What Employees Don't Know Can Hurt You
January 10, 2010
During the past year, organizations across the nation have made significant changes to survive the global economic downturn. Workers have experienced job cutbacks, reduced pay and benefit allowances, cut or reduced capital expenditures, etc.
It's tempting to communicate only the bare minimum to employees—after all, if there's nothing good to say, why talk about anything? Stop and think again. Staying silent can wreak havoc on employee engagement and, consequently, negatively affect market value at a time when every advantage counts. You also stand a greater risk of losing top talent who could walk out the door at the first opportunity.
According to a recent study conducted by the human resources consulting firm Watson Wyatt Worldwide, only about one-third of study participants have communicated to employees about how the economy is affecting the company's business and, consequently, its impact on employees' pay and benefits. And only 14% are explaining how this may affect employees going forward. People know that their employment deal has changed, but they don't know what the new deal is.
Messages to employees explaining organizational changes are not easy to deliver. But employees operating in a communication-free vacuum are apt to imagine the worst (and the grapevine keeps the worry pot stirring). People need reassurance, information, and context.
And, consider the upside to honest, open communication. An earlier study by Watson Wyatt Worldwide showed that organizations that communicated most effectively with employees experienced a return to shareholders of 26%. Organizations that communicated least effectively produced a -15% return. That's a 41% difference in returns between companies that communicate well and those that don't.