The Cost of Poor Internal Communication

As of December 2015 there are roughly 122 million Americans going to work everyday. The average work week for salaried US employees is 47 hours and according to the Federal Emergency Management Agency, roughly 50% of that time is spent communicating in some capacity.

Companies with highly effective communication practices enjoy 47% higher total returns.

Good communication is good business

Good communication has been cited as the single most important thing when it comes to successful businesses.

A recent study by Tower Watson (2010) found that companies with highly effective communication practices enjoy 47% higher total returns to shareholders compared with the firms that are least effective at communicating.

With communication being as vital as it is to the continued growth and prosperity of an organization, it makes sense that a business would want to be communicating as efficiently and effectively as possible.

Unfortunately, many businesses struggle with optimizing their communication channels and this negatively impacts business growth both internally and monetarily. For example, a business with 100 employees spends an average downtime of 17 hours a week clarifying communication, which translates to an annual cost of $528,443 (Siemens Enterprise Communications). Over half a million dollars lost annually due to poor internal communications and it doesn’t end there.

Great communication creates engagement

There has also been considerable research done examining internal communication and the role it plays in employee engagement.

  • 70% of U.S. employees are not engaged
  • Actively disengaged employees cost the U.S. $450 to $550 billion per year in lost productivity
  • Every employee that crosses over from being disengaged to engaged adds an incremental $13,000 to the bottom line each year (Gallup)
  • According to an SMB communications study, poor internal communications cost businesses more than $26,000 per employee per year in lost efficiency.

When employees become disengaged, it has to do with a poor relationship with their managers and senior leaders. Better communication between management and employees will help your company’s workforce remain engaged and productive.

Retaining employees has more to do with the quality of the work experience overall. While some elements — like pay — affect both attraction and retention, the latter depends far more on the quality of employees’ relationship with their managers, their trust in senior leadership and their ability to manage stress on the job. (TowersWatson)

We all know that internal communication is a vital component in a company’s success. Without it, any organization would be unable to function. Communication not only affects your operational strength, but also your employees’ performance and the overall health of your work environment.

Are you communicating effectively?

If your company is communicating poorly, it will operate poorly. Better communication translates to a direct contribution towards your company’s goals and ideals.

It could be time to look at the current systems in place that your company utilizes for communication and examine whether or not you are getting the most out of what you’re putting in.

How can they be improved upon?

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