What Is the True Cost of Poor Employee Communication?

Effective employee communication is no longer an option. If you’re on the fence about implementing an internal communication channel at your workplace, you should first consider the high cost of poor employee communication.

Great communication is the foundation of every productive relationship. That includes communication between C-level executives and employees, as well as cross-departmental communication.

If you’re still on the fence about prioritizing internal communication, then you probably don’t realize the extent of the damage that ineffective information flow may cause to your business!

🔥Learn why Employee Communications are Better Internal Comms

With the rise of search engines and social media, people  expect the right information to reach them when they need it instead of having to look for it. Today’s employees consider internal communication to be a vital part of their employee experience.

Your employees may feel that they are not well informed about the company’s vision, or they may have to spend a lot of time every day chasing down information that’s vital to their work. They might even feel that they have no viable ways to connect with their colleagues.

Ineffective employee communication can have serious knock-on effects on your business. Here are four key factors that reveal the true cost of poor employee communication:

1. Valuable Time Wasted Searching for Information

Instant information rules our lives. When you fail to share the information that matters at the right time or when you overwhelm your employees with too much information, you make it difficult for them to find the data they need. Your employees may have to put their work on hold and hunt through mass messages to find that one vital piece of information.

The typical knowledge worker spends 2.5 hours a day searching for information. If we consider that $39,818 is the average annual wage in the OECD member countries, and 1,686 is the average annual hours worked per employee, then ineffective employee communication could be costing you an average of $15,350 per worker, per year in terms of time wasted searching for information. Extrapolate that to a 1,000-employee company, and you’re looking at over $15 million wasted per year!

Related: Why Your Employees Are Missing Out on Important Information

We’ve all experienced two-hour meetings that were inefficient or unnecessary. When information is not shared in an effective way, people are far more likely to schedule unnecessary meetings. In a business with good employee communication, a general update is sufficient.

2. Reduced Employee Productivity

Good employee communication helps team members to forge tighter bonds, enabling improved collaboration and better teamwork. Employees that communicate freely and openly will trust each other more, work faster, and ultimately be more productive.

Employees who feel engaged at work want to be productive and to deliver high-quality work. Excellent internal communication is the cornerstone to positive employee engagement, especially when you employ remote workers who might feel disconnected from the company as a whole. Companies with high employee engagement are 22% more profitable, but only 33% of employees feel engaged at work!

Related: The Secret to Improving Employee Engagement Is Better Communication

3. Lower Customer Retention

In the world of IT, information silos are common challenges that need to be tackled. It’s not much different in the business as a whole. When there’s a corporate culture of poor communication, employees learn to keep things to themselves. This could be anything from key project deadlines to valuable client feedback.

In this sense, poor employee communication increases your risks of siloing business data in one department, causing the business to let down a client or miss a critical deadline due to a lack of information.

Customer service is highly sensitive to the impact of poor employee communication. Employees who don’t feel engaged at work and lack sufficient guidance fail at customer service, which is why customer retention rates are 18% higher when you have well-informed and highly engaged employees.

4. Poor Corporate Culture

A business driven by poor internal communication loses employees’ motivation and morale quickly. Managers and executives who fail to communicate in an effective way may lose trust of their employees, which drags morale down even further and reduces employee engagement. The end result is a business of unengaged and unhappy employees who are eager to leave the company.

It costs businesses $4,129 on average to hire new talent, and around $986 to onboard the new hire. That means you lose over $5,000 each time an employee walks out the door, not to mention the unquantifiable cost of losing an experienced employee. If your employees want to leave your company because of poor internal communication and inefficient collaboration at your workplace, you’ll be paying a high price for it!

Millennials in particular care a great deal about working in a place with great corporate culture, with the top 20% of employees using it as a criteria to choose where they want to work. If you don’t put effort into building a great company culture and effective internal communications, you may face critical talent attraction and retention challenges!

Conclusion

When you consider the total impact of hours spent by employees looking for the information they need, reduced productivity, decreased customer retention, and high employee turnover, the true cost of poor employee communication could be greater than you can imagine. In fact, it could end up costing you your entire business! When you look at it from that angle, it’s clear that implementing an internal communication channel and a successful communication policy is no longer optional.