The second annual “State of Business Communication” report examines how businesses can increase productivity and profitability in the face of a shifting labour market.

The second annual Grammarly Business “State of Business Communication: The Path to Productivity, Performance, and Profit” report, which reveals that communicating effectively at work is a growing challenge for U.S. businesses and employees, was released today by the company that powers effective communication for over 50,000 teams. The study, conducted in collaboration with The Harris Poll, demonstrates the growing negative impacts of poor communication on a variety of factors, including stress, confidence, and work satisfaction.

As firms face ongoing market challenges and workplace transformation, effective communication is crucial to meeting new business, consumer, and employee needs. According to the research, we are communicating through more channels than ever, yet it is becoming less effective. Workers spent 18% more time writing to one another year over year (YoY), while leaders are employing more asynchronous communication (communication that is not in real time or does not expect immediate responses). Yet over the same time period, leaders perceive a 12% decline in written communication efficacy, which they attribute to “decreased productivity” (+15% YoY).

“The research is clear: Leaders who shrug off the massive impact of poor communication on their bottom line will lose”, “Last year, we found that ineffective communication costs U.S. businesses up to $1.2 trillion annually, or $12,506 per employee. This year’s report shows the problem is getting worse with greater impact on everything from operational efficiency to employee and customer satisfaction. At a time when the stakes are critically high, leaders who invest in empowering efficient, consistent communication across their organizations will see results and profits climb.”

Matt Rosenberg, Grammarly’s Chief Revenue Officer and Head of Grammarly Business

The survey of U.S. business leaders and knowledge workers highlights the rising connection between communication and firm performance in a shifting environment by highlighting the state of communication trends, challenges, and technologies. Other conclusions are as follows:

The majority of workers (58%) still wish they had better tools to be more successful, notably Gen Z (63%), Millennials (65%), Tech (68%), and ESL (71%) respondents. Employees now communicate via a variety of platforms for more than 70% of the workweek.

The negative effects of poor communication are felt by more than 80% of business leaders (84%), with decreased productivity, missed deadlines, and higher costs ranked as the top three effects.

Due to inadequate communication, workers report more stress (+7% YoY), and the majority of leaders (60%) and over half (45%) of employees claim that personal relationships have suffered in the hybrid workplace.

Depending on communication, increase revenue and results—or sacrifice them: Better internal and external performance is a result of effective communication, with improved productivity (72%) and customer satisfaction (63%) ranking at the top of leaders’ lists of results. 69% of respondents that indicate improved customer satisfaction claim that the improvement is 10% or more. Nonetheless, most executives (68%) report losing at least $10,000 or more in revenue in the previous year as a result of inadequate communication; 13% even record losses of $50,000 or more. One in five also claim that it damaged the trust or reputation of their brand.

Put quality and tone first for effective communication: Executives (72%) and employees (53%) are both becoming more conscious of the tone of messages recently. Millennials and Gen Zers are especially inclined to produce higher-quality work based on a positive tone, according to the majority of workers (62%) who claim that a happy tone causes a faster reaction. Yet, the surge in written and asynchronous communication makes it more difficult to understand tone, and 63% of workers say they spend too much time attempting to communicate ideas clearly.

Consider your efforts in enhancing teams’ skills and capabilities: Leaders focus spending money on extra platforms and processes rather than giving teams the tools they need to communicate more effectively where they already operate. They regard the communication platform as “extremely important” (66%), but just 36% of employees agree, placing it last below factors like content, tone, and empathy. Although eight out of ten CEOs are considering using AI solutions to help their workforce become more productive and successful, improving communication is not one of their top three investment priorities (88%), which are instead better procedures and strategies.