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COST OF POOR
INTERNAL COMMUNICATIONS
A Business Case for Engaging Employees using
Effective Internal Communications, 2014
...
68 Point Swing
• "When employees understand their overall role in
the business,

• 91 percent will work towards that succe...
68 Point Swing
• The number plummets to 23
don’t."

percent if they

– Bill Quirke. As noted by Melcrum.
Leading indicator of Financial Performance
• Companies that have highly effective internal
communications had 47%

higher ...
ROI Impacts of Poor Internal
Communications on:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Engagement
Payroll Efficiency
Communication Ba...
1) Engagement
• Every employee that crosses over from being
disengaged to engaged
• adds an incremental $13,000 to the bot...
Gallup Says!

• 70% of U.S. employees
are not engaged.
• Actively disengaged employees cost the U.S.

$450 to $550 billion...
Engagement = Opportunity
Operating Income
• In 2012, companies with high levels of
employee engagement reported an average...
Engagement = Opportunity
Earning Per Share (EPS)
• Organizations with an average of 9.3
engaged employees for every active...
Engagement = Opportunity
• A Work Foundation study showed that
organizations that increased practices related
to engagemen...
2) Payroll Efficiency Factor
• Payroll Efficiency Factor of disengaged
employees is on average 63%
• For every

$100,000 s...
3) Communication Barriers

• $26,041 is the cumulative cost per
worker per year due to productivity
losses resulting from ...
4) Downtime
• A business with 100 employees spends an

average downtime of 17 hours
a week clarifying communication.
• Tra...
5) Safety Costs Add Up

• $63 = average cost of a safety incident for
an engaged employee.

• $392 = average cost of a saf...
6) Employee Retention
• Employees with the highest level of commitment

perform 20% better & are 87%
less likely to leave ...
7) Turnover
• The U.S. national turnover for
disengaged employees is 23%
Current Reality -- Turnover
• 70% of companies say that retaining talent is their
top HR challenge this year.
– (IO Partne...
8) Managers’ Time

• 71% of employees feel managers do not
spend enough time explaining goals &
plans.
9) Corporate Change =
Communication Challenge

09 Jun 2013

Employees Don't Receive Enough Information During Corporate Ch...
Better Companies through Better
Communications
– Updated, January 2014
– www.pdpsolutions.com
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Cost of Poor Internal Communications 2014

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Improve employee engagement and profitability by communicating effectively. Understand how poor communication is affecting companies.

Publié dans : Business, Technologie
  • I loved the idea of creating your own ted-x event. I also recommend making your own employee engagement app as tool to share knowledge and pushing a lot of content. there are platforms like http://dronamobile.com available to do that bit.
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Cost of Poor Internal Communications 2014

  1. 1. COST OF POOR INTERNAL COMMUNICATIONS A Business Case for Engaging Employees using Effective Internal Communications, 2014 Better Companies through Better Communications
  2. 2. 68 Point Swing • "When employees understand their overall role in the business, • 91 percent will work towards that success but…
  3. 3. 68 Point Swing • The number plummets to 23 don’t." percent if they – Bill Quirke. As noted by Melcrum.
  4. 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. 5. ROI Impacts of Poor Internal Communications on: 1. 2. 3. 4. 5. 6. 7. 8. 9. Engagement Payroll Efficiency Communication Barriers Downtime Safety Employee Retention Turnover Managers’ Performance Corporate Change Internal Communications Profits Employee Engagement
  6. 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. 7. Gallup Says! • 70% of U.S. employees are not engaged. • Actively disengaged employees cost the U.S. $450 to $550 billion per year in lost productivity. • http://www.gallup.com/strategicconsulting/163007/state-american-workplace.aspx
  8. 8. Engagement = Opportunity Operating Income • In 2012, companies with high levels of employee engagement reported an average improvement of 19.2 percent in operating income – while companies with low levels of employee engagement declined an average of 32.7 percent. • http://www.thankgoditsmonday.com/blog/2013/06/09/connectingengagement/?inf_contact_key=0b72a1e41ec9a7c991710a8b5436c03bd6e45f51d647 ba88a542eec43955369b
  9. 9. Engagement = Opportunity Earning Per Share (EPS) • Organizations with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher EPS compared with their competition in 20112012. – Those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period.
  10. 10. Engagement = Opportunity • A Work Foundation study showed that organizations that increased practices related to engagement by just 10 percent • increased profits by an average of $2,400 per employee per year. • And the engaged organizations grew profits as much as three times faster than their competitors.
  11. 11. 2) Payroll Efficiency Factor • Payroll Efficiency Factor of disengaged employees is on average 63% • For every $100,000 spent on payroll there is only $63,000 worth of work performed. http://resourcedevelopmentsystems.com/seblog/2010/06/the-payroll-efficiency-factortm/
  12. 12. 3) Communication Barriers • $26,041 is the cumulative cost per worker per year due to productivity losses resulting from communications barriers. – SMB Communications Study. Prepared by SIS International Research, January 2009. Sponsored by Siemens Enterprise Communications.
  13. 13. 4) Downtime • A business with 100 employees spends an average downtime of 17 hours a week clarifying communication. • Translates to an annual cost of $528,443.
  14. 14. 5) 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. – engaged employees were five times less likely than non-engaged employees to have a safety incident and – seven times less likely to have a lost-time safety incident. – By strengthening employee engagement, the company saved $1,721,760 in safety costs during 2002. – Engagement improved sales performance at Molson Coors: Low-engagement teams fell far behind engaged teams in 2005 sales volumes. – The difference in performance-related costs of low- vs. high-engagement teams totaled $2,104,823.
  15. 15. 6) Employee Retention • Employees with the highest level of commitment perform 20% better & are 87% less likely to leave the organization. – Paulson Training
  16. 16. 7) Turnover • The U.S. national turnover for disengaged employees is 23%
  17. 17. Current Reality -- Turnover • 70% of companies say that retaining talent is their top HR challenge this year. – (IO Partners, Employee Retention Report, 2013) • 44% of employees in North America say they may or will leave their current organization within the next 12 months. – (Blessing White, 2013) • Losing an employee can cost an organization up to 213% of the employee's salary. – (Quantum Workplace Survey, 2013)
  18. 18. 8) Managers’ Time • 71% of employees feel managers do not spend enough time explaining goals & plans.
  19. 19. 9) Corporate Change = Communication Challenge 09 Jun 2013 Employees Don't Receive Enough Information During Corporate Change • Two thirds of employees do not receive enough information during corporate change. • 84% of workers are caught up in some sort of change. • Poor communication during change increases misconduct by 42%. – which affects the bottom line and shareholder returns. • • CEB http://www.holmesreport.com/expertknowledge-info/13511/Employees-Dont-ReceiveEnough-Information-During-Corporate-Change.aspx#sthash.15F1P1xy.dpuf
  20. 20. Better Companies through Better Communications – Updated, January 2014 – www.pdpsolutions.com

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