Benchmarking should be more than cliché

Many HR departments have turned to benchmarking to prove they can add value
By David Brown
|Canadian HR Reporter|Last Updated: 04/29/2003

W

ith HR under constant pressure to act as a business partner and prove it can add value, many HR departments have turned to benchmarking: whether they’re doing it right is another story.

According to the Benchmarking Exchange, a business process benchmarking Web site, customer service and information systems are the first and second most popularly benchmarked process. Employee development is third, performance measurement is sixth, employee recruitment and staffing is seventh and human resources itself is ranked ninth.

By no means is benchmarking new, in fact it’s been around for more than 20 years, writes Colin Dawes in

Best Practices: Human Resources Benchmarking

. Dawes is also the director of compensation and benefits with Extendicare Canada Inc. and founder of the Human Resources Benchmarking Network (HRBN). Many people still don’t understand exactly what benchmarking entails and at most small organizations people are too busy to take the time to benchmark properly, he says. People use the term a lot but often use it incorrectly. In fact, it’s become a bit of a cliché.

When done right, benchmarking should enable HR to not only improve what it does, but make it easier to prove it to the entire organization, says Dawes.

There are different definitions out there but true benchmarking entails systematic continuous measuring and process improvement. Ultimately it is about two things: designing and using measurement systems to enhance performance and learning from others.

Many people think they can buy a book of statistics, take their own measurements, make the comparison and they are benchmarking. That can help but the most value — though more time consuming and requiring greater effort — comes from getting together with organizations and developing benchmarking partnerships, sharing information, completing surveys and learning lessons from other companies.

Sick time is one of the most popular statistics organizations like to benchmark. If an organization sees its numbers are high, it can talk to one of the other members of the benchmarking group about attendance management programs.

Results don’t happen over night, says Dawes. For people starting from scratch it can take a few years to establish benchmark foundations and then another two or three years before change can be implemented and begin to take effect.

But the important thing for HR is it has to come up with numbers to prove its worth.

You won’t get resources for new performance measurement programs if you can’t prove performance management is tied to profit, Dawes says.

“If you are not going to benchmark and measure you are almost by definition going to prove that HR cannot contribute,” says Dawes. “If you don’t have the numbers you’re dead.”

In some ways, benchmarking is like many other popular business concepts, says Owen Parker, an HR expert with Watson Wyatt. It starts out as a specific idea, or strategy but then mutates and becomes generalized and overused and therefore loses some of its meaning.

An organization does a survey, waits a while, does the survey again and makes comparisons. “I would call it trending but a lot of people call it benchmarking,” he says.

Similarly, people often use the term benchmarking when they actually mean normative comparisons, he says. When someone wants to compare their numbers to a broad survey, that is norming; trying to compare organizational results against more generalized results.

Royal Victoria Hospital has been benchmarking (as part of Dawes HRBN) for about four years, says Richard Kelly, director of HR at the Barrie, Ont. facility.

When you are talking with finance or people from information systems, they are using data to back up their points. When HR can do the same thing, it helps prove HR can be a business partner.

In the past, too much of what was done was based upon qualitative rather than quantitative analysis, he says. Benchmarking changes that.

Kelly said the board wanted to see some numbers and scorecard-type analysis. By benchmarking, the department was able to create a scorecard with the important performance indicators the board wanted to see compared to other organizations. Information from other companies about employee assistance plan usage, grievance activity, turnover, time-to-hire and spending on education help shape many of the decisions Royal Victoria’s HR department now make.

For example, says Kelly, they noticed stress-related absenteeism and disability were a bit high compared to other organizations. With numbers to clearly illustrate the problem, the decision was made to invest more resources in EAP programs.

The benchmarking process can take a lot of time and effort to gather the necessary internal data that drives the process, so each summer Royal Victoria gets a student from Georgian College’s post-graduate HR program to do it for them. It makes it easier for the HR department, but it’s also a great opportunity for the student to “roll up their sleeves” and learn about HR, says Kelly.

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