The Cost of (Mis)Communication: An ROI Study

February 29, 2012


We often talk about the importance of communication and have an intuitive understanding that it’s a big deal. After all, each and every one of us can point to a time in our professional lives when poor communication did damage. But what exactly is the cost of poor communication? Of an unnecessary meeting? Gossip around the water cooler? Consider the following:

Let’s assume that at your organization, the average salary is $60,000 or $5,000/month.

Double that for benefits, office space, and other overhead – $10,000/month.

Divide that by 20 days in a month – $500/day.

Divide it by 8 hours in a day – $62.50/hour.

Divide it by 60 minutes to an hour – $1.04/minute.

Given this foundational math, input the number of employees at your organization to determine the cost of the following common forms of communication.

Memo = $1.04 x 5 minutes x Number of Employees = $???

Five Hour Training = $1.04 x 300 minutes x Number of Employees =$???

You get the point, and hopefully could come up with an equation more tailored to the specific numbers at your organization. Whatever the specific numbers may be, it is a truth that organizations fail to realize how damning (and expensive) poor communication and wasted time really are. Share your numbers below (and prepare to be shocked!).



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