Emerging Issues in Internal Communications

Abstract

Internal communication is rising in prominence and resources due to generational shifts as Baby Boomers retire and Millennials enter the workforce. Through 32 interviews with executives in marketing, public relations and human resources, this study identifies some of the communication challenges and opportunities presented for internal communicators. These issues are explored based on theories of organization power and encroachment, stakeholder theory and organizational identity. Some of the major trends include the emergence of internal social media channels and efforts to drive and measure employee engagement. The findings suggest that public relations tends to lead internal communications initiatives in close collaboration with human resources and executive leadership. This study also identifies differing organizational structural relationships for internal communication and their strengths and weaknesses. Finally, the findings provide support that internal communication is becoming a strategic function and is shifting from one-way to three-way communication. 

Source: Public Relations Journal, https://prjournal.instituteforpr.org/wp-content/uploads/2016v09n04Neill.pdf
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 License.

Introduction

Internal communication is considered one of the fastest growing specializations in public relations, and is gaining renewed attention due to a range of factors including the rise of employer branding, workplace uncertainty caused by the Great Recession, and expectations of a worker shortage once more and more Baby Boomers reach retirement age. As evidence, the Seventh Communication and Public Relations Generally Accepted Practices (GAP) study, administered by four leading public relations associations, found an 11% increase (from 47% to 58%) among senior-level practitioners reporting internal communication as one of their core responsibilities compared to 2009. 

More and more companies are realizing employees aren't just another stakeholder as their degree of engagement is tied to key business outcomes such as profitability and customer satisfaction. In fact, the costs associated with poor employee relations are estimated at $450 to $550 billion a year including absenteeism, labor grievances, production interruptions, repair and warranty expenses, and employees who are disengaged or underperforming. Not included in those calculations are the costs associated with recruiting, training, and hiring new employees. Recent surveys have found that only 29% of employees in the U.S. and Canada are engaged, and that number declines globally to 14% in Western Europe, and 6% in East Asia. 

While many terms have been used to describe this function such as internal marketing, internal public relations, employee relations, and management communication, the most accepted term among European communication practitioners is internal communication. But which department is most qualified to lead this area? In a qualitative study in the United Kingdom, Dolphin found that independent internal communication departments were being created and tended to report to a communications executive. A 2006 survey found that corporate communications was the most common place for internal communication to be placed at 44%, followed by human resources at 18%, and public relations or public affairs at 8%. However, Johnson reported that a U.S. merger team that managed employee communication was comprised of investor relations, marketing, and human resources with no mention of public relations or corporate communications. Wright warned that "if public relations fails to reclaim the responsibility for all internal and external communications its function might be relegated to a publicity operation supporting, and maybe even reporting to, marketing". More recently, scholars and industry leaders pointed out that "both internal and external communication…must be integrated" to be effective and "you cannot communicate externally without communicating internally – the two are interdependent". 

While much of public relations practice and research has been focused on external communications, scholars have decried the "surprisingly sparse" contributions from the public relations and corporate communications disciplines in this realm, and the "dearth of research" in the academic literature. Fortunately, public relations scholars are beginning to fill this void. Verčič, et al., found industry leaders ranked internal social media and employee engagement among the top three issues in internal communication, with the other issue being change communication. However, the authors did not examine any of those issues in-depth. Kim and Rhee found that employees with good relationships with their employers were more willing to serve as advocates by communicating positive information externally on behalf of their organizations. Luo and Jiang identified some of public relations practitioners' internal roles as providing communication training to middle management, and reinforcing shared visions through communication with employees. Ruck and Welch examined common communication assessment tools and found a lack of measures for employee engagement among internal communication programs.  

