The
worthy objective to “achieve world-class standards” is often a stated aim of
those who embark on a benchmarking programme. It is good to aim high, but I expect
many are put off by the magnitude of the task that this implies.
Many
more companies will set out with this laudable aim but become confused by the
complexity and fall at the early hurdles of establishing which global companies
have world-class standards and convincing them that they should participate in
(yet another) benchmarking project.
So
while every benchmarking study has behind it the wish to improve, we should be
realistic in seeking out comparators and fellow participants.
Does
your organisation see real benefits in applying the policies and practices of a
multi-national corporation? A recent medium-sized company engaged in medical
research was almost brought to its knees following the appointment of a chief
executive whose main, and most recent, career experience had been in a
multinational pharmaceutical giant. He was insistent that all the formality and
trappings of a blue-chip company’s HR policies and procedures should be
imported wholesale.
It
is far better in most circumstances to approach the benchmarking process from
the other end of the spectrum. We need to recognise what the term “benchmark”
means “a criterion or point of reference”. This being the case, it is possible
to use “where you are now” as a benchmark or stake in the ground, from which
improvement can be made. This implies, however, that there should be quite
rigorous measurements of the current position, and some understanding of standards for which to strive.
Access
databases
As
a start, to help you establish the measures that might be applied, you could
access one of the databases available. However, it is worth noting that several
databases provide the potential to measure more than 200 metrics, when in fact
a dozen or so ratios and statistics will often more than suffice.
Sometimes
the metrics offered are cumbersome and even unrealistic in their calculation.
Clearly, the value of any database that, for example, purports to give a
detailed breakdown of all absenteeism and its causes, should be suspect since
few organisations have the resources and means of measurement to obtain this.
It
can be more helpful to establish your own grouping of similar types of
organisation and a measurement agenda. Recent groupings have been formed in
local government, police forces, higher education, the financial sector, legal
firms, retail, chemical and pharmaceutical and petroleum companies. Each has
key areas for benchmarking to address the issues they uniquely face.
However
in every case they have found it helpful to use an external facilitator and/or
access an established database to see where their standards and approach differ
from “the norm”.
Ad-hoc
approach
Established
groupings – such as standing salary surveys – can often provide a ready-made
base for participants in an HR benchmarking study. But the danger in accessing
benchmarks through such a source is that they are often approached on an ad hoc
basis. This can result in a lack of commitment and consistency. It is better to
get together a small sub-group of salary survey members to identify, collect
and monitor the required metrics.
Industry,
or even local, employers’ groups can provide a similar potential participant
base. In the local instance, diverse industries are likely to be represented.
This is not a bad thing, since several HR issues – turnover, staffing
shortages, absenteeism and even HR structures – can be compared at a local
level.
Often
you can learn more by conducting cross-industry benchmarking through
revelations of new and improved approaches that could readily be adapted. This
leads into the possibility that you might consider benchmarking discrete
activities in HR such as recruitment, training or strategy with specialist
providers like recruitment agencies, training or strategy consultancies, which
have to be good value, effective suppliers to survive in a competitive
marketplace.
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Whatever
the source of your benchmark data, it is essential to establish your current
position and measurement criteria with absolute clarity from the outset, rather
than floundering at the data-analysis stage when a need to revisit the
definitions would be costly and time-consuming.
By
Derek Burn, partner, MCG Consulting Group [email protected]
