Industry News – Increasing the Effectiveness of Internal Communication
by Raha Naddaf, staff writer
Connecting
Organizational Communication to Financial Performance
The better you communicate, the better your return on investment
(ROI). The fact is that organizations that communicate effectively
dramatically outpace organizations that don’t. According to
a report by Watson Wyatt Worldwide, a significant improvement in
communication effectiveness is associated with a 29.5 percent increase
in market value. Companies with the highest levels of effective
communication experienced a 26 percent total return to shareholders
from 1998 to 2002, compared to a -15 percent return experienced
by firms that communicate the least effectively. Organizations that
communicate effectively were more likely to report employee turnover
rates below or significantly below those of their industry peers.
Source: Watson Wyatt Worldwide
Good
Communications Keep Employees on Board
Why do good employees quit good jobs to take other jobs? Your immediate
reaction might be that the new job pays better. You'd be wrong.
In fact, salary ranks fourth in a survey conducted recently by Robert
Half International. Only 11 percent of respondents said inadequate
salary and benefits would cause good employees to quit their jobs.
At the top of the list: limited opportunities for advancement, which
garnered 39 percent of the vote. Unhappiness with management came
in second with 23 percent, and lack of recognition was third with
17 percent. While good employee communications can't do much about
inadequate salary and benefits—other than explain the rationale
behind pay grades and benefit packages—the top three reasons
for leaving can all be improved through solid internal communication.
Since employee turnover is one of the issues that keeps executives
awake at night, focusing on these issues can lead to positive return
on investment for your company's internal communication efforts.
Source: Holtz Communication + Technology
Internal
Communication a Key Tool for Bottom-Line Results
Internal Communication is a key tool when it comes to improving
bottom line results, according to the findings of the III Study
on Internal Communication in Spain under the title of “Leadership
in Internal Communication.” The study was based on 78 questionnaires
completed by firms that are among the 500 most important in Spain
in terms of turnover, together with extensive interviews with directors.
The study finds that 88 percent of the firms had an internal communication
department, and that in 52 percent of companies it came under the
Human Resources Department. In spite of the importance firms attach
to internal communication, budget allocations tend to be low. Forty-two
percent of the companies spend less than 30,000€ on it, while
31 percent allocate between 3,000 and 150,000€, although the
current trend is that these figures are rising.
Source: Instituto de Empresa
Internal
Communications in Professional Firms
According to an e-mail survey conducted in March 2004 by the PM
Forum Global Thought Leadership Panel and partners, 89 percent of
respondents believe that corporate reputation is always influenced
by effective dialogue with employees, 81 percent believe that creating
greater understanding of the organization’s goals amongst
staff always influences profitability and 61 percent believe that
engaging communication always makes employees less likely to leave.
Given the uniformity of beliefs in favor of internal communications,
one might expect that all firms have put in place a formal internal
communications strategy. However, this is only the case at 62 percent
of firms, with 30 percent having no such strategy. Eighty percent
of those firms with more than 2,000 employees have a strategy compared
with only 40 percent for those with less than 100 employees.
Source: PM Forum
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