Employee Engagement Surveys – Cost-Cutting Strategy When Using a Vendor

Those of you in smaller organizations who have worked in HR/OD for even just a few years are sure to be familiar with organizational surveys

. You then also know depending on the size and complexity of the organization how costly this effort can be when you hire a vendor to carry this out. To help control your cost in conducting your employee survey, let me try to separate out the "essentials" from the "non-essentials" or those that can be done at a lower cost.

In just about any survey effort, there are five major steps: (a) survey questionnaire planning & design, (b) data collection, (c) data analysis, (d) data interpretation, and (e) reporting/results presentation. Again, if you're working with a vendor, you'll need to take into account a sixth, project management fees. The following table illustrates the average cost proportion breakdown by major phase or step:

Survey step

Cost proportion (%)

Is the cost justified?

Questionnaire design

15%

Yes

Data collection

20%

No

Data analysis

15%

No

Data interpretation

15%

No

Reporting/presentation

20%

Yes

Project management

15%

Yes

Total

100%

As you can see, vendors typically charge a significant amount for data collection, analysis, and interpretation (typically over 50% of the total cost). Regarding data collection, technology has come a long way in just the past 5 years such that in many cases, any one of a dozen online survey tool will do the trick; they are secure, flexible, and, most importantly, cost just a fraction of what a vendor will typically charge.

When working with a vendor, one should always request that the obtained data be sent to you in a MS Excel file (for up to 62,000 employees) or a DAT file. Once received, data can be organized and analyzed by an in-house analysts or statistician using popular statistical packages (e.g., SAS, SPSS). If an analyst is not available, you can often negotiate the cost of advanced analyses primarily because analytical techniques e.g., regression, factor analysis, cluster analysis necessary for most organizational surveys are relatively straight-forward, requiring little actual time.

Finally, accuracy and validity of the interpreted data depend more on the validity of the questionnaire design than on a consultant's experience or analytical skills. You know more about your organization than any outside consultant can ever know. Hence, if possible, use an in-house analyst or statistician. If not, negotiate with the vendor to around 5% of the total project cost. Profit margin for data interpretation is high; meaning there's usually quite a bit of room for negotiations.

Employee Engagement Surveys Cost-Cutting Strategy When Using a Vendor

By: Stephen B. Jeong

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