11 Key Reasons Why Internal Communication is Important

Effective internal communication is not simply a matter of holding corporate meetings or distributing company newsletters. It is a vital aspect of organizational health that impacts employee engagement, productivity, morale, and many other aspects of an organization’s functioning. But there is strong evidence that leaders and employees have such different views, and this is impacting every level of business operations. 

According to a 2022 Grammarly report on The State of Business Communication, 93% of business leaders believe that “communication is the backbone of business.” But, a much-cited study indicates that 86% of employees identify the lack of effective collaboration and communication as the main cause of workplace failures. How can opinions vary so radically?

A recent 2023 study warns that a lot is “going wrong” in workplace communications right now. According to the study by Axios HQ, ineffective communication is costing U.S. businesses $2-trillion every year. They estimate that this translates to more than $15,000 per U.S. employee in lost productivity alone. Apart from anything else, this shows there’s an urgent need for more effective internal communication and increased employee engagement. 

What can you do to reverse the trend in your company?

In this article, we aim to showcase the significant role of internal communication in modern organizations. We will provide 11 critical reasons why it matters more than ever in today’s corporate world. We will also explore strategies that will help to channel internal communication more effectively. Then we will discuss the importance of implementing superior internal communication software to achieve key benefits. 

The Vital Role of Internal Communication in Modern Organizations

Jim Kouzes and Barry Posner, authors of the bestselling classic, The Leadership Challenge, are explicit about the role of leadership and what it takes to be successful. Good leaders get things done by aspiring and inspiring – and communication is their most powerful leadership tool. 

If you’ve ever questioned why internal communication is important, consider how its absence can cripple the ability to maintain a unified, consistent, and motivated workforce. In today’s fast-paced business environment, an effective internal communication strategy isn’t a luxury, it’s a necessity. It’s what forges a common understanding, empathy, and a sense of belonging among employees. 

Furthermore, the larger the organization, the more dramatic the need becomes. This is because larger organizations typically have more complex and diverse needs, which leads to an increased demand for solutions or resources to address these needs. 

Good, effective internal communication within organizations drives team spirit, fosters innovation, and fortifies brand identity. Understanding and embracing an effective internal communications strategy can turn a scattered workforce into brand promoters, championing your brand vision both in and out of the workplace.

What’s Gone Wrong with Internal Communications?

The Axios HQ 2023 state of essential workplace communications report maintains that one of the major problems is that teams and their leaders are misaligned. Judge for yourselves. 

Asked whether the “essential communications” at their organization were helpful and relevant, 77% of leaders said yes vs only 46% of employees. Similarly, when asked if communications were clear and engaging, 78% of leaders said yes, with only 51% of employees sharing the same sentiment. 

Other issues that the report highlights are that context is often missing, data is frequently incomplete, and insights simply aren’t accessible. 

Based on employee feedback, the report suggests how leaders can improve essential internal communication:

• Offer more insightful and thoughtful ideas
• Cover topics that are more relevant to employees
• Share information and insights more frequently
• Give employees the opportunity to provide feedback
• Be more consistent in terms of regularity
• Use a more engaging voice and tone of voice

11 Critical Reasons Why Internal Communication Matters

Some people may argue that having an effective internal communications strategy is simply about sending company news through an internal newsletter or an internal email. However, it’s a lot more than that. From enhancing the employee experience to improving productivity, internal communications have the ability to create a bridge of understanding and collaboration across any organization. 

For instance, using platforms like internal communications software, social media, and custom email lists, employees can provide insightful employee feedback that informs vital changes in the company’s practices. 

Here are 11 top reasons why internal communication is essential and what it has the ability to achieve.

#1 Enhance Employee Engagement

The relevance of an effective internal communication plan in enhancing employee engagement cannot be overstated. Clear internal communication fosters an environment where employees don’t just know what they’re working on, but also why and how it contributes to the larger organizational goals. A well-thought-out internal communication strategy will make it clear why and how employee input contributes to larger, more important organizational goals. 

Promoting employee feedback through various communication channels such as internal communications channels and tools is invaluable. This approach gives them a voice and makes them feel valued within the company, in this way reinforcing and strengthening their engagement.

