The High Cost of Poor Communication

Top-down, bottom up, lateral, vertical, external and internal – there are so many moving parts to communication. The Internet, intranets, emails, text, twitter and specialized software have given rise to make spreading the word even easier. But at its core, the ability to communicate isn’t so easy after all.

Effective communication skills are at the core of every successful business. Sharing your company’s vision and goals, making meetings matter, building consensus, communicating change, motivating employees, resolving conflicts and skillful negotiation are just a few of the responsibilities managers face each day, and whether each one succeeds or fails relies on the ability to communicate effectively.

When projects fail, revenue drops, clients go silent and employee attrition rises, more often than not, poor communication practices are the cause. Yet, miscommunication is rarely pegged to be the root cause.

The ability to communicate is simply taken for granted. However, research is proving that companies cannot afford to assume their communications approach is indeed working. (a big thanks to,, Gallup and Entrepreneur for supplying the statistics.)

Consider the following statistics that demonstrate the high costs of miscommunication:

  • 70% of all business mistakes are due to poor communication.
  • 46% of employees rarely or never leave a meeting knowing what they are supposed to do next.
  • 57% of employees report not being given clear directions.
  • 69% of managers are not comfortable communicating with employees in general.
  • Poor communication is cited as the main cause of failure by IT companies by nearly 30% of respondents to a study conducted by a national association of IT professionals. Two out of three projects failure.
  • 40% of malpractice claims against real estate agents involve communication errors with their clients.
  • Employee replacement costs can be as high as 3x the person’s salary, however, companies that communicate most effectively are more than 50% more likely to report turnover levels below the industry average.
  • The US Joint Commission for Hospital Accreditation reported the primary root cause of accidental patient harm was communication failure in over 70% of cases.
  • Companies with highly effective communication practices enjoy 47% higher total returns to shareholders compared with firms that are least effective at communicating.

Skillful communication has the power to create trust, build morale, strengthen employee confidence, drive collaboration and breed creativity among employees. Simply said, communication, literally impacts the bottom line.