Business communication involves the constant flow of information within and outside a company.

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Corporations with a large number of people and various levels of hierarchy often struggle to manage business communications effectively. Therefore, there should be effective and continuous communication between superiors and subordinates in an organization, between organizations and society at large.

What Is Business Communication?

Business communication is the process of sharing information between employees within and outside a company.

Effective business communication is how employees and management interact with each other to reach organizational goals and be more aligned with the core company values. Its main purpose is to improve organizational practices, eliminate silos, keep employees informed and reduce errors.

Effective business communication is essential for the success and growth of every organization. Unlike everyday communications, business communication is always goal-oriented.

Yet, data shows that 60% of internal communications professionals do not measure internal communications.

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For an enterprise company to operate successfully, all the rules, core company values, regulations and policies have to be communicated to people within and outside the organization.

What Are the Different Types of Business Communication?

There are 4 main types of business communications.

4 types of business communication

1. Internal upward communication

Internal upward business communication is communication that comes from a subordinate to a manager or an individual up the organizational hierarchy. Every leader should enable information to flow upwards in order to have a true understanding of the company’s operations.

Internal upward communications usually include surveys, feedback, forms and reports that employees deliver to their managers or team leaders.

For example, a marketing report may include statistics such as total website visitors, social media engagement or total leads generated.

2. Internal downward communication

Internal downward communication flows from a superior to one or more subordinates. This type of communication might be in the form of a letter, a memo or a verbal directive.

When communicating with employees, leaders should keep communication professional and clear. An example of this type of communication may include a memo regarding a new company operations procedure such as safety requirements and new regulations.

3. Internal lateral communication

Internal lateral business communication happens among employees in the workplace. Today, there are many different ways employees can communicate: chats, messaging, email, employees communication software solutions.

This type of communication can be within or among departments and it happens more regularly than other types of business communication. Moreover, frequent communication among employees plays a crucial role in employee engagement and productivity.

4. External communication

External business communication is any communication that happens with external parties such as customers, prospects, vendors or partners.

Unlike all the internal business communications types, external communications happen on a less regular basis.

📹 Before we move forward, check out our Masterclass: How to Tackle Communication Barriers In the Workplace

11 Reasons Why Effective Business Communication is so Powerful

Here are the top 11 reasons why business communications are so important for every company’s success:


1. Improves employee engagement

Ragan’s research on employee engagement shows that leadership communication is the top internal communication factor that statistically correlates to how engaged employees are. Internal communication teams have a significant role in supporting, coaching and reminding leaders of communication’s importance.

To understand the importance of employee engagement, here are a few useful stats.

2. Eliminates email overload

Within companies, email is used for everything from information requests, employee communications and feedback, status reports, task assignments, communications with customers and suppliers, meeting invites, document distribution, notices from HR on various team activities, benefits and birthday wishes.

quick stat from SaneBox

Radicati reported that the average corporate worker spends 25% of the workday on various email-related tasks.

However, only a small fraction of the emails that hit our inbox deserves our immediate attention. We filter out the important emails by sender or subject. Moreover, many emails we receive are not relevant to us at all.

Internal business communications that use modern tools for employee engagement and communications have eliminated this problem of email overload.

3. Eliminates communication silos

Too much irrelevant content often results in information silos. Meaning information that is actually important to an employee can easily get lost. Ask yourself why information gets lost in your organization.

Proper internal business communications and the use of the right communications tools are crucial for eliminating this challenge.

4. Increases employee productivity

4 in 5 employees believe that effective internal business communications help their job performance.

With the information overload, employees often spend too much information searching for content that they need to do their job.

Moreover, an average employee spends 2.5 hours searching for information needed. Monthly, this results in the entire week lost to find something that should be at employees’ fingertips.

Here are just a few ways how internal business communications improve employee productivity.

5 ways to boost digital workplace productivity chart

5. Improves inter-departmental communications

Without a proper communications strategy, it is very hard to keep effective interdepartmental communications within companies.

For employees to be more productive, they need to communicate and collaborate easily.

quick stat from Queens University of Charlotte

For example, your research department needs to be on the same page as your marketing team, and your business office has to be in sync with the IT department.

Besides communication itself, here are a few more tips for improving interdepartmental team collaboration.

6. Improves communication with remote workers

Remote teams are the future of work. In developed countries such as the US it is expected that 75% of the working population are now part of fully mobile.

This means a new kind of communication, leadership and management approach is required. Coordinating across time zones, information silos and overcoming language and cultural barriers are just a few communication challenges remote teams face. In addition, distance often makes it harder for team members to feel like a team.

Better internal business communications can have a significant positive impact on how remote teams collaborate and feel.