While these studies provide valuable insights, in this changing landscape more research is needed to determine which departments can best fulfill the emerging communications needs in internal communication as well as when it is appropriate for internal departments to collaborate. The purpose of this study was to examine who oversees internal communication and what role public relations fulfills in this domain. In addition, the study examined current trends in internal communication and whether or not the employer branding movement that has been mentioned in the trade press is influencing the practice of internal communication. To examine these issues, 32 interviews were conducted with business executives working at companies listed among Fortune's "100 Best Companies to Work For" as well as other well-known companies and organizations. Participants included executives from marketing, human resources, and public relations because previous studies listed these departments as most likely to manage some aspects of internal communication.

Literature Review

Due to confusion regarding which function should manage internal communication, theories related to organization power and encroachment were examined as a theoretical foundation for this study. Other theories explored in the context of internal communication included stakeholder theory and organization identity. Finally, recent scholarly work in the areas of employee engagement and measurement are examined to identify gaps in the literature. 

Organizational Power & Encroachment

Public relations scholars have long expressed concerns about the potential for functional encroachment by marketing and other similar departments, which is defined as "one department intruding on the activities traditionally in the domain of the other". But are public relations practitioners claiming internal communication as part of their domain? Neill found evidence of confusion regarding public relations' oversight of internal communication among other departments. While public relations practitioners in the study named employee communications as one of their primary responsibilities, a human resources executive said the "focus and influence for public affairs is external a lot of times rather than internal with HR issues" Scholars and industry leaders reported that marketing and human resources also have managed internal communication, and marketing scholars have provided evidence of an interest in managing internal communication from an employer branding or internal marketing perspective. 

Even more threatening to public relations is structural encroachment, which is defined as assigning someone from outside of public relations to manage the function, which also diminishes public relations' influence in communication policy decisions. So if public relations executives yield management of employee communication to marketing or human resources, it remains to be seen whether or not that would weaken their influence in the organization and increase the likelihood of structural encroachment. This merits more research into the oversight over internal communication. 

Stakeholder Theory

A core responsibility in public relations is stakeholder analysis, a process that involves identifying potential stakeholders and their concerns, and determining which to give priority to when there are competing claims. Stakeholders are defined as "any group or individual who can affect or is affected by the achievement of the organization's objectives", those who have a "contract, expressed or implied, between them and the firm," and who may experience harm or benefit as a "result of the firm's actions or inactions", all criteria that are applicable to employees. 

Scholars suggested that marketers tend to view employees as internal customers or as channels of delivery of services for customers, and both marketing and public relations executives view employees as brand ambassadors.

Organizational Identity

A foundation for the study of internal communication can be found in organizational identity theory. Organizational identity refers to "what members perceive, feel and think about their organizations"… as well as a "collective, commonly-shared understanding of the organization's distinctive values and characteristics". A more recent trend tied to organizational identity is the focus on employee engagement defined as "the ability to capture the heads, hearts, and souls of your employees to instill an intrinsic desire and passion for excellence". Engagement has been focused on motivating the "discretionary effort exhibited by employees," or the willingness to go beyond the minimal efforts required to keep a job. Related to employee engagement is organizational commitment, which involves an employee's decision about whether or not to leave the organization. Effective internal communication may influence engagement and commitment, but poor communication can lead to disengagement. 

One of the ways that organizations try to build organization identity and engagement is through employee orientation and other training programs. Organizations spend $54 billion annually on formal orientation programs for new employees. However, ongoing communication is necessary as recent studies have found that engagement can decline by 9% in the first year of employment and as much as 12% over five years. Companies communicate with their existing employees through a range of channels including face-to-face, company newsletters, and email to provide information about new employees or promotions, updates regarding benefit programs, and recognize individual contributions and achievements. More strategic roles may include creating a corporate identity, motivating employees, communicating organizational change, and providing the information necessary for employees to complete their jobs. Cheney described several techniques that can build organizational identification such as the common ground technique, which involves expressing concern for the employee, promoting shared values, sharing praise by outsiders or testimonials by employees. 

