HR benchmarking is a process that is used in order to compare similar characteristics across organizations in order to identify milestones. It’s sort of a compare and contrast system of determining success and best practices. When HR professionals have data for comparison purposes, they are better able to set goals and objectives for their own company. Read on to learn more about benchmarking and what it means for organizations.

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About Benchmarking

Benchmarking for specifically HR purposes involves looking at the policies and practices of one organization, then comparing and contrasting those with another similar organization. A benchmarking approach should focus on best practices or the things organizations are doing that consistently lead to successful results. In order for an understanding of best practices to be obtained, benchmarking activities must be planned strategically with particular goals in mind. By identifying in advance the types of patterns and data they are seeking, HR professionals can then create a benchmarking system that is more reliable and valuable.

Benefits of Benchmarking

HR benchmarking can provide some useful and quite powerful information. When looking at similar organizations, a lot can be determined through benchmarking comparisons. HR pros can see where gaps exist within certain practices. Which policies are working well and which may be causing problems can also be identified. As can issues within such areas as hiring, training, and promotion. Specific issues such as sick time, retention and discipline can be examined separately. This is helpful when attempting to identify patterns for future use.

Best Practices in Benchmarking

Best practices in benchmarking revolve around identifying a particular strategy. It’s critical that professionals determine what it is they wish to learn prior to undergoing any data collection. Otherwise, it’s likely they will waste time and resources obtaining information that proves to be useless. It’s also important to ensure comparisons are being made between very similar variables. For example, it isn’t very worthwhile to compare the salaries of a large corporation that’s been in business for decades with those of a small startup. While the purpose in benchmarking is to identify best practices within HR, it’s also necessary that best practices within the field of benchmarking be utilized in order to gain the most success.

Tips for Successful Benchmarking

As noted, it’s most important to define in great detail the process, activity or attribute to be benchmarked. If the outcome isn’t defined, the search can tend to go off track. Then, the measurements must be determined. It’s imperative to know what units of measurement are to be used in order to be sure of gaining clear results. Data collection comes next, with precise information being obtained from the organizations being studies. Again, be sure to choose organizations that are similar in attributes. Look for glaring disparities or gaps among the data and then look for the underlying causes of these. Once the cause is analyzed and correctly determined, begin to create an improvement plan and set goals in accordance. This plan must be communicated to all stakeholders. Then, after a specific timeframe, measurements should be taken to determine if the gaps have been closed. A report is usually written to disseminate the benchmarking results.

Benchmarking is a complex process that helps organizations to improve upon their policies, practices, and products. HR benchmarking is specific to the field of human resources and is used to examine best practices within departments.

Source: Personnel Today