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Strapped for cash? Survey reveals paltry IC budgets

Emma HanleyEmma Hanley·

One-third of internal communicators have annual budgets of less than $10,000, the results of Newsweaver’s Inside IC 2016 survey have revealed.

While the majority of these communicators come from companies of less than 1,000 employees, the figure is nonetheless startlingly low given the huge impact internal communications can have on a business.

With huge percentages of employees worldwide not engaged in their workplace, and companies with highly engaged workforces known to significantly outperform their peers, it is becoming increasingly evident that organizations are not investing enough in internal communications.

According to the survey, the average IC budget is $150,000, excluding salaries. This rises to $250,000 for large organisations with more than 10,000 employees. These might sound like large figures, but in fact they amount to a spend of approximately €25 per employee, per year.

This is a very low figure, given the transformative effect a good IC strategy can have on the productivity of a workforce.

So how do internal communicators negotiate to get a better share of the budget?

Budget allocation for each department is generally calculated as a percentage of the department’s impact on the bottom line. For example, the budget for the marketing department can be calculated as a proportion of sales revenue.

For many internal communicators, it can be difficult to know what a reasonable proportion of budget allocation is for their department.

In order to demonstrate the impact of internal communications on the bottom line, internal communicators must be able to prove return on investment and link their activity to the organization’s strategic goals.

This means that internal communicators must become fluent in metrics.

Some 94.5% of respondents to the Inside IC survey believe that it is important to measure the impact of internal communications.

So we know that it’s important to measure IC activity in order to increase the IC budget, but it’s still not happening: 67% of survey respondents believe it is difficult to measure.

This lack of measurement has some concerning effects: the survey found that some seven out of ten IC departments expect their budget to remain flat for the next two years. Even more concerning is that this figure is on the rise: when asked the same question two years ago, six out of ten expected their budget to remain the same.

Measurement is key

Measurement is key to understanding what is working. At a basic level, some metrics and measurement must be in place in order to know when objectives have been reached and desired goals are accomplished.  

Once internal communicators can clearly demonstrate the impact of their communications on business critical areas such as change, mergers, and employee engagement, they will be seen as a strategic ally.

When the IC function is elevated to this level, it becomes easier to get budget approval and for IC to get the resources needed.

Through examining each of the objectives needed to accomplish a goal, it is possible to determine what success is and provide milestones to track progress.

Measuring progress means ongoing analysis of engagement reports of content and interaction, email reports, sentiment analysis and pulse surveys.

Producing quarterly, monthly and yearly reports provides visibility on work done. Results achieved are valuable to stakeholders both inside and outside the department. Setting key performance indicators (KPIs) and tying these goals back to the organization’s objectives enables the department to clearly demonstrate return on investment (ROI) and potentially increase budget and resources available to internal communications.

For IC to get a seat at the decision making table, measurement is going to be key.
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