Every company, regardless of the industry it belongs to, should always be seeking different ways to quantify or qualify its accomplishments. Today, there is one particular process organizations rely on to achieve this, and it is called benchmarking.
Benchmarking is the process of measuring products, services, and procedures and comparing them to those of other similar businesses, especially ones that are considered industry leaders. The objective of benchmarking is to identify gaps in an organization’s performance and, based on these gaps, to ultimately improve its business operations.
How Does Benchmarking Work?
The first phase of benchmarking consists of planning what you wish for your business to improve upon and which other industry players you will compare your organization against. A key aspect of this stage also involves defining your idea of “success” and how to achieve this.
The second stage of benchmarking involves gathering information on your business processes and comparing these to those of industry-leading competitors. If you are a human resources manager or executive at your company, you may wish to conduct research on the types of benefits other