Article

January 27, 2025

Why is Internal Communication Important for Your Business?

Jade Burens

SEO & Growth marketer

8 minute read

Good internal communication ensures clarity for every team member in the organization. By utilizing the right tools and fostering a positive culture, internal communication helps everyone perform better. But what is effective internal communication, and how does it work? This article reviews the value of internal communication and how transparency, communication tools, and feedback lead to success.

What is Internal Communication?

Internal communication shares information about the company, utilizing various tools and platforms so employees can perform their roles well. It keeps people informed and fosters strong team relationships.

Internal communication’s purpose is to provide an effective flow of information between an organization's departments and team members. This includes the use of tools like intranets and email systems to enhance communication both up and down the management/employee chain. It also works among employees who are interacting socially and collaboratively within the company.

Solid internal communication nurtures company culture and builds employee engagement. Utilizing the right tools for sharing content and fostering relationships, employees who feel well-informed become a company’s most credible ambassadors externally. Conversely, without effective internal communication, they may become its fiercest critics.

Internal Communication Types and Channels

Workforce demographics constantly change, highlighting the need for different communication channels and tools. Whether employees work in teams at the office or remotely, there is an advantage in utilizing both internal communication in-office and through digital tools to enhance collaboration.

The sharing of information can be verbal or electronic through systems such as the company intranet, email, and various tools. The beauty of an intranet is that it’s available 24/7, and employees have access to it from any location with an internet connection, facilitating better sharing of content and fostering team relationships.

What are the types of internal communication? There are five main sources of internal communication:

‍Management – who dispense information such as strategies, company results, internal and external information, and other important general information. Tools like video updates and leadership blogs play a crucial role in this communication.

One additional management tool to note is the creation of leadership blogs, which allows the CEO and other senior figures to share news directly with employees and receive feedback.

‍Team – communication within teams helps achieve the same end goal through collaborative tools and regular meetings.‍
Face-to-face – briefing individuals on tasks and situations helps build strong relationships and a cohesive culture.‍
Peer – informal chats between colleagues to share information foster a supportive environment and enhance team development.‍
Resources – the intranet, email, social media, messaging tools, video calls, telephone, and even newsletters can be shared digitally to highlight the latest news and valuable content. These tools support the sharing of information and recognition within the team.

Each of these types uses specific channels to achieve its internal communication goal:

‍Verbal – the passing of information by word-of-mouth, strengthening team relationships.‍
Electronic – how most information in writing is shared using tools like email and intranet platforms.‍
Paper – a way of communicating using posters and graphics to share content visually.

Source: https://www.lumapps.com/internal-communication/workplace-internal-communication-tools/

10 Reasons Why Internal Communication is so Important

Recent research from Grammarly and The Harris Poll estimates that poor communication costs businesses approximately $12,506 per employee every year. Business leaders estimate they lose 7.47 hours (almost a full workday) per week as a result of ineffective internal communications. These are consequences that not only disrupt continuity, but also represent a significant source of lost time, productivity, and of course, money.

A strong and well-supported internal communications strategy, supported by the right tools, can translate into significant cost savings. In a company of 5000 people, 5 minutes saved daily through efficient communication tools translates to over 2000 hours of time recovered for the organization in the course of a week. This is a staggering amount of time and money saved through better communication practices!

Here are 10 key reasons that highlight the importance of internal communication:

1. Boosts employee engagement and productivity

Start the right conversations across your organization and bring leaders, partners, and employees together to focus on internal strategies that boost engagement and productivity. Utilizing tools like video conferencing and social platforms can enhance team collaboration.

According to McKinsey, organizations that manage to keep employees connected through the right tools and strong relationships tend to see their productivity rise. Ultimately, it is all about creating the communication touchpoints that generate the opportunities to discuss projects, share ideas, network, mentor, and coach.

A powerful intranet solution enables critical communication between staff and leadership where employees feel encouraged to submit their ideas and opinions. This makes them feel valued and recognized, leading to increased engagement. When employees are actively engaged, they are motivated to work harder and deliver better quality work. It also contributes to organizational development and cohesion. As much as it is a tool to reach out to clients and get work done, in the age of hybrid work, your company's intranet is the preeminent tool to help weave and foster a committed, enthusiastic, and productive company culture.

With a host of powerful AI-driven productivity features, LumApps makes collaboration easier and more efficient. A Digital HQ with a data-rich and ultra-personalized interface, your enterprise intranet is where virtual and distributed teams can share knowledge effectively, stay up to date on the latest developments, and make more informed decisions.

2. Promotes the supply of information

Another benefit of internal communication is that it delivers the right message to the relevant people using the appropriate tools. Modern technology tools mean most of us connect at some point during the day, particularly at work. Many employees have access to a company intranet and email systems, which they can use to connect when it suits them and keep up to date with relevant communications.

Effective internal communication also ensures employees don't suffer from information overload. Utilizing tools for better content sharing and streamlined communication can avoid the need to spend hours sending and reading emails, messages, and comments.

