The 5 Costs of Miscommunication

We’ve all made mistakes in our communication in our everyday life. It can be as simple as sending an angry email to one’s boss. Or, using a bad word at a work meeting. When communicating incorrectly in the workplace, it can have harmful and undesirable costs. Miscommunication is the failure to communicate an intended message to another person or persons. According to a study by Dr. Thomas Jackson and Dr. Bart van den Hoof, poor communication can occur in the workplace from messages that are¹:

• Inappropriately used (email or text messaging)
• Too complicated
• Lacking sufficient details
• Having multiple meanings
• Poorly structured
• Hard to understand
• Not requiring a task or action

Further, it happens more often than we realize. Whether it is unintentional or not, it can have the same negative consequences. But, what are the costs of communicating poorly? In this blog, I have selected the top 5 major costs that we need to watch out for.

1. Financial

First, poor communication can become a financial burden to small and large businesses. According to Mr. Skip Weisman, president of Weisman Success Resources Inc., miscommunication costs $5,200 each year per employee². Worse yet, the Society of Human Resource Management (SHRM) shared that small businesses lose an average of $420,000 per year and large businesses lose $62.4 million per year because of poor communication at work³. A study found that businesses that experience higher rates of miscommunication are more likely to report higher rates of employee turnover, and this can be costly to an organization⁴. For example, the Work Institute’s 2017 Retention Report found that if an employee who makes $50,000 a year leaves an organization, the cost for this employee would be $15,000⁴. This means that for every employee who quits, the company loses 30% of each employee’s annual salary⁴.

2. Ruined Relationships

Second, poor communication can also harm relationships at work. When frequent communication errors occur between leaders and their employees, employees can lose trust in their leader. This can lead to not taking a leader seriously even in important matters. Also, if poor communication occurs between employees, misunderstandings can occur, making it hard to communicate in the long run. This lack of effective communication can negatively impact workplace relationships. For instance, if a team project fails due to a team members’ poor communication, then this can have a negative spillover effect in future team project goals.

Also, employees may hesitate to share an important viewpoint on a problem. For instance, employees may fear judgment and humiliation. This can then lead to making bad business choices. Without effective communication, relationships of mutual trust and cooperation among employees is almost impossible. Poor relationships at work can cause unnecessary tensions between the employees, and it can take a huge toll on the company.

3. Higher Stress and Anxiety

Third, when the communication in an organization is poor, especially coming from the leadership of a company, it increases the stress and anxiety of employees. In 2019, a survey from Dynamic Signal found that 80% out of 1,001 employees reported experiencing high levels of stress because of ineffective company communications⁵. Stress and anxiety can also increase by frustration, job strain, and high demands⁶. Employees who experience sudden challenges and doubts from poor communication also report feeling stressed out and anxious in the workplace⁶. And, these feelings make it hard to be productive and effective at one’s job⁶.

4. Lower Motivation and Engagement

Fourth, poor communication can also reduce employees’ motivation and engagement at work. Employees have communication expectations. And, when this is not the case, employees feel less motivated to perform at adequate levels. For instance, when employees do not see value or meaning in their work tasks, employees’ motivation may suffer leading to reduced productivity. Employees may also become disengaged at work, leading to higher rates of absences at work and reduced levels of work effort. Employees can become confused and perform poorly when the communication is unclear. This becomes visible in their poorly written reports, missed deadlines, and missed appointments.

5. Reduced Customer Satisfaction

Fifth, customers may become dissatisfied from miscommunication. Repsly reports that businesses with poor communication have dissatisfied employees, and this reduces customers’ satisfaction. Employees who are unhappy provide low quality service, have a bad attitude, and communicate poorly to customers. After receiving poor customer service, customers feel dissatisfied. These customers then tell at least 10 people they know about the bad experience they had with the company. The result is this bad “word of mouth” can impact the reputation of the company.

Preventing Miscommunication

In sum, poor communication can have negative costs in the workplace. To prevent miscommunication, organizational leaders and employees need to work on their verbal, nonverbal, written, and virtual communication skills. When sending a message, there is no guarantee that it will make sense. The sender and the listener must communicate clearly. The sender, whether sending a message in person or virtually, can check to see if the message was clear and ask if there are any questions. Additionally, listeners need to pay attention to what is being said and how it is being said. Listeners should also ask questions.

Without a set of effective communication skills, businesses may suffer the consequences of miscommunication. The good news is that our college offers many quality and fun communication courses that can train you to communicate better in the workplace.

Sources

1. Jackson, T. W., & van den Hoof, B. (2012). Understanding the factors that effect information overload and miscommunication in the workplace. Journal of Emerging Trends in Computing and Information Sciences, 3(8), 1240-1252.
2. Why business communication skills are the new currency. (2019). Rider University. https://online.rider.edu/blog/why-business-communication-skills-are-the-new-currency/
3. The cost of poor communications. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/communication/pages/the-cost-of-poor-communications.aspx
4. Otto, N. (2017). Avoidable turnover costing employers big. Employee Benefit News. https://www.benefitnews.com/news/avoidable-turnover-costing-employers-big?brief=00000152-14a7-d1cc-a5fa-7cffccf00000&utm_content=socialflow&utm_campaign=ebnmagazine&utm_source=twitter&utm_medium=social
5. Employee communication and engagement study. (2019). Dynamic Signal. https://dynamicsignal.com/2019/03/20/2019-employee-communication-and-engagement-study/
6. Bhui, K., Dinos, S., Galant-Miecznikowska, M., de Jongh, B., & Stansfeld, S. (2016). Perceptions of work stress causes effective interventions in employees working in public, private and non-governmental organisations: A qualitative study. BJ Psych Bulletin, 40(6), 318-325. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5353523