Cost of bad employee surveys

Cost of bad employee surveys


It's hard to overestimate the importance of employees surveys, as they provide valuable insight into the attitudes and feelings within an organization. But striking a balance between conducting these surveys and managing other priorities such as growth, evaluation, and other HR initiatives, can be challenging. It becomes essential then to understand the monetary implications of bad surveys and potential impacts.

In this article, I’ll explore the cost of poorly executed employee surveys, the impact on turnover and eNPS, available tools for improvement, and how effective survey management can lead to greater productivity and retention, resulting in substantial returns on investment.

Why investing in employee surveys is important

When not designed or conducted correctly, the implications of employee surveys can be more harmful than positive.

Lower morale: Surveys that are perceived as ineffective or overly time-consuming lower employee engagement and satisfaction.

Neglect of key issues: Bad surveys often overlook crucial aspects, causing a delay in addressing important challenges or areas for improvement.

Inaccurate Employee Feedback: With bad or absent surveys, there's a threat of forming inaccurate understandings of your employees' needs and concerns, leading to poor management strategies and unfilled gaps in employee satisfaction.

Questionable HR Decisions: Faulty insights typically lead to faulty decisions. For absent or poorly conducted surveys, HR might take actions based on incorrect assumptions and data, further

What’s the cost of lower eNPS?

To calculate the cost to the company based on the Employee Net Promoter Score (ENPS) level of a person, we would need additional information such as the specific formula or methodology used to determine the cost impact. ENPS is typically a measure of employee satisfaction and engagement rather than a direct cost-related metric.

However, if we assume that the ENPS level of 5 out of 10 indicates average satisfaction or engagement, and we want to estimate the potential cost impact, we can consider some indirect factors. Lower employee satisfaction and engagement can lead to reduced productivity, increased turnover, and potential negative effects on team dynamics.

Here’s a rough estimate using a simplified approach:

  • Reduced Productivity: If we assume that a person with lower satisfaction and engagement might have a productivity level of, for example, 80% compared to a fully engaged and motivated employee, the cost impact would be a loss of 20% of their productivity. In this case, the cost to the company would be 20% of their salary.

Cost impact due to reduced productivity: 20% of $1000 = $200

  • Increased Turnover: Lower employee satisfaction and engagement can also contribute to higher turnover rates. The cost of turnover can include recruitment, onboarding, training, and lost productivity during the transition period. The exact cost will vary depending on industry, position, and company-specific factors.

To estimate the cost of turnover, you would need additional information, such as the average turnover rate, average cost per hire, and average time to fill a vacant position. With that data, you can calculate the turnover cost for the specific employee based on their likelihood of leaving.

  • Negative Effects on Team Dynamics: Lower satisfaction and engagement can impact team dynamics, collaboration, and overall morale. This can result in decreased team performance, communication issues, and potential conflicts. The cost impact of these factors is difficult to quantify directly, but it can have indirect effects on productivity, employee satisfaction, and overall company performance.

It’s important to note that these estimates are based on simplified assumptions, and the actual cost impact can vary significantly depending on the specific circumstances and context of the company. Additionally, it’s recommended to use comprehensive methodologies and specific data to assess the cost impact accurately.

How employee surveys impact turnover & attrition

One of the purposes of employee surveys is decreasing turnover and attrition. They reflect employee perspectives, acting predominately in enhancing better working conditions backed by informed decisions.

By focusing on improving eNPS (Employee Net Promoter Score)/ESAT (Employee Satisfaction) metrics, surveys serve to increase employee wellbeing. Measuring satisfaction within the organization leads to improved workplace climates and nurtures employee longevity.

Executing surveys more frequently generates feelings of value amongst staff. Regular feedback loops thus grant higher employee retention, fostering a culture of loyalty and respect.

Surveys can be used to optimize performance and compensation reviews. Collecting employee feedback on review procedures, questions, scales, and outcomes will make the process more transparent and foster trust within the organization.

Finally, surveys contribute to overall employee engagement. Supported by gratified and aligned teams, the organization achieves enhanced output and productivity due to improved engagement. This continuous interaction cycle reaps fiscal benefits as increased productivity resonates with improved revenues.

In conclusion, the smart use of employee surveys gives a business the upper hand in keeping its team happy and minimizing turnover and attrition.

Tools for Improved Surveys and Engagement Management

Unlike conventional tools for surveys like spreadsheets, online survey tools, or HRIS, modern performance management software solutions provide a holistic approach to employee development and engagement. They help you gather all employee performance and growth data in one place, track metrics for reducing employee attrition, and address risks quickly.

Implementing these tools not only streamlines HR tasks but also fosters open communication, continuous improvement, and a culture of engagement, leading to higher productivity, lower turnover rates, and ultimately, better business outcomes.

Explore the 8 best performance management solutions, including Peoplelogic, Hibob, BambooHR, 15Five, Lattice, Betterworks, Leapsome, and Reflektive, and compare their features and benefits in this article.

Evaluating the ROI of investing in better employee survey tools

Employee engagement plays a pivotal role in driving organizational success, and according to Gallup, it hinges on fulfilling development needs. Such tools like Peoplelogic understand this critical aspect and equips managers and HR teams with the right tools to enhance engagement.

Peoplelogic's features are designed to address the Hierarchy of Employee Needs outlined by Gallup. Effortless employee surveys will help People teams understand their employees better and implement change, driving improvement in engagement and retention. With intuitive performance reviews tied to Personal Development Plans (PDPs), managers can provide constructive feedback that fosters growth. Individual and team goal tracking ensures alignment with the company's mission and values, promoting a sense of purpose and direction. One-on-one meetings and real-time feedback from managers facilitate continuous communication and support, creating an environment of trust and collaboration.

The expected return on investment (ROI) from implementing Peoplelogic is 217.85% for one year. To illustrate this, let's consider a company with 100 employees. First, by implementing regular feedback, companies can reduce turnover by 14.9%, resulting in a return of $12,385. Second, by streamlining the review cycle, significant administrative time can be saved, amounting to $1,050. These calculations take into account factors such as the cost of the Peoplelogic Pro annual plan for 100 people, the average cost of employee replacement, turnover rates, and the average HR hourly wage.

Peoplelogic and similar tools can improve surveys, engagement, and performance management, resulting in a significant return on investment with reduced turnover and saved administrative time. Unlock your team's potential and maximize business efficiency. Start a Peoplelogic free trial today.

Andrii Bas

Andrii Bas

Product Strategist, People & Performance

Founder of 3 products and product development agency @Uptech before 25. Use and consult about OKRs, performance management, and team leadership for 4+ years.


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