What internal communication is, and how it affects the bottom line

Employees lose hours every day hunting for information, and that leads to delayed projects and shrinking profits. The math is simple, yet many people still don’t understand what internal communication is, and how it connects people, speeds up work and saves a company money.

Imagine waking up every morning with no idea what you’re supposed to do, where to go, why you even exist, or what your purpose in life is. That’s roughly how employees feel in companies without clearly defined internal communication.

Internal communication is one of the key components of every successful company. It connects employees, keeps them up to date, gives direction, motivates, and keeps work flowing without hold-ups. But it also protects profit and saves money. Here’s how.

Did you know that, globally, every employee spends 1.8 hours a day looking for the information they need to do their job? That means one in five employees in your company spends the entire day just looking for information so everyone else can do their part. What a waste of money! Let’s put it in numbers. If you’re a company of 1,000 people with an average gross salary of €1,000, that’s: 9 hours a week per employee, 9,000 hours in total, €52,200 a week, €2.7 million a year.

And that’s just the cost of searching for information. What about the cost of duplicated work, mistakes, lost productivity and lost focus? All of that happens because people are working without the information that’s crucial to doing a good job. So bad, ineffective or non-existent internal communication is very, very expensive.

Internal communication isn’t a new practice. It’s been around since the 19th century, and today it’s as important a business process as HR, IT or marketing. Its role is to create a clear flow of information inside the company, so employees get timely, relevant information that helps them be effective, aligned and motivated.

But today, internal communication means much more than just informing people. It builds employee trust, identity and loyalty; creates community and a sense of belonging; plays a key role in communicating change; promotes and embeds values and behaviors; and helps employees understand the organization and their contribution to its business. In other words, internal communication connects a company’s people, processes and purpose.

Who owns internal communication?

That’s the million-dollar question, and it’s been starting fights in business circles for 20 years. Honestly, I’ve been part of those debates many times in my career. The truth is that internal communication sits in different departments: HR, PR, marketing, or directly under the CEO. My view is that what internal communication does matters far more than where it sits.

The bottom line is that a good internal communicator knows how to connect business goals with employee needs, doesn’t spam, manages communication strategically, and knows how to turn information into action. So choose the model that works for your company, your goals and your people.

What happens when internal communication doesn’t work?

Hell, chaos and confusion. And in that situation, your company loses a lot of money. Data shows that 72% of employees feel important information doesn’t reach them, and 44% believe project delays are the result of poor communication. When employees don’t have accurate, timely and clear information, they can’t work efficiently, projects run late, productivity drops, and trust and engagement erode. And when all that crumbles, business results go down with it.

The biggest challenges for internal communication today

• Communicating with frontline workers: they make up 70% of the global workforce and are often outside digital channels.

• Line managers: they’re the first source of information and the people employees trust most, but they’re often very unskilled at communicating.

• Lack of business support: internal communication is still fighting to be recognized as a strategic partner.

• AI and new technologies: they bring automation of operational work, but also the risk of AI shaping the tone and key messages.

According to the topIC research I ran in 2024, internal communication in Serbia is most often an operational rather than a strategic function. Communicators mostly sit in HR and mainly communicate HR topics, instead of distributing key business information. It often all comes down to organizing events and producing content for internal channels, rather than a strategic approach and a communication plan that supports business goals.

Five tips to improve your internal communication

• Define clear roles and responsibilities for your internal communication.

• Build a matrix of channels and tools: who communicates what to employees, and how.

• Get to know your employees as a target audience: their habits and their needs.

• Plan the outcome of every piece of communication, and measure the results.

• And if you’re missing the structure or the support for all this, get in touch.

Finally, internal communication really isn’t a luxury. It’s an investment that saves time and money. Any company that wants productive, engaged and happy employees has to get its internal communication in order.