Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

HR benchmarking is more than cost-cutting

by Personnel Today 17 Jul 2001
by Personnel Today 17 Jul 2001

HR teams that join benchmarking networks seem to be making a desperate, yet
futile, attempt to justify their existence. It is highly ironic, therefore,
that the growth in the use of HR benchmarking seems to bear a direct
correlation with the huge losses in HR jobs through outsourcing. The main
reason for this is that benchmarking is using the wrong type of measures for
the wrong reasons.

HR databases suffer from two fundamental flaws. Most of the data comprises
meaningless activity measures (for example, number of training days per employee),
which is usually of no great interest to anyone outside the HR department. Yet,
when more business-focused measures are used (profitability per employee, for
instance), the database can show no causal connection to HR activity.

One particular metric that I regard as the worst possible piece of data that
an HR department can collect is the "full-time equivalents per HR
department FTE" ratio. What is better, 100:1 or 50:1? Surely it depends
entirely on what the "1" HR person is actually doing. Would anyone
ever try to gauge how effective a football team may or may not be on the basis
of the players-to-manager ratio?

No doubt accountants are interested in this metric because they regard HR
costs as an overhead, and overheads are usually a one-way street. So even if
your FTE/HR ratio is the best on the database (although I’m still not sure
whether "best" means lowest or highest), there will always be
pressure to reduce HR’s cost.

HR teams that have signed up to these databases seem to have missed the whole
point about benchmarking. It is meant to be a continuous improvement technique,
not just a cost-reduction tool. Improvements can and will come from increasing
resources as well as reducing them.

The only possible good I can see coming from such databases is that if
inefficient and ineffective personnel administrators want to act like turkeys
voting for Christmas, then they get what they deserve. This should free up
precious resources for those HR people involved in more important work.

I would go further and argue that an organisation can never have too many HR
people if they all actually add lots of value – an argument that any board
director can understand and accept as long as they see some convincing
evidence.

I would not say the same for accountants, however. The sooner we publish
their FTE ratio, the better. Let’s see how they like it.

By Paul Kearns, senior partner, Personnel Works

Personnel Today
Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

previous post
Plans for reform of public services need more detail
next post
UK firms forge ahead on staff consultation

You may also like

Employees going into office just 1.5 days a...

15 Aug 2022

Barrister wins gender critical belief discrimination claim

27 Jul 2022

‘Patchy’ mental health services failing ethnic minority communities

11 Jul 2022

Global study highlights hypertension treatment failings

8 Jul 2022

NICE sets out new guideline on managing depression

8 Jul 2022

Half of employees struggle to switch off on...

8 Jul 2022

Five steps for organisations across the globe to...

8 Jun 2022

The Search for Talent: Six Major Employer Pitfalls

24 May 2022

Grants scheme set up to support women’s health...

16 May 2022

How music can help to ease anxiety at...

9 May 2022
  • 6 reasons why work-based learning is better than traditional training PROMOTED | A recent Fortune/Deloitte survey found that 71% of CEOs are anticipating that this year’s biggest business disrupter...Read more
  • Strengthening Scotland’s public services through virtual recruiting PROMOTED | This website is Scotland's go-to place for job seekers looking to apply for roles in public services...Read more
  • What’s next for L&D? Enter Alchemist… PROMOTED | It’s time to turn off the tedious and get ready for interactive and immersive learning experiences...Read more
  • Simple mistakes are blighting the onboarding experience PROMOTED | The onboarding of new hires is a company’s best chance...Read more
  • Preventing Burnout: How can HR help key workers get the right help? PROMOTED | Workplace wellbeing may seem a distant memory...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+