Cost Of Poor Internal Communications 9.12
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Transcript of Cost Of Poor Internal Communications 9.12
68 Point Swing
• "When employees understand their overall role in the business,
• 91 percent will work towards that success but…
Leading indicator of financial performance
• Companies that have highly effective internal
communications had 47% higher total returns to shareholders – over the last five years compared to companies with the least effective
internal communications.
ROI Impacts of Poor Internal Communications
1. Engagement
2. Direct Cost of Miscommunication
3. Opportunity Cost
4. Safety
5. Turnover
1) Engagement
• Every employee that crosses over from being disengaged to engaged
• adds an incremental $13,000 to the bottom line
each year
Gallup Says!
• 71% of U.S. employees are not engaged.
• The cost of ‘actively disengaged’ workers at
$416 billion for 2009 alone!
Payroll Efficiency Factor
• Payroll Efficiency Factor of disengaged
employees is on average 63% • meaning for every $100,000 spent on
payroll there is only $63,000 worth of work performed
2) Miscommunication
• $26,041 is the cumulative cost per worker per year due to productivity losses resulting from communications barriers.
– According to internal communications expert, David Grossman.
3) Opportunity Cost
• A business with 100 employees spends an
average downtime of 17 hours a week clarifying communication.
• Translates to an annual cost of $528,443.
4) Safety Costs Add Up
• $63 = average cost of a safety incident for an engaged employee.
• $392 = average cost of a safety incident for an unengaged employee.
5) Turnover
• Employees with the highest level of commitment
perform 20% better & are 87% less likely to leave the organization.
– Paulson Training
5) Turnover
• The national turnover for disengaged employees is 23%
• Cost of replacing an average worker equals 50%
annual salary
• and 150% annual salary for highly skilled
employees