Article

November 6, 2024

Why is Internal Communication Important for Your Business?

Milton Herman

8 minute read

What is Internal Communication?

Internal communication shares information about the company so employees can perform their jobs well. It keeps people informed.

Internal communication’s purpose is to provide an effective flow of information between an organization's departments and colleagues. This applies both up and down the management/employee chain. It also works among employees who are interacting with each other in the company.

Solid internal communication nurtures company culture and builds employee engagement.

Internal Communication Types and Channels

Workforce demographics constantly change, which highlights the need for different communication channels. Wherever employees work and whatever they do, there is an advantage for both internal communication in the office and remotely.

The sharing of information can be verbal, or electronically through systems such as the company intranet. 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.

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.
Team – between colleagues who work together to achieve the same end goal.
Face-to-face – briefing individuals on tasks and situations.
Peer – informal chats between colleagues to share information.
Resources – the intranet, email, social media, messaging, video calls, telephone.

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

Verbal – the passing of information by word-of-mouth.
Electronic – how most information in writing is shared.
Paper – a way of communicating using posters and graphics.

The Internal Communication Plan

An internal communication plan serves as a roadmap that motivates employees to take action through sharing information. The plan encourages enhanced collaboration as it makes goals clear.

Tactics are part of the internal communication plan and should point out the specific initiatives and actions needed to achieve your business goals.
The technology or method used to deliver these tactics should match the target audience, for example, connecting through Slack to update on a project in real-time.

Checklist: How to Build a Communication Strategy

Change the way you communicate in a few easy steps - it's time to go from reactive to proactive!

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 work day) 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 can translate into significant cost savings. In a company of 5000 people, 5 minutes saved daily 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!

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.

According to McKinsey, organizations that manage to keep employees connected tend to see their productivity rise. Ultimately, it is all about creating the communication touch points 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 listened to, which leads to engagement. When employees are actively engaged, they are motivated to work harder and do better quality work on the job.. It also contributes to organizational performance 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 of the benefits of internal communication is that it delivers the right message to the relevant people. Modern technology means most of us connect at some point during the day, particularly at work. Many employees have access to a company intranet, which they can connect to when it suits them and keep up to date with relevant communications.

Effective internal communication also ensures employees don't suffer from information overload. It avoids the need to spend hours sending and reading emails, messages, and comments.

3. Improves employee experience

Organizations can use internal communication 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 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. Giving an overview and explaining your goals through a consistent information 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.

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 training 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. 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. It can take seconds to communicate a piece of information clearly and effectively.

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.

7. Brings people together in difficult situations

In times of crisis, internal communication is a valuable tool. Being able to communicate fast and easily with the right people in the organization can reduce stress and get things done.

Another of the advantages of internal communication in a crisis is that it can alleviate rumors. Nothing spreads faster than office gossip, and accurate communication from management can prevent negative situations. This can also feed through to external communication, as an organization’s reputation can easily be damaged by rumors that aren't true.

8. Allows for change

Technology is fast-moving. Competition is fierce and companies have to stay ahead of the competition to be successful. Why is internal communication important in this respect? Because it allows businesses to respond fast 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. Strong internal communication can mean the difference between averting or suffering a crisis.

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 assists understanding, particularly if people speak different languages.

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

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 reputation. When employees talk about the company and share information through social media they become advocates. This form of brand-building can impact an organization’s success and results from clear internal communication that encourages employees to share information.

Internal Communications – Measurement to Mastery

Enhance your internal communication strategy and learn the impact of communication done right.

How to Build an Effective Internal Communication Strategy

With people working 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 solutions 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 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 teaches you to maintain consistent employee communications. By taking the steps above and understanding the importance of an effective internal communication plan 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 the improvement of these strategies and tools as well.

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,
Neglecting the power of face-to-face interactions or video calls,
Underusing internal comms software like company intranets,
And failing to encourage two-way communication channels for feedback and ideas are common pitfalls.

Recognizing and rectifying these issues is the first step towards cultivating a more engaged and informed workforce.

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.

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,
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.

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 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.

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 devices, and measuring the effectiveness of communication strategies, businesses can create a conducive atmosphere for collaboration, innovation, and growth. As we navigate the complexities of the modern workplace, the emphasis on good staff communication strategies becomes increasingly evident, underscoring its critical role in enhancing employee experience and driving business success.

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