fbpx

Bad connection: Study finds poor communication costs businesses $1.2 trillion annually

by | Mar 14, 2022 | Public Relations

Effective communication with teams, customers, and stakeholders is pivotal as the hybrid workplace continues to evolve business demands—but new research from Grammarly reveals that not only does good communication remain a problem for many brands and businesses, but it is also racking up costs.

The firm’s recently released State of Business Communication: The Backbone of Business Is Broken report, in partnership with The Harris Poll, reveals the far-reaching impacts of poor workplace communication on U.S. businesses and employees. The study estimates up to a $1.2 trillion annual loss among businesses due to ineffective communication.

Among respondents, nearly three in four business leaders (72 percent) say their team struggled with communicating effectively over the last year, and most business leaders (82 percent) and employees (59 percent) are concerned about effective communication with remote or hybrid working models in the future. Leaders estimate teams lose the equivalent of nearly an entire workday (7.47 hours) each week to poor communication—or approximately $12,506 per employee every year.

“Poor communication permeates the workplace—we all know that intuitively. This research finally puts a number on how massively it’s costing businesses,” said Dorian Stone, Grammarly Head of Organizations Revenue who leads the company’s enterprise offering, Grammarly Business, in a news release. “Businesses must stop ignoring the impact of poor communication and commit to making communication a competitive advantage to move faster, be more efficient, and do better for customers and employees. It’s time for a reckoning of how we communicate in the digital workplace and empower teams to be successful.”

By exploring communication trends, challenges, preferences, and tools, the survey of U.S. business leaders and knowledge workers illuminates why success in a hybrid landscape hinges on improving communication. Additional top-line findings include:

  • 96 percent of business leaders agree that effective communication is essential for delivering the business results expected of their team in the coming year, but nearly three in four (74 percent) say their company underestimates the cost of poor communication.
  • Employees spend nearly half of a 40-hour workweek on written communication alone (19.93 hours), and business leaders (88 percent) and employees (63 percent) alike wish their company had better tools to communicate effectively.
  • Three in four business leaders (75 percent) say they spend too much time and energy resolving miscommunications, and those that grew revenue in the last year are more likely to say their team communicates effectively (92 percent, vs. 81 percent whose revenue declined or did not change).

Overcome bad communication to achieve growth and profitability

Nearly all business leaders (93 percent) acknowledge that effective communication is the backbone of business, but the study reveals the widespread effects of poor communication on business results. Over nine in 10 business leaders say poor communication impacts productivity, morale, and growth, contributing to increased costs, missed or extended deadlines, and reputational erosion. One in five leaders even lost business or deals due to poor communication.

Evolve the employee experience with better communication

Amid the Great Resignation and rising workforce expectations, most business leaders (57 percent) cite employee satisfaction and retention as a top priority for the coming year—ahead of team productivity and customer satisfaction. But the vast majority of employees (86 percent) experience communication issues at work, and they cite increased stress as the top impact. The study also links communication with turnover: business leaders reporting higher employee retention were more likely to have better communication.

Revisit lagging technology to underpin the digital workplace

Written communication occupies a significant part of employees’ workday; over half (57 percent) say they communicate in a written format a majority of the time, and email remains the most popular and preferred method. But employees and business leaders cite the need for tools to make communication easier. Teams may also be collaborating more than leaders realize: they estimate their team spends 29 percent of the time working with others when employees say it’s nearly half of their time (49 percent).

Bad connection: Study finds poor communication costs businesses $1.2 trillion annually

Download the full report here.

The findings are based on a survey conducted online by The Harris Poll from October 1–28, 2021 among 1,001 knowledge workers and 251 business leaders in the U.S. Respondents include employees working full-time at corporations with 150 employees or more and represent a diverse mix of industries and job functions. The online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated.

Daily PR Updates

Essential PR industry news, opinion, and analysis delivered to your inbox daily.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

RECENT ARTICLES

PR in 2023: 4 predictions for the year ahead

PR in 2023: 4 predictions for the year ahead

The public relations industry is changing at a dizzying pace. Now more than ever, conventional PR wisdom is being called into question. In its place, new approaches are blossoming, we are dealing with a global economic downturn, and PR professionals are thinking more...