Employers are now taking a more proactive approach to build organizational identification through employer branding programs. Lloyd defined employer branding as the "sum of a company's efforts to communicate to existing and prospective staff that it is a desirable place to work". Employer branding tends to focus on experiential benefits such as education and training opportunities, advancement potential, and culture during recruitment and orientation. Scholars warned that the brand promise and actual experiences of employees need to be aligned with the culture, policies and procedures as "any gaps…will become starkly evident" and could lead to employee disengagement. 

Some of the characteristics associated with strong employer brands include a strong brand identity, positive reputation, differentiation from competitors, and perceptions of delivering on brand promises. Strong employer brands typically appear on prominent lists of best places to work and spend triple the amount on internal communication compared to lower performing companies. This finding supports the value of studying companies that appear on these lists, due to the fact that they likely spend more money and effort on internal communication. 

Aligned with employer branding is values communication. Lencioni described core values as those that are deeply ingrained and that consistently guide a company's actions. Berg wrote that historical accounts about the corporation's founding are often used to illustrate desired values or behavior and develop a sense of belonging. Trevino, Hartman, and Brown pointed out that in large organizations most employees rarely have face-to-face interactions with senior executives, so employee's perceptions about values come indirectly from images, policies, and communication. 

Because employees can serve as brand ambassadors, it is crucial that they not only understand those core values, but "firmly believe in and internalize the brand values". Internalization of values is a form of identification, and refers to when an individual adopts behavior in order to maintain relationships with another person or group, in this case relationships with supervisors and coworkers. 

A challenge in building organizational identity is organizational change. Today's business climate includes globalization, mergers/acquisitions, and changes in senior management. Some of the biggest changes are generational shifts as Millennials enter the workforce, and forecasts of a workforce supply shortage once Baby Boomers retire. Myers and Sadaghiani reported that Millennials have different expectations of open, supportive and affirming communication from their supervisors and managers; and "are unlikely to accept an organizational policy that information is communicated on a 'need-to-know basis'". Millennials also value teamwork and collaboration, unlike Generation X workers who tend to work autonomously. 

Measuring Success in Internal Communication

All communicators are being asked to produce evidence that prove their efforts are successful, and internal communicators should do the same. Human resources professionals tend to look at average length of tenure among employees, average turnover, and engagement. In their study on intranets, Spurlock and O'Neil found some common metrics used for internal communication included readership numbers, amount of discussion, user surveys, and informal feedback. But do numbers like these fully capture employee engagement? Ruck and Welch wrote that their assessment of 12 academic and consultancy studies found a focus on measuring "communication processes, channels and volume of communication" rather than organizational engagement. 

This review of the literature suggests several topics related to internal communication that deserve more attention such as encroachment, generational shifts, employer branding or values communication, and metrics. Specific questions that should be addressed include:  

• RQ 1a: Who leads internal communication? RQ1b: Is there evidence of encroachment or a blurring of boundaries in this domain?  
• RQ 2a: What are the latest trends impacting the domain of internal communication? RQ2b: How are internal communicators adapting to these changes? 
• RQ 3: Is there a focus on building organizational identity through employer branding and if so, which department leads these efforts? 
• RQ 4: How are internal communication and engagement being measured? 

Methodology

Based on the research questions regarding management of internal communication, qualitative research is appropriate to uncover new and unexpected changes in this discipline. Personal interviews have previously been used to study the role of leadership during internal brand building, the role of internal communication in employee engagement, and internal marketing for a rebranding effort. Personal interviews are considered appropriate when the subject matter is highly confidential, when group pressure is likely to alter or discourage honesty, and when there is a need to probe attitudes, behaviors and motivations. In addition, qualitative research such as in-depth interviews is valued for the deeper level of detail it provides, and the ability for researchers to probe the reasons why participants give specific answers. 

