Benchmark analysis is a form of market research used by businesses who wish to compare their existing performance to the best practices in the industry. Through benchmarking, companies are better able to gauge what is the best performance to be achieved and how to go about making changes in order to gain a competitive advantage. While benchmarking is not a fast or simple tool, it can provide businesses with invaluable insight and encourage continuous improvement. Learn more about benchmark analysis, its benefits, and how a benefits consultant can assist you.
The Benchmarking Process
Before you can take advantage of benchmark analysis, you must fully understand the process. While there are many types of benchmarking, the most recognized include a series of steps that aim to reveal an industry’s best practices.
The first step consists of planning, starting with the tasks that should be benchmarked. The planning step involves identifying required resources, confirming vital activity performance measures, and documenting the existing process.
The next step is analysis, which includes collecting information to determine the scope for improvement and to agree on expected targets. Step three involves taking action. Communicate the results with stakeholders and implement an improvement plan. The final step involves reviewing performance after changes have been made.
Benchmark Analysis Benefits
Performing a benchmark analysis can be beneficial for a company in a number of ways. Through benchmarking, businesses are able to find ways to outperform their competitors and become more open to new ideas and forms of improvement. They are also able to identify the gap that exists between their desired performance and their actual performance. When businesses know where their strengths and weaknesses lie, they become better equipped to make necessary improvements for optimal growth.
Companies often use benchmark analysis to improve upon their product quality. With the help of professional engineers who can take a product and thoroughly study its performance, businesses are able to see how their product quality stands up against the competition. A benchmark analysis also provides the details necessary to compare certain elements from one product to another, allowing you to make the necessary changes for a better product. All types of products can undergo benchmark analysis for quality purposes, from clothing and home goods to food and cleaning products. Once quality is determined, businesses can decide if they want to change the product or price it accordingly.
Benchmark analysis can also have a direct effect on your business’ sales and profits. Companies that use this strategic tool are often able to improve their operations, products, and services, thus increasing sales and profits. These improvements are not only seen on the company end, but also among customers. This can help boost brand recognition and build a loyal fan base. With benchmarking, greater profits are in reach. When companies are able to operate more efficiency with the help of benchmarking data, they have the resources necessary to significantly lower their business expenses.
When you own a business, you must create the perfect balance. You do not want to pay your employees too much, but you do want to offer enough incentives to create motivation for optimal performance in the workplace. Many employees accomplish this by offering employees a competitive benefits package. With benchmark analysis, employers can compare nearly every component of their chosen benefits, such as co-pays, employee contributions, deductibles, and out-of-pocket maximums. Once the proper comparisons have been made, you are better able to evaluate how your company will fare against the competition. You can also use this information to build a strategy that best works for your business and workforce.
Using the results of a benchmark analysis, you can strategize about the level of benefits you want to offer to your employees. The benefits you offer should be majorly based on the objectives you would like to achieve. Perhaps that is attracting new talent to create an incredible workforce. Or maybe the goal is to improve retention and build a strong team of loyal employees. No matter your company’s end goal, a benchmark analysis can help you create a plan of action that will get you one step closer to successfully achieving your objectives.
Benchmarking helps employers see the larger picture. Instead of focusing on the here and now, a thorough analysis helps to place the focus on continuous change in the workplace. With the right information, you can set a minimum standard of excellence and enforce it. Know that your efforts will not cost you a fortune. In fact, most benchmarking efforts are highly cost effective. In addition to saving money, a benchmark analysis can help a business find a deeper understanding of the industry and its competition. This allows businesses to explore the world for resources and form mutually beneficial relationships with other industry leaders.
The ultimate goal of a benchmark analysis is to bring focus onto areas of your business that require special attention. During this exercise, a company is able to discover new and creative ideas of effective working. Businesses are also able to gain a better understanding of the winning strategies used by its competitors. Improvement can be measured based on both past performances of the business, as well as a comparison with its competitors. However, benchmark analysis does have some limitations. While it can compare various factors, benchmarking cannot solve issues at hand on its own.
Contact a Professional Benefits Consultant
Benchmarking has been found to be an effective technique in evaluating a business’s performance by comparing it to its competitors and the targeted industry as a whole. Of course, it is not always easy to acquire the information you need without the help of a professional. A benefits consultant is your best solution for performing a benchmark analysis and creating a benefits package that will be most advantageous to both you and your employees. Your benefits consultant can advise you on employee benefits, insurance, and other essential business products. For more information about benchmark analysis, contact an experienced benefits consultant.