Communication is at the core of any organization’s day-to-day activities. Every email, text, tweet, face-to-face chat, report, phone call, and so on is a part of a business’ communications. Without effective communication, operations would likely grind to a halt.
Yet, despite the importance of communication, many businesses struggle to communicate effectively — both internally among teammates and externally with customers or clients. What are the costs of poor internal communication, and how can better communication improve business outcomes?
The Cost of Poor Internal Communication Techniques
Poor communication techniques can cost organizations dearly. In fact, according to data cited by the Society for Human Resource Management, “400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees.”
As staggering as this figure is, it only covers the costs that these businesses were able to quantify — it may not cover the variable costs of project delays, bad hires, misfiled paperwork, and all of the other potential consequences of people not being informed of everything they need to know, when they need to know it.
Worse yet, as reported by the SHRM, “although worldwide surveys continue to confirm the importance of good communication, these same surveys consistently report that prospective and current employees are doing poorly enough to be labeled ‘deficient’ in their communication skills.”
Benefits of Having Better Communication Skills and Techniques:
1) Improved Success of Diversity Initiatives
In an article for Big Think, Jennifer Brown, management expert and founder of Jennifer Brown Consulting, highlights the importance of communication in diversity training initiatives. According to Brown, effective communication techniques are “so important from an authenticity building perspective to make a connection with people and to make them feel that you are accessible and that you are still learning.”
High quality communication inspires workers and improves engagement, making them feel that their learning directives are important and that their leaders care about the results.
2) Better Employee Retention
In the same article, Brown also highlights the importance of “targeting the middle.” Most employees in the “rank and file” of an organization don’t often directly interact with the CEO or other top-level execs — aside from one-off mass emails or speeches. Instead, their usual point of contact — and with whom they most often express friction on the organization’s leadership—will be with their direct manager. Improving the communication techniques of these managers, with their reports and in relaying back to leadership, can pay enormous dividends when it comes to employee retention.
As Brown states, “The middle, to me, is the powerful impact and really if we don’t get that right, employees will vote with their feet, because the managers and their direct bosses — and the statistics show this — is they have an enormous amount of impact on day-to-day employee engagement which leads to retention.” In short, people don’t quit their jobs; they quit their bosses.
When the “boss” an employee reports to isn’t great at communicating expectations, available resources, and other critical information, the employee is much more likely to become highly frustrated and quit.
3) Getting Better New Hires
All organizations are wary of the “bad fit” hire. This type of hire is not only a large organizational cost, but can bring down the morale of an entire team and incite distrust toward hiring managers. This is where effective communication during the hiring process can help.
Roberta Matuson of Forbes highlights a major issue with some hiring processes — inept hiring managers. As Matuson states:
“Most hiring manager have never had any formal training on how to assess candidates. They'll glance at a resume a few minutes prior to walking into the room to meet with a candidate and then they spend the next sixty minutes shooting the breeze. Both the candidate and the manager usually leave the room scratching their heads.”
The issue here is that the hiring manager doesn’t know how to effectively communicate the goals of the organization to the candidate or how to listen to the candidate effectively to determine whether or not they are a good fit for the organization.
Strong communication techniques, like active listening, can help make hiring managers more effective in their role — leading to higher-quality hires and less disruption from unqualified candidates.
4) Less Disruptions from Team-Level Disputes
From needing access to the same limited resource (such as an expert, a lab, a company vehicle, etc.) to interpersonal conflicts, to disputes over who is responsible for specific tasks, there are endless potential scenarios for conflict. However, strong negotiating skills can help alleviate conflicts quickly while allowing teams or individuals to find a solution that benefits the organization as a whole.
With strong negotiating skills, workers can assess the needs of each team, rate priorities based on the goals of the organization, and find a compromise that best balances the needs of each team member and the organization as a whole.
Negotiating benefits employees from entry-level to upper management. Leaders can use negotiation to foster stronger working relationships with their teams and earn their trust and respect by exercising reason and displaying consideration for the needs of their workers.
The benefits of effective internal communication go far beyond those mentioned here. Take a deeper dive into effective business communication from industry-leading experts with Big Think Edge’s Business Communication course!