The Financial Impact of Employee Communications

From the Desk of the CFO

The first in a multi-part series on the financial impact of Employee Communications.

As the Chief Financial Officer of XL Communications, my primary focus is financial. But, I'm not just a numbers person. I recognize that numbers don't change people, people change the numbers. I strongly believe that effective employee communications can have a significant impact on how people perform, and can ultimately help organizations succeed.

In fact, statistics show that organizations that manage change and communicate effectively financially outperform their competitors by 30%!

And yet, one of the primary reasons we hear that organizations don't enhance their employee communications is lack of budget. In other words, organizations are not willing to make a relatively small investment to dramatically increase their bottom line.

As a CFO, that concerns me. And, that's the reason I've decided to step out of character and write this series of newsletters. From the Desk of the CFO will examine Employee Communications from our shared objective of organizational SUCCESS.

Enhancing communications may seem overwhelming, onerous and costly. With some guidance, it doesn't have to be. There's a lot to be gained -- for you and the organization.

Don't know where or how to begin? The following information can help you get started.

Getting Support and Money

No doubt, you are already spending money on employee communications. But are you getting the results you want? Do you have goals against which you can measure the success of your current communication efforts?

To get support from senior leadership, identify how an investment in communications will help deliver on important company objectives. Establish three or four attainable, measurable goals. Look at where the organization is now versus where you want to be.

Start with those areas that are of greatest concern. They vary from company to company, but might include areas, such as:

  • Employee Turnover

  • Employee Absenteeism

  • Employee Productivity

  • Improved Healthcare Claims Experience

  • Greater Participation in Wellness Initiatives

  • Higher Participation and Savings Rates in 401(k) Plans

Having identified your goals, consider the ripple effect – what impact will attaining those goals have on you, your department, the organization?

For example, if your goal is:

• Improving employee turnover by a given percentage

o How much time andmoney will you save in searching for, interviewing, onboarding and training new employees?
o How will employee productivity be affected and what is the financial impact?
o Will it improve customer satisfaction and how will that impact your ability to improve sales?
o What is the effect on the employer brand (how prospective employees view your organization)?

As we’ve seen with the airlines recently, social media can have a powerful and far reaching impact on how your company is perceived and on stock values.

You might try using a Communications Scorecard, similar to the one below.

Sample Communications Scorecard

Goals Required Outomes Measurement Method Actual Outcome Rating

Reduce turnover

10% reduction in turnover Employment Metrics    
Effective Messaging 30% Increase in Engagement Engagement Survey   Town Hall Survey    
Impact on Behavior 50% Increase in customer satisfaction Customer Survey Metrics    
Business Impact 3% increase in sales Sales Report Metrics    

Rating Scale

  1. Did not meet required outcome

  2. Marginally met required outcome

  3. Met required outcome

  4. Exceeded required outcome

  5. Far exceeded required outcome