In today’s competitive business environment, organizations understand the value of gathering employee and customer feedback. Surveys provide critical insights into how a company is performing and where there are opportunities for improvement. However, many businesses choose to conduct these surveys internally, believing it saves money and leverages internal expertise.
While this approach might seem cost-effective on the surface, it comes with hidden opportunity costs – resources and potential insights lost – that can outweigh any immediate savings. In this blog, we’ll explore the real costs of conducting surveys in-house and why partnering with a specialized third-party provider might ultimately be the more valuable choice.
1. Understanding Opportunity Cost
Opportunity cost is a core economic principle that refers to the benefits one misses out on when choosing one alternative over another. In the context of conducting surveys, the opportunity cost includes all the things an organization could have done with its time, resources, and energy instead of managing an internal survey.
On the surface, the cost of conducting a survey internally may seem minimal – especially when compared to hiring an external service provider. However, this viewpoint overlooks the indirect costs and the resources diverted from core business activities. The real question is: What is your company losing by choosing to conduct surveys internally?
2. The Time Investment
Diverting Staff Resources
When a company conducts a survey internally, it must allocate employees to handle various tasks, including survey design, distribution, data collection, analysis, and reporting. While some organizations have skilled HR or marketing departments that can handle this, it often means pulling key personnel away from their core duties.
For example, an HR manager might have to dedicate hours or even weeks to develop the right questions, distribute the survey, and analyze the responses. During this time, other important HR responsibilities—such as employee development, conflict resolution, and recruitment—may be neglected. Similarly, if a marketing team conducts a customer survey, they might spend less time on promotional campaigns or lead generation efforts.
Productivity Losses
When employees are tasked with managing internal surveys, it’s not just the hours spent on the survey that count—it’s the opportunity cost of those hours. Every minute they spend on survey administration is a minute not spent on their primary job functions, which are typically aligned with the company’s core objectives and revenue generation.
This diversion can lead to productivity losses, missed deadlines, and reduced output in other critical areas of the business. The cumulative effect can be costly, especially in fast-paced or high-growth environments where every hour counts.
Delayed Insights and Decisions
Conducting surveys internally can also lead to delays in gathering and analyzing data. Without the right tools, experience, or manpower, the process can take longer than anticipated, delaying the company’s ability to act on the insights. Delayed decisions can mean missed opportunities to improve employee engagement, address customer concerns, or make strategic adjustments in a timely manner. The longer it takes to analyze the data, the longer a company risks losing valuable feedback momentum.
3. Expertise and Quality Challenges
Lack of Specialized Knowledge
Survey design is both an art and a science. The phrasing of questions, the order in which they are presented, and even the response format can significantly impact the quality of data collected. Internal teams may lack the specialized knowledge required to create a survey that accurately captures the information the company needs.
Third-party survey providers, on the other hand, have extensive experience in designing surveys that are not only engaging but also structured to yield meaningful, actionable insights. They understand how to avoid bias, craft questions that probe deeper, and structure surveys to maximize response rates.
Risk of Bias
One of the biggest challenges of internal surveys is the potential for bias. When employees know that their own colleagues are conducting a survey, they might not feel entirely comfortable providing honest feedback. Even if the survey is anonymous, there may be lingering doubts about whether responses can truly be traced back to individuals.
For customer surveys, bias can occur when the company inadvertently designs questions that lead respondents to answer in a certain way. These unintentional biases can result in skewed data, leading to inaccurate conclusions. When the data is unreliable, the decisions based on it are equally flawed, which can lead to missed opportunities or ineffective strategies.
Missed Insights
Internal teams may lack the analytical expertise to extract deep insights from the data. Professional survey providers have the tools and experience to analyze large datasets, identify trends, and uncover hidden patterns that might go unnoticed by an in-house team. This expertise allows companies to make more informed decisions, ultimately leading to better business outcomes.
4. Financial Costs of Internal Surveys
Direct Costs of Time and Resources
At first glance, conducting surveys internally may seem like a cost-saving measure. However, companies often overlook the direct financial costs associated with internal surveys, including the time spent by employees, the software required to create and distribute the survey, and any other administrative costs that may arise.
For example, companies may need to purchase or subscribe to survey platforms, tools for data analysis, and reporting software. There are also hidden costs like the time spent troubleshooting technical issues or training employees on how to use these tools effectively.
Long-Term Costs of Poor Decisions
Inaccurate or incomplete survey data can lead to poor decision-making, which has long-term financial implications.
Whether it’s employee engagement initiatives or customer retention strategies, acting on faulty data can cause companies to invest in the wrong areas, leading to wasted resources and missed opportunities for growth.
For example, a company might believe it has a high level of employee satisfaction based on its internal survey, only to experience high turnover or disengagement because the survey didn’t capture critical areas of concern. Similarly, misreading customer feedback could lead to product or service changes that don’t align with actual customer needs, resulting in lost sales.
5. Impact on Employee Engagement
Confidentiality and Trust Concerns
Employees are more likely to provide honest, candid feedback when they believe their responses will remain confidential. Internal surveys, even when conducted anonymously, can raise concerns about privacy. Employees may worry that their responses could be traced back to them, especially in smaller organizations where identifying who said what might be easier.
Without the assurance of true confidentiality, employees may hesitate to share honest opinions, leading to a lack of actionable data. This erodes the value of the survey and can lead to decisions based on incomplete or inaccurate information.
Survey Fatigue
When employees know that surveys are being conducted internally, they may not take them as seriously. Internal surveys can often feel like just another HR task, leading to survey fatigue. Employees may rush through the questions or provide superficial responses, especially if they don’t believe the survey will lead to meaningful changes.
In contrast, surveys conducted by an external provider often carry more weight, as employees may view them as part of a larger organizational initiative. This can lead to higher participation rates and more thoughtful, engaged responses.
6. The Value of Third-Party Survey Providers
Expertise and Tools
Partnering with an external survey provider eliminates many of the opportunity costs associated with internal surveys. Third-party providers bring specialized expertise in survey design, deployment, data analysis, and reporting. They use advanced tools and methodologies to gather more accurate and insightful data, allowing companies to make informed decisions quickly.
External providers also offer unbiased perspectives, which leads to more trustworthy data. Employees and customers may feel more comfortable providing honest feedback to a neutral third party than to someone within the organization.
Comprehensive Reporting and Recommendations
One of the greatest benefits of using a third-party provider is the quality of the reporting and analysis. External providers don’t just present raw data—they offer comprehensive reports with actionable insights and recommendations. These insights are often accompanied by benchmarks, allowing companies to compare their performance against industry standards or competitors.
This level of detail helps companies understand not only what their employees and customers think, but also what actions they should take to improve satisfaction, engagement, and performance.
Cost Savings in the Long Run
While there’s an upfront cost associated with hiring a third-party provider, the long-term value is clear. By outsourcing surveys to experts, companies save time, avoid productivity losses, and make better decisions based on high-quality data. These better decisions can lead to improved employee engagement, higher customer satisfaction, and ultimately, increased revenue.
Read our full blog on Third-Party Employee Surveys: Unlocking Actionable Insights
7. In Closing: Weighing the Real Costs
The true cost of conducting surveys internally goes far beyond the monetary savings many companies expect. From the diversion of staff resources to the risks of poor data quality and decision-making, internal surveys come with significant opportunity costs.
Partnering with a third-party provider ensures not only better data but also more time for employees to focus on their core roles, leading to more efficient operations and better business outcomes. By considering the full picture, organizations can make smarter choices about how to gather the insights they need to drive long-term success.