Research Design

Sampling

Because the primary purpose of the study was to understand public relations' role in internal communication, the public relations officer was recruited first for participation and was then asked for assistance in scheduling interviews with other members of the internal communication team at their organizations. The informants were selected using purposive sampling based on their specialized knowledge and involvement in either managing or executing internal communication for their company/organization or their clients. The sample size was 32 executives, and most of the participants worked in public relations with 20 (62.5%) participants, five (16%) in human resources, one (3%) in marketing, and the remaining six (19%) were external consultants in marketing, human resources, and public relations. Fourteen participants (44%) were in manager or director level positions. The others included five vice presidents, six coordinators/specialists, six external consultants, and one CEO. The sample included 23 (72%) females and 9 (28%) males, and four minority participants representing 12.5% of the sample (3 African-American females and 1 Hispanic male). The participants represented the following sectors: corporate 12 (37.5%), government/military four (12.5%), education/nonprofit 10 (31%), and agencies six (19%).

Those selected for the study participated in personal interviews, which averaged 39 minutes. Three of the interviews were conducted in person and the remaining 29 by phone using the same interview protocol. All participants signed consent forms, which detailed actions to be taken to preserve anonymity and confidentiality. The interviews were audio-recorded and transcribed for analysis producing 305 pages of typed, singled-spaced text, representing almost 21 hours of interviews. 

Data Analysis

The data were analyzed using standard approaches. The researcher developed a code book and coded each interview individually under broad themes based on the conceptual framework and key variables under study. Next composite code sheets were created electronically using qualitative research software reflecting all the respondents' comments for a particular code. Then the researcher wrote memos and analyzed the data further to identify additional insights and refined the codebook. A key feature of the study was multiple participants at three of the companies/organizations discussed the same issues allowing a means for verifying accuracy. The data analysis also included negative or discrepant case analysis to identify any examples disconfirming or challenging emerging findings. To establish intercoder reliability, a sample of 25% of the transcripts was independently coded by a graduate student, who was trained using a code book. Both coders used the same qualitative research software for coding, which calculated the inter-rater reliability as 88.3%. 

Findings

The internal communicators provided insights into several issues impacting their discipline today including organizational structural changes, generational shifts in the workforce, the rise of internal social media channels, and the development of metrics associated with employee engagement. Collectively, these issues appear to be strengthening the power and demand for strategic internal communication. 

Organizational Structural Changes

A couple of the participants said the ideal structure is a close partnership between public relations and human resources on internal communication initiatives. As a managing director at a public relations agency said, 

However, the problems that participants reported with the decentralized structure were a duplication of services, lack of collaboration, and different priorities. 

Integrated Communication Approach

While many of the organizations had either separate departments or specific employees dedicated to internal communication, some were moving toward more of an integrated communications approach due to the overlap of internal and external stakeholders and channels. A vice president of communication at a Fortune 500 company explained their integrated approach: 

A senior director of public affairs in a healthcare organization offered support for the integrated approach due to the blurring of audiences for various communication channels. 

Generational Shifts in the Workforce

The next research questions asked what are the latest trends impacting the domain of internal communication and how are internal communicators adapting to these changes? One of the biggest transitions impacting internal communication is the retirement of Baby Boomers and the entrance of Millennials in the workforce. Employers must anticipate how to handle the loss of institutional knowledge and experience. As a vice president of brand and strategy at a Fortune 500 company said, 

Further complicating this transfer of knowledge, Millennials have different communication expectations. An internal communication consultant explained the challenges this presents: 

The Rise of Internal Social Media

One of the emerging trends in internal communication is the rise of internal social media channels. Some of the more popular platforms are SharePoint, Yammer, Jive, and Chatter, which are used for building intranets or as collaboration tools. Some of the features of these platforms include the ability for employees to like content, rate/review content, comment, and collaborate with other employees. These tools appeared to be more likely to be found in corporate settings with less presence in nonprofit and government environments. 

