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Why does internal communication matter?

There’s a great line in Priya Bates and Advita Patel’s book, Building a Culture of Inclusivity, where they state that “internal communication is the backbone in any organisation, large or small”.

This is a great way to look at internal communication. Communication supports the organisation as the spine supports a body; it creates alignment, it holds everything together, it gives it shape and structure. Without it, you’re going to have a bit of a mess.

Smart organisations are coming around to the realisation that internal communication is more than an internal postal service or a team that produces pretty powerpoint slides; internal communication is a strategic driver of business outcomes.

Here’s a few solid reasons why internal communication matters. You may find it useful to keep a few of these points up your sleeve the next time your CFO wants to cut your budget.

Good communication saves money Axios reported that ineffective communication costs organisations $15,000 per employee EVERY YEAR in the United states through lost productivity and inefficiency. Through investing in good communication where employees have access to the information they need when they need it, organisations can save huge sums of money each year.

Internal communication creates alignment Every CEO wants their employees crystal clear on the vision and mission, with a solid understanding of the organisational strategic goals. But how many organisations invest in internal communication to achieve this? The IoIC Index Report 2023 found that 1 in 4 UK workers neither understand nor believe in their employer’s strategy – a fairly staggering statistic. Effective communication can align employees around what matters and get them all rowing in the same direction. Music to every CEO's ears.

Communication is a culture builder Communication plays a significant role in reinforcing organisational culture, by communicating clearly and regularly about ‘how we do things here’ (in other words, communicating the core values and what they mean for employee behaviour). Organisational culture is the set of shared values, beliefs, attitudes and behaviours that shapes how employees behave, make decisions, interact with each other and approach their work.

Communication is essential for transformation and change The world is changing all the time and employees need to be helped through planned transformation programmes and also unexpected periods of change. Internal communication can ensure that employees know what is happening, what the changes mean for them and they understand the rationale for the changes. They're also clear on what's expected of them and what they need to do.

Better communication is correlated with improved financial performance Organisations with strong internal communication practices produce superior financial results than those that don’t. Communication can produce higher return to shareholders and increase in market value. This just makes good business sense.

Communication lowers employee turnover The number of people voluntarily quitting their jobs keeps rising every year. Employee turnover is top of mind for CEO, COOs and CPOs everywhere. And yet they often miss the fact that investing in internal communication is likely to lower your employee turnover rate. The IOIC Index 2023 found that employees’ intent to quit their job within the next 2 years is 13 points lower among those who work for an organisation with an internal communication team in place.

It saves money AGAIN… because attrition is expensive When people quit their job, it costs a lot of money to replace them especially if they leave within the first 12 months. According to the Work Institute, it costs about one-third of an employee’s base salary to replace them successfully. We know that communication can reduce the level of turnover, so here again is evidence that communication can be a cost-saving measure for organisations today.

Think about your own CEO, CFO or maybe even your direct manager. What's important to them? What do they care about? Which of the areas above can you leverage in order to show the value of your work and a solid reason for increased investment in internal communication?


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