#2 Boost Productivity and Performance

Time wasted in poor communication is time that could have been spent on productive endeavors. 

According to Grammarly’s latest The State of Business Communication report, 72% of business leaders think that effective communication can enhance the productivity of their workforce. A lower percentage (60%) think it increases employee confidence. At the same time so-called “knowledge workers” think differently. These are skilled employees who work at the intersection of technology and information, and who are paid to “think for a living.” Only 52% of them believed effective communication increased productivity, and 56% agreed it increased work satisfaction. 

By optimizing workplace communication through tools like an email builder, list management resources, and email analytics, you facilitate clear instruction and feedback channels that minimize misunderstandings and increase productivity. Furthermore, with a refined internal communication strategy, you can keep your employees informed about their roles, responsibilities, and expectations, thereby improving their performance. The aim will be to get knowledge workers on the same page as business leaders. 

#3 Foster Organizational Alignment

Internal communication is critical for aligning employee objectives with organizational goals. Communication platforms such as social media, internal communication tools, and employee emails can be used to reinforce the company’s brand promise, vision, and values. This can also facilitate a sense of common cause throughout the organization. 

The more connected employees feel to the company’s mission and goals, the more dedicated they will be in their roles. Apart from anything else, a well-defined strategy based on meaningful communication is an ideal opportunity to align and outline a company’s cultural values. 

Remember, management and marketing teams see things differently from employees. By focusing on internal communication, you can give them a voice and help to promote organizational alignment. 

#4 Improve Employee Morale and Satisfaction

Neglecting internal communication leads to ambiguous job expectations and increased workplace anxiety. Not only will employees tend to have low morale, as the Harvard Business Review points out, but it will also result in missed goals and lost sales, impacting the bottom line of the organization.

On the other hand, prioritizing regular and clear communication has the potential to uplift employees by making their roles, expectations, and the company’s values clear. 

Providing channels for informal communication such as internal communication software allows the fostering of relationships between peers and management, thereby improving morale. Additionally, listening and responding to employee feedback will generally boost satisfaction and promote a sense of inclusivity.

#5 Drive Innovation through Communication

Internal communication doesn’t merely exist to serve as a conduit for directives. It can also form the bedrock for innovation. A company that fosters free expression and welcomes ideas from its employees is one that encourages innovation. 

“The single most critical element that separates innovation success from failure is communication,” says Alex Goryachev, a chief innovation officer writing for Forbes. In an article titled When Communication Is At Its Best, So Is Innovation, he says that unlike invention, innovation cannot exist without communication. It also requires constant active listening. If you don’t listen carefully you’re not going to grasp what problems can be solved by being innovative. 

Effective internal communication allows each employee, irrespective of their position, to share their ideas and contribute to the company’s progress. This could be achieved through internal communications software or even more traditional, but still effective, suggestion boxes. This kind of employee engagement is a good way to drive innovation.

#6 Mitigate Conflict and Misunderstandings

Conflicts and misunderstandings are inevitable in any organization, but poor communication will exacerbate these problems. At the same time, a robust internal communication plan can help mitigate them. 

Project.co’s Communication Statistics 2023 report highlights that the costs of poor business communication include wasted time, missed messages and employee burnout and stress. The stats are shocking. As a result of poor communication in the business:

• 68% said they’d wasted time 
• 53% admitted they’d missed messages
• 42% acknowledged suffering from stress, fatigue, and/or burnout 
• 35% lost or mislaid files
• 30% reported poor customer experiences
• 12% lost customers to competitors
• 10% lost employees

Timely, truthful, and clear internal communication leads to a shared understanding and alleviates the conditions for gossip and misinformation. Whether this is carried out through periodic employee newsletters, team meetings, or a dedicated internal communications tool, a good communication strategy can minimize friction and promote harmony within the team.

#7 Promote Diversity and Inclusion

Promoting diversity, equity, and inclusion (DEI) at work entails creating a culture that welcomes and respects everyone’s differences. Good internal communication helps show the company’s dedication to diversity. It encourages open conversations and the sharing of diverse ideas. This makes everyone feel valued and empowered to contribute. It’s about making the workplace more innovative, collaborative, and inclusive for everyone.

