Welcome to all of our new newsletter subscribers and to all of our long-time readers. Last month, we explored why so many change programs fail to deliver on their promises. You may have been surprised to learn that many of those reasons hinged on poor communication -up, down and sideways.
This month, we take a closer look at the other costs of poor communication practices in organizations. We review some of the many studies conducted in this area and draw you to reflect upon the communication practices in your organization.
Exciting news this month is our Managing Director, Leslie Allan, accepting Top 10 Blogger of 2011 award from HR Toolbox. This web site is well-known for hosting a very active human resources community. On accepting the award, Mr. Allan said, "The success of my People at Work blog is due to the many people who contributed their ideas and experiences to generate many interesting and fruitful discussions. I sincerely thank all of you."
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Costs of Poor Workplace Communication
Why Communication Practices Are Important
Good communication practices are at the heart of every successful business. Communication serves two essential functions in every organization. It disseminates the information needed by employees to get things done and builds relationships of trust and commitment. Without it, employees end up working in silos with no clear direction, vague goals and little opportunity for improvement. Successful projects and change programs are a rarity and real leadership is scarce.
Staff morale plummets when communication is ambiguous, unfocused, lacking in important details and does not allow for genuine two-way dialogue. Critically, the impact of poor communication hits customers and suppliers. They begin to feel disenfranchised and take their business elsewhere.
Not long ago, the ability to communicate well was viewed as a "soft" skill that was nice to have, but considered not really necessary. In today's rapidly changing business climate, it's a mandatory requirement for everyone, from top level executives to the people on the shop floor. Organizations that fail to convey clear strategies and processes and engage employees in shared goals are likely to lose to companies with more effective communication practices.
The Business Impact of Poor Communication
We all feel the personal costs of poor communication when a manager is rude or when we are not invited to an important meeting. However, what are the tangible costs of not paying attention to the quality of communication practices in your workplace? Below we list the key business costs as a result of poor communication practices. The items on the list may convince you to take a closer look at the practices in your organization.
Increased employee turnover
People voluntarily leaving is a significant cost to any employer. Employee replacement costs can be as high as three times the person's annual salary. A Watson Wyatt study found that companies that communicate most effectively are more than 50% more likely to report turnover levels below the industry average compared with only 33% for the least effective communicators.
Inadequate, inefficient and insensitive communication severely impacts employee motivation. This in turn drives the employee's decision to come to work each day. One company study revealed that 18% of the variation in sickness and absence rates across the company was due to variations in communication practices. A more general study showed that where employees feel fully informed, absence rates are below average.
Poor customer service
Poor communications with employees lead to frustrating communications with customers. Employees who lack guidance from management and are locked out of genuine dialogue about their job struggle to know how to satisfy customers and lose the commitment to do so. In the case of legal firm, Slaw, the company reports that 40% of malpractice claims against real estate agents involve communication errors with the client.
The link to the bottom line is well-established. A well-known study of retailer, Sears, revealed that a five-point improvement in employee attitude results in a 1.3% increase in customer satisfaction, which then drives an 0.5% increase in company revenue.
Read all 8 costs of poor communication
Do you want to find out more about building a communication culture in your organization? Get Jennifer McCoy's practical guide, 2 Way Feedback, today. This compact e-book is packed with strategies for building trust and creating a high performance culture in your workplace. Used successfully by business owners, team leaders and managers, use it at all levels of your organization. Find out more about 2 Way Feedback and download the free introductory chapter today.
"2 Way Feedback has helped us create our team and to make the most of every opportunity when we do meet, giving us practical points to act on and also challenging us at times to re-think our approaches."
Kristian and Kerrie Guppy, Aus Eco Solutions
Meet Our Expert of the Month - Sue James
Have you met our team of expert consultants, coaches and trainers? This month we proudly feature Sue James. Sue is a highly skilled facilitator and consultant with many years of experience working with businesses and nonprofit organizations. She is passionate about possibilities, helping people work with the day-to-day practicalities of what is achievable right here and now while also holding a vision of what's possible for the future.
Sue explains her approach, "When any group of people come together they bring with them different world views, perspectives, energies and skills. In my workshops, my aim throughout is to help the group make progress together, moving beyond adversarial thinking to 'higher ground' where shared goals, collaboration and transformative change are possible." Sue also delivers, in partnership with Chris Bennett, a highly successful program called The Essence of Appreciative Inquiry. She is currently finalizing venues and dates to repeat this program in Australia during 2012. Contact us today find out more about the program or how Sue James can help you.
Visit our web site at www.businessperform.com for lots of expert guidance and practical tools designed to help you get ahead of your competition. Also, be sure to pass this newsletter on to friends and colleagues who want to stay up with what's on. From all of us here on the Business Performance team, we wish you a productive month and look forward to communicating with you again soon.