By the Numbers: The True Cost of Poor Communication in the Workplace

Magda Occhicone, LMFT
Jun 9
2 min read

When communication breaks down in the workplace, the consequences often show up quietly — in missed deadlines, disengaged employees, and mounting stress. But what if we could measure the real impact in hard numbers?

The data is clear: poor communication isn’t just frustrating — it’s expensive, stressful, and unsustainable. If you’ve ever wondered whether investing in communication is worth it, the numbers below offer a compelling case.

The Financial Impact: Communication Breakdown = Lost Revenue

Let’s start with the bottom line.

$62.4 million per year is the average loss due to poor communication for large companies (100,000+ employees), according to a report by SHRM and The Holmes Report.
For smaller businesses (100 employees or fewer), the annual loss still averages around $420,000 due to misunderstandings, missed information, and lack of clarity.

When employees don’t have the right information — or don’t understand what’s being asked of them — errors, inefficiencies, and rework pile up quickly.

The Human Cost: Turnover and Retention

Employees don’t just leave jobs — they leave broken systems. And communication is often the silent dealbreaker.

33% of employees say a lack of open, honest communication was one of the reasons they left a job (Gallup).
Replacing an employee costs anywhere from 30% to 50% of their salary for entry-level roles and up to 400% for highly skilled or executive positions (Center for American Progress).

Retention isn’t just about salary and perks — it’s about culture, connection, and clarity. And when communication falters, trust erodes.

The Productivity Gap

When teams don’t communicate effectively, alignment disappears — and so does efficiency.

Organizations with connected employees see productivity improve by 20–25% (McKinsey Global Institute).
Meanwhile, 86% of employees and executives cite ineffective communication as the leading cause of workplace failures (Salesforce).

The costs of miscommunication show up as duplicated work, missed tasks, and confusion over priorities — all of which slow down progress.

The Mental Health Toll

Workplace communication directly affects employee well-being. When people don’t know what’s going on, they often fill in the gaps with stress, anxiety, and overwork.

Poor communication is ranked among the top 3 sources of workplace stress (American Psychological Association).
Employees who feel “left in the dark” are twice as likely to experience high stress levels and burnout (Slack Future Forum, 2023).

Psychological safety begins with information clarity and open dialogue — not just more messages, but better ones.

What the Numbers Are Telling Us

The data points to one conclusion: communication isn’t a “soft skill” — it’s a strategic investment. Organizations that prioritize clarity, transparency, and consistent messaging don’t just improve morale — they protect their bottom line.

Whether you’re a team leader, executive, or HR professional, it’s time to ask:

Are your teams aligned and informed?
Do your managers know how to communicate expectations and feedback clearly?
Is your culture one where people feel safe to speak up and ask questions?

If not, the cost may already be showing up — in turnover, burnout, and missed opportunity.

📌 Final Thought

Clear, effective communication isn’t a luxury — it’s a leadership responsibility. The numbers don’t lie: investing in communication is investing in your people, your performance, and your future.