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What Are The Four Types Of Benchmarking?

January 25, 2021, by New City Insurance

team is in a types of benchmarking sessionIn today’s fast-paced world, businesses and their Human Resource departments are constantly searching for different strategies for improving their business operations. Regardless of industry, each organization ultimately seeks to maximize profits while using the most efficient processes possible. To accomplish this, organizations conduct benchmarking.

This process evaluates a company’s success and compares it to other similar organizations, especially industry leaders, to identify potential gaps in performance. One key aspect of benchmarking involves defining what “success” specifically means for your company. How does your HR department define “success” when reviewing business processes? Or is this concept more related to the quality of your products or services?

The Four Main Types Of Benchmarking

There are several ways to perform benchmarking. Some may be more effective than others in helping HR managers achieve their objectives depending on your organization’s industry. Suppose you are an HR manager at a growing firm that provides health insurance and employee benefits. In that case, you will benefit most by comparing your company to other businesses that provide similar types of benefits (e.g., 401k & retirement plans, wellness plans, PEOs, etc.). Here are the four main types of benchmarking your organization may conduct.

Generic Benchmarking

Generic benchmarking broadly compares how core processes or functions are practiced in a similar way without regard to the industry to gain a new perspective and way of thinking. For example, a local hospital may compare how quickly employees adopt well-being programs to its city’s employee rideshare program. Although they’re different industries and programs, HR managers can use generic benchmarking to gain insight into the tools and methods used to encourage program adoption. The advantage of generic benchmarking is the ability to compare your business to almost any other organization in the world.

Functional Benchmarking

HR departments will use this type of benchmarking when comparing results across different industries and processes by utilizing similarities in functional capacities. Functional benchmarking serves as a way to provide information on industry trends. For example, a medium-sized law firm could compare the adoption of incentive rewards for its employee benefits to those of nearby fitness centers. Alternatively, a luxury hotel could benchmark its customer service quality to that of an airline company. This information is invaluable in helping to identify performance gaps and maintain steady improvement.

Internal Benchmarking

Internal benchmarking refers to a comparison of one business process to another similar procedure inside of your company. For instance, you can evaluate how your organization’s health insurance plans’ price-quality ratio has changed over a given period of time (due to changes in the plans’ costs or the benefits offered). Conducting an internal benchmark is one of the most cost-efficient and simple benchmarks that can perform and it’s recommended that organizations internal benchmark their health insurance plan over time. A common internal benchmarking is employee surveys on the perceived value of health insurance benefits being offered.

Competitive Benchmarking

team is talking about which aspects of the company that need different types of benchmarking benchmarkingThis involves directly comparing one of your processes, products, or services with a competitor’s. An example of competitive benchmarking would be to compare the employee benefits or health plans provided by one manufacturing company in California and those offered by other firms in this industry. Gaining this type of insight can be very helpful in implementing strategies designed to attract and retain key employees.

Other Types Of Benchmarking

Aside from the four primary types of benchmarking, HR managers will use three other forms of comparing their business’s offerings to competitors. They are:

Process Benchmarking

Process benchmarking is designed to help HR departments gain a more accurate understanding of how competitors’ processes compare to their organizations. This can help you optimize the efficiency of your business processes.

Strategic Benchmarking

As its name indicates, this type of benchmarking pertains to your business strategies and how these may help you gain an edge in your field. Regardless of your industry, there are many different tactics you can take to become more competitive.

Performance Benchmarking

This is a relatively more difficult type of benchmarking because you need to understand key performance metrics (e.g., number of employees retained in a year) and processes to conduct it. You will likely need to devise a long-term change plan as part of the performance benchmarking process.

Speak To Professional Benefits Consultants About Benchmarking

team celebrates after using types of benchmarking to achieve their goalsReach out to the professionals at New City Insurance in San Diego for more information on the different types of benchmarking consulting and which one may benefit your business the most. Since our founding in 2008, we have been dedicated to helping clients obtain customized, high-quality insurance and employee benefits solutions.

At New City, we invest substantial resources in benchmarking plan designs across a variety of industries. We can provide HR managers with industry-specific plans and average employer contribution amounts so that you may deliver tailored benefits packages to all of your employees. We always survey the market for data as part of this process, which will help you gain more workers and retain them year after year. Simply develop a vision for your business to change and succeed, and we will take care of the rest. Call New City Insurance today at (888) 210-2759 to learn more about our work or contact us online to request a consultation.

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Filed Under: Benchmarking,  Benefits

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Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
Claudia Villalobos
20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
17:02 22 Feb 22
I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
Jennifer Polito
17:15 09 Feb 22
Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
23:46 07 Jan 22
So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
23:38 07 Jan 22
So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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