"Why is good employee communication so important during an economic downturn?"
No news is definitely not good news from an employee communications perspective. October 2008 Research from Weber Shandwick showed that 71% of
people felt that their company should be communicating more about current economic problems. Unfortunately, the uncertainty caused by lack of internal
communications can cause staff to be less productive.
Workforce Week reported that 48 percent of staff said that the economic uncertainty has caused them to be less productive at work.
Retain revenues in a shrinking market
Due to the economic downturn, it is likely that demand for your organization’s products or services is reducing. In order to keep revenues healthy, it is
necessary to increase the overall market share.
In a competitive marketplace, organizations need to be agile, to reduce process inefficiencies and to increase effectiveness across the business. Effective
employee communications plays a critical role in achieving these goals with an investment that’s small compared to value gained.
Good employee communication is a competitive advantage.
Maintain operational effectiveness
Uncertainty (job security, future career potential, fear of increased workload etc.) due to a lack of effective internal communication can cause high performing
employees to jump ship. Low morale within remaining staff can impact customer interactions and damage brand identity. Uncertainty can also damage a
company’s culture. Competition for internal resources can increase between (and inside of) departments. Focus can shift onto projects that ‘look good’ but
don’t really contribute towards real business objectives. Good employee communications can enable you to retain your best employees, protect your company
culture and maintain the strength of your brand.
According to the U.S. Department of Labor, it costs at least one-third of a new hire's annual salary to replace them. There are also associated opportunity costs
such as lower productivity during re-training to consider.
"Companies with the most effective employee communication programs provided a 91 percent total return to shareholders (TRS) from 2002 to 2006,
compared with 62 percent for firms that communicated least effectively. Moreover, a significant improvement in communication effectiveness is associated
with a 15.7 percent increase in market value ."
Read more about communicating during an economic downturn.
Quantify the value of effective Internal Communications:
Enter the number of employees in your organization 2,300 (Numbers in orange are variables that can be changed by the user)
Enter an employee's average annual salary 50,000
Salary per hour 28 (Calculated automatically)
Now work through each tab filling out variables in orange…
Snap Channels - Productivity improvement calculator
The impact of effective employee communication can be far reaching. For example, the time to market for product launches can be reduced, uptake of new products can
be faster due to a more effective sales force, customer service and retention levels can be impacted by a more informed and engagement customer support team. The list
is extensive. Fill out the orange variables to assess just a few potential productivity improvements made possible by the Snap Internal Communications Channels.
Productivity cost caused by email overload Productivity cost using Snap Mag to aggregate email
Average number of ‘news and admin’ emails/wk 25 Issues of Snapmag (per week) 2
Time to recover from each email interruption (Mins) 1 (research) Time to recover from a single interruption (Mins) 1
% of employees react to emails within 6 seconds 70% (research) Total cost $102,222 p.a
Total Interruption cost $894,444 p.a. How the Snap channels can help with email overload
Est. Value of increased productivity $792,222 p.a.
Meeting Productivity Targeting and sending message via Snap Channels
Time spent (per team) covering general updates 0.5 hrs per week Hours 2 /wk
Average number of staff in a meeting 15 per week Total cost $2,667 p.a
Number team meetings across the business 20 per week
Total Administration cost $200,000 p.a. Est. Value of increased productivity $197,333 p.a.
Providing 'helpdesk' functionality by email or phone
Time answering same question more than once (email) 3 hrs per week Centralized helpdesk functionality using via Snap Interactive
Time answering same question more than once (phone) 2 hrs per week Time answering same question more than once 0 /wk
Total Repeat Activity cost $6,667 p.a. Total cost $0 p.a
Helpdesk functionality via Snap Interactive
Other possible productivity improvements: Est. Value of increased productivity $6,667 p.a.
(Value not included in calculation)
Staff more involved in decisions Snap Poll, Snap Interactive
Improved information cascade Snap Poll Cost for 3 Snap Channels $8 p.a.
