The (high) cost of employee miscommunication


Our CEO recently discussed the cost of miscommunication during our webinar for the Profile of the Hourly Worker report. He cited an IDC Research study that found US and UK employees are costing their employers $37 billion per year because they do not fully understand their jobs.

Take a look and listen to our discussion.

While this figure may seem astonishing, we were not shocked. We have found there to be tremendous loss due to miscommunication. Every missed deadline, dropped shift, weather delay, regulatory penalty, and product recall can be translated as a loss for a company.

In addition, our profile report found that employers are using communication channels that cannot be measured or controlled. Such as in-person staff meetings, written memos, phone trees, bulletin boards, postal mail and Facebook groups. These channels hinder a companies ability to communicate a consistent message or assess comprehension.

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A key finding from the IDC study indicates that on average businesses with 10,000 employees are each losing $6.2 million annually, that’s $620 per employee.

While organizations are often aware of the costs of misunderstanding, only one in three claim to have taken any action to close the gap. By ignoring the issue, firms put themselves at risk for compliance, public safety, and legal problems.

The findings also highlighted that the real cost of employee misunderstanding may be even higher when costs such as impact on brand, reputation, and customer satisfaction are taken into account. All companies reported that employee misunderstanding had placed their company at risk of injuries to employees or the public; 99 percent cited risk from loss of sales and reduced customer satisfaction in the last 12 months.

For instance, one of our customers recently announced publicly that they would stop producing an item due to controversy but that communication didn’t reach the production facility for almost 5 days. Imagine the cost of this miscommunication . . . wasted product, production cycles, employee time, and reputation.

Most employers would agree that its greatest asset is its employees. So, why are organizations not proactively seeking better tools/methods to communicate?

  • How much does it cost you in lost productivity if your employees don’t show up for a shift?
  • Are you missing out on sales because employees don’t know about your current promotions?
  • Are you risking employee safety by not effectively communicating procedures?

Understand the ROI of communication

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Red e App isn’t here just to sell software to put a Band-Aid on your communication problems — we’re out to change the world for non-desk workers. We’ve spent years in the trenches with companies of all sizes and all levels of complexity, and we’d love to help you consider how to make real change in your organization.

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