Strong internal communication is key to thriving in today's fast-paced business environment. Think of it as the invisible thread that weaves together every department, ensuring that everyone marches to the beat of the same drum.
But here’s the twist: effective internal communications aren’t just about keeping the team in sync.
Internal communications are a powerhouse for boosting your bottom line, a catalyst for driving impressive returns on investment (ROI). Intrigued? Let’s peel back the layers and explore how honing your internal communications strategy can transform your business into a profit-generating machine.
Internal communications are not just a mere necessity but a strategic asset. Like any investment, internal communications need to be justified by their return on investment (ROI). In this blog, we'll explore how to build a compelling business case for a modern intranet, demonstrating its value and impact on organizational efficiency and culture.
Understanding the Value of Internal Communications
Internal communications bridge the gap between management and employees, fostering a connected and informed workforce. According to a study by Deloitte, effective internal communications can boost employee engagement by up to 30%, leading to higher productivity and better organizational outcomes. According to Gallagher’s most recent State of the Sector report, 74% of more than 2,000 respondents said the primary purpose of internal communications is to support culture and belonging. Post-pandemic, this marks a shift from IC’s long-standing leading role in communicating strategy and creating alignment around an organization’s vision and purpose (67%). These main IC objectives are followed by:
- Organizational agility — supporting the adoption of new behaviors, systems, and processes (47%)
- Managing risks, like cybersecurity and employee health and safety (29%)
- Customer experience — empowering employees to provide the best CX (25%)
- Talent retention — demonstrating what people get in return for working for your organization (22%)
Building a Business Case: The Basic Steps
Identify Needs: Understand what your organization seeks to achieve with better internal communications.
Set Objectives: Define clear, measurable goals for your communications strategy.
Benchmark: Compare your current communications against industry standards.
Calculate Costs: Estimate the financial investment in a dedicated internal communications platform.
Project Benefits: Forecast the expected benefits, including improved employee engagement, reduced training costs, faster information dissemination and the positive ROI of the investment across the organization.
A Primer on ROI in Communications
ROI in internal communications is not just about financial returns. It encompasses qualitative benefits like increased employee satisfaction, reduced turnover, and enhanced corporate culture. Calculating ROI (Return on Investment) for an internal communications platform can be tricky because it deals with employee engagement, a softer metric compared to hard sales figures. However, there are ways to quantify the impact and build a strong case. Here's a breakdown:
Step 1: Define Goals and Metrics
- Goals: Align platform goals with company objectives. Is it to improve employee knowledge, boost collaboration, or reduce time spent searching for information?
- Metrics: Choose metrics that reflect your goals. Here are some examples:
- Employee Engagement: Survey employee satisfaction with communication, measure content engagement (likes, comments, shares).
- Productivity: Track time saved using the platform compared to old methods (email, meetings).
- Reduced Costs: Calculate cost savings from streamlined communication (printing, distribution).
Step 2: Gather Baseline Data
- Before implementing the platform, establish baseline readings for your chosen metrics. This will be your benchmark for comparison.
Step 3: Track and Analyze Data After Implementation
- Monitor your chosen metrics after using the platform for a specific period.
- Look for improvements in employee engagement, productivity, or cost savings compared to the baseline data.
Step 4: Calculate ROI
- ROI = (Benefits - Costs) / Costs
- Benefits: Quantify the value of improvements in metrics (e.g., increased productivity translates to higher revenue).
- Costs: Include platform cost, implementation fees, and ongoing maintenance.
Recommended KPIs for an Internal Comms Platform Investment
Here are some recommended KPIs (Key Performance Indicators) for an internal communications platform:
Adoption and Usage:
- Employee Adoption Rates: This measures how many employees actively use the platform.
- Logins and Page Visits: Tracks how frequently employees access the platform.
- Mobile Usage Rates: Shows how readily employees use the platform on the go.
- Profile Completion: Measures how comprehensively employees fill out their profiles, impacting the platform's usefulness for finding colleagues.
Engagement and Content Consumption:
- Message Open Rates and Click-Through Rates: Measures how many employees open and interact with messages sent through the platform.
- Online Interaction and Viewership: Tracks how employees engage with content (likes, comments, shares) on the platform.
- Content Consumption Metrics: Analyzes what type of content is most viewed and interacted with by employees.
Employee Sentiment and Feedback:
- Employee Feedback: Gather feedback through surveys or polls to understand employee sentiment towards the platform and internal communications.
