Cost Of Poor Internal Communications 9.12

COST OF POORCOMMUNICATIONBy the Numbers – A Business Case for Effective of Internal Communications

68 Point Swing

• "When employees understand their overall role in the business,

• 91 percent will work towards that success but…

• The number plummets to 23 percent if they don’t."

– Bill Quirke. As noted by Melcrum.

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

1 More To Boot!

• 71% of employees feel managers do not spend enough time explaining goals & plans.

PDP Creates High Performance Cultures

• PDP is proven to – Accelerate alignment to strategy– Engage employees– Extend the CEOs reach

www.pdpsolutions.com

Using the Power of Internal Communications