Some of the barriers to adopting these tools that participants mentioned included gaining approval from information technology and legal departments as well as senior leadership, who may see the channels as a waste of time. When adopted, these channels are fostering collaboration and three-way communications. An internal communication coordinator in a healthcare organization described this trend: 

Some employers took a hands-off approach to these new communication channels allowing for user-generated content and only monitored the content for insights into employee concerns, while others would take a more proactive approach. An internal communication adviser for a Global 500 company said, 

An internal communication consultant said his company has found positive indicators associated with the adoption of internal social media channels: 

While the number of internal communication channels has increased, some participants said two challenges are moving people from email to the new channels and a lack of one primary source of crucial information. 

Employer Branding

The next research question asked is there a focus on building organizational identity through employer branding and if so, which department leads these efforts? A new trend tied to Millennials' entrance in the workforce is the development of an employer brand or employer value proposition to establish commitment. Millennials have the reputation of being less loyal to employers and more willing to move on to advance in their careers. As a managing director at a public relations agency said, "The millennial mindset is very much in the moment and I don't mean this in an ugly way; it's…what have you done for me lately?" 

While the exact terminology used slightly varied from "internal branding," "employee brand" or "employer brand," the majority of the internal communicators (n=21) were able to list specific tactics they were using to promote their core values to employees as a means to improve employee engagement and commitment. Some examples of core values found in the organizations that participated in the study included collaboration or "working without silos," respect, honesty, integrity, humility, character, innovation, workplace safety, and customer service. As a managing director for a public relations agency said, 

Human resources tended to be responsible for introducing and communicating the company/organization's core values in employee recruitment campaigns and new employee orientation. Several executives (N=6) reported that their employers integrate their values into the annual awards program and recognize employees who exemplify those values, and these efforts were also led by human resources. 

Public relations executives reported that they play a role in reinforcing their employer's core values through routine communication. They did so through promotional videos and employee testimonials and the use of editorial calendars, through which they deliberately scheduled content regarding core values. Some (n=6) even reported reviewing all messages for inclusion of core values. As a senior manager working in the education sector said, 

Metrics Associated with Employee Engagement

The final research question asked how are internal communication and engagement being measured? Most of the participants reported using online metrics such as page visits, returning visitors, time spent with content and referring sites. Other common metrics included click through rates for electronic newsletters or attendance at employee meetings. A positive trend is the use of routine surveys on communication and culture, and several participants (n=6) discussed how they used employee feedback to support changes in communication programs and the organization as a whole. A central focus of the survey questions is employee engagement. A manager of employee programs for human resources described the specific questions they use: 

Other participants reported using similar questions such as familiarity with business priorities and how employees rate the organization on its core values. Others said they look for signs of improvement compared to previous years' responses (n=3) . In addition, several executives said they look for ways to address employee concerns. As a chief marketing officer said, "They're administered, the results are given and then every division and leader is responsible for taking those results and crafting an action plan based on the results of those surveys". Similarly, a regional public relations director in the tourism industry said,  

One participant pointed out that low response rates in taking the survey also can be an indicator of low employee engagement. An indicator that was unique to employers seeking to place among the lists of best places to work was the requirement to find employee stories. As a human resources consultant, who previously worked for a company featured on Fortune's best list said, 

Another key metric that internal communicators are examining is turnover, specifically regrettable attribution, which involves tracking the loss of the most valued employees. Some participants (n=6) also reported using qualitative data gleaned from informal conversations with employees or supervisors. A more formal program at one employer for gaining insights was an internal communication advisory council.  

On the other hand, three participants reported using no metrics, and one participant said she only looks at click through rates for email newsletters, evidence that some internal communicators have yet to adopt more advanced metrics.

Discussion & Implications

This study provides support that public relations tends to lead internal communication and that human resources is a close collaborator. However, it appears that human resources may be the department facing potential functional encroachment as a few participants reported that internal communication was recently restructured to report to public relations or marketing. One executive reported this change was made due to the perception that public relations executives had stronger skills in writing and design. Areas where human resources had a dominant role in internal communication were recruitment and new employee orientation, as well as oversight of employee awards programs and annual performance evaluations. At the same time, public relations tended to oversee routine communication such as newsletters, videos, and employee intranets. 

