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2.

11

The internal communication


function
This chapter takes a detailed look inside internal communication functions worldwide.
How are they structured and how many employees work in the function? How has this
changed over the years and what are the trends driving future changes?

Chapter Contents
2.1 Overview .............................. 12

2.2 Structure of the internal


communication function ......... 12

2.3 Internal communication staff


headcount ............................ 18

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The internal communication function

2.1 Overview
This chapter takes a detailed look inside internal communication functions worldwide. How are
they structured and how many employees work in the function? How has this changed over
the years and what are the trends driving future changes?

12

2.2 Structure of the internal communication


function
• The most popular area of the business for the internal communication function to be
placed in is corporate communication, with 44% of respondents selecting this option (see
Fig 2.1, below).

• In 2003, just 28% of respondents selected this option, indicating a rise of 16% (see Fig
2.2, right).

• Eighteen percent of respondents said their internal communication function sits within HR,
a rise of 10% on 2003 figures.

• The areas that are now less popular include housing internal communication within
PR/Public affairs (down from 15% in 2003 to 8% in 2006), marketing (dropped from
15% to 9%) and within the office of the CEO (from 12% to 4%).

• Where respondents replied “Other” many did so because the function was shared between

Fig 2.1 Where does the internal communication function sit?

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The internal communication function

a number of other business areas. Some typical responses include:


“It’s a cross-over function between the CEO and corporate communications”
“Combination of PR and Compliance”
“Has its own department but sits with media, corporate affairs, marketing, HR, business
development and volunteering”
“Shared by Marketing and Corporate Communication/PR”

• Many respondents who selected “Other” also said that individual business units had their
own internal communicator or internal communication function:
“Company wide internal communication is in Corp Comm, but business segments have 13
their own Internal Comm.”
“The majority of internal communications roles sit in Corporate Communication, but
others are employed within individual business units”
“Centrally it sits in Corporate Communication but at Branch level it is located in HR.”

Fig 2.2 Where does the internal


communication function sit? (2003 data)

% of
respondents

Corporate communication 28%

Public relations/Public affairs 15%

Marketing 15%

Office of the CEO 12%

HR 8%

Strategy and planning 4%

Organizational development 2%

Legal and corporate affairs 2%

Finance .5%

Other 13%

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The internal communication function

EXPERT COMMENTARY: The structure of the internal communication function

It’s good news to see the trend for internal communication moving into either corporate communications or HR
(see Fig 2.3, below). Both provide an opportunity to build a more powerful, joined-up proposition – whether as
part of an integrated communication strategy within corporate communications or an employee engagement
strategy within HR.

Since the 2003 survey, the rise of the concept of employee engagement “Changes in structure
seems to have helped crystallize the business value of having employees
14 who are motivated and committed, highlight the role a strong internal are happening
communication strategy can play and raise the profile of internal
communications in general.
because organizations
are seeing internal
This is borne out by fact that changes in structure are happening largely
because organizations are seeing internal communication as more
communication as
important and want to position their practitioners to be able to add more more important.”
value (see Fig 2.6 page 17).

An ideal home: HR or corporate communication?


The question of which of these two areas is the most appropriate home for internal communication always
provokes lively debate. Many internal communicators instinctively resist a reporting line into HR. They see it as a
function that can find itself under fire and undervalued by the business (why should internal communications be
tarred with the same brush?), sometimes overly focused on process, and less “independent” than a pure
communications team and therefore less able to play the middle person between employees and the business.

However, HR is the home of recruitment and induction, leadership competency frameworks, learning and
development, and performance management – all areas that can help make communication a key part of every
leader’s role and give them the skills to
fulfil their responsibilities effectively. Fig 2.3 Where does the internal communication function sit? (2003
Being part of a strong HR team may vs 2006 data)
bring the opportunity to be a part of a
compelling, value-adding employee
2003 2006
engagement strategy that combines


every aspect of the “people” toolkit to Corporate communication 28% +16% 44%
help shape an organization’s culture


and drive its performance. PR/Public affairs 15% -7% 8%

The argument against the corporate


Marketing 15% -6% 9%
communication function, of course, is -8% 4%
Office of the CEO 12%
that it owns none of those things. It


+10%
may also be lead by a director or VP HR 8% 18%
with a PR or public affairs background,
Strategy and planning 4% 2%
who might give more of their time,
attention, budget and air-time at board Organizational development 2% 2%
meetings to the external
communications areas they know best. Legal and corporate affairs 2% 1%

Finance 0.5% 1%
But here is an opportunity to be part of
a team where communication is the Other 13% 9%
main order of the day. Your external

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The internal communication function

communication colleagues are generally experts in their field and you can “Reporting lines and
develop a joined-up strategy, with consistent messages, for all
stakeholders. There is also a less “navel-gazing” feel, as your externally- structures are not
focused colleagues continually prompt discussions about what the media
and analysts are saying about the company, what the competition is up to
barriers to an internal
and what politicians and regulators have in store. communication
Who is valued in your organization?
professional with a good
At the end of the day, what’s best for your function depends on what network, sound
and who is valued in your organization. We all want to work for 15
someone who sees the value of internal communication, has influence relationships and strong
at board level, gets you good access to the CEO, and whose function is influencing skills.”
well-respected, valued and makes a difference.

