Why is Internal Communication Important for Your Business?

Good internal communication ensures clarity for everyone in the organization. But what is effective internal communication and how does it work?
This article reviews the value of internal communication and how transparency, communication, and feedback lead to success.

LumApps for Internal Communications
Internal Communication Benefits

What is Internal Communication?

Internal communication shares information about the company so employees can perform their jobs well. It keeps people informed.

Internal communication’s purpose is to provide an effective flow of information between an organization’s departments and colleagues. This applies both up and down the management/employee chain. It also works among employees who are interacting with each other in the company.

Solid internal communication nurtures company culture and builds employee engagement.


Internal Communication Types and Channels

Workforce demographics constantly change, which highlights the need for different communication channels. Wherever employees work and whatever they do, there is an advantage for both internal communication in the office and remotely.

The sharing of information can be verbal, or electronically through systems such as the company intranet. The beauty of an intranet is that it’s available 24/7 and employees have access to it from any location with an internet connection.

What are the types of internal communication? There are five main sources of internal communication:

  • Management – who dispense information such as strategies, company results, internal and external information, and other important general information.
  • Team – between colleagues who work together to achieve the same end goal.
  • Face-to-face – briefing individuals on tasks and situations.
  • Peer – informal chats between colleagues to share information.
  • Resources – the intranet, email, social media, messaging, video calls, telephone.


Each of these types uses a specific channel to achieve its internal communication goal:

  • Verbal – the passing of information by word-of-mouth.
  • Electronic – how most information in writing is shared.
  • Paper – a way of communicating using posters and graphics.


The Internal Communication Plan

An internal communication plan serves as a roadmap that motivates employees to take action through sharing information. The plan encourages enhanced collaboration as it makes goals clear.

Tactics are part of the internal communication plan and should point out the specific initiatives and actions needed to achieve your business goals.
The technology or method used to deliver these tactics should match the target audience, for example, connecting through Slack to update on a project in real-time.

10 Reasons Why Internal Communication is so Important

Here are 10 key reasons that highlight the importance of internal communication:


1. Boosts employee engagement and productivity

Start the right conversations across your organization and bring leaders, partners, and employees together to focus on internal strategies that boost engagement and productivity. Employees should be encouraged to submit their ideas and opinions. This makes them feel valued and listened to, which leads to engagement. When employees are actively engaged, they are motivated to work harder and do better quality work on the job.

These types of conversations can be set up easily through internal communication platforms. There’s no need for long time-wasting meetings.


2. Promotes the supply of information

Another of the benefits of internal communication is that it delivers the right message to the relevant people. Modern technology means most of us connect at some point during the day, particularly at work. Many employees have access to a company intranet, which they can connect to when it suits them and keep up to date with relevant communications.

Effective internal communication also ensures employees don’t suffer from information overload. It avoids the need to spend hours sending and reading emails, messages, and comments.


LumApps Intranet Video Center

LumApps Intranet Video Center

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3. Improves employee experience

Organizations can use internal communication to improve the employee experience This helps maintain employee retention, as working for a company that cares about its people sends out a positive message. Internal communication can be used to advertise:

  • company events
  • sports club membership
  • free healthy drinks and snacks
  • free cab service for employees that work late
  • the introduction of a chill-out area

Unless everyone knows about these benefits they won’t be able to take advantage of them. This is why the internal communication role is important for both business and leisure time.


4. Sharing goals and objectives

One of the best ways to communicate the roadmap of your business is by leveraging your internal communication platform. Giving an overview and explaining your goals through a consistent information flow helps employees feel well-informed and capable of taking actions.

A clear roadmap also emphasizes company strategy so everyone in a team or department has a defined view of where the organization is heading. It gives a single, clear reference point that summarizes the overall objectives. This clarity can promote confidence in making decisions and carrying out roles.


