When allegations of misconduct surface or when complaints are lodged to the company, managers will look to resolve the issue as fast as possible. In cases where a resolution is not easily reached, the organisation needs to decide whether it needs to conduct an internal or an external investigation. Not all incidents will have the same severity but employers need to act quickly and determine their course of action. Before making the decision on whether an internal or external investigation is required, the managers need to look at the differences between the two and the suitability for the case.

Differences between an internal and external investigation

There are a number of things that influence the decisions managers make. Costs, goals and time restrictions can highly impact whether an organisation chooses an internal or external investigation. The main area they differ are:

  • Objectivity
  • Time
  • Experience
  • Severity
  • Publicity


In internal investigations, objectivity is often questioned. The person conducting the investigation is seen as wanting what is best for the company, not the employees. Staff may not feel comfortable talking to someone within the company as they may fear they will land in a worse position than the one they are in. The person in charge of the investigation may be familiar with some employees which could unintentionally influence their behaviour and thoughts. This could lead to a biased process as the investigator may regard one person more highly than the other. 

In an external investigation, the investigator does not work for the company and even though they are paid to carry out the process, the result does not impact them. Customers usually believe that external investigations are more objective than internal, as there are fewer chances of conflict of interest and the investigator does not know the employees. Independent investigators are usually hired for cases of unfair dismissal for this reason.


Internal investigations require HR staff to focus temporarily on carrying out the process. However, this takes time away from other tasks and work duties. As a result, some steps of the investigation may be skipped or not given enough importance. HR may not see the pre-planning of the investigation as an essential task and there may be a delay in starting the investigation as other duties are prioritised. The delay could be harmful to the success of the process as witness recounts may be influenced by outsiders and certain events are forgotten.

In an external investigation, an independent individual is hired only for the purpose of conducting the investigation. This means that they can focus on this task solely and not be distracted by irrelevant matters. If the company acts quickly, there will not be a delay in initiating the investigation and a clear timeline can be established.


Internal investigators are more familiar with workplace policies. They know the procedures they need to follow and what laws they have to comply with. However, they may lack experience in conducting an investigation in general or for a particular incident. They might face issues they do not know how to handle and they might lack knowledge in carrying out every step of the investigation. In some cases, being inexperienced and making mistakes during an investigation can be very expensive for the organisation. It could lead to lawsuits, increased costs and a damaged reputation, all consequences that businesses want to avoid.

External investigators usually work for a firm and are certified. They have probably conducted numerous investigations in the past and have more experience with the process. They may not be familiar with company policies but since they have worked with different organisations, they most likely know how to follow them while also complying with relevant laws and regulations. This stresses the importance of choosing the right investigator for the job and doing some research before making a decision.


An internal and external investigation are used for different kinds of incidents.

A low-risk incident is usually handled with an internal investigation as the issue is not as serious. These types of investigations tend to be shorter in length and easier to navigate through. Internal investigations are also preferred for low severity allegations due to the lower costs they incur. Businesses may not have time to spend researching for an external investigator or spend money on unnecessary expertise. For example, a one-time harassment issue is something HR managers can look into. 

External investigations are usually needed for serious misconduct and situations where the business’s commitment to the investigation could be questioned, such as the unfair dismissal case we mentioned. An external investigation is also required if the incident is related to work culture or is very complex. This is because an independent investigator will be able to give a new and fresh perspective on how things work and uncover if something is wrong.


Internal investigations tend to attract less publicity as it is less likely information will be released to the media. On the other hand, an external investigation is more likely to be picked up by the media.

If both go public the customers will see them differently depending on the result. A poor internal investigation could be seen as biased and as the business not putting enough effort. A poor external investigation could be seen as the business not choosing the right people.

A properly done internal investigation highlights that the company takes its working environment seriously and values its employees. A successful external investigation is seen as the company being committed to ensuring procedural fairness and a professional process.

Publicity of both types heavily depend on how well the business manages the process.

internal v external investigation

What they need to have in common

While there are differences between an internal and external investigation, there are some elements that both must have in common. Those are:

  • Confidentiality
  • Encourage reporting
  • Reinforce policies


While the investigation going public is not necessarily a bad thing, the details of the people involved should not be shared with anyone. The company has a duty to protect its employees for as long as necessary. In some situations, the company may be required to release information once the investigation has been completed. However, during the investigation, the managers and investigator should work together to prevent any gossip or rumours from spreading as this could damage the reputation of the employees involved. Their reputation and mental health are very vulnerable during the investigation and details going public could be detrimental to their career.

Managers should stress the importance of keeping everything private and the consequences that will follow if data is leaked on purpose. If details about the investigation are leaked it could not only affect the process but the team members or co-workers. This is why information should not be discussed with outsiders or anyone else who is not involved. Lack of confidentiality can damage the trust employees have in the organisation and potentially discourage others from speaking up and reporting incidents.

Encourage reporting

An investigation can show employees that all complaints are taken seriously. It can emphasise how the organisation wants employees to feel safe and comfortable in the environment they work in. To encourage complaint reporting, the business should ensure that the investigation was conducted fairly and made a change in the company if required, or if no misconduct was found they should be able to clearly and fairly explain why. This will tell employees that if they speak up, the problem they are facing will be addressed and corrective action will be taken if wrongdoing has been found.

Just like with the investigation, an effective reporting system should be confidential so staff feel more confident. If they are not private, then employees may feel like they will be targeted for reporting something inappropriate. Once a supervisor has looked into the complaint, they can decide how to handle it. In some cases, the employee can be called forward for more information to achieve a better outcome but that only happens if they are willing to.

Reinforce policies

A well-executed investigation can reinforce the importance of policies. Policies exist to protect the workplace and guide procedures like an investigation. By either conducting an internal or external investigation, the company emphasises that compliance is required otherwise repercussions will follow, Organisational values may be reviewed during the process to ensure that they align with the goals the company is trying to achieve.

Investigations can also be used to strengthen the current policies in place and implement new ones if needed. They can spot weaknesses that can be used to enhance policy compliance and greater coverage of issues.

The reinforcement of policies should lead to a healthier work environment and a more positive workplace culture where illegal or unethical behaviour is discouraged and reported.

Don’t forget

The health and well-being of employees along with confidentiality are a priority during any investigation. If an organisation fails to protect its employees then negative publicity will follow regardless of the outcome. An internal and external investigation have their own differences but the managers should analyse every complaint separately in order to make the right decision. Just because one type of investigation is appropriate for one problem it does not mean it should be used for the next.

Polonious assists businesses with both internal and external investigations. While our clients focus on investigating fraud, bribery and misconduct allegations, we focus on keeping all their information confidential. Polonious provides detailed security configuration that ensures all investigations are highly confidential and we assist our customers to save administration time and costs. Do you want a more productive investigation with faster turnaround times? We are here to help. Reach out!