It shouldn’t come as a surprise to learn that employees aren’t generally impressed with their organizations’ DEI initiatives. A study undertaken by the HR Research Institute in 2022 indicates that only 9% of employees rate their employers’ DEI initiatives as “highly effective.” Similarly, only 9% say equitable pay is a top priority.

According to The Future of Diversity, Equity and Inclusion 2022, organizations that do have successful DEI programs seem to follow similar practices. These include making DEI visible to the workforce, which, of course, requires effective internal communication. 

But the study shows that only 23% of organizations offer communication practices training that is DEI-specific. On the other hand, organizations recognized as being high DEI performers commonly focus on varied communication and training initiatives.  

#8 Support Change Management

Comprehensive internal communications form a crucial pillar in affecting any business transition, be it a change in policy, leadership, or operating systems. Being transparent by keeping employees in the loop helps them understand, accept, and adapt to such changes. This approach also alleviates fears associated with change and fosters trust in the leadership.

Mergers and acquisitions (M&A) can be a huge challenge and often fail due to misunderstandings and conflict that result from poor communications. A primary concern for employees is job security. A main concern for organizations is employee retention. An effective internal communication plan will ensure employee engagement and give management the opportunity to address and resolve anxieties. 

#9 Build a Positive Organizational Culture

Good internal communications play a vital role in building a positive company culture. Regular company updates, celebrating successes, and acknowledging individual contributions boost morale and contribute to a positive work atmosphere. Including elements focused on employee wellness in your internal communications landscape also signifies the importance the company places on its employees’ well-being. It’s also an excellent way to boost company branding and improve its retention rates. 

Current research points to the importance of organizations shifting to a more human-centric approach. For instance, Gartner research shows that by giving employees more control over their work they will become more productive. It’s a complete shift in performance management that is not limited to measuring employee outcomes. It relies on recognizing that:

• employees are people not simply workers
• work is part of life and not a separate entity
• value is derived from emotions, not just attributes

It’ll help increase employee loyalty, improve retention rates, and go a long way to building a positive organizational culture.

#10 Boost Employee Retention

A solid internal communications strategy not only improves the employee experience, but also nurtures an environment where people want to stay and grow their careers. Effective communication and open dialogue breeds trust among the workforce, which in turn leads to an improvement in employee retention. 

A ZenHR report shows that effective employee communication increases employee retention by 4.5 times, compared to businesses that don’t have ineffective business strategy. 

The key is to have an open, healthy line of communication. Communicating openly, honestly, and regularly will promote trust and loyalty and improve morale. This will help to improve employee retention and reduce turnover.

#11 Strengthen Leadership and Employee Relations

Good internal communications ensure that the leaders’ messages, directives, and visions reach the employees in an authentic, concise, and understandable way. This way, effective internal communication highlights the leadership’s transparency and willingness to maintain open lines of communication with employees. This approach fosters trust and strengthens the relationship between leadership and staff members.

Channeling Internal Communication into an Effective Strategy

Understanding why internal communication is important is the first step towards developing a transformative internal communication strategy for any business. Good internal communications ensure that employees are aligned with the brand vision and promise which in turn, contributes positively to the customer experience.

On the contrary, poor communication can hamper productivity and employee satisfaction, thereby creating rifts within the company culture. Engaging with employees via internal communications channels, be it social media or traditional mediums, can provide valuable employee feedback and help the management identify specific areas of employee dissatisfaction.

An internal communications tool such as an internal newsletter or an employee newsletter is a great way to disseminate company news and keep your workforce intact. An email builder can assist with creating custom email lists for varying employment levels or functions while assuring list management, resulting in clear internal communication.

But there’s a caveat, as Tom Gibby, co-founder and CMO of the employee experience technology company, The Bot Platform highlights in an article published by Forbes. In Most Companies’ Internal Comms Are Broken. Here’s How To Fix It, he warns that many large companies believe that their internal communication processes are running smoothly because they are paying for communication tools. But many haven’t analyzed what they need and many more don’t utilize the full potential of the tools that they have.

