When it comes to running a successful business and effectively managing your workforce, there are certain elements that are absolutely crucial. Communication is without a doubt, one of the most important elements that make up a successful organization. The importance of communication in the workplace is often under-prioritized as managers assume it’s a given. However, communication in the workplace is more than just how people speak to each other. It’s about building relationships, minimizing friction, avoiding error, and improving efficiency and productivity. As a business owner or manager, recognizing the importance of communication in the workplace is fundamental for success.
Studies have shown that on average, companies lose up to $63.4 billion per year on the cost of poor employee understanding. When broken down, this includes the actions or errors of omission by employees who misunderstood or were misinformed about company policies, business processes, job function, or a combination of all 3. The same study also shows the opposite to be true, with companies that have leaders who are actively working to improve communication. Those companies had 47% higher total returns to shareholders. These figures truly highlight the importance of communication in the workplace, and the real impact it can have.
Companies lose up to $63.4 billion per year on the cost of poor employee understanding.
Provoke Media
The increasing importance of communication in the workplace
In the current global workplace, workforces are becoming increasingly more mobile, or remote. With that, the ways in which colleagues and managers communicate are changing. With these changes, managers are finally understanding the importance of communication in the workplace, and are actively developing strategies around it. Over the last decade, roles in communication have continued to grow, and according to the U.S Bureau of Labor Statistics, it won’t be slowing down any time soon. In fact, employment in communication occupations is projected to grow 14 percent from 2020 to 2030, faster than the average for all occupations.
Common issues from poor communication in the workplace
The best way to highlight the importance of communication in the workplace is to break down the common issues that arise from poor skills/strategies.
Email Overload
Have you ever CC’d someone on an email “just in case”? Have you ever gotten an email and asked yourself how it’s relevant to you? You’re not alone. Depending on job function, some industries see workers checking workplace emails up to 3 hours a day! This, of course, takes employees away from their actual job responsibilities and dilutes productivity.
Cross-departmental work efforts
The importance of communication in the workplace is most obvious when different departments need to work together. Without the right tools, processes, and strategies, it’s hard for one department to fully understand and help its counterparts. This often leads to poor execution of tasks/projects and even breakdowns in communication between departments. This is the worst-case scenario for any business.
Communication Silos
With poor communication standards, unnecessary content is often distributed to employees. When this amount of content becomes too much, it creates information silos. Essentially, this means that employees are overwhelmed with information, and important communications get lost amongst the noise.
Avoidable Errors
Accuracy and efficiency are two of the main reasons to highlight the importance of communication in the workplace. As you can imagine, without the right tools or processes, important messages, instructions, or policies can be miscommunicated. This will ultimately result in mistakes or errors that could easily have been avoided if the information was communicated well. These errors often have costs associated with them, leading to an impact on your bottom line.
Loss of Knowledge
Communication is the foundation for the transfer of knowledge between employees. Without this transfer of knowledge, organizations are literally leaking money. One study has shown the value of effective knowledge transfer for manufacturing companies. Those that had the right communication strategies in place for knowledge transfer saw huge savings. Operating costs were reduced by $2 billion annually, energy savings amounted to $1 billion, and exploration/production costs were reduced by $50-$250 billion. These figures represent the money leaking out of organizations that fail to recognize the importance of communication in the workplace around knowledge transfer.
Benefits of effective communication in the workplace
Another way to highlight the importance of communication in the workplace is to break down the long-term benefits of getting it right. Aside from mitigating the risk for the issues above, there are further benefits to investing in communication strategies, processes, and tools.
Employee Engagement
We’ve broken down the importance of employee engagement in our recent blog post, which you will find here. If you’re not worried about your employee engagement levels, you should be. Internal communication is often a determining factor for employee engagement. As we know, low employee engagement is linked to high employee turnover, which is very costly for a business. Studies have shown that Businesses with effective communication are 50% more likely to have lower employee turnover. Other studies have also shown that 85% of employees said they’re most motivated when management offers regular updates on company news. The importance of communication in the workplace in keeping an engaged workforce cannot be ignored.
Organizational Alignment
One of the main functions of internal communications in the workplace is to educate employees on your core values, purpose, mission and vision. Without effective communication skills, this will never be fully achieved. In fact, only 23% of executives say that their companies are excellent at aligning employees’ goals with corporate purposes. The benefits of organizational alignment are priceless. Employees are driven, loyal, and engaged, productivity soars, culture grows and the company expands. This further illustrates the importance of communication in the workplace.
Productivity & Profitability
Related to the previous point, when employees are engaged and goals are aligned through communication, you get results. With clear instructions, deep understanding, and shared knowledge, efficiency and productivity are proven to increase. Those who understand their job function completely, are totally aware of their goals, and have the knowledge to get it done, will always outperform those who don’t. With increased levels of productivity, profitability will also trend upwards. Again, those with the knowledge and understanding will actively look for ways to cut costs, improve sales and essentially improve the bottom line.
How to Improve Communication in the Workplace
We recently broke down essential communication skills to have as a leader in the workplace, so be sure to take a look at those first! Once you have those communication skills down, it’s time to turn those skills into workplace strategies. Now that you understand the importance of communication in the workplace, here are some key actions you can take to work to improve it.
Regular check ins
Taking the time to check in with employees is vital. This opens up opportunities for clarification on instructions, and to remind employees about individual and company goals. Simply dedicating the time to opportunities to improve communication is a great place to start. Even though it might take time to find a cadence and process that works for you and your employees, it will improve over time.
Company Culture
Internal communications should always be a key element of your company culture. Enforce open, positive communication the same way you encourage other key elements of the company culture such as employee wellness, adaptability etc. A great way to do this is simply to remind employees about the importance of communication in the workplace. You can also take other initiatives such as workshops, focus groups and town halls, where openness and honesty are highlighted.
Technology
Finding the right technology to suit your workforce needs is also key to improving your workplace communication. This will be unique to your business needs, including the needs of your employees. Aside from the daily essentials, like Slack, Zoom or Teams, what other tools do you have in place? Specifically, what are you using to communicate company goals, vision and mission?
Some workplaces lean towards intranets for these needs. However, according to Medium, 31% of workers have never used their organization’s intranet at all! Instead, employers should be finding technology that appeals to all employees, with features such as relevant groups, personalized news feeds, and instant messaging/notifications. These features engage employees, and involve them in internal communications in a fun way!
These actions paired with the right communication skills can set you on the right path to improving your workplace communication practices. Consequently, you will reap the rewards of an engaged workforce, with improved productivity & profitability.
