I am attempting the seemingly impossible: to measure the financial cost of poor communication.

The Goal

We all know communication is essential for good business, for an organisational culture that works. Yet, it often falls down the priority list because we are not measuring it. We aren’t measuring it because it doesn’t have a single budget line or direct correlation, it impacts everything to varying degrees. As a data nerd, I know that we can’t fix what we can’t see. This is an attempt to make the cost of poor communication visible and tangible for leaders to understand the importance of investing in conversational infrastructure. Bad conversations are leading to leaky costs across the organisations, and the fix is simple but requires effort and focus.

I need your help

While I am a numbers nerd who loves to gather and evaluate data for impact, I do not have a background in finance and operations. If you are reading this, I believe that you do have experience that will be uniquely useful to help me test this tool.

The ask:

  • Have a play with the diagnostic testing if it feels accurate and useful

  • Confirm the methodology is sound

  • Provide feedback to Emma via email, call, voice note, coffee, carrier pigeon (actually that’s too slow) or any other means

To compensate you for your time and expertise, I offer an hour of consultation, books, a small stipend ($50?), being named in the paper, or whatever else you think is fair. I so appreciate your assistance in developing this important work!

Diagnostic Tool
What is poor communication
costing your organisation?
A conservative, research-backed estimate in under 3 minutes
Step 1 of 4
Your organisation
This calibrates the estimates to your actual scale. A midpoint or best estimate is fine.
Blended midpoint across all levels — or use the level split below for a tighter estimate
Refine by workforce level? optional — improves accuracy
Replacement costs and disengagement impact differ significantly between senior and frontline staff
% of total headcount
% of total headcount
Replacement cost multipliers applied: senior 150% of salary, frontline 65%. Blended average salary above used as fallback if level fields are incomplete.
People & culture
Use your actual figures if you have them, or accept these conservative benchmarks.
Annual staff turnover rate
Australian average: 12–18%
15%
Average sick days per person per year
Australian benchmark: 9–11 days
10 days
Gallup global average: ~23% actively engaged
Include HR & grievance process costs?
Formal complaints, investigations, case management
Your number gives a more precise result
Projects & operations
Poor communication generates significant hidden waste in how work gets done.
Rough average — optional
Estimated rework / delay rate
PMI research: 20–30% of project cost is rework on average
20%
Include missed & unspoken risk costs?
Risks not surfaced due to silence, avoidance, or fear of speaking up. Uses a payroll-based proxy.
Include avoided performance conversation costs?
Productivity loss from underperformance that persists because direct conversations don't happen
15%
Industry research suggests 15–20% on average. Adjust to reflect your organisation.
Your estimated annual cost of poor conversational infrastructure
—
Where the cost sits
Attribution rates draw on research from Gallup, SHRM, Safe Work Australia, and the Project Management Institute. All figures use conservative lower-bound estimates. This tool does not include strategic costs (innovation loss, poor decisions, reputational damage) or individual costs — meaning the true cost is likely higher. Results are indicative and intended to prompt strategic conversation, not replace financial analysis.
Emma Gibbens
emmagibbens.com  ·  emma@emmagibbens.com

The Diagnostic

This is a tool I’ve developed to help organisations identify the costs of communication. Below the tool I have included a methodology explanation to add integrity. The estimates are conservative. Ideally this tool and methodology is seen as credible, rigorous and cynic-proof (as much as can be).

Emma Gibbens - Conversation Strategist
The cost of poor
conversational infrastructure
Methodology and attribution framework — the research behind every number in the diagnostic.
Conservative by design. Every rate applied sits at or below the midpoint of published research. The output is a floor, not a ceiling.
Purpose of this document

This page explains how the Conversational Infrastructure Cost Diagnostic calculates its estimates. All figures use conservative lower-bound attribution rates derived from peer-reviewed research and published industry benchmarks. The tool is designed to produce a defensible cost range — not a financial audit — intended to prompt strategic conversation about the organisational cost of poor communication.

