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Top 7 ROIs of Effective Employee Communications

July 21, 2014
From the past decade of experience working with clients in the employee communications field, I've outlined what I've learned are the top seven employee-communications returns on investment.

Employee communications is a term that emerged into the mainstream at the beginning of this century. It was born of sophisticated technology and the social media-inspired work style of modern employees. It reaches above and beyond both the interrupt-driven nature of email and the passive nature of slideshow presentations.

Just as people—particularly the Y Generation—have moved from email to social media tools to stay connected personally, the modern work team is shifting to the self-regulating advantages of an employee communications solution.

That's all fine and dandy, I hear you say, but where's the benefit to the organization that feels the pressure to embrace all of it?

From the past decade of experience working with clients in the employee communications field, I've outlined what I've learned are the top seven returns on investment. There are more than seven, but these seven apply particularly to manufacturing environments.

Effective employee communications translates into a high level of employee engagement. There are many reasons for that—which I may expand upon in a future article—but for today, I'll speak to how that resulting employee engagement puts money back into the company's coffers.

1. Lower Work Accident Costs

Top of my List of Seven is a lower accident rate.

Aside from the obvious human benefit of a lower work accident rate, the organization can expect both fewer accidents and a lower average accident cost. This shortlist will keep both your accountant and your attorney happy:

● It's the right thing to do. Maintaining high safety standards might not return hard dollars directly or immediately, but looking after the safety of your employees will enhance the quality of life of everyone under your roof. It might even save someone's life someday.

● Fewer accidents translate into lower insurance claims, less production downtime, and less equipment and/or product damage.

● Lower average cost per accident.

● Proven best efforts where safety is concerned reduces potential negligence liability down the road. (Ask your attorney what "depraved indifference" means.)

2. Product Quality Increase

Employee Communications is about inclusion and empowerment. When an employee is empowered with the information to do their best work, their level of personal responsibility increases, and they take a higher level of ownership in their contribution to productivity, which translates into a better product (or service).

Over an equivalent amount of time, with the same material investment, employees empowered by having access to all the information they need simply do better work.

Higher product quality translates into:

● A lower cost of handling defective products or components.

● A lower rate of product returns.

● A higher level of customer satisfaction.

Even a 1% decrease in defective products can have an order-of-magnitude effect of profitability, because in some instances a single defective product unit may wipe out the profit of 10 flawless ones.

Predictability, Retention & Competitiveness

3. Improved Predictability

Disengaged employees are secretive folk. Effective employee communications throws light on everything that's happening as it entices more and more of the disengaged and indifferent employees to come into the light, as it were.

● Communication is owned not by the organization but by the people in it, so information is coming from the actual source of events on the frontline.

● It connects the edges of the organization to its center, where day-to-day events are tied to the organization's databases.

● Trends and warnings are more obvious, and management is less likely to be surprised by information on the frontline that never made it to the decision center.

4. Employee Retention

An effective employee communications solution provides to employees the information they need to do their job optimally, and includes them in making decisions on subjects likely to impact their work. Those two factors alone increase their level of employee engagement, and their corresponding sense of belonging to the Big Team. More important than money or window office seating, most employees are highly motivated by a strong sense of belonging, so they stay longer.

When you consider the cost of replacing an employee (recruitment costs, as well as the distraction and cost of getting them up to speed), adding even a single year to the average tenure of an employee at your company can shave a big chunk off those costs.

5. Customer Retention/Revenue Increase

Customers are often the first to realize a company has a poor internal communications model. That's because sales and service usually has the lowest rates of employee engagement within a for-profit company. That's according to the results of a recent worldwide survey by Bain & Company.

On the other hand, fully empowered with the information they need to serve customers consistently and thoroughly, your support staff are simply more effective. Problems are solved faster, issues are resolved more often on the first attempt, and pre-emptive support practices can be implemented because your support staff always knows when there is a product issue. Reaching out to customers proactively endears your customers to you further. Such satisfied customers:

● Are more likely to give you more of the same business.

● Will expand their consideration of your service and product range.

● Are generally less price sensitive.

6. Increased Competitiveness

High-quality products and better customer service— detailed above—together push your company towards the top of your market.

A company whose employees are fully connected to each other responds to the market in a consistent way, no matter which part of the organization the outside world comes in contact with. And aconsistent customer experience across all frontline points increases the value of your company's brand.

7. Customer Service Cost Reduction

Last but not least, employees empowered with the knowledge to do their work optimally provide better customer support in less time. It might mean having 80 support staff instead of 100. The reduction in mean-time-to-resolution translates directly into a payroll savings of the same percentage.

Knowledgeable support staff save time and money.

Louise Dickmeyer is president of People Driven Performance, an employee communications company that combines proprietary software, touchscreen hardware and a proven approach to solve employee communications problems. In 2014, PDP published "Engage! Revised and Updated: Essays on the Path to Higher Productivity through Effective Employee Communications." This month, PDP will publish its second book, "11 Ways an Employee Communications Solution Pays You Back." Available on

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