The Cost of Poor Communication

The Cost of Poor Communications: The Business Rationale for Building this Critical Competency

Feb 19, 2016
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David Grossman reported in “The Cost of Poor Communications” that a survey of 400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees.1 Debra Hamilton asserted, in her article “Top Ten Email Blunders that Cost Companies Money,” that miscommunication cost even smaller companies of 100 employees an average of $420,000 per year.2

The critical problem—which you may also recognize—is that although worldwide surveys continue to confirm the importance of good communication, these same surveys consistently report that prospective and current employees are doing poorly enough to be labeled “deficient” in their communication skills.

So much of the HR professional’s success depends on “the ability to understand business functions and metrics within the organization and industry.”3 However, only effective communication skills enable HR professionals to make their business case. Even with all the HR knowledge in the world, practitioners’ inability to communicate their understanding of the business will leave them unable to leverage their knowledge for the good of the organization.

As strategic business partners, HR professionals interact with executives, line managers, rank-and-file employees, and outside stakeholders. With this increased visibility comes an opportunity to influence the organization and its strategic objectives. This opportunity, however, depends in large part on the HR professional’s ability to effectively communicate up (to superiors), down (to subordinates), and sideways (to peers).

The HR practitioner with strong communication skills will be strategically positioned to have a great impact in the workplace. The role of HR professionals has become increasingly complex—and is likely to become even more complicated in the foreseeable future. Gone are the days of the personnel administrator sitting alone in a back office processing the company payroll, never to see the light of day or any real-life employees. Today’s HR professionals have taken on a more strategic role that has increased their visibility throughout their organizations.

Whether in a generalist or specialist role, HR practitioners’ wide range of responsibilities can only be effectively met with strong communication skills. Staffing the firm, training employees, developing and implementing policies, and integrating HR needs with the overall organization are all responsibilities that require effective communication.

The HR professional will need to become adept at speaking, which means channeling nervous energy into positive energy, presenting information logically, reading and using body language effectively, and supplementing verbal content with powerful visuals, all while seeming approachable and conversational.

In addition to possessing general speaking skills, HR professionals must be competent communicators to succeed at one of their main tasks: workforce management. This function includes crafting a recruitment strategy, interviewing, welcoming new talent aboard, and then training and managing that new talent. Recruiting, selecting, and retaining talent require effective communication. Applicants will often forego employment with a company whose recruiter was not able to compellingly communicate what the position involved and specifics about the company.

With so much at stake in the HR arena today, HR professionals must be skilled communicators. In some cases, a failure to communicate successfully could land the company in court; in other cases, it could make the company unable to recruit and retain key talent; in all cases, it will cost the company money. By contrast, if we can better our communication skills, we can increase our value.

  1. David Grossman, “The Cost of Poor Communications,” The Holmes Report, July17, 2011.
  2. Debra Hamilton, "Top Ten Email Blunders That Cost Companies Money,"  Creative Communications & Training, 2010.
  3. Society for Human Resource Management, "SHRM Competency Model," 2012.
Excerpted from Patricia M. Buhler and Joel D. Worden, Up, Down, and Sideways: High-Impact Verbal Communication for HR Professionals (SHRM, 2013).
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