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Here’s why you should invest in professional internal communication

Internal communication (IC) is underestimated in many companies. Medium-sized companies in particular neglect the topic. One reason for this could be that the benefits of professional IC are difficult to quantify and management is reluctant to invest if the ROI (return on investment) is not obvious. Three arguments why every euro invested in internal communication pays off:

1. Professional IC increases efficiency

Wherever people work together, there is communication. In small companies all employees can exchange information directly. But when 500 or more people are involved, unstructured personal communication reaches its limits. If there are different locations, complex issues, home office or special challenges added to the mix, the limit can be as high as 100. When there is no official channel for internal communication, the next best sources of information are meetings, personal conversations, and office grapevine. Organising information this way can be extremely time-consuming and inefficient.

The following calculation example illustrates this: 500 people are employed in a company. There is no efficient IC. To obtain information, all employees spend one hour more per week on informal exchange than they would in a comparable company with professional communication. Doesn’t sound like much? But it is! At an average cost of 40 euros per working hour in German industry[1], one hour of office communication per person per week costs 920,000 euros per year. Of course, it also takes time to get information at events, via newsletters, magazines or the intranet. But this information is correct, serves the company’s goal and ideally has a positive effect on corporate culture and employer image. Rumours and false information, on the other hand, cause confusion and dissatisfaction, lead to demotivation and can undermine the goals of the organisation.

2. IC helps to reduce personnel costs

Dissatisfied employees are expensive in several ways. Lower motivation leads to subdued commitment, reduced willingness to perform and often to resignation. High turnover is an expensive matter: according to a survey[2], the average cost per dismissal is around 14,000 euros. These include, for example, severance payments, recruiting and training new colleagues. If professional internal communication helps to prevent only three avoidable resignations per year, this means a possible saving of about 42,000 euros for our example company. Thus, it is more sustainable to invest in the retention of existing employees. For instance, by informing them comprehensively and appreciatively – before they learn about internal issues from the press.

And just to remind you: satisfied employees are also less likely to be ill. According to estimates by the Handwerksblatt (a German business newspaper), a sick employee costs a medium-sized company around 250 euros per day.[3]

3. Internal communication promotes innovation

Competitive pressure is increasing, and most companies are forced to constantly adapt to changing market conditions. However, according to studies, small and medium-sized enterprises in particular find it difficult to develop and implement innovations.[4] How can professional IC help them?

Internal innovation communication creates the framework conditions for greater innovative capability, for example by conveying information and knowledge. But also by contributing to an innovation-friendly corporate culture characterised by transparency, openness, the ability to engage in dialogue and criticism. It provides platforms that promote networking and creative exchange. Last but not least, it also helps employees to understand and deal with the consequences of innovations.

The profit that a professional, innovation-promoting IC can bring strongly depends on the framework conditions and products of a company. But a study by the Institute of the German Economy shows, that the net turnover of very innovative companies is 33 % higher than the average. The turnover of companies without an innovation focus, on the other hand, remains 36 % below the average.[5] So it makes sense to use every opportunity to systematically increase one’s own innovative capacity.

Exploit the full potential of internal communication!

Professional internal communication increases efficiency and innovation – it saves money and supports company growth. In addition, it contributes to higher employee satisfaction when all internal target groups feel well informed and valued, can participate and exert influence.

So what to do? Develop an IC strategy and exploit the full potential of internal communication with an adapted IC mix. It doesn’t cost a fortune, but it pays off in any case.

[1] Arbeitskosten in der EU 2019: Deutschland an siebter Stelle | destatis.de [25.01.2021]

[2] Fluktuation und deren Auswirkung auf Unternehmen | Deloitte.com [25.01.2021]

[3] Kranke Mitarbeiter sind teuer | handwerksblatt.de [25.01.2021]

[4] Deutsche Unternehmen schwächeln bei Innovationen | springerprofessional.de [25.01.2021]

[5] Innovative Unternehmen sind erfolgreicher | idw.de [25.01.2021]