The ROI of effective frontline employee communication

The benefits of frontline employee communication run deep. Really deep. 

Keeping your frontline workers well-informed and well-trained goes way beyond safety and execution—it impacts your bottom line in many more ways than you’d think. 

But it’s not always easy. In our latest research, 37% of frontline respondents said that fractured communication was very or extremely challenging to their day-to-day work. Why? One issue might be frequency. Our research found that the only communication type regularly shared daily with frontline workers is shift and scheduling updates; all other communication types were more commonly shared once a week or, in the case of recognition and cultural initiatives, once a month. Another issue is the fractured nature of frontline communication, thanks to a dangerous concoction of ad-hoc channels and indirect cascades. Information is coming to workers through a range of channels and sources, including peers, direct managers, head office and automated sources. 

And perhaps most worrying is the disconnect on whether communication channels are effective at all; while 65% of corporate leaders believe their communication is effective, only 35% of frontline workers agree. 

Ready to talk more about the ROI of effective communication? Here are 7 benefits of effectively communicating with your frontline employees.

1. Lower employee turnover

One of the most common challenges facing frontline organizations is employee turnover. According to the U.S. Bureau of Labor Statistics, the retail and hospitality industries consistently have the highest “quit rate.” Depending on the industry, turnover rates can be as high as 300%. Yikes.  

And it goes without saying that high turnover can take a huge chunk out of your profits. One estimate puts the cost of losing a single retail employee at over $3000, while this research found the cost of losing a hospitality worker is between $3,000 and $13,000. 

There are several reasons why frontline turnover is such an issue—and salary isn’t always at the top of the list. Frontline workers want a sense of purpose, clear information and a company that listens—all of which has traditionally been lacking at frontline organizations, where communication can be somewhat of a broken telephone.

That lack of investment in the frontline employee experience is a mistake. In Harvard Business Review, Achyuta Adhvaryu, Teresa Molina and Anant Nyshadham outlined their research on frontline worker turnover, where they found that being heard matters way more than wage hikes: “In a context where turnover is high and workers do not typically have many opportunities to communicate their concerns to management, providing workers with voice can be a simple yet powerful way to keep workers from quitting.”

2. Less workplace accidents

Financially—and this is really a no-brainer—there are a number of reasons why you want to avoid workplace accidents among your frontline workers. There’s the medical and administrative expenses, and loss of labor, of course, but according to the National Safety Council, there’s also time lost by workers indirectly involved; cost of time to investigate and report on injuries; damage to work property and vehicles; and overall productivity loss. The council estimates the cost of workplace injuries in the U.S. to be over $170 billion a year. 

To put it another way, this study found that for every dollar an organization needs to spend on direct costs around workplace incidents (like the worker’s compensation claim), there’s another $2.12 spent on indirect costs (like work stoppages, fines, legal council, additional hires and increased worker’s compensation premiums). However, the same study found that every dollar spent on improving workplace safety had an ROI of $4.41.

Enter employee communication. With a proper strategy in place (like bite-sized updates and nudges sent straight to employees’ phones), safety training becomes an ongoing process that keeps frontline workers engaged and well-informed on protocols and daily tasks. 

3. Higher profitability 

Yes, frontline employee communication boosts engagement, but employee engagement isn’t just about happiness. Frontline workers armed with the right information are more engaged about their job—and more productive and profitable as a result. Gallup explains it best in their State of the American Worker report: 

“Organizations falter in creating a culture of engagement when they solely approach engagement as an exercise in making their employees feel happy . . . Organizations have more success with engagement and improve business performance when they treat employees as stakeholders of their future and the company’s future. They put the focus on concrete performance management activities, such as clarifying work expectations, getting people what they need to do their work, providing development and promoting positive coworker relationships.”

In other words? To make more money, you need to give your frontline workers the information they need to make you more money. 

4. Better CX and customer loyalty

Want happier customers and loyal guests? Of course you do. New customers are expensive, and repeat customers are more valuable. Back in 1990, Bain & Company startled executives by reporting that increasing customer retention rates by 5% could increase profits by 25% to 95% (HBR compared the numbers against e-commerce trends 10 years later with similar results). Today, the value of customer retention still can’t be overstated—and the cost of losing customers is a serious concern.

In today’s dynamic landscape, particularly in industries like retail, integrating an omnichannel approach has become paramount. As brick-and-mortar and ecommerce platforms converge, it’s imperative for organizations to ensure that their frontline workers are equipped to meet customers at their level of expertise and knowledge, to deliver a human-centric interaction that’s informative and valuable. 

5. Fewer costly mistakes… 

Yes, mistakes can be learning experiences. But especially in industries like retail, food service and hospitality, mistakes can have a huge impact on customer loyalty and revenue—not to mention workplace safety. 

What makes it even more frustrating is how many mistakes are easily avoidable by standardizing tasks, and—you guessed it—clearly communicating with your frontline workforce. That means sharing easily-digestible information and then finding ways to test retention and identify knowledge gaps on an ongoing basis. It also means leveraging upward feedback to hear directly from your frontline on what’s working—and what’s not—so you can keep processes as regulated as possible. 

6. …and more valuable ideas

Speaking of upward feedback, one of the most profitable benefits of frontline employee communication is that amazing ideas find their way from your workforce back up to head office—and to other locations. After all, if one location discovers an easy way to improve the customer or guest experience through a tweak in a display, or boosts sales through a simple upsell, wouldn’t you want the rest of the company to leverage that learning? 

There’s another benefit to sharing great ideas—and that’s employee engagement. We’ve already established that employees want to be heard, and that line of communication can be particularly fragmented in frontline industries, where there’s often no way for employees to communicate with head office. But when you find ways to connect your frontline with head office, and offer ways for your various locations to communicate, share ideas and voice concerns, you’re opening the door to way more great ideas and best practices. 

Take Southeastern Grocers. When the U.S. grocer started using Axonify to train and enable its 35K associates, they quickly uncovered an additional value in being able to communicate directly with its workforce. 

“For us, it’s very important to be connected with our associates and to listen loudly, ask for feedback. Of course, you are always wanting and expecting positive feedback, but even if it’s not positive, it is constructive feedback,” says Claudia Lara, Sr. Manager of Content Design and Development at Southeastern Grocers.

“Take an action, just listen and understand what the needs are and what are the gaps that you need to fill. Associates are extremely open and very generous when they are sending their feedback. And if you are not receiving any feedback that also tells you that maybe they are not as engaged as they should be. So, if you don’t receive any feedback, make a change.”

7. Increased operational agility to change quickly 

Never before has operational agility been so important to organizations; the ability to respond quickly to changing local, national and global conditions means something a lot different than it did a few years ago. And the role of employee communications has been a huge differentiator for companies looking to accelerate change to stay relevant (or even just open) during a crisis. 

The pandemic may be in the past, but the need for agility remains strong, with workplace violence, theft, customer volatility and even environmental factors still transforming the frontline world of work like never before. So companies will need to stay nimble and adaptive to this changing world. And a well-informed workforce will be an integral piece of that puzzle. 

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The benefits of frontline employee communication go far beyond these numbers and advantages. Giving your frontline workers the information and training they need to truly thrive will boost your business in more ways than we can count.