WHY YOU NEED TO COMMUNICATE WITH YOUR EMPLOYEES A WHITEPAPER FROM SEQUEL GROUP
CONTENTS CHAPTER 1 – SMEs as part of the economic picture 1.1 Defining an SME 1.2 Why Internal Communications matters for SMEs 1.2.1 Productivity 1.2.2 Creativity and collaboration CHAPTER 2 – Barriers and challenges 2.1 The Ultimate Weapon? CHAPTER 3 – Overcoming the challenges 3.1 Time 3.2 Technology 3.3 Resource CHAPTER 4 – Conclusion: Paving the way for productivity and growth CHAPTER 5 – Sources and further reading
CHAPTER 1 SMES IN THE IC LANDSCAPE 1.1 Defining an SME SMALL AND MEDIUM-SIZED ENTERPRISES IN NUMBERS: MEDIUM-SIZED BUSINESSES UP TO 250
EMPLOYEES
MSBS IN THE UK:
MICRO ENTERPRISES
SMALL ENTERPRISES
UP TO 10 EMPLOYEES
UP TO 50 EMPLOYEES
34,100 MSBS IN 2013
(compared to 3,180 large corporates)
4.2 MILLION PEOPLE employed by MSBs
124,000 JOBS CREATED
in 2012-3 (500,000 more by 2030) Contributed £270BILLION to the UK economy
7.5% total turnover growth in 2013 Annual turnover £712 BILLION
SMEs are the engine of the UK economy. Collectively,
private sector turnover, employing more than
The report goes on to say that MSBs are enjoying a more
they employ more people than the country’s large
15.2 million people.
favourable economic outlook than their larger and smaller
corporations, and are widely credited as one of the driving forces behind the country’s economic recovery.
business counterparts: Research from Grant Thornton (Agents of Growth: The power of mid-sized businesses) indicates that
“The UK mid-market has proven itself to be exceptionally
Medium-sized businesses (MSBs) in particular have
resilient during the economic downturn. It continues to
start of 2014, SMEs accounted for 47.8 per cent of
outperformed expectation in recent years, contributing
outperform other segments (SMEs and large corporates)
private sector employment and 33.2 per cent of
£270 billion to the UK economy in 2013 alone.
in terms of productivity and employment.
The Federation of Small Businesses says that at the
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even two-way, communication. Today, it’s also about
at larger and smaller firms, and the significant majority
1.2 WHY INTERNAL COMMUNICATIONS MATTER FOR SMES
of mid-sized business leaders expect to create more jobs
Internal Communications has firmly established its place
peers across the organisation, flattening hierarchies
in the next year.”
in the modern enterprise. Many large corporations now
and breaking down functional silos.
“Headcounts are growing faster at MSBs than they are
giving employees an opportunity to communicate with
accept there is a real return on investment when employee But this MSB optimism only tells half the story. Employee
communication is done in a considered, strategic way.
productivity figures from the report show there’s untapped
A lot of this has to do with the influence of social media; people expect to be able to participate in conversations,
1.2.1 PRODUCTIVITY
not just listen in. Internal Communications should
Studies show what we have long suspected: that there
enable peer-to-peer conversations, as much as it
“Though UK MSBs’ average productivity outshines the
is a clear link between internal communications and
does the CEO’s message or the latest health and
domestic business community as a whole, it lags behind
employee productivity.
safety update.
Research from the Hay Group, for example, found that
Collaboration and knowledge sharing are critical in
highly engaged employees are, on average, 50 per cent
the face of the increasingly competitive and fast-
more likely to exceed job-role expectations than the least-
changing business landscape. Letting employees share
engaged workers.
ideas and problems leads to new and creative solutions –
potential within the MSB workforce:
that of counterparts in much of Europe.”
UK PRODUCTIVITY LAGS BEHIND LEADING EUROPEAN COUNTRIES: IRELAND
€373,000 AUSTRIA
€310,000
and technology can help that happen quicker. Companies with highly engaged people also outperform those with the most engaged workforce by 54 per cent in
A 2013 study by Information Week looked at 629
employee retention, 89 per cent in customer satisfaction
organisations to measure the impact of Enterprise
and fourfold in revenue growth.
