7 Reasons Why Effective Internal Communication Matter

Picture of Anete Vesere

Communication isn’t just a nice-to-have in today’s fast-paced business environment; it’s the lifeline of your operations.  Effective frontline communication can mean the difference between a thriving business and one that’s struggling. Have you thought about how an employee communications app can help? 

Let’s break it down.

Why excellent internal communication matters more than you think

1. Without clear communication, turnover issues skyrockets

The U.S. Bureau of Labor Statistics reveals that the retail and hospitality sectors consistently face the highest "quit rates." In some cases, turnover can soar to as high as 300%. Ouch.

Moreover, studies show that 70% of American employees are not fully engaged at work, largely due to communication breakdowns. This disengagement is costly - one estimate puts the cost of losing a retail employee at over $3,000, while other research indicates that losing a hospitality worker can cost between $3,000 and $13,000.

Workers crave purpose, clear communication, and a company that listens—aspects that are often missing in frontline roles where communication is like a broken telephone. Ignoring these needs is a big mistake. Research from HBR by Achyuta Adhvaryu, Teresa Molina, and Anant Nyshadham shows that having a voice is more impactful than wage increases: 

“In high-turnover environments where communication with management is limited, giving workers a way to be heard can be a powerful retention tool.”

2. Without communication, employees are not safe 

Safety isn't just a priority; it's a necessity that directly impacts both costs and employee well-being. 

From a financial standpoint, avoiding workplace accidents is a no-brainer. Beyond the obvious costs of medical care and lost labor, there are additional expenses like investigating incidents, property damage, and productivity losses. The National Safety Council estimates that workplace injuries in the U.S. cost over $170 billion annually.

For every $1 spent on direct costs from workplace incidents, companies spend an additional $2.12 on indirect costs like lost productivity, fines, and legal fees. However, investing in safety has a strong ROI: $4.41 for every dollar spent.

Bite-sized updates sent directly to employees' phones can keep safety top of mind and reduce incidents by 15-35%. A safe workplace doesn’t just lower costs; it boosts employee satisfaction.

3. Miscommunication = operational chaos

Miscommunication in the workplace doesn’t just slow down operations; it grinds them to a halt, affecting productivity and operational efficiency. About 48% of employees report receiving unclear instructions, resulting in 40 minutes of lost productivity per person per day. This adds up to $26,000 per employee annually.

Effective communication is essential to cut through this chaos, ensuring operations are tight, efficient, and free from costly overlaps and do-overs.

When everyone knows what they need to do and when they need to do it, things get done right the first time. Less confusion means fewer mistakes, and that translates to more productive, cost-efficient operations.

4. When comms are ineffective, employee engagement takes a hit

When your frontline is engaged, they’re not just filling a spot—they're filling it with intention. Effective communication fosters a workplace where employees are motivated and morale is high. This translates directly into productivity, which then reflects in better customer service and, ultimately, fattens up that profitability margin. 

In fact, highly engaged employees are a significant asset. Companies with highly engaged employees show a 21% increase in profitability and a 41% reduction in absenteeism. Engaged employees are more likely to put in discretionary effort, leading to higher productivity and improved job satisfaction. Moreover, businesses with highly engaged teams are 17% more productive and experience 10% higher customer ratings.

5. Bad comms = badly informed employees = unhappy customers

Ever been helped by someone who knew exactly what they were talking about? It feels good, right? When your frontline is well-informed, they handle queries like pros and solve problems with ease.  According to the 2024 Qualtrics Global Study:

  • Customers are 2.9 times more likely to trust a brand after a 5-star experience significantly influenced by how frontline employees interact with them. If employees are disengaged or poorly trained, the chance of delivering such an experience plummets, and with it, customer trust.
  • Positive interactions can increase the likelihood of a customer recommending your brand by up to 91%. This advocacy is crucial for business growth and relies on motivated, well-supported employees. 
  • Satisfied customers are up to 3.1 times more likely to return, emphasizing the importance of consistent, high-quality interactions provided by happy employees.

6. Too many communication channels = lost information

Without a unified platform, important information and updates often get lost in private WhatsApp groups, email threads, or handwritten notes, failing to reach those who could act on them. When frontline communications are centralized, it’s easier for this information to travel to every corner of your organization. Here are some examples that show just how beneficial a centralized communication channel can be:

  • Take Domino’s Germany as an example. Before adopting Domino’s Chat, communication was fragmented, and insights rarely made it beyond local stores. Now, frontline employees share successes and challenges directly through the app, leading to faster feedback and improvements across all locations.
  • Similarly, Wurst Steel Construction overcame communication gaps between workers across multiple sites. By centralizing communication, they closed the loop on important updates, significantly improving coordination and safety practices.
  • VitaS also saw the impact. By using a unified employee experience platform, they effectively reached their healthcare workers across numerous facilities, ensuring that critical information was delivered to the right people at the right time.
  • Finally, Restaurant Company Europe centralized communication across their dispersed teams in one employee communications app, allowing their 2600+ employees across more than 75 locations to collaborate easily, share feedback, and improve the overall customer experience.

7. Especially in times of uncertainty & change, internal communication is the cornerstone of success

Let’s be real: agility isn’t a nice-to-have anymore; it’s a must. In today’s fast-moving world, being able to pivot quickly in response to local, national, and global changes is what keeps companies ahead of the curve. And guess what?

Employee communication is at the heart of this agility.

Remember the pandemic? It taught us that being nimble isn’t just for crises; it’s a daily requirement. From dealing with workplace challenges like violence and theft to navigating customer fluctuations and environmental shifts, your frontline needs to stay on their toes. That’s where a well-oiled communication system comes in.

A centralized communication setup ensures that your team isn’t left scrambling for updates or stuck with outdated info. It keeps everyone on the same page, ready to tackle new challenges and seize opportunities without missing a beat. So, while the world outside keeps shifting, your internal operations can stay sharp and responsive. 

Agility is about more than just reacting; it’s about being prepared. And with effective, centralized communication, your frontline workers will be well-informed and ready to adapt—keeping your business agile, relevant, and resilient no matter what comes your way.

Wrapping it up: the financial sense of getting communication right

Investing in an effective employee communications app isn’t just about avoiding the pitfalls of miscommunication; it’s about leveraging every chat, every update, and every piece of feedback as an opportunity to boost your ROI. 

When you ensure that the frontline staff are informed, engaged, and aligned, you’re not just setting up your operations for smooth running—you’re setting them up to thrive. 

Effective communication is your best bet at turning everyday challenges into solid gains. It’s not just about keeping everyone in the loop; it’s about creating a loop that moves your business forward. Because in the world of business, getting your message across clearly isn’t just good practice—it’s essential for success.