The Cost of a Poor Internal Comms Strategy

Alexandra Monica Cote

Growth Advisor & Content Strategist

10 Sept 2023

Want to learn more about the hidden costs of poor internal comms and how to avoid a huge budget drain? Look no further!

Only 13% of employees strongly agree their leadership knows how to communicate well with them.

And that’s costlier than you’d expect for everyone else.

Many companies still rely on email to communicate with their employees. But 38% of workers have had enough of this ‘email fatigue’ and are likely to quit their jobs because of poor employee-employer communication.

That’s all because chaotic communication…

  • Makes them feel socially isolated or anxious
  • Leaves them disorganized and spending a lot of time between back-and-forth messages
  • Reduces employees’ trust in their employer
  • Can lead to burnout, lowered productivity, and overall disengagement

That’s a lot to lose. Thankfully, we’re here to help!

Financial costs of poor internal comms

We’re breaking down the hidden costs of poor internal comms and how to prevent a huge budget drain.

A lack of engagement and productivity

  • The problem:

Almost half of employees say their productivity is being impacted by ineffective communication. And 86% of all workers agree that poor communication is why workspace productivity is failing.

Poor internal communications can lead to a lack of engagement and productivity by creating an environment of distrust and confusion. 

Without clear and effective communication, employees may feel disconnected from their colleagues, and may not even be aware of the objectives and expectations of their job. 


A lack of motivation?

Lowered morale?

All perfectly common consequences while unhappy workers continue to cost the US $450 to $550 billion yearly due to lost productivity. 

Without an effective internal communication system, employees can become disconnected from their company and its objectives, leading to a lack of engagement and productivity.

  • The fix:

A McKinsey study found that by using social and digital tools, you can raise the productivity of knowledge workers by 20% to 25%.

Start by setting up an employee communication and engagement tool like Workvivo to allow your team members to consume information differently: podcasts, live streams, articles, social posts, or simple comments. 

Workvivo can also help you engage your employees by building community spaces and letting them experience a familiar social environment. 

Additionally, Workvivo’s shoutout feature allows peers to recognize and honor individual and team accomplishments in a public manner. It also provides an opportunity for peers to demonstrate the company’s values by nominating colleagues for awards.

Abhishek Shah, Founder at Testlify, says that investing in internal comms translates into significantly higher levels of employee engagement and productivity.

“By fostering an environment where team members feel trusted and have their voice heard, we’ve witnessed a remarkable increase in their commitment to their roles. 

“When employees are genuinely in on everything that’s going on around the company (and hence satisfied with their work environment), they become dedicated to achieving their goals and contributing to the organization’s success. This surge in engagement has also directly led to a notable rise in overall productivity, as motivated employees consistently go above and beyond to deliver exceptional results.”

A high turnover rate

  • The problem:

Let’s say you’ve just hired an entry-level worker. 

Imagine they’re not happy with the way the organization or their colleagues communicate – it gets to one or two months in and they decide to leave. That’s going to cost you as much as 30% to 50% of that employee’s annual salary just to find someone else to fill the role.

And the costs keep growing. A technical professional or a supervisor will cost you 100% to 150% of their annual salary for each individual employee.

That’s why you should never wing it when it comes to communicating with your employees. They’re listening, and they expect a certain level of internal comms that will help them become better at their jobs and even excel in their careers.

  • The fix:

It’s worth noting that internal comms is part of every interaction you have with your employees.

This is good news because it also allows you to improve your communication efforts on multiple fronts – from establishing open communication channels to the way you listen and act on feedback or reward your employees for their achievements.

For Abhishek, using a well-thought-out internal comms plan not only elevates internal operations but also acts as a powerful magnet for attracting top-tier talent.

“In today’s competitive job market, candidates are actively seeking workplaces that make it easier for them to work and collaborate. By focusing on internal communications, we’ve not only been able to attract high-caliber professionals, but also retain them over the long term. 

“Low turnover rates are a testament to the fact that companies that prioritize communication are more likely to have employees that stay committed to their roles and grow within the company.”

A lack of initiative and unhappiness

  • The problem:

In one study, 43% of respondents estimated that they waste more than two weeks a month just thinking about an unresolved problem at work. The same report revealed that one in three employees think their inability to speak up in vital scenarios costs their organization at least $25,000.

That’s burning out your teams mentally, leading to general unhappiness and demotivation. Work-related stress affects 36% of workers in the US, resulting in an annual $30 billion loss in workdays for businesses.

  • The fix:

Encourage employees to be proactive and take initiative by providing incentives, recognizing their efforts, and offering growth opportunities. 

Set expectations for your employees and allow them to take on additional responsibilities, find innovative ways to solve problems, and suggest new ideas. You can do so by creating an environment where employees feel comfortable taking risks and being creative. Don’t forget to follow up with feedback and support to help employees learn and grow.

Wasted time

  • The problem:

Teams lose an entire day per week just because of communication issues like having to clarify messages or send reminders. Moreover, 44% of people say that miscommunication has caused a delay or failure to complete projects within their organization.

Without clear communication between team members, tasks may be duplicated, misunderstood, or forgotten. This means team members may not be aware of deadlines or expectations, leading to wasted time and resources. 

On top of this, whenever team members aren’t able to effectively communicate with each other, they’ll experience delays in decision-making and conflict resolution. 

  • The fix:

A well-structured internal comms plan by itself can help employees save time by providing clear guidelines for communication. 