No matter where you report, to be effective you’ll need strong working relationships with both the HR and
corporate communication functions. Reporting lines and structures are not barriers to an internal communication
professional with a good network, sound relationships and strong influencing skills.

Talking of access to the CEO, one disappointing result is the reduction in the number of internal communication
professionals reporting directly to the CEO. Hopefully the other consistent results we see throughout this report
reflecting a growing appreciation of the importance of internal communications mean we shouldn’t read anything
too untoward into this, and my comments about networks, relationships and influencing skills style apply. But it’s
a bit disappointing to see, nevertheless.

Finding value in a restructure


If you see value in a structural change, the challenge is that you may lose good people in the process.
Communications teams do seem to be restructured more than most, and I continue to see organizations lose
strong internal communicators who are searching for stability and a company that doesn’t feel the need to keep
asking them to re-apply for their job every 18 months. There’s also the risk that you may lose focus on your
strategy and have to renegotiate and rebuild business relationships.

Do hairdressers have the worst haircuts?


Conversely, a restructure brings opportunities to refocus your strategy, bring new energy to the team, sharpen
relationships, and of course makes eminent sense where the business itself is re-organizing. The rules for us are
the same as those we tell our internal customers embarking on a restructure:
• be clear about the reasons behind it
• paint a clear and compelling vision for the new function;
• focus on why your people would want to be a part of it;
• make roles and responsibilities clear;
• manage stakeholders carefully; and
• of course, communicate, communicate, communicate.

It may sound obvious, but then they do say hairdressers tend to have the worst haircuts.

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The internal communication function

Current and future structure of the internal communication function

• A highly centralized model was the most popular choice for the current structure of the
internal communication function (87%). (See Fig 2.4, below).

• However, only 53% of respondents selected this model as one of the ways their function
would be structured in future, a drop of 34%.

• Unsurprisingly, many respondents said they didn’t know how the function would be
16 organized in the next one to five years.

• A shared service model was the only option that respondents gave more votes for a future
structure than a current one (58% currently, rising to 64% in one-to-five years’ time).

Fig 2.4 How is the communication function currently organized and how will it be organized in the next one to
five years?

Note: the survey allowed respondents to


select more than one option for current
and future organizational structure.

Fig 2.5 How is the communication function Percentage of


currently organized? (2003 data) respondents

Highly centralized 42%

Organized by business units 18%

Shared service model 16%

Highly decentralized 10%

Other 6.5%

Organized by geographical lines 4.5%

Don’t know 3%

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The internal communication function

Reasons for structural changes

• The majority of respondents (40%) said they plan to restructure in order to become more
value adding (see Fig 2.6 below).

• Just over one quarter (26%) said they were restructuring to reduce costs.

• Twenty-eight percent said restructuring was planned in line with a wider organizational
restructure. 17

• Just six percent of respondents were restructuring for a reason different to the above
options.

Fig 2.6 Primary reason for structural change (all respondents)

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The internal communication function

2.3 Internal communication staff headcount


Number of internal communicators compared to budget size

• The overall average number of internal communicators employed by survey respondents’


organizations was 13.8.

Fig 2.7 How many employees are there in your company’s internal communication
18 function?

Internal communication budget Average number of employees in internal


communication function
All respondents ..........................................................................13.8
0 - $100,000 ...............................................................................2.8
$100,001-$200,000 ....................................................................4.4
$200,001-$300,000 ....................................................................6.6
$300,001 - $500,000 ................................................................10.5
$500,000 - $700,001 ................................................................17.8
$700,001 - $1 million.................................................................19.6
$1.1million - $3 million ...............................................................14.6
$3.1 million - $5 million ............................................................103.8
$5.1 million - $10 million ...............................................................44
More than $10 million .................................................................26.4

Note: see chapter 3, page 24 for more on internal communication budgets.

Changes to internal communication headcount

• Almost three times as many respondents have seen an increase in internal communication
staff headcount compared to those who have seen a decrease (see Fig 2.8, below).

• Over one-third (34%) of respondents report either an increase or a dramatic increase in

Fig 2.8 How has the number of internal communication staff in your organization changed over the past 12
months?

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The internal communication function

internal communication headcount over the past year.

• Only 12% of respondents say the number of internal communication staff employed in
their organization has decreased over the past 12 months.

