UK businesses compare themselves to measure performance

majority of UK businesses seek higher performance by measuring themselves
against other organisations, a new report has found.

two-thirds (63 per cent) of companies surveyed by The Work Foundation for its
Managing Best Practice guide to HR benchmarking compare their HR practices
against a variety of external organisations, despite two-fifths (39 per cent)
finding it hard to identify suitable or appropriate comparators.

economic conditions have forced many organisations to seek improved
performance, so HR benchmarking is becoming increasingly important in
identifying areas of competitive advantage or disadvantage to exploit or
rectify. This is backed up by the fact that nearly half of those surveyed use
benchmarking to improve specific areas of performance (47 per cent).

only 6 per cent use this type of comparison to make cost savings, 71 per cent
of financial service firms benchmark to highlight inefficiency, which is twice
the average for this purpose.

pay and benefits are the most frequently benchmarked activities (80 per cent of
respondents), followed by absence (74 per cent) and labour turnover (66 per
cent). However, sectorial differences exist as public sector organisations are
significantly more likely to compare equal opportunities performance than
commercial companies – 47 per cent compared with 17 per cent for manufacturers.

differences exist, such as organisational size. None of the respondents from
organisations with less than 100 employees undertake benchmarking on a
consistent basis, although they are more likely to undertake internal analysis
than their larger counterparts. Service firms are the most likely to examine
recruitment costs.

By Quentin Reade

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