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Cost Of Poor Internal Communications 9.12

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Financial impacts of poor internal communication usually overlooked, but significant.

Financial impacts of poor internal communication usually overlooked, but significant.

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  • Another best practice is to remember that communication must be ―7 times in 7 different ways.‖ The 7 ways could be face-to-face, at a shift meeting, in a memo, from a CEO session, weekly newspaper or perhaps front line to front line. It is also important to realize the responsibility for making sure the message is received lies with the individual sending the message. Faux pas

Transcript

  • 1. COST OF POORCOMMUNICATIONBy the Numbers – A Business Case for Effective of InternalCommunications
  • 2. 68 Point Swing• "When employees understand their overall role in the business,• 91 percent will work towards that success but…
  • 3. • The number plummets to 23 percent if they don’t." – Bill Quirke. As noted by Melcrum.
  • 4. 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.
  • 5. ROI Impacts of Poor Internal Communications1. Engagement2. Direct Cost of Miscommunication3. Opportunity Cost4. Safety5. Turnover
  • 6. 1) Engagement• Every employee that crosses over from being disengaged to engaged• adds an incremental $13,000 to the bottom line each year
  • 7. Gallup Says!• 71% of U.S. employees are not engaged.• The cost of ‘actively disengaged’ workers at $416 billion for 2009 alone!
  • 8. 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
  • 9. 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.
  • 10. 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.
  • 11. 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.
  • 12. 5) Turnover• Employees with the highest level of commitment perform 20% better & are 87% less likely to leave the organization. – Paulson Training
  • 13. 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
  • 14. 1 More To Boot!• 71% of employees feel managers do not spend enough time explaining goals & plans.
  • 15. PDP Creates High PerformanceCulturesUsing the Power of Internal Communications • PDP is proven to – Accelerate alignment to strategy – Engage employees – Extend the CEOs reach www.pdpsolutions.com