The Cost of Misunderstanding

“The worse we are as communicators the faster we are to end relationships or fire someone.” We make this statement in our workshops or in coaching clients every time someone brings up issues in their relationships at home or work. If you have unresolved problems there is presence of miscommunication. 

Communication is the cornerstone to any healthy relationship. In fact, surveys have uncovered that communication is the leading cause of divorce (65%) followed by a couples inability to resolve conflict (43%). With divorce costing on average $15,000 and according to the CDC’s National Center for Health Statistics there were 782,038 splits in 2018 (45 states and D.C. reporting), that means Americans spent over $11.73 BILLION in 2018 alone because of communication issues. 

Miscommunication in the workplace is even more costly. Employee misunderstanding refers to actions or errors of omission by employees who misunderstood, misinterpreted or were misinformed about company policies, business processes, job function or a combination of the three.

To truly comprehend the importance of communication for you at work, let’s review statistical data around communication in business.

1. $37 billion lost annually in United Kingdom and United States due to employee misunderstanding. 
2. Employee misunderstanding costs a 100-employee companies more than $500,000 a year. 
3. Businesses with poor communication practices have 53% lower returns to shareholders than those with effective communication practices. 
4. Misaligned communication costs small-medium businesses an average of $26,041 for every worker dealing with ineffective communication. 

Look at that final stat again, especially if you are a manager or business owner. Communication alone costs you and your business $26,041 real dollars a year PER EMPLOYEE. Pause and do the math right now. 

Every business leader celebrates incoming revenue, but rarely do they calculate out the whole cost of gaining that revenue. Naturally they minus production, material, and labor costs but intangibles like miscommunication and stress aren’t considered.

Advantages of Effective Communication for businesses are plentiful.  

1. Companies with highly effective communication practices had 47% higher total returns to shareholders over five years. 
2. Employees who rate their companies’ HR and training programs as very good are twice as committed to remaining at their jobs than employees who characterize those efforts as fair or poor, 42% compared to 23%. 
3. Employees are more engaged when they feel their immediate manager recognizes, appreciates and communicates their good work. This factor alone was found to increase engagement by 60% in low-engagement workplaces and 20% in high-engagement workplaces.

More money for businesses translates to raises, benefits, and programs for workers. 

If your department or company needs a boost in their communication training, make sure to comment below or send us an email. 

“You communicate with or without intention, so you better get good at it.” – Jen Butler, MEd