- Employee Net Promoter Score (eNPS): Measures employee loyalty and willingness to recommend the platform and workplace to others.
- Reduction in Communication Errors: Tracks if the platform helps reduce misunderstandings and improves communication clarity.
Business Impact:
- Employee Engagement Rates: A more engaged workforce can lead to higher productivity and satisfaction.
- Retention and Turnover Rates: Effective communication can contribute to lower employee turnover.
- Return on Investment (ROI): While ROI can be challenging to measure precisely, track cost savings associated with the platform and weigh it against any related expenses.
Examples of Successful ROI in Internal Communications
A transportation company based out of Scotland with 24,000 employees operating all over United Kingdom, implemented an internal comms mobile app to reach its large, frontline workforce of bus drivers. The app boasted an 84% user rate within the first week and led to a 32% increase in employee satisfaction and a 26% reduction in turnover. This demonstrates the platform's effectiveness in boosting employee engagement and reducing costly turnover.
A major US financial services company had a need to improve communication efficiency for its 30,000 employees, and they revamped their internal communications platform. The new platform increased employee engagement with key company updates. This exemplifies the ROI gained from a platform that facilitates clear and timely information flow.
Dealing with Objections
Senior management might hesitate to invest in a new internal communications platform. Here's how you can address potential objections:
Objection 1: Cost
- Respond: Frame it as an investment, not just a cost. Highlight potential cost savings from reduced turnover, improved efficiency, and streamlined workflows. Present a clear ROI plan that factors in potential cost savings and increased productivity.
Objection 2: We already have email/existing tools.
- Respond: Acknowledge existing tools but explain their limitations. Show how an internal communications platform offers a more centralized, engaging, and interactive experience compared to email overload or fragmented tools.
Objection 3: We don't have time to learn a new platform.
- Respond: Focus on user-friendliness. Many platforms are intuitive and offer easy onboarding processes. Emphasize the time saved by having a single platform for all communication needs.
Objection 4: How will we measure success?
- Respond: Develop clear KPIs (Key Performance Indicators) aligned with your communication goals. This could include metrics like employee engagement scores, content reach, or reduced time spent searching for information.
By addressing objections proactively and demonstrating the value proposition of an internal communications platform, you can increase your chances of securing buy-in from senior management.
Sparrow Connected: Your Trusted Partner
Organizations in over 25 industries trust Sparrow Connected as a leading internal communications platform because of its comprehensive features and solutions. Sparrow Connected’s user-friendly platform integrates natively with Microsoft Suite tools and offers an AI powered Omni-Channel solution that ensures seamless communication across various channels. Sparrow Connected is focused on employee engagement, collaboration, and employee well-being, to help organizations build a transparent, productive and innovative work environment, making it easier to keep employees informed and engaged.
Why Sparrow Connected?
Intranet: Sparrow Connected's platform enables you to use the Intranet to create a connected community where information flows freely and every voice propels us forward.
Employee Engagement Survey: Discover a culture of empowerment with Sparrow Connected's nuanced Engagement Surveys, where every response shapes your company's future.
Omni Channel: Seamlessly reach every team member with Sparrow Connected's Omni Channel approach, where connection is omnipresent, and every message resonates.
Analytics: Drive strategic decisions with Sparrow Connected's Analytics, turning data into your most compelling narrative of success.
Operational Efficiency: Sparrow Connected elevates efficiency, transforming everyday operations into a symphony of streamlined productivity.
One of our clients, a global retail chain, saw a 300% increase in employee engagement scores after implementing Sparrow Connected’s platform in just 6 months. By integrating Sparrow Connected, they were able to streamline their internal communications, leading to improved operational efficiency and a more cohesive work environment.
Key Take Away:
Investing in internal communications is not just about improving information flow within your organization. It’s about creating a culture of engagement, enhancing productivity, and ultimately driving business success. By leveraging the right tools and strategies, you can unlock significant ROI from your internal communications efforts.
Internal Comms = backbone of your business. It's crucial for alignment and culture.
Boosting ROI = A surprising yet undeniable side effect of great internal communications.
Strategy revamp = Unlock your business's full potential and watch it soar.
What challenges are you facing with internal communications? Let’s tackle them together and explore how enhancing your comms can lead to substantial business gains. Ready to transform your internal communications? Book a Free 30-Min IC Consultation today and discover how our solutions can help your organization.
What’s Next?