One trend that appears to be emerging in larger corporations is an integrated communication approach to internal communication, which involves treating employees as just another stakeholder in larger campaigns rather than assigning dedicated employees to internal communication. This trend would represent a shift compared to earlier research, which reported the creation of independent internal communication departments. This new approach may be due to limited resources, but it also may be attributed to the perception of the blurring of audiences that was mentioned by five of the executives in this study. Employees often read information about their employer from external sources such as the media and external social media channels as well as internal communication channels. The integrated approach also may be due to the push to create consistent messaging both internally and externally. At the same time, public relations practitioners should engage in stakeholder analysis as priorities will change based on the specific issue. Treating all audiences as a general public is neither an efficient use of resources nor effective.  

One of the biggest forces impacting internal communication is the generational shifts. Millennials are resisting traditional communication tactics such as long mass emails instead preferring short messages on the device of their choosing. But internal communicators warn this change can present another challenge for employees, the lack of one primary source of information. Millennials also expect more dialogue in internal communication, and internal social media channels are enabling more collaboration. Verčič et al. had previously identified internal social media as the number one issue in internal communication through a Delphi study in Europe. This study provides new insights regarding the types of tools being used and the benefits associated with employee engagement. Opinions varied on whether internal communicators should only monitor employee comments posted on internal social media channels or engage directly in the conversations. 

The entrance of Millennials in the workforce also has reinforced the need for employer branding as a means of increasing employee loyalty and engagement. The majority of the internal communicators were well aware of this trend, and had implemented specific strategies and tactics to promote their core values as a competitive advantage. These efforts included promoting their values in employee recruitment materials, employee orientation, routine communication as well as recognizing employees who are modeling their values in annual awards program. 

Finally, it is encouraging to see internal communicators using annual surveys as a benchmark to identify areas for improvement. More specifically, there was evidence of questions to measure engagement not just communication processes. Public relations practitioners should adopt some of these specific questions in their employee surveys to measure employee engagement. Six of the participants also discussed the lengths they go to use feedback from employees to enhance their work environment, providing evidence of two-way symmetrical communication. This is a sign of progress as Verčič et al. found that internal communication was more tactical and focused on one-way communication in their study in Europe. 

Limitations and Direction for Future Research

While this study provided new insights, the sample was limited to 32 employees in 26 companies or organizations, so the results cannot be generalized. However, the sample did vary on key dimensions such as organizational size, sector, and geography, which is consistent with the goals of qualitative research in portraying the range of depth of the phenomena to develop theory. Another limitation associated with interviewing business elites is their accessibility due to time and status constraints as well as the "instinct to protect against intrusion into potentially sensitive matters". For these reasons, it is difficult to interview business executives for more than an hour, with interviews averaging about 40 minutes. 

Additional research should be conducted using surveys to allow for generalization and ethnography for organizational context. Issues that deserve further attention include how common the integrated communication approach is used for internal communication versus dedicating specific employees to internal communication. The two employers in this study that have been featured on Fortune's list of best employers were evenly split between the two approaches, so it is difficult to determine which approach is better or which factors organizations should consider when choosing between the two. 

A second area that deserves more attention is the rise of internal social media channels. Because these channels are new, it is too early to identify the range of challenges they present in managing internal communication. Areas that deserve more attention include policies for use of the channels and identifying effective uses for internal communication.

Conclusion

This study has provided new insights into the domain of internal communication including who is managing the function, how changes in workforce demographics and the focus on employee engagement are demanding new communication approaches, and the types of metrics that are being utilized. All of these trends indicate a move to a more strategic role for internal communication and more dialogue with employees rather than one-way communication. 

Appendix A: Code Book