What internal communication is and why it’s important

Internal communication is key to informing employees, enhancing workplace positivity, and achieving organizational goals.

• Why it matters: 44% of employees say communication barriers result in delays or failures in project completion, 25% say they’ve led to missed goals, and 18% say they’ve led to lost sales — sometimes worth hundreds of thousands of dollars.

A cohesive workforce thrives on a solid internal communication strategy. Such teams are more aligned on organizational goals and equipped to deliver their jobs more effectively.

What is internal communication? 

Internal communication is the exchange of information, messages, and ideas within an organization. It covers all forms of communication between employees, teams, management, and stakeholders — and it can occur through formal channels such as emails, newsletters, reports, company updates, and official meetings.

It can also happen through informal channels such as casual interactions, break room conversations, team chats, and social platforms within the organization. Proper internal communication includes:

• Top-down communication: from management to employees. Examples are directives, policies, and organizational updates.
• Bottom-up communication: includes feedback, suggestions, and concerns from employees to management.
• Horizontal communication: peer-to-peer communication, e.g., between departments or employees on the same organizational level.

The overarching goal of internal communication is to facilitate collaboration, engagement, and alignment with organizational goals.

11 reasons why internal communication is important at work

Poor internal communication costs U.S. businesses over $15,000 per employee due to lost productivity. A strong internal communications strategy can save you from incurring such costs. These 11 reasons further highlight the importance of internal communication:

1. Keeps everyone well informed

Internal communication ensures that all team members receive the same information, or at least the most relevant information, about what’s happening in your company. Regular internal updates about projects, goals, and organizational changes are necessary if you must build a thriving workforce. It’s also good for employee morale when they don’t have to make guesses about what’s happening in the organization. 

Effective internal communication management ensures information is readily available and easy to access.

• Use communication channels like emails, newsletters, company meetings, and intranets to disperse important information throughout your organization. 
• Also, create dedicated information repositories so employees know where to look when they need specific information.

When everyone is well-informed, team members are empowered to work more effectively, leveraging the critical insight they receive. 

2. Boosts employee engagement

High-performers thrive on clear, regular, and concise information. Informed employees are also four times more likely to be engaged in the workplace. Internal communication fosters engagement by involving employees in organizational affairs and recognizing their contributions. 

• Effective internal communication management helps promote shared company values and cultures. It positions your organization as a strong community to which employees belong, increasing loyalty and engagement.
• Clear communication about work expectations minimizes ambiguity, reducing the likelihood of employee stress and anxiety, which can lead to disengagement.
• To top that, internal communications practices that involve employee shoutouts, spotlights, and team recognitions allow you to show workers how their input has contributed to your progress. Such acknowledgments can encourage even more involvement in future endeavors.

Collecting progress reports from various departments can also boost employee engagement. It’s a way to foster accountability and demonstrate leadership’s interest in the team’s work. This can be a significant motivation to drive progress and keep initiatives on track. 

Internal communication can also help you involve employees in the decision-making process. For instance, taking polls on policies that will affect the team, involving the team members in planning new projects, and similar efforts are great motivators for an engaged workforce.

3. Improves employee alignment

IBM found that 72% of employees don’t know where the company is headed due to poor communication, and 58% of employees wish they had better insight into the company’s next steps. Clear communication about team objectives ensures everyone understands how their roles fit into the wider organizational context. 

The key is to keep communication open so leaders and employees are better aligned. Help employees see the big picture by clearly communicating the vision for large-scale and project-specific ventures. With the right communication tools, you can always keep employees aware of your corporate milestones and schedules so they can plan accordingly. 

• Open communication enables employees to voice looming questions, ideas, and challenges. To foster employee input, leverage all-hands events, intranet communication, and one-on-ones.
• Creating such dialogue mediums makes employees feel valued, resulting in an organization defined by strong employee alignment to organizational pursuits. 
• Managers are 2.1 times more likely to nurture a trusting relationship with employees when they give daily feedback. 

Effective internal communication unites team members of diverse expertise, empowering each to contribute significantly to organizational success and laying the foundation for robust teamwork and collaboration.

4. Ensures brand alignment

Value alignment matters, with 82% of employees believing it’s important to work for a company whose values align with theirs. But, employees can only determine such alignment when you communicate your “brand values.”

• Regular communication about your brand values reinforces their importance and ensures all employees understand what you stand for.
• According to Qualtrics, up to 70% of employees say they are more likely to recommend their employer when the company's values align with theirs. Employees who are aligned with your values become effective brand advocates. They eagerly promote the brand both internally and externally. 
• Customers are more likely to develop a positive brand perception and become loyal when they see employees advocating for your brand. Sprout Social discovered that 72% of consumers feel more connected when employees share information about a brand online.

Employees who have embodied your brand values are empowered to reflect this in how they execute their jobs. This can trigger quality customer service and further solidify your brand’s reputation.

5. Increases transparency

Internal communication thrives on transparency and trust. 95% of business executives agree organizations are responsible for building trust, according to PWC. The same report shows that 86% of executives claim to highly trust their employees. But here is the fascinating bit — only 6-% of employees feel highly trusted. 

So, where’s the gap? Leaders must share information openly and honestly to create a sense of trust and mutual reliance. 

• The best internal communication practices ensure that communication flows freely throughout the company. There’s little to no vagueness that could leave employees unsure about the next steps.
• Transparency requires honest communication. Organizational leaders who are upfront about both positive and negative news demonstrate commitment to open communication and are more likely to earn employee trust. 
• Your organizational leaders must employ various communication channels to inform the team in a crisis. This can foster a united workforce and a more positive attitude to work.

