proficiency that offer guidelines that you can use, and (more importantly), hiring institutions might be using as well. One example is the Interagency Language Roundtable scale (ILR) which describes how the US Government defines levels of language proficiency for foreign service. "Elementary" proficiency would be something like my example of being able to get around, minimally, and to be polite, but not much more than that ("able to use questions and answers for simple topics within a limited level of experience"). However, a level like "Professional working proficiency" includes things like "able to speak the language with sufficient structural accuracy and vocabulary to participate effectively in most conversations on practical, social, and professional topics", and would be close to (if not a bit higher than) what a non-Government job might refer to as "business level". There is a similar framework used in Europe, the Common European Framework of Reference for Languages (CEFRL).
My recommendation to anyone trying to figure out how describe their language proficiency would be to let one of these frameworks do the talking for you, and to reference whichever one you're using right there in your resume. If you're applying for jobs in the US, for the government or otherwise, use the ILR scale; if in Europe, use the CEFRL scale, and so on; the idea is to get information across as clearly as possible, and limit the amount of work/number of questions your interviewers have to go through to get the information they need.
So, on a resume, it would be completely reasonable to have a section for Language Skills that looked like this:
- English: native language
- French: limited working proficiency (ILR scale)
- German: full professional proficiency (ILR scale)
But if you think all of that is overkill, it's still ok to do this:
- English: native language
- French: intermediate (speaking, reading); basic (writing)
- German: fluent (speaking, reading, writing)
if you reasonably map basic, intermediate, and fluent along the same general guidelines as one of the proficiency frameworks provide.