The Impact of Internal Communication Software

Leveraging internal communication software or internal communications software can ensure consistency, relevancy, and regularity in communication. Investigating email analytics can provide data-driven insights on user engagement, measure effectiveness, and help optimize your communication strategy.

Not only will good internal communications software provide a comprehensive view of the internal communications landscape, but it also has the potential to serve as a critical employee wellness tool. Ensuring effective internal communication and transparent two-way dialogue can significantly enhance the employee experience.

Additionally, organizations can use an internal communication tool to deliver personalized messages to employees directly to their email inboxes. This is a powerful way of fostering a sense of informality and comfort. It also enables the integration of informal communication and professional discussion, making employees feel part of the corporate brand identity. It could easily be a first step in transforming them into active brand promoters.

Customizing an Internal Communication Plan for Your Business

An effective internal communication plan is never a one-size-fits-all solution. It requires an intimate understanding of your business, employees, and company culture. Inclusivity is a crucial element of any internal communications strategy. For this reason, business leaders must ensure that everyone, regardless of where they’re working, is informed and involved.

Furthermore, when considering the diversity of communication channels – from internal emails and employee newsletters to social media platforms – it is essential to tailor messages for different platforms. This ensures not just internal but also effective external communication, and it maximizes employee engagement. 

A thoughtfully designed internal communication plan cultivates a culture of openness. It also encourages proactive discussions and reinforces the brand vision. In essence, understanding why internal communication is important, and how to deploy it effectively will bolster the health and longevity of most businesses.

Improve Your Internal Communication Strategy with Cerkl Broadcast

Cerkl Broadcast provides a holistic approach to employee communications. It modernizes the employee experience and enables internal communicators to share real-time, cross-channel analytics with their teams. High-powered and streamlined, Cerkl software also empowers team leaders to send targeted communications to preferred communication channels. 

Additionally, Cerkl Broadcast software is secure and compliant, which is a vital element of any top-quality communication software.

How Can Cerkl Broadcast Help You? 

The resources Broadcast offers are versatile and adaptable. Here’s how they will help you with the 11 issues we suggest you address to ensure your internal communication strategy is effective:

1. Cerkl Broadcast is ideal for boosting employee engagement. Because you don’t always want to engage the full quota of employees, the platform allows you to target specific employees or groups. 
2. Email is a great way to boost productivity and performance. The Cerkl Broadcast email platform simplifies email creation and streamlines communications. 
3. The platform has everything you need to align employees with organizational goals including email. Broadcast Email Blasts are a great way to achieve this. 
4. Company newsletters are an ideal way to improve company morale and increase satisfaction. Broadcast will enable you to create a unique newsletter template that you can use for internal communications. You can also use internal newsletters to endorse your brand and ultimately increase productivity.
5. Organizations can drive innovation by addressing and utilizing employee feedback from communications sent out. Email Blasts are great for this too. 
6. We’ve said that mitigating conflict and misunderstandings is essential. A winning way to do this is with newsletters and other internal communications. Broadcast holds the key. 
7. You can use Cerkl Broadcast to power DEI initiatives by sending the right message to the right people.
8. During an M&A, clear, concise email communications will keep employees informed.
9. The options Broadcast offers for internal communications will allow you to provide updates, share successes, and provide an inclusive platform that will lead to a positive company culture. 
10. You want your valued employees to stay. Broadcast will help you maintain constant contact that will make them feel valued. Again, the ability to send messages to targeted individuals and groups makes all the difference.
11. In addition to various kinds of internal communications. Broadcast helps you gauge the satisfaction levels of employees with employee communication surveys. This is a vital step in improving morale and motivation.

What’s Next?

Are you still asking the question, why is internal communication important? If you can see how important it is, have you assessed the effectiveness of your internal communication strategy? Do you focus on employee engagement? Are you still weighing up your needs and trying to assess them? 

We know how difficult it is to work through all these issues. So, we’ve done the research for you and we’ve prepared an in-depth whitepaper that will give you an in-depth overview of the importance of internal communications. Don’t miss the opportunity to access The Importance of Internal Communication today.   

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