1
Attribution logic
Cost categories and how they are calculated
Cost area Base calculation Attribution Rationale and sources
Staff turnover
Headcount x turnover rate x 75% of avg salary
32-42%
Gallup (2023): manager relationship and culture account for 50-70% of engagement variance. SHRM: 30-50% of voluntary turnover is driven by culture and relationship factors.
Disengagement drag
Total payroll x 34% productivity loss x engagement discount
15-32%
Gallup State of the Global Workplace (2023): disengaged employees cost ~34% of salary in lost productivity. Low: 25-32%, Medium: 15-22%, High: 6-10%.
Absenteeism and sick leave
Headcount x sick days x daily salary rate
22-30%
Safe Work Australia (2022): psychological injury accounts for ~25-30% of serious workers compensation claims. Strong link to workplace relationship quality.
HR and grievance process
Cases x 25% of avg salary. Default: 4% of headcount
55-70%
AHRI (2021) and CIPD: majority of formal grievances originate in unresolved communication breakdowns or avoided conversations.
Project rework and delays
Projects x avg budget x rework rate entered
30-45%
PMI Pulse of the Profession (2017): ineffective communication is a factor in 56% of all project budget losses.
Missed and unspoken risks
Total payroll x 0.5-1.2% proxy
100%
McKinsey and Deloitte: psychological safety and speak-up culture are leading indicators of risk incidents. Payroll proxy used as risks are rarely tracked directly.
Avoided performance conversations
Underperforming % x headcount x salary x 10-15% productivity loss
40-55%
CIPD (2022): significant underperformance persists because managers avoid direct conversations. CEB/Gartner: only 29% of managers feel effective at performance conversations.
2
Scope
What this tool does not include
Strategic costs
  • Innovation lost because people don't feel safe to speak up
  • Poor decisions made on incomplete information due to suppressed dissent
  • Reputational damage — internal employer brand and external stakeholder perception
  • Cultural erosion as avoidance becomes the norm and trust degrades
Individual and personal costs
  • The cognitive and emotional load of carrying an unresolved conversation
  • Physical stress responses — sleep disruption, cortisol, rumination
  • Erosion of self-respect when people repeatedly don't say what they mean
  • Identity cost — the gap between who someone wants to be and how they show up
Note: These exclusions mean the total presented is a conservative floor, not a ceiling. The true cost of poor conversational infrastructure is likely materially higher.
3
How to read the results
Interpretation guidance
Results as a range

The tool outputs a low-to-high band rather than a single number. This is intentional — precision implies false certainty. The range reflects natural variance in attribution rates across organisations.

Conservative by design

Every attribution rate sits at or below the midpoint of published research. This ensures the output withstands scrutiny from finance, risk, and executive audiences. The actual cost is likely higher.

Your figures vs estimates

Where users supply their own data — HR case numbers, underperformance percentage — those figures replace formula defaults and are flagged in results as "your figure." Defaults are flagged as "estimated."

Not a financial audit

This diagnostic is a strategic prompt, not a financial statement. It is designed to make an invisible problem visible and create the conditions for a conversation about investment in conversational infrastructure.

4
Evidence base
Primary research sources
Gallup — State of the Global Workplace (2023)
Engagement levels, productivity loss from disengagement, manager relationship as driver of voluntary turnover
SHRM — Employee Turnover Research
Culture and relationship factors as proportion of voluntary turnover — 30-50% estimate
Safe Work Australia (2022)
Psychological injury claims as proportion of workers compensation; link to workplace relationship quality
PMI — Pulse of the Profession (2017)
Communication as primary contributor to project failure; 56% of budget losses linked to poor communication
CIPD — Performance Management Research (2022)
Manager avoidance of performance conversations; underperformance attributed to avoided feedback
AHRI — Australian HR Practices Research (2021)
Grievance and complaint rates; proportion originating in communication breakdown
McKinsey and Deloitte — Risk and Psychological Safety
Speak-up culture as a leading indicator of risk incidents; cost modelling for unspoken risks
CEB / Gartner — Manager Effectiveness Data
Only 29% of managers feel effective at performance conversations; downstream productivity cost analysis
Emma Gibbens
emmagibbens.com - emma@emmagibbens.com
Attribution rates draw on peer-reviewed research and published industry benchmarks. All figures use conservative lower-bound estimates. Results are indicative and intended to prompt strategic conversation, not replace financial analysis.

The Methodology

Here is the thinking that myself and Claude generated to create the impact weighting in the diagnostic.