Regional changes to internal communication headcount

• Regionally, Asia-Pacific saw the largest growth with 43% of respondents reporting an 19
increase or a dramatic increase in internal communication headcount (see Fig 2.9,
below).

• At the opposite end of the spectrum, UK-based respondents were most likely to report a
decrease over the past year, with 18% reporting their internal communication headcount
was less than this time last year (compared to just 11% in North America and 10% in
Asia-Pacific and Rest of World).

• In North America, 33% of respondents reported an increase, compared to 31% in the UK.

• The Rest of World region saw most stability in headcount with 61% of respondents
reporting headcount had stayed the same over the past year.

Fig 2.9 How has the number of internal communication staff in your organization changed over the past 12
months? (By region)

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The internal communication function

Reason for changes to number of internal communication employees

• By far the biggest reason (45%) for headcount changes is an increased emphasis on
internal communication (see Fig 2.10, below).

• Other explanations given for headcount changes are due to wider organizational headcount
increases (nine percent) or decreases (16%).

• Six percent put headcount changes down to the devolution of communication


20 responsibilities to individual business units

• Six percent say the change is due to their company being acquired or acquiring another
organization.

• Only three percent say the change is due to decreased emphasis on internal
communication.

• Of the 14% of respondents who selected “Other,” the majority involved internal
restructuring:
“Restructure created additional business units.”
“More emphasis on external comms incidentally increased attention to internal.”
“Going through a change process - it is recognised that internal communications is
under resourced.”
“Structural changes - Internal Communication Unit created within HR department.”
“New director who views external comms with a higher importance than internal comms.”

• A significant number also responded that employees had left the function and not been
replaced:
“VP Communication left the company and has not been replaced.”
“Departures from the organization. Resources have not been replaced.”
“Organizational restructure with members of staff leaving and not being replaced.”

Fig 2.10 What is the primary reason for changes to the number of internal communication staff?

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The internal communication function

EXPERT COMMENTARY: The size of the internal communication function

It’s good news to see that so many internal communications functions are growing (see Fig 2.8, page 18), and
apparently because of an increased emphasis on internal comms within organizations (see Fig 2.10, page 20).

So why the emphasis? Well, I refer again to the prominence of employee engagement. Not so many years ago
the term wasn’t even in our business vocabulary. Now, everyone talks about
it, and the language is so much more compelling. “Communication” suggests “Senior leaders are
“information.” It’s just about talking to people and sending out e-mails, isn’t
it? Everyone knows how to do it. “Engagement” suggests something much seeing evidence 21
more sophisticated and value-adding, and there are a range of models that we can add
showing the link to business performance, employee retention and external
reputation. value.”
Results lead to investment
But it’s not just about theory and semantics. While I still meet plenty of internal communicators struggling to be
seen as more than writers, distributors and conference organisers, where internal communication professionals
are being given the license to operate, we’re making a clear difference to company results.

Senior leaders are seeing evidence that we can add value. For example, at Melcrum’s US Summit1, a CEO and a
senior leader from two large global corporations stood up and spoke passionately about the difference effective
internal communication has made to their businesses. They quoted impressive
improvements in revenues, profits and retention rates. I’d defy any senior “We have
team to listen to the powerful way those two business leaders spoke and not
want to make the investment.
compelling data at
our disposal to
Using research as the foundation
These days we also have sound research into the business value of
illustrate the value
communication that we can call on to help make our case. From classic case we can add.”
studies such as the Holiday Inn service-profit chain2 piece, to ongoing studies
into the impact of communication on performance by companies such as Watson Wyatt, internal communicators
have compelling data at our disposal to illustrate the value we can add if we’re given the opportunity. And data,
after all, is the language of business.

The importance of leadership buy-in


It’s hard to say why the UK has seen the largest decrease in internal communications headcount (see Fig 2.9,
page 19). It would be interesting to know how much is down to the type of activity internal communicators are
choosing to focus on (and therefore the value they’re seen to add) and how much is due to senior leaders that
just don’t see the point, full stop. As that CEO said at the Summit, some leaders will just never get it.

It’s certainly noticeable in the UK how many high-quality communication professionals are choosing to leave their
in-house roles and take the freelance route, where they can decide upon the organizations and the leaders they
want to work with.

Are you really making a difference?


All things considered, I firmly believe that what will continue to make the difference, wherever we are in the
world, is demonstrable proof that effective internal communication makes a positive impact on business results.

Are we actually doing the things that make a difference? Do we have the courage to operate as coaches,
challengers, and trusted advisers to senior teams? Are we investing in our professional development to  

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The internal communication function

  build our competence? And if we know data is what makes leaders sit up and take notice, why are so
many of us apparently not measuring our results? (More of that in Chapter 5, page 45.)

But – it’s great to see that we’re being given the resource and the positioning to make a difference. Let’s show
our companies the return on their investment.

References:
1. Strategic Communication Management Summit, US, 2006, Melcrum.
22

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