7. Reduces employee turnover

Companies with more engaged and satisfied employees enjoy much lower turnover rates. To attract and keep Millennials and younger generations in the workplace, employers have to make sure to keep their employees informed about what’s relevant to their jobs.

On the other side, too much irrelevant information often leads to stress, disengagement, frustration and, with that, lower employee retention.

8. Improves knowledge sharing efforts

One of the main goals companies are trying to achieve by investing in internal communications is to improve knowledge sharing best practices.

In a world where employees are constantly growing and learning new things, employers need to enable easy knowledge sharing within their organizations.

Without a well-set internal business communications strategy, knowledge sharing and organizational knowledge suffer.

9. Increases employee advocacy

When employers know how to communicate with their employees effectively, they are much more successful in turning them into brand ambassadors.

Brand ambassadorship is not as hard to achieve as many companies believe. In fact, happy employees would love to contribute to brand ambassadorship programs.

There are 4 main ways how brand ambassadorship and employee advocacy can help a company’s operations:

10. Improves customer satisfaction and retention

Better business communication also means better customer satisfaction. If there’s poor communication within an organization, two things happen when it comes to customer service and satisfaction.

First, employees in customer-facing roles won’t have the information they need. Second, customers will sense the low employee morale and have a negative experience.

In fact, one study found that employee attitude has a significant impact on customer satisfaction, which then results in an increase in revenue.

11. Builds a better company culture

Finally, a proper business communications strategy is crucial for building a better company culture and workplace environment.

Companies that communicate in a transparent and open way have a much healthier work atmosphere, employee motivation and satisfaction.

On the other side, organizations that neglect business communications as a means for improving the workplace culture, suffer from low engagement, high turnover rates and low employee and customer satisfaction rates.

The Rise of Mobile Business Communications

Millennials represent 50% of the workforce worldwide and they are projected to represent 75% of the workforce by 2025.

As we all know, millennials, as well as gen Z employees, are tech-savvy and mobile-oriented. Therefore, if you want these generations to engage with your business communications content, you need to adjust your communication efforts to their habits and mobile-first preferences.

quick stat from The Tech Report

Organizations are now becoming aware that sending generic company-wide emails or using outdated Intranet is not enough to catch employees’ attention!

Therefore, many companies are now implementing mobile-first employee communications apps in order to improve employee communication, ensure that employees always have access to important information, and to make sure that the entire organization is aligned.

To add, the growing shift towards remote work is also one of the reasons why employers are looking into implementing communications solutions that best mimic social and communications apps that employees use in their private lives.

This way, business communications becomes much easier, faster and more streamlined.

20 Interesting Business Communications Facts

If you like statistics, you will also like this section. Let’s take a look into some f the most interesting internal business communications facts.

  1. 60% of companies don’t have a long-term strategy for their internal communications
  2. Only 13% of employees use their  intranets on a daily basis
  3. 74% of employees have the feeling they are missing out on company news
  4. 72% of employees don’t have a full understanding of the company’s strategy
  5. 87% of people use a mobile phone to communicate at work at least once per week
  6. Employee productivity increases by 20 to 25% in organizations where employees are connected
  7. 38% of companies have a growing number of remote employees
  8. Only 23% of executives say that their companies are excellent at aligning employees’ goals with corporate purposes
  9. 60% of people face a crisis at least once a month due to communication issues
  10. 29% of employees say that poor internal business communication is the reason for projects to fail
  11. Only 40% of IC professionals believe that employees understand “well” or “very well” the contribution they’re making to their organization’s strategy
  12. 62% of the emails received by employees are not important
  13. 60.8% of employees say they occasionally or often ignore emails on the job
  14. 47.7% of employees say that receiving fewer emails at work would likely increase their happiness
  15. Employees are 75% more likely to watch a video than read text
  16. Only 24% of IC professionals consider they’re using their communication channels in an effective way
  17. Organizations with effective change and communication programs are 3.5 times more likely to outperform their peers
  18. 28% of leaders report poor communication as the primary cause of failing to deliver a project within its original time frame
  19. 77% of employees keep their phones within reach at work
  20. Only 17% of employers think line managers are good communicators

How Technology Can Help You Improve Business Communication at Your Workplace

In the world of digital transformation, companies must be ready to adopt new technologies to improve their organizational efforts.

As employee communications and engagement have become extremely important, new tools in this field have evolved.

As mentioned earlier, emails, intranets and other outdated employee communications solutions are not enough anymore.

Today, we see new software solutions that enable companies to improve both internal and external business communications.

With Haiilo, companies across the world have managed to:

The Future of Business Communication

The pandemic has drastically changed communication in today’s workplace.  To get a better understanding of what business communication may look like in the near future, check out this short video where internal communication experts explain what essential skills employee comms professionals need to develop to adjust to the new normal 👇

Curious to learn more? Check out our report on IC trends in 2023

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