Benchmarking is a customary practice among business leaders, including those in human resources positions. What is HR benchmarking exactly? It is essentially a technique that uses qualitative or quantitative data to make comparisons between organizations to periodically measure, challenge, and improve their practices. By measuring areas such as recruitment and retention and how a business compares with other companies, that business can measure their own performance. There are countless benefits that result from HR benchmarking.
Understand How an Organization Stacks Up Against Its Peers
Do you know how your business compares to your competitors? Without the proper research to back up your perception, you could put your business in a poor position. It is important to not only understand the details about your own business but also the businesses that you are competing against. This process requires research to determine what benefits other businesses provide to their staff in terms of salary, health benefits, and job promotions. You can typically find this information online, and the data can help you create a more advantageous compensation package for your own staff.
Understanding how your organization stacks up against your peers is a form of external benchmarking. While HR benchmarking can be a time-consuming endeavor, the results could potentially help businesses perform better over time and keep ahead of the competition. Once a business knows its strengths and weaknesses compared to other companies in the industry, they can start developing strategies to improve their future performance levels.
Improve Recruiting, Retention, and Benefits Programs
When it comes to running a business, the ultimate success of a company is significantly based on the employees that you hire to assist you. Hiring the most talented staff is an important goal for all businesses that want to thrive and grow. HR benchmarking can help companies attract high-quality candidates by defining what makes a great potential hire and what type of compensation and benefit packages these employees typically look for when applying for jobs.
HR benchmarking is not just useful for recruiting new employees to your company but also for retaining the staff that you already have. While you may have talented employees who work for you now, it is important to take the necessary steps so that they choose to stay long-term. Failure to do this could result in your skilled employees looking elsewhere for better opportunities. Through HR benchmarking, you can determine how your compensation package and benefits program aligns with similar companies in your industry and where you can improve or cut back.
Assess and Improve Employee Engagement
Does your company experience a high turnover rate? If so, this usually indicates that a problem exists. In many instances, a high turnover rate is the result of poor employee experiences, poor management, or inadequate professional development programs. All of these things can be remedied when a business takes the necessary steps to assess and improve employee engagement. HR benchmarking against industry standards can help businesses better distinguish between organizational issues and the industry norm.
The benchmarking process can help businesses pinpoint problems that may be causing a high turnover rate. For example, if new employees are frequently quitting, the problem may be due to a lack of training or that you are hiring staff that do not have the proper skills to fill the roles that need filling. In addition, it is not just high turnover rates you have to be concerned about. When you have very low turnover rates, it could indicate that you are allowing low-performing employees to slip through the cracks, which can be detrimental to workplace productivity and employee motivation.
Optimize Experiences for Employee Growth and Leadership Roles
You already know that bringing in new talent is important to the long-term growth and success of your business. However, where many businesses lack experience is in encouraging staff to take on leadership roles. While management within your company may be complete now, it is important to prepare early on for the next generation of management. This means training employees who have showed leadership skills to potentially take on these larger roles in the future. The benchmarking process can help you determine how long it will take to prepare these workers and how low long before succession occurs.
When a company fails to properly plan for changes in leadership, they can experience a number of pitfalls. If an important person in management should suddenly quit, retire, or pass away, would you have someone available to replace them quickly, or would your business suffer until a qualified replacement could be found? It is critical to consider and prepare for all possibilities that could occur in the future.
Improve Workplace Culture and Employee Perception of Your Brand
Company culture affects all things in the workplace, from employee performance to overall morale. It is important for businesses to make it a goal to improve workplace culture and their employees’ perception of their brand. Your mission and those of your employees should align so that everyone is working to grow the company. When workers lack passion for their roles, it can show in their work, which then will have a poor effect on the business overall.
Your culture and brand must match if you want to maintain happy and productive employees. HR benchmarking can help you determine where your business stands in terms of work culture compared to other companies. You do not necessarily need to try and one-up your competition by offering your employees bigger and better perks, but it is crucial to listen to your workers and create a workplace environment that is advantageous to its workers.
Learn More About the Benefits of HR Benchmarking
HR benchmarking can deliver a number of benefits to growing companies, from lowering labor costs and improving product quality to increasing sales and boosting profits. Of course, learning how to best leverage HR benchmarking practices is not always easy. For more information about the benefits of HR benchmarking or for assistance utilizing these practices, contact the business management consultants today at Business Benefits Group.