Employee Misunderstanding: How Many of Your Employees Don’t Know What They’re Doing?

The (high) Cost of Employee Misunderstanding


It’s no secret that a confident and capable workforce is the bedrock of any thriving organization. This makes employee training and monitoring an essential cornerstone of success. One in four employees misunderstands critical aspects of their job. However, the reality is that, on average, a startling one in four employees misunderstands critical aspects of their job.

Data Dive: Losses Looming Large

Recent research from IDC has cast a revealing light on the matter. The study spanned 400 companies in high-risk sectors, including pharmaceuticals, petrochemicals, financial services, and transportation. These industries grapple with distinct risks such as handling funds, hazardous substances, and transportation perils.

Startlingly, a majority of the businesses surveyed confessed to experiencing employee or public injuries, along with sales losses, all due to employee misunderstandings. The numbers are staggering: U.S. and UK companies together are hemorrhaging an estimated $45.36 billion annually, amounting to almost $760 per employee. These losses manifest through business downtime, procurement pitfalls, injury claims, and legal settlements.

It’s essential to note that these losses arise not from accidents or deliberate rule-breaking, but from employee misunderstandings defined as “understood incorrectly while thinking to have understood correctly” by IDC.

While this figure may seem astonishing, we were not shocked. We have found there to be tremendous loss due to miscommunication. Every missed deadline, dropped shift, weather delay, regulatory penalty, and product recall can be translated as a loss for a company.

Training Terrain: Charting a Course

In addition, our profile report found that employers are using communication channels that cannot be measured or controlled. Such as in-person staff meetings, written memos, phone trees, bulletin boards, postal mail and Facebook groups. These channels hinder a companies ability to communicate a consistent message or assess comprehension.

Enter the realm of training programs. In the face of complex business pressures like compliance, regulations, and security needs, organizations often turn to training. These programs not only help employees navigate these challenges but also offer a glimpse into their skills, competencies, and confidence levels.

However, a common stumbling block emerges. Employees might not always recognize their training needs or be willing to admit them. Effective training hinges on identifying real training needs, a task that’s challenging given the scale, consistency, and coordination needed across the organization.


Insights for Excellence: The Role of Assessments

The key to overcoming these training hurdles lies in robust employee assessment programs. Assessments delve deep into employee understanding, uncovering strengths and weaknesses. These assessments move beyond just outcomes, encompassing an individual’s confidence and competence.

Crucially, quality assessments offer a holistic view, setting the stage for targeted, effective training processes. Without such insights, training efforts might veer off course and lead to unnecessary costs.

Interestingly, IDC’s research unveils a striking similarity between companies without employee assessment programs (73 percent) and those lacking a comprehensive view of their employees (72 percent). This points to a critical awareness gap regarding employee misunderstanding, employee knowledge and employee confidence.


Tech-Powered Revolution: Embracing Automation

Intriguingly, while only 27 percent of respondents with assessment programs were using technology-driven approaches, the majority (73 percent) still preferred face-to-face assessments. This inclination is surprising given the time and labor intensity associated with in-person assessments. Anecdotal evidence suggests that face-to-face assessments can be challenging and not always fully effective. By ignoring the issue, firms put themselves at risk for compliance, public safety, and legal problems.

Here’s where technology steps in. Automated employee assessments provide an efficient, cost-effective alternative. They can be tailored to fit any industry sector, save time, and streamline the assessment process.


Beyond the Numbers: Tangible Gains

Choosing the right path in employee assessments comes with clear and measurable rewards. Survey respondents reported a host of positive outcomes, including reduced errors (63 percent), decreased health and safety breaches (60 percent), and improved policy compliance (48 percent). Productivity gains and reduced employee turnover were also among the tangible benefits.

The findings also highlighted that the real cost of employee misunderstanding may be even higher when costs such as impact on brand, reputation, and customer satisfaction are taken into account. All companies reported that employee misunderstanding had placed their company at risk of injuries to employees or the public; 99 percent cited risk from loss of sales and reduced customer satisfaction in the last 12 months.

For instance, one of our customers recently announced publicly that they would stop producing an item due to controversy but that communication didn’t reach the production facility for almost 5 days. Imagine the cost of this miscommunication . . . wasted product, production cycles, employee time, and reputation.


Path to Prosperity: Charting Success

In today’s dynamic economic landscape, nurturing a comprehensive understanding of what your employees grasp, where they lack confidence, and what needs improvement is paramount. This attention to detail holds the potential for substantial financial savings and the difference between a thriving enterprise and market stagnation. Most employers would agree that its greatest asset is its employees. So, why are organizations not proactively seeking better tools/methods to communicate? Remember that true excellence comes from understanding, training, and a tailored approach to nurturing your most valuable asset: your workforce.