Six Ways Miscommunication Costs Your Company
We’ve all experienced miscommunication in the workplace. With remote work, it seems that the possibilities for misunderstanding only increase as we decrease face-to-face communications and rely more on email, chat or other technologies to facilitate discussion.
And for hybrid teams where some employees are in the office and others work from home, it can feel like those who are working virtually are more disconnected because they miss out on conversations that naturally occur in the office.
Miscommunication can arise from something as simple as feeling out of the loop or receiving an email that lacked a clear call to action. It can also be much more impactful when team members spend a week working on their individual assignments only to realise that they were not aligned on the overall objectives of their project.
Big or small, these misunderstandings add up in literal and figurative costs, so it’s no wonder that effective communication remains one of the most essential skills required in business today. Learning and Development teams can make a powerful impact on their company’s bottom line and employee engagement by delivering programming that helps team members be more effective communicators.
To make the case for your leadership to invest in programmes that enhance connection, I recommend exploring the impact of miscommunication.
What Is Miscommunication Costing Your Business?
1. It costs businesses between $4,000 and $6,000 per employee each year
SHRM shared studies that looked at the financial impact of inadequate communication for companies of 100 employees as well as 100,000 employees. In an average year, these organisations lost $402,000 USD and $62.4 million USD, respectively.
Breaking down that cost on a per-employee basis shows just how much value you could recoup by investing in training programmes designed to enhance your employees’ ability to communicate.
2. It reduces efficiency
No matter how well-thought-out and effective your processes are, miscommunication can significantly slow down your work. When individuals do not express themselves clearly, time is often wasted in seeking clarity, revisiting previous conversations or going down one path only to realise that you were not on the same page.
Effective communication allows your employees to more quickly align on priorities, projects and next steps, supporting your ability to get work done efficiently.
3. It affects productivity
Related to challenges with efficiencies and collaboration, productivity also suffers when we fail to communicate effectively. As we spend time trying to understand context, rereading emails and messages or getting frustrated by misunderstandings with our colleagues, we aren’t able to perform at our best, which can cost the company lost or diminished output.
When colleagues are skilled communicators, they can work together more effectively, which ultimately enhances their individual and collective productivity.
4. It impacts trust
Miscommunication often occurs when there are intent-impact gaps, which means the intent of the message is not properly understood by the recipient of the information. This gap is challenging, leading to confusion at best and hurt feelings, frustrations or eroded trust at worst. When employees lose confidence in one another, it can be much more difficult to collaborate, leading to additional costs in lost time or unneeded friction.
By helping employees learn to deliver information in a way that connects with the needs of their colleagues, you can close intent-impact gaps and enhance trust within your organisation.
5. It limits innovation
While innovation may not be your first thought when you consider the impact of miscommunication, it can be a long-term challenge. As trust begins to erode, so too does the psychological safety of your team. When individuals feel like they don’t have a safe place to share their opinions, innovation stagnates because they no longer are willing to share their ideas or build on the thoughts of others. That means lost profits for your company in the long term.
When employees know that their counterparts will listen to their ideas, seek clarity and assume positive intent in their line of questioning, they feel encouraged to speak up and help push your organisation forward.
6. It generates employee turnover
When individuals experience the five previously mentioned costs of miscommunication, it’s no wonder that retention becomes an issue. People want to work in an environment where their ideas are valued, they trust their colleagues and they are empowered to work effectively.
When these expectations aren’t met, you will start to see increased departures, which in turn leads to dips in morale and financial losses. Recent studies show replacement costs for employees to range between 30 – 50% of an entry-level employee’s salary and 100 – 150% of a technical employee’s or supervisor’s salary.
As you add up the costs, it’s evident that miscommunication isn’t just an inconvenience – it’s an expensive business challenge. And, when your teams are working remotely, it can be even easier for these miscommunications to come to life.
As your Learning & Development teams and managers seek opportunities to improve remote working relationships and enhance productivity in your organisation, I invite you to consider delivering programmes that can help your staff close intent-impact gaps and communicate intentionally. In doing so, you can see a positive return on investment while simultaneously strengthening employee engagement and connection.
Interested in Learning & Development programmes that can enhance communication in your organisation? Discover why 85% of respondents in a recent survey reported that Emergenetics helps their organisation reduce miscommunication. Learn more about how we can support your work by filling out the form below.