Encouraging feedback and input from employees is also essential for building trust. Actively seek their opinions and ideas to show you trust and value employee input.

6. Supports employee retention

ZenHR reports that effective team communication increases employee retention by 4.5 times. The same report concludes that a strong two-way communication channel is the core of employee retention as it promotes confidence in leadership.

Your management team should: 

• Implement an open-door policy where employee feedback is genuinely valued. This encourages workers to voice grievances that might otherwise cause them to disengage or leave. Addressing these issues promptly reinforces a more positive work environment. 
• Two-way communication opens avenues for employees to seek guidance and support, preventing feelings of stagnation in their roles. 

Strategic internal communication prioritizes employee involvement and aims to create an environment where workers know they’re valuable. Regular team communications, such as weekly check-ins and team meetings, help workers stay connected to company activities. Moreover, updates on company performance, strategic changes, and market positioning help employees stay informed about the company’s direction. 

• Both efforts reassure employees that they are part of an organization that wants to keep them involved. This builds a strong sense of belonging and ownership that compels employees to stay.
• Gallup and Workhuman found that making recognition part of the company culture can reduce employee turnover, potentially saving organizations up to $16.1 million annually. 

Use internal communication tools like newsletters to acknowledge employee milestones like work anniversaries, project completions, and birthdays. This creates a sense of belonging that encourages employee loyalty. You can use internal surveys or polls to gauge employee sentiment and tailor recognition efforts to be more effective and meaningful.

7. Facilitates change management

Change management communication involves informing, involving, and supporting stakeholders throughout organizational change. The aim is to deliver clear, timely messaging that enables relevant parties to understand, accept, and commit to the change.

• Organizations that communicate a compelling case for change are 5.8 times more likely to succeed in organizational transformation efforts.
• Such organizations are also 6.3 times more likely to succeed when senior leaders share aligned messages about the change efforts across the organization.

Clear communication helps employees grasp the reasons behind organizational changes, expected outcomes, and how these changes align with the company's vision and goals. Business leaders should use internal communication to reduce change resistance, increase employee adoption, and ensure a smooth transition to new processes or initiatives.

8. Supports knowledge sharing

Internal communication is crucial in supporting knowledge sharing and promoting employee improvements. With appropriate internal communication mediums, leaders can:

• Acknowledge employees who share their knowledge so others are encouraged to do the same.
• Communicate the need for knowledge sharing as a part of your organizational culture. When knowledge sharing is framed as a core value, employees are more likely to participate.
• Implement formal structures for sharing knowledge. Mentorship programs and regular knowledge-sharing sessions are quite effective for facilitating collaborative learning. 
• Create centralized knowledge hubs where employees can share and access resources such as organizational reports, employee handbooks, and operating procedures.
• Gather feedback and input to identify knowledge gaps and areas for improvement.

Encourage knowledge sharing by building discussion forums and chats where employees can explore ideas, concepts, and insights relevant to your organization. Regular newsletters with sections that share best practices, lessons, or links to important knowledge repositories are also critical.

9. Reduces rumors and gossip

Employees with access to reliable information are less likely to rely on assumptions or unverified sources that may spread rumors. Leaders should proactively communicate important information to employees rather than letting rumors spread. This should be done through:

• Regular internal communication messaging that provides context and details to prevent misinformation from taking root within the system. 
• Continuously encouraging employees to refer to the right channels for information.
• Build various channels to meet employees wherever they are. If possible, create a system whereby information flows directly from your internal communications team to the rest of your workforce.
• Clear and concise communication from management to address potential misunderstandings before they turn into widespread rumors. 

Consistent messaging across all communication channels helps ensure that employees get the same information from all sources. In the same vein, a consistent communication style empowers employees to recognize messages from you.

Lastly, creating effective feedback channels is crucial for leaders to reduce rumors and gossip. However, only 43% of employees report having an easy way to share feedback on key communications, highlighting a significant gap in organizational communication strategies.

10. Enhances employee experience

You can use internal communications to maintain rapport with employees and facilitate a good working experience. This can be done through:

• Empathy. Communicating with empathy when employees voice their concerns helps them feel understood and valued. Leaders can use personalized communication to address specific employee concerns, ensuring each team member feels seen.
• Accessibility. Organizations can boost employee efficiency and experience by providing easy access to essential materials, documents, and tools.
• Support. Internal communication that champions flexible working arrangements and wellness programs can significantly enhance employees' overall experience by showing respect for their personal needs.

Regular reminders about the importance of taking time off and utilizing benefits can help employees prioritize their well-being, leading to a healthier work environment.

11. Supports business goals

Only 14% of workers feel entirely aligned with business goals, based on our recent findings. Internal communication plays a pivotal role in emphasizing your organization’s vision, mission, and strategic objectives. 

• Employees who understand the overarching organizational goals are better equipped to align their efforts with these objectives.
• Communicating specific, measurable goals helps employees understand what is expected of them and how their roles contribute to the organization’s success. This clarity ensures everyone is working towards the same outcomes.
• Providing regular updates on the organization’s progress toward its goals keeps employees informed and engaged. Employees can see how their contributions impact the organization's overall success.

When business goals evolve, internal communication ensures that employees are promptly informed of the changes. This allows employees to adapt their efforts accordingly to support organizational objectives.

The bottom line

Effective internal communication strategies foster employee engagement, alignment, and trust, producing a thriving workforce. Proper internal communication efforts also help organizations navigate change and prevent misinformation. When you prioritize transparent and open internal comms, employees are empowered to air their concerns and contribute to achieving organizational goals.

Go deeper: Internal communication strategies that keep teams better aligned