It is commonplace for CEOs to assign a much greater dollar amount to their sales and marketing budgets versus their funds for internal communications. One is seen to drive revenue while the other is perceived as a cost center. But that might be flawed thinking. There are several key indications that point to employer branding and internal communications as having a strong ability to make a significant impact on the bottom line. Here’s how: 1. The Real Cost of Turnover – Choose your statistic – the cost of employee turnover is estimated in a variety of ways. Recent studies from SHRM put it at 6-9 months of salary and ERE Media cautions that when you add in the costs of interviewing hiring, training, lost opportunity etc. it can be anywhere from 50% of the annual salary for an entry level employee to 500% for a high–level employee. So on average it might cost you $250,000 to replace 12 employees.
Internal communications vehicles can include everything from your benefit communications updates to the signage on the flat screens in reception. You can add footers to your PowerPoints and newsletters or banners to your intranet. For something way more ubiquitous add an Employer Branding statement to your corporate email signatures. The greatest job satisfaction comes from knowing your efforts make a difference and the more frequently employees are reminded and recognized for their contributions, the less likely they will be to leave.
Now that we’ve made the correlation to internal communications and reduced turnover, let’s factor in the Service-Profit Chain which links employee loyalty to customer loyalty. The famous research from Harvard Business Review linked profit increases of more than 50% to the 20% Taco Bell stores with the lowest turnover. That’s because higher levels of employee loyalty result in greater levels of customer satisfaction so you have customers who stay longer and spend more.
One of the greatest perks of careers in retail are the employee discounts. And for many retailers, their employee base represents their largest customer segment. Since 40%-50% discounts on the retail price is roughly the same as the wholesale prices, companies are still making money along with providing a great employee incentive. Savvy communications pros use internal communications to continually promote new styles, trends and behind the scenes intelligence to the people who have the largest vested interest in the company’s success. To some it’s a marketing campaign, to others it is a way to build internal brand ambassadors. To us it’s a win-win.
The average person has 1 to 12 intimate contacts, 150 social contacts and 500 – 1,500 weak ties. So if you’re working for a company of 1,000 employees that means that you could be sharing information with 1.5 million people just from your internal communications.
Use these internal evangelists to sell your products and services (see above) but also to build your image as an Employer of Choice.
Promote your job opportunities to them through a well-designed Employee Referral Program. You will save the company money spent on paid recruiting methods such as advertising and recruiting agency fees. Best of all, by telling other people why they love working for your company, your employees will also be re-selling themselves on why they stay. So turnover goes down.
And now we’ve come full circle.
Need help with your internal comms? We can help.