Every company wants to improve its HR practices and stay competitive, and HR benchmarks are a great first step. In fact, they make tangible improvements to your business since they help gauge where your company is at and identify areas for improvement.
What are HR Benchmarks?
HR benchmarking is a process that uses quantitative and qualitative data in order to make comparisons between organizations, practices, processes, etc. For example, let’s say an organization can’t identify service gaps and areas of improvement for their company. Benchmarking would enable them to do this, and it can provide information to organizations that can help their business flourish. By benchmarking, it is easier to determine where your company needs the most help.
Types of HR Benchmarks
Internal benchmarking is when you take a deeper look into your own organization. This uses existing data from your company to understand how each department or team member within an organization compares with others. One example of this would ask, “which department is the most engaged, performs the best, etc.?” After viewing all of the data, you can calculate the average and determine what your organization’s normal is. This can show what your strengths are, what your areas for improvement are, and what employee engagement plan will work best for you.
External benchmarking is comparing your organization with others in the same industry. This shows the industry norm and is a good way to tell if your organization is performing at, above, or below the industry standard. It’s also useful when determining the HR strategy for the year; the best HR strategy will help you improve your position in your respective market.
In both internal and external benchmarking, the data sets must be comparable to your organization. For example, an organization with few employees shouldn’t be compared to a company with hundreds of employees because the numbers will be skewed.
Benefits of HR Benchmarks
Benchmarking can help companies stay on top of trends in their industries. This helps you stay competitive and helps you design beneficial HR programs. Another benefit of benchmarking is that you can assess your recruitment, compensation, talent, and so on. This helps you identify areas for improvement for your organization. This also helps you improve employee experience. By improving HR processes, employees will reap the benefits. This is a win-win situation because not only will your business improve, but employees will feel satisfied with their job.
Aligning your Team to these Goals
For benchmarking to work, it’s important to first collect data and study the gaps between internal-external data. Then, you need to design a plan to implement change. HR and colleagues can collaborate in order to create a plan that helps achieve goals. After the plan is implemented, study the long-term results. This will show whether the changes made were helpful and will show what still needs improvement. For help establishing your company’s benchmark and identifying the next steps, contact HR Collaboration Group.