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Poor communication costs businesses £2.7bn

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13th Aug 2013
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Failing to tell staff about the benefits on offer is costing companies £2.7bn every year through increased staff turnover and sickness absence, according to new research from Cass Business School.

Employee retention and engagement is lower among staff who are unaware of the benefits on offer, and as a result are more likely to call in sick or leave the company altogether, the research commissioned by income protection specialist Unum also found.

The cost of replacing a member of staff equates to a year’s salary due to recruitment and training costs, combined with lost productivity. For companies that fail to communicate about employee benefits this costs £1.5bn a year, rising to £2.7bn when higher workplace absence costs for this group are included.

A typical organisation with 1,000 employees that offers good benefits but fails to communicate them, spends £470,000 a year more on staff turnover and sickness absence than those companies that have comparable benefits packages, but have good communications practices, the research also found.

The research used data from the government’s 2011 Workplace Employment Relations Survey.

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