According to David Grossman and Debra Hamilton, the average loss from inadequate communication to and between employees for companies with 100,000 employees is $62.4 billion annually. For companies with 100 employees, the cost of poor communication can be as much as $420,000 a year. The cost per worker per year due to productivity losses from poor employee communication averages $26,000. If these numbers alone don’t compel you to address this issue, please keep reading.
On average, 48% of employees say that they often get confusing directions at work, and the resulting average loss of productivity is 40 minutes per employee a day. According to a study conducted by Best Buy, every percentage point increase in employee engagement results in a $100,000 increase in annual operating income.
Workplace communication can affect your bottom line in a number of ways including productivity, morale, and employee safety. Communication and productivity go hand in hand: companies with engaged employees perform up to 202% better according to a Dale Carnegie study.
We also know that companies with poor employee communication are 50% more likely to have low retention rates and their safety incident cost is over 6 times higher for unengaged employees versus engaged ones ($392 versus $63 per incident).
So why then, with these kinds of numbers at risk, do 70% of American workers say that they are not engaged at work? Why would companies not address this serious drain of corporate profits? The answer is that most companies with poor employee communication think that random blasts from corporate leadership qualify as communication.
This old-fashioned way of top-down messaging is not effective at communicating, much less engaging employees. Old fashioned message boards, breakroom monitors, and flyers do not create a 2-way connection. These are all easily ignored and lack organizational transparency. Real and impactful workplace communication requires managers to connect with frontline employees; these non-desk team members are key to improving performance, product quality, and customer service. When these essential workers feel that they have a voice, are listened to, and feel a bond with the company, the results can be remarkable. These improvements can be measured, and the tools required to facilitate this communication have been proven and are easy to implement.
So, let’s review the math again:
Communication and engagement can create changes including a 15 to 35% reduction in incidents, 6 times fewer costs per accident, 19.2% increase in annual income, $3,300 for every employee retained, $100,000 in annual revenue, and performance increases up to 202%.
The costs of implementing a highly engaging, secure, and structured communications solution across your organization are far lower, and you can even try it for free.
At Red e App, we believe that all companies can create an atmosphere where every employee, especially your non-desk workforce feels connected, empowered, and committed to doing their best. Creating WorkTrust is not just the right thing to do, it creates success for all.