5. Provides focus points

Internal communication can be used to align and guide teams on how to prioritize and distribute effort. Clear internal communication in the work environment ensures employees are aware of deadlines and can set time schedules to achieve them. This focus also emphasizes how a smaller project fits into the overall picture and why a specific deadline is important. For example, the installation of new software for the HR department may need to be implemented to capture a seasonal trend.

6. Drives action

Internal communication promotes both internal and external action. For example, it can authorize people to go ahead with a task, ask them to communicate with suppliers or collect opinions via the number of likes for a new product on an intranet page. It can take seconds to communicate a piece of information clearly and effectively.

People are more inclined to respond if they just have to press a button, rather than write a long response. This especially applies to the younger generations, who’ve grown up in the digital era.


7. Brings people together in difficult situations

In times of crisis, internal communication is a valuable tool. Being able to communicate fast and easily with the right people in the organization can reduce stress and get things done.

Another of the advantages of internal communication in a crisis is that it can alleviate rumors. Nothing spreads faster than office gossip, and accurate communication from management can prevent negative situations. This can also feed through to external communication, as an organization’s reputation can easily be damaged by rumors that aren’t true.


8. Allows for change

Technology is fast-moving. Competition is fierce and companies have to stay ahead of the competition to be successful. Why is internal communication important in this respect? Because it allows businesses to respond fast to climatic, environmental, and unexpected situations.


Strong internal communication can mean the difference between averting or suffering a crisis.


This could range from a retail store reducing the price of bread in every store in the state to match the competition, to warning staff in the travel industry of bad weather. Strong internal communication can mean the difference between averting or suffering a crisis.


9. Crosses borders

The importance of communication in international business can be seen in global organizations. Employees may be working in different time zones and only have a limited window to hold video meetings or telephone calls. Effective internal communication assists understanding, particularly if people speak different languages.

It’s also important to consider culture when communicating with colleagues in a different country. The tone of the communication should respect any cultural differences in terms of attitude to work, behavior, and customs.


10. Promotes the brand

According to Gartner Communications, “Employees who feel well-informed become a company’s most credible ambassadors externally, while they may become its fiercest critics if they do not.

Positive external communication is the key to strengthening an organization’s reputation. When employees talk about the company and share information through social media they become advocates. This form of brand-building can impact an organization’s success and results from clear internal communication that encourages employees to share information.

How to Build an Effective Internal Communication Strategy

All organizations, regardless of size, should have a well-crafted internal communication plan. What are the functions of an internal communication plan and how do you create one?

Here are some key steps you should include:

  1. Analyze the organization’s current situation – identify where communication is already good and where it can improve.
  2. Define communication goals and objectives – what are the advantages of internal communication for your company?
  3. Identify your audience and segment it accordingly – define groups by department, location, skills, generation… Choose the categories that are appropriate for your business.
  4. Outline your core messages – clearly, so everyone understands them.
  5. Specify your tactics and communication channels – such as Gmail, Slack, Trello, news feed…
  6. Create an internal communication calendar – and keep it up to date.
  7. Determine key performance indicators for tracking results – measuring the effectiveness of internal communications helps to define both short and long term improvements.

According to a study conducted by IBM, 72% of employees don’t understand their organization’s strategy, which is a result of poor communication. Make sure your employees understand your strategy through clear internal communication.

Read more: How to Build a Successful Internal Communication Strategy?


A well-crafted communications plan will support your organization in all internal initiatives and teaches you to maintain consistent employee communications. By taking the steps above and understanding the importance of an effective internal communication plan you’ll move closer to a more collaborative and engaged workplace.

LumApps for Internal Communications

Internal communication’s purpose is to provide an effective flow of information between an organization’s departments and colleagues. This applies both up and down the management/employee chain. It also works among employees who are interacting with each other in the company.

  • It boosts employee engagement and productivity
  • It promotes the supply of information
  • It improves employee experience
  • It provides focus points
  • It brings people together in difficult situations

See all the reasons

  1. Analyze the current situation
  2. Define goals and objectives
  3. Identify your audience
  4. Outline your core messages
  5. Specify your tactics and communication channels

Explore all the steps