Articles

Cost of poor communication

Why on-going development of communication matters

Working as a trainer and coach for many years I have noticed that the value of poor communication has never really been quantified. This is an attempt to put a value on it.

Poor communication is not just about the processes of sending (intention) and receiving (interpreting) a message. It is about the impact of language used and the ability to listen authentically, together with other broad interpersonal factors, such as; personal lack of enthusiasm, lack of motivation, reduced service mindedness, unclear organisation (who does what), level of personal responsibility and so on.

Estimate of costs incurred due to poor or bad communication

Assume company/organisation with 3000 – 500 employees

Assume each person miscommunicates (misinterpret/misunderstand) 20 minutes/day

Allow 220 working days /person / year

 Poor communica-tion/day  Number of employees in company / organisation  Labour cost Hourly Cost (employer’s expenditure)  Total time of poor communica-tion/day  Total Cost of poor communication / day & (/year)  10% & (5%) of total time miscommunicating in English 
20 minutes  3000 35 € 1000 hours 35 000 €/day7.7m €/yr. 3500 (1750) €/day 770 000 €/yr.(385 000 €/yr.) 
20 minutes  1000 35 € 333 hours 11 655 €/day2.6m m €/yr. 1165  (583) €/day 260 000 €/ yr.(130 000 €/yr.) 

 

20 minutes  500 35 € 166 hours 5810 €/day1.3 m €/yr. 581 (290) €/day 127 820 €/yr.(63 910 €/yr.) 

 

A

B

C

D

E

F

 

Notes:

 

Column A

Poor communication results in misunderstanding and misinterpretation of the message, or the information/message is not as clear as it should have been

20 minutes is extremely low. In face-to-face interviews most interviewees say it is much higher!

 

Column C

Costs include, salary, insurance, pensions and other employer costs.

 

Column F

It is difficult to know how much time employees spend using English; of course it all depends on the nature of an organisation or company’s business. But we have taken 10-5% as average representations.

 

Further clarification.

 

For example, a poorly written e-mail sent to 5 people will need to be interpreted by those 5 recipients. Thus, 2 minutes trying to understand what has been written, takes up a total of 10 minutes work-time. In addition, it often leaves employees unsure of what to do, frustrated, demotivated or taking no action at all.