Social Collaboration (ESC). The results were staggering: businesses that had a clear strategy for enabling ESC
FRANCE
€273,000 GERMANY
€235,000 UK
€226,000
But even with the mounting evidence, Internal
saw a 131 per cent greater increase in operational
Communication is still low down on the list of priorities for
efficiency, 122 per cent greater improvement in on-time
many SMEs. Precious resources are funnelled into day-to-
project delivery and 55 per cent greater increase in
day operations at the expense of ‘softer’ investments like
annual company revenue.
employee engagement. It’s not just creativity that flourishes when you allow However, if SMEs can tap into the same benefits being
employees to work together, but operational efficiency
realised by their bigger business counterparts – and
and business performance too.
approach internal communications in a manner fit for their size and circumstance – they could discover the missing link
The larger businesses become – or the more
that helps drive employee productivity and further growth.
geographically spread their employee base – the
If MSBs could achieve the productivity levels of the leading
more difficult it is to enable these conversations to
European nations, their contribution to the UK economy
1.2.2 COLLABORATION AND CREATIVITY
take place. That’s where social collaboration tools
would be even more impressive. Internal Communications
The role of Internal Communicators has evolved into much
created specifically for the workplace can, and do,
has a part to play in unlocking this potential.
more than owning and delivering channels for one-way, or
make a big difference.
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CHAPTER 2 BARRIERS AND CHALLENGES By their very definition, SMEs are a wide-ranging category:
Report author Professor Nick Bacon says:
a business with 10 people is hugely different to one with
“Time, technology and resource are the three big challenges facing SMEs. For example, many business owners are often
250 employees, and the internal communications needs
“With the cost of living rising more quickly than many
the internal communications team, along with HR, Finance,
and challenges of each are just as diverse.
people’s income, and employers struggling for growth,
IT and more and juggling everything can be a challenge.
staff retention is a vital issue. When organisations can’t Logic dictates that the smaller the organisation, the easier
easily increase salaries, they need to identify other ways
“With the rise of technology, people expect information
it should be to communicate with and engage employees,
to build staff engagement - and a good benefits package
fast and this comes at a cost. Keeping up can also be
and enable collaboration. After all, small businesses have
does this. However, our research shows that even if
challenging for a business that may not be able to
the luxury of face-to-face communication.
companies are offering good benefits, if they fail to tell
prioritise communications to their employees, despite
staff what’s available, it’s no better than not offering
knowing its value.”
The issue is a lot more complex. Research suggests
these benefits at all.”
smaller businesses might actually be doing worse
The key point here is that what works for a multi-national
than their bigger brothers and sisters when it comes
This research focuses on employee benefits, but how
corporation doesn’t necessarily work in a small business.
to employee communication.
many other areas of business strategy and performance
There is never a perfect out-of-the-box solution when it
are suffering from a lack of communication?
comes to internal communications, and that applies equally
In their study Money Talks: Communicating Employee
to businesses of a similar size.
Benefits, Cass Business School looked at the specific area
If you’re not telling your employees what’s good about your
of employee benefits, to see whether the way businesses
business, ask about customer feedback, what’s bad, what
SMEs do not need to establish dedicated Internal
communicate their benefits affects employee understanding
needs to change and how they contribute, are you making
Communications departments to reap the benefits of
and business performance.
the false assumption that they already know these things,
an informed, engaged – and therefore more productive
or worse, implying that they don’t need to know?
– workforce. However, they do need to understand the
They found that 64 per cent of organisations fail to
reasons for communicating well, the options available to
communicate their benefits packages to employees and
2.1 THE ULTIMATE WEAPON?
them, and have the right tools and partners to deliver a
perform no better than those who don’t offer any benefits
SMEs might have all the intention to communicate well and
communications strategy that is fit for purpose.
at all. Communicating benefits is just as important as
foster engagement, but resource constraints can often get
investing in them in the first place.
in the way.
Perhaps even more surprising, the companies that
Internal Communications Adviser to the Federation
performed worst in the study were smaller organisations
of Small Businesses, Bridget Moylan, in Sequel Group’s
of fewer than 50 people.
AQ magazine, says:
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Time, technology and resource are the three big challenges facing SMEs.
CHAPTER 3 OVERCOMING THE CHALLENGES Every business is different, but one thing there is usually
Taking a longer-term view also means that tactical
higher if you aren’t asking people to change their behaviour.
a shortage of is resource – be it budget, people’s time, or the
communications can be planned in advance, giving
For instance, if you have a workforce that spends time out
right systems and tools to support the business strategy.
the people responsible for communications greater
on the road or away from their desks, a mobile or printed
opportunity to schedule their time accordingly.
channel might work better than an email or online solution.
be a daunting one. It implies a drain on precious resources
Creating that plan requires time and expertise. Bringing
Understanding your audience is the first, and most
and that means it falls behind more business-critical needs
in an expert to help develop the strategy and roll-out plan
important, step when selecting tools to help inform and
like day-to-day operations or good accounting.
can be an investment worth making up front.