(E.G. SnapMag, Snap Interactive, SnapScreensavers)
Managers equipped to manage teams better Snap Alert, Snap Ticker, Snap Interactive
More effective workforce
Snap Shots screensavers, Snap Interactive,
Staff more aligned to company vision
Snap Ticker etc
Total Cost for Snap Channels $17,250 p.a
Staff share ideas and best practice Snap Poll, Snap Interactive Note) The cost of the Snap Channels varies depending on organization size, number of channels
Increased response for actionable messages Snap Alert Snap Ticker and in-house / hosted solution. Please contact Snapcomms for a more specific pricing.
Reduce inaccuracies Various Snap channels
Total value of $978,972 p.a
Staff product knowledge improves Snap Quiz
Snap Channels - Cost Saving Indicator
When budgets are tight and the future looks uncertain a knee-jerk reaction can be to pull back to the bare essentials and not try anything new. The Snap Internal
Communications Channels can easily be cost justified by the resultant savings made in other areas:
Managing face to face meeting invites Managing face to face meeting invites
Managing group meeting invites 5 hours per month Hours managing Snap RSVP (per month) 0.2
Total cost $1,667 p.a. Total cost $67 p.a
Cost saving $1,600 p.a
‘Awareness’ campaign via posters, flyers, drinks coasters etc ‘Awareness’ campaign via screensavers
Awareness campaigns 4 per year Manual input hours (per campaign) 10
Manual input in hours 25 hours per campaign Total cost $1,111 p.a
Average production cost 1000 per campaign How the Snap Channels can assist an awareness campaign
Total cost $6,778 p.a. Cost saving $5,667 p.a
IT deploying 'Group Policy' screen savers Screensavers deployed by comms team
External IT support agency charge 1,000 per screensaver Comms team time per screensaver 0.2 hrs
Internal IT hours 0 hours per screensaver Number of screensavers 4 per month
IT internal charge rate 0 per hour Total cost $267 p.a
Number of screensavers 4 per month Snap Screensavers can be deployed quickly and easily
Total cost $48,000 p.a. Cost saving $47,733 p.a
Staff E-magazine production costs Snap Mag as Staff E-Mag
Gathering and editing content = 8 hrs / wk Approving content 1 hr / wk
Total annual cost $10,667 p.a. Total cost $1,333 p.a
HTML formatting not required and content is 'user generated'
Printed magazine costs Cost saving $19,698 p.a
Magazines per year = 4 p.a.
Magazine copies = 1000 per run Cost for 3 Snap Channels $8 p.a.
Gathering and editing content = 40 hrs / magazine (E.G. SnapMag, SnapAlerts, SnapScreensavers)
Production cost = 0.18 per page
Number of pages = 6 per magazine Total Cost for Snap Channels $17,250 p.a
Distribution costs = 400 per issue Note) The cost of the Snap Channels varies depending on organization size, number
Total annual cost $10,364 p.a. of channels and in-house / hosted solution. Please contact Snapcomms for a more
Total Cost Savings per year = $57,448
Improving the effectiveness of existing channels
Existing channels such as the intranet or video communications can be an expensive investment. Snap can help improve the effectiveness of these channels in simple
Increase in Intranet effectiveness 10 %
Typical Intranet costs How the Snap Channels can improve the effectiveness of the intranet
Initial intranet set up cost = $60,000 (intranet cost calculator)
Ongoing annual intranet cost = $45,000 ( intranet cost calculator)
% increase in viewing = 20
Typical video costs Increase in Video effectiveness 20 %
Manual input in hours per year (ex. prod cost) 100 How the Snap Channel can increase message cut through
Production cost per year $10,000
Total video production cost/ year $12,778 p.a.
Risk of Ineffective Internal Communications
At best, Internal Communications breakdown can be a major source of inefficiency. At worst it can be a source of litigation, lost customers and increased staff
£75,000 fine (in UK) for failing to comply with 'Information and 115,000 US$
Consultation of Employee' Regulations
Employee Litigations per year 2
Attorney costs per litigation 20000
Average settlement costs per litigation 30000
Average internal hours per litigation 100 per litigation
Total cost $220,556 p.a.
Impact of poor customer service
Average value of customer 20,000 US$
Additional customers lost due to poor internal communication 20 p.a.
Total cost $400,000 p.a.
Increased staff turnover
Increase in staff turnover due to poor internal communications 2% of total staff
Cost to replace staff 33% of annual salary
Productivity loss due to retraining new staff 2 Wks per new hire
Total cost $854,833 p.a.