This means you’ll need to cover scenarios like the following ones to give employees an action plan:

  • Sharing feedback with their colleagues
  • Communicating bad news
  • Recognizing and rewarding their peers
  • Solving internal conflicts
  • Sharing ideas and goals or getting involved in new projects
  • Managing specific crises like colleague confrontations
  • Meeting and onboarding new colleagues
  • Making announcements
  • Organizing company-wide events and meetings
  • Using different communication channels

Having a plan lined up to help employees deal with change or tough situations means they’ll be able to quickly communicate with each other, reducing the amount of time they waste on inefficient methods. This also ensures employees are aware of any changes or updates to company policies and procedures, keeping them informed.

Hallmarks of a poor internal comms strategy 

Now that we’ve looked at the financial implications of poor communication, it’s time to understand what makes for a poor internal comms strategy.

Even though the reasons for miscommunication and lack of communication may vary from one employer to the next, a few common causes impact most organizations. Leaders should be aware of the following hallmarks of poor internal comms.

  1. One-way communication

It’s not all about your company and what you’re doing. Only communicating about this can lead to a lack of trust and engagement. 

When communication is one-way, employees feel like their ideas and opinions aren’t heard. This will only make them feel frustrated and demotivated. 

Employees want to be a part of your decision-making process. You can cultivate a culture of openness and transparency by using two-way communication tools and allowing employees to weigh in on decisions.

Workvivo’s social intranet provides employees with the opportunity to collaborate and make sure their decisions have an impact on the organization as a whole. You can use it as a central hub to give employees access to corporate info and resources.

This can help improve employee engagement, collaboration, and productivity, which can lead to better organizational culture and morale. Additionally, social intranets will reduce miscommunication and mistakes, as well as foster an environment of open dialogue and discussion.

  1. Closed comms vs. open comms

With open communication, you’re freely sharing news between two or more people without barriers. This allows for honest, direct, and clear dialogue as it encourages employees to express their thoughts and feelings freely.

Closed communication, on the other hand, happens when communication is limited and controlled, typically because you want to avoid criticism or potential conflicts. Closed communication restricts the flow of information and can lead to misunderstandings and frustration.

Yvette Ankunda, People Operations Manager at Oula Health, says closed comms and open comms serve opposite purposes when it comes to work communication.

“Closed comms are beneficial when there’s one singular direction that a certain project needs to take, with no room for change or outside ideas. In these cases, closed comms might be more productive given that it eliminates unnecessary communication that might slow down the process. 

“Open comms, however, will likely result in a more well-rounded and highly informed final product because of the many perspectives, opinions, and insights taken into account during the process. The end goal will determine which type of comms suits a project best.”

  1. Not giving people a way to provide feedback

When was the last time you asked your employees for feedback on the way you communicate?

A simple survey or poll could give you immense insights into how effectively your communication is being received and what areas need improvement. That’s all you need to decide what to work on next and avoid future mistakes in your internal comms plan. 

Additionally, simply asking for employees’ thoughts can build trust and foster a more collaborative workplace culture, as employees feel that their opinion is valued and respected.

Kyle Kuczynski, Co-Founder of MessageDesk, stresses the value his employees get from simply having managers who listen.

“We’re still a small team so I try to take the time every week for a quick chat or one-on-one meeting with every person. This allows me to see if they’re engaged, demotivated, or simply not feeling satisfied with their work or the way we collaborate. 

“At our stage, it’s easy to just gather this feedback and make a change. For instance, if one person comes in and says they’re not happy with the level of detail they got for a task, we’ll make sure to tweak this in the future and double-check they have all the required resources.”

Kyle notes that the push for more feedback sharing should come from a leader’s side.

“It’s my duty as a manager to get this feedback and make the appropriate changes to the way we communicate internally. I’d recommend taking a close look at hidden cues that might indicate when an employee isn’t satisfied with the way the team communicates. That’s when you’ll know you need to push for that feedback and transparency. ”

  1. Not planning for the worst

Bad days happen, and you should prepare to have to share bad news with your team. 

Unfortunately, this is one of the sections most internal comms plans lack.

Bad news can include anything from changes in company policy to layoffs.

It’s important to ensure that all employees are informed of any changes that may affect them to maintain trust and transparency. Proper communication in times of distress gives employees a sense of preparedness and allows them to plan ahead. 

???? Drop an eye over our complete guide on communicating bad news to employees to see how other people leaders are approaching sensitive topics.

Developing an internal communications plan 

It’s pretty clear from all of the above that failing to prioritize internal communications comes at a high price. Consequently, leaders need to take the necessary steps to support better communication within their organization. 

60% of companies have no long-term internal comms plan as we’re speaking. So to begin with, they should create a comprehensive internal communications roadmap.

An internal communication plan is a strategy that maps out how a company will communicate with its employees. It outlines the type of communication, the frequency, and the channels used to do this. 

All companies should have an internal communication plan if they want to maintain transparency and ensure that employees are kept informed of company news. That’s because, when done right, this plan helps build trust and foster better relationships between employees and management.

So where do you start?

Here are the six core steps to developing your first internal comms plan…

  1. Determine what your objectives are
  2. Identify your exact audience
  3. Create your internal comms messaging to answer the ‘what’s in it for me’ question 
  4. Pick the most appropriate communication channels
  5. Run a couple of tests to experiment with different ideas
  6. Measure the results of your internal communications strategy

For a detailed look at how to produce an internal comms plan, head over to our comprehensive article on How to Create an Internal Communication Strategy, which includes a free template to guide you.

To find out more about how Workvivo can help you set up and maintain your internal comms plan, check out our Customer Stories or book a free demo.