inspire your people. Working back from there, you can
Bridget Moylan of the Small Business Federation says:
3.2 TECHNOLOGY
suits the type of information you want to deliver, and the
For many SMEs, the term ‘Internal Communications’ can
find a technological solution that meets those needs and There are now so many tools that encourage two-way
budget you have to work with. The cost of technology is
“I think the definition of ‘internal communications’ can
dialogue and collaboration that technology is no longer
also coming down all the time, particularly if you don’t
cause confusion with SMEs, it’s more important to focus
a barrier, but an enabler for small companies wanting
require a bespoke solution.
on the tools they need to create an informed and engaged
to invest in their internal communications.
workforce.” Bridget Moylan from the Federation of Small Businesses says:
3.1 TIME It is not unusual for SME employees to take on additional
“With the rise of technology, people expect information
work or roles alongside their core focus areas, so time
fast and this comes at a cost. Keeping up can also be
is always in short supply. When it comes to delivering for
challenging for a business that may not be able to prioritise
clients or working on an employee engagement campaign,
communications to their employees, despite knowing its
there’s no prize for guessing which falls to the bottom of
value. This is where mobile and social tools (many free)
to-do lists again and again.
can be helpful for a growing and disparate team and encourage self-generated content.”
Proper planning is one of the best ways SMEs can save time in delivering their internal communications.
The first word of reassurance is that just because all these tools are available, doesn’t mean you need to use them all
A strategic plan that lays out which areas are important
(you shouldn’t).
to communicate and why can help businesses save time by focusing their attention on the messages and channels
Technology should match existing ways of working wherever
that really matter.
possible. Engagement with a new tool or channel is much
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3.3 RESOURCE Resource usually means money, but it also means your human resource: do you have the people to deliver your internal communications strategy and crucially, do they have the right skills? Money can also be difficult to find in companies stuck in short-term cycles of paying suppliers and wages, and receiving customer payments. Having the right comms strategy is an invaluable starting point that can save costs and time down the line. Where talent is concerned, you might have a perfectly capable employee who is willing to take on some internal communications responsibilities, but do they have the right combination of strategic and creative skills to deliver communications that get results? They might be a good writer, handy with design software, or great at seeing the bigger picture and mapping the strategic communication goals for your business – but can they do it all? Your internal communications plan should play to the strengths of the people you have at your disposal, and recognise where there are skills gaps. Outsourcing a portion of your internal communications activity can save time and can result in a better quality ‘product’. It can also cost less than the cost of hiring an internal person and doesn’t add to your head count or regular overheads.
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CHAPTER 4 CONCLUSION: PAVING THE WAY FOR PRODUCTIVITY AND GROWTH Internal communication has been delivering benefits for
“No matter a business’s size, an engaged team to support
large businesses for years. The ROI is being demonstrated
growth and deliver its objectives is essential. It’s about
more and more, and internal communicators are getting
creating the right ethos within a company.”
their place at the boardroom table – such is their growing importance in a changing business world.
Given the proven uplift in productivity and performance, and the benefits of collaboration, it should no longer be
At the other end of the spectrum, SMEs are largely still
a case of SMEs asking whether they should be doing
to reap the benefits of a strategic approach to employee
internal communications, but rather how.
communication and engagement. An internal communications strategy need not be overly To quote Bridget Moylan from the Federation of Small
complex. It should be mapped backwards from the needs
Businesses again:
of the business, the needs and behaviours of employees, and the budget tools and resources available.
“We know that confidence is high among small firms and they are looking to employ more, and nearly 60 per cent intend to
When all those needs are considered, internal
grow over the next year. From an external perspective, I would
communication no longer becomes a scary concept for
argue that now has never been a better time for SMEs to
small businesses – it becomes an exciting new way to
engage their workforce and to reach these growth aspirations,
connect employees to each other and to the goals of the
as engaged and productive workforce is crucial.
business, paving a path towards profitability and growth.
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No matter a business’s size, an engaged team to support growth and deliver its objectives is essential.
CHAPTER 5 SOURCES AND FURTHER READING HERE TO HELP Do you need help developing an internal communications strategy that’s right for your business? Sequel Group helps businesses of all sizes and types to
SOURCES AND FURTHER READING: 1. Agents of Growth: The power of mid-sized businesses, Grant Thornton, 2014
2. Hay Group research, cited in “Creating the Best
communicate with their people in creative and impactful
Workplace on Earth”, by Rob Goffee and Gareth Jones,
ways. We can provide a full suite of internal communications
Harvard Business Review, 2013
services, or simply support you in delivering certain aspects of your strategy.
3. “Why Enterprise Social Collaboration Means Business”, www.informationweek.com, 2013
We have 40-plus writers, editors, project managers, designers, coders, web and video developers and strategists, and together we’ve won more than 30 awards
4. Money Talks: Communicating Employee Benefits, Cass Business School, 2013
in the last four years for our client work. We’d be happy to discuss your internal communications needs with you, and how to get your people united behind your company’s vision and goals.
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