What Does It Really Cost?

As I wrapped up the last blog, I referenced a study that showed how many organizations lose as much as 17 hours per week to miscommunication. Unlike the Salesforce.com study, I couldn’t put my find on any of the additional details that study covered or who conducted it. That said, I found it! We typically share these statistics during the second lesson of our Emerging Leader Development course, Critical Principles for Effective Communication… Here you go:

According to an SIS International Research study, the cumulative cost per year due to productivity losses resulting from communication barriers is more than $26,000 per employee. Not only that, the study found that a business with 100 employees spends an average downtime of 17 hours a week clarifying communications. Translated into dollars, that’s more than $530,000 a year.

I go on to detail out that math for companies half that size and twice that size, just so participants have a chance to relate it to the costs their own organizations are incurring. Based on that study’s numbers, poor communication will cost a company with 50 employees around $250k/year and a company with 500 employees around $2.5m/yr! Then I always make the point that every business owner I know can easily find better things to do with that much profit than have it wasted on poor communication…

So why do I share those numbers with you here? I can’t count the number of times where I’ve seen a production manager push back against any type of training that’s pulling their team members away from their daily routine. And quite honestly, I don’t blame them, especially when the person scheduling or conducting the training hasn’t provided them with specific, tangible data showing how that training will have any impact at all on whether or not those team members achieve the productivity numbers they’re being measured by!

Consider this… By providing tools to help a foreman, lead, or supervisor train a new employee quicker and more effectively, would it be fair to assume we could expect just a 5% reduction in the amount of downtime from clarifying communication? If that’s the only metric impacted, a company with 100 employees could expect a $25,000 reduction in downtime costs, and I believe a 5% improvement is an extremely conservative expectation. But that same action to decrease downtime automatically increases uptime, which directly impacts the team’s productivity and the total amount of work that’s produced - which also creates additional revenue! So that $25k reduction in downtime cost could account for a total swing of $100k or more…

Sure, there are programs out there that have crazy-high price tags and still don’t provide tangible results… But if you've been reading these messages for a while, I can only guess that it’s because you’re able to get real value from them. And every course we build is designed to do the same! In just over three weeks, we get to host a virtual event that will be packed with world class material AND comes with a ton of bonus content, all for just $79. If you haven’t secured your spot already, I want to personally invite you to join us for the LIVE2LEAD:Harrisonburg VIRTUAL session on Friday, Oct 9 so you can take one more step in driving a tangible ROI for your organization!


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