3. Improves employee experience

Organizations can use internal communication tools to improve the employee experience. This helps maintain employee retention, as working for a company that cares about its people sends out a positive message. Internal communication can be used to advertise:

company events
sports club membership
free healthy drinks and snacks
free cab service for employees that work late
the introduction of a chill-out area

Unless everyone knows about these benefits through effective communication tools, they won't be able to take advantage of them. This is why the internal communication role is important for both business and leisure time.

4. Sharing goals and objectives

One of the best ways to communicate the roadmap of your business is by leveraging your internal communication platform. Sharing goals and objectives through the right tools and consistent content flow helps employees feel well-informed and capable of taking actions.

A clear roadmap also emphasizes company strategy so everyone in a team or department has a defined view of where the organization is heading. It gives a single, clear reference point that summarizes the overall objectives. This clarity can promote confidence in making decisions and carrying out roles.

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5. Improves employee alignment

According to a study conducted by IBM, 72% of employees don’t understand their organization’s strategy, which is a result of poor communication. Make sure your employees understand your strategy through clear internal communication tools and effective content sharing.

Internal communication can be used to align and guide teams on how to prioritize and distribute effort. Clear internal communication in the work environment ensures employees are aware of deadlines and can set time schedules to achieve them. This focus also emphasizes how a smaller project fits into the overall picture and why a specific deadline is important. For example, the installation of new software for the HR department may need to be implemented to capture a seasonal trend.

Clarifying communication goals, supporting and developing your people, and choosing the right tools and technology are critical concerns when trying to improve your company's approach to communication and connectivity.

→ Read more: How to improve Internal Communication?

6. Drives action

Internal communication promotes both internal and external action by leveraging tools like email and video platforms. For example, it can authorize people to go ahead with a task, ask them to communicate with suppliers, or collect opinions via the number of likes for a new product on an intranet page. Effective tools ensure that information is communicated clearly and efficiently.

People are more inclined to respond if they just have to press a button, rather than write a long response. This especially applies to the younger generations, who’ve grown up in the digital era and prefer using social and digital tools for communication.

7. Brings people together in difficult situations

In times of crisis, internal communication tools like video calls and instant messaging become invaluable. Being able to communicate fast and easily with the right people in the organization can reduce stress and get things done efficiently.

Another advantage of internal communication during a crisis is that it can help mitigate rumors. Nothing spreads faster than office gossip, and accurate communication from management can prevent negative situations. This also reinforces external communication, as an organization’s reputation can easily be damaged by false rumors.

8. Allows for change

Technology is fast-moving, and competition is fierce. Companies have to stay ahead by using effective internal communication tools to respond quickly to climatic, environmental, and unexpected situations.

Strong internal communication can mean the difference between averting or suffering a crisis.

This could range from a retail store reducing the price of bread in every store in the state to match the competition, to warning staff in the travel industry of bad weather. Utilizing the right tools and fostering strong team relationships through internal communication can make this difference.

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9. Crosses borders

The importance of communication in international business can be seen in global organizations. Employees may be working in different time zones and only have a limited window to hold video meetings or telephone calls. Effective internal communication helps overcome these challenges by using tools that assist understanding, particularly if people speak different languages.

It’s also important to consider culture when communicating with colleagues in different countries. The tone of the communication should respect any cultural differences in terms of attitude to work, behavior, and customs, fostering a global team culture.

10. Promotes the brand

According to Gartner Communications, “Employees who feel well-informed become a company’s most credible ambassadors externally, while they may become its fiercest critics if they do not.”

Positive external communication is the key to strengthening an organization’s brand. When employees talk about the company and share information through social media and internal tools, they become advocates. This form of brand-building can significantly impact an organization’s success and is driven by clear internal communication that encourages employees to share content.

Internal Communications – Measurement to Mastery

Enhance your internal communication strategy and learn the impact of communication done right with the help of effective tools and strategies.

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Internal Communications – From Measurement to Mastery

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How to Build an Effective Internal Communication Strategy

With people working in teams at the office, at home, or on the road, keeping your hybrid, digital-first workforce on message and on mission is critically important. At the same time, leadership has to keep top of mind the importance of choosing technology tools that are versatile and powerful enough to support their internal communication strategy.

All organizations, regardless of size, should have a well-crafted internal communication plan. What are the functions of an internal communication plan and how do you create one?

Here are some key steps you should include:

Analyze the organization’s current situation – identify where communication tools are already effective and where they can improve.
Define communication goals and objectives – determine how internal communication can help your team achieve better collaboration and productivity.
Identify your audience and segment it accordingly – define groups by department, location, team roles, skills, generation… Choose the categories that are appropriate for your business.
Outline your core messages – clearly and concisely, so everyone understands them.
Specify your tactics and communication channels – such as Gmail, Slack, Trello, video calls, and news feeds.
Create an internal communication calendar – and keep it up to date to ensure consistent sharing of content.
Determine key performance indicators for tracking results – measuring the effectiveness of internal communications helps to define both short and long-term improvements.

Analyze the organization’s current situation – identify where communication is already good and where it can improve.

Define communication goals and objectives – what are the advantages of internal communication for your company?

Identify your audience and segment it accordingly – define groups by department, location, skills, generation… Choose the categories that are appropriate for your business.

Outline your core messages – clearly, so everyone understands them.

Specify your tactics and communication channels – such as Gmail, Slack, Trello, news feed…

Create an internal communication calendar – and keep it up to date.

Determine key performance indicators for tracking results – measuring the effectiveness of internal communications helps to define both short and long term improvements.

A well-crafted communications plan will support your organization in all internal initiatives and teach you to maintain consistent employee communications. By taking the steps above and understanding the importance of an effective internal communication plan, supported by the right tools and fostering a strong culture, you’ll move closer to a more collaborative and engaged workplace.

A solution like LumApps’ intranet comes with employee data layer analytics to offer valuable insights about the success of your internal communication efforts. It makes it easy to synchronize information from various channels, devices, and applications and generate a secure, holistic view of each individual employee. Harnessing the power of AI, the employee data layer also helps deliver personalized communication and enables tailored experiences throughout every stage of the employee journey.

To broaden the scope of discussion about the indispensable role of internal communication in business, it is essential to pay much more attention to the subtleties of creating an environment where communication is barrier-free. Therefore, not only the importance of internal communication but also the improvement of these strategies and tools is crucial.

Addressing Common Internal Communication Mistakes and Issues

Here are some of the most common issues :

Lack of a coherent internal communication strategy, leading to fragmented and inconsistent messaging.
Over-reliance on emails, ignoring the potential of other communication tools.
Neglecting the power of face-to-face interactions or video calls, which are essential for building strong team relationships.
Underusing internal communication software like company intranets, which can enhance content sharing and collaboration.
Failing to encourage two-way communication channels for feedback and ideas, hindering employee recognition and development.
Lack of a coherent internal communication strategy, leading to fragmented and inconsistent messaging.
Over-reliance on emails, ignoring the potential of other communication tools.
Neglecting the power of face-to-face interactions or video calls, which are essential for building strong team relationships.
Underusing internal communication software like company intranets, which can enhance content sharing and collaboration.
Failing to encourage two-way communication channels for feedback and ideas, hindering employee recognition and development.
Recognizing and rectifying these issues is the first step towards cultivating a more engaged and informed workforce by utilizing the right tools and fostering a positive culture.

Leveraging Common Internal Communication Tools

Nowadays, corporate communication tools extend beyond traditional emails and memos. Collaboration tools and platforms, such as Slack, Microsoft Teams, and Zoom, facilitate real-time communication and collaboration. Company intranets serve as centralized hubs for company news, resources, and social interaction. Additionally, social media and employee experience platforms offer innovative ways to engage employees, share achievements, and foster a sense of community through effective content sharing and team recognition.

Measuring the Effectiveness of Workplace communication

Key Performance Indicators (KPIs) are instrumental in gauging the success of internal communication efforts. Metrics such as :

engagement rates on the company intranet,
open and click-through rates of internal newsletters via email,
employee feedback and survey results,
participation rates in internal events or forums,
and the frequency and quality of two-way communication can provide valuable insights.
engagement rates on the company intranet,
open and click-through rates of internal newsletters via email,
employee feedback and survey results,
participation rates in internal events or forums, and the frequency and quality of two-way communication can provide valuable insights.
…

These KPIs help organizations identify areas of strength and opportunities for improvement in their internal communication strategies by using the right tools and fostering strong team relationships.

Enhancing Internal Communication for a Positive Employee Experience

How to Improve Employee Communication Strategies and Tools

To elevate internal communication, organizations should focus on integrating diverse communication channels and tools tailored to their workforce's needs, promoting a culture of openness and transparency, and leveraging technology to facilitate seamless interaction. Implementing regular employee experience surveys and feedback mechanisms ensures that employees' voices are heard and valued. Furthermore, training leaders and managers in effective communication practices can significantly improve the dissemination of information and foster a culture of engagement and recognition.

Importance of Barrier-free Communication

Barrier-free communication enhances the overall employee experience by ensuring that all team members, regardless of their role or location, have access to the information they need to perform their jobs effectively. It promotes inclusivity, reduces misunderstandings, and accelerates decision-making processes. Companies that prioritize clear, concise, and open communication channels witness higher levels of employee engagement, satisfaction, and retention.

Corporate communication lies at the heart of a thriving work environment, acting as the linchpin that connects the dots between individual contributions and organizational goals. By addressing common challenges, leveraging modern communication tools, and measuring the effectiveness of communication strategies, businesses can create a conducive atmosphere for collaboration, innovation, and development. As we navigate the complexities of the modern workplace, the emphasis on good team communication strategies becomes increasingly evident, underscoring its critical role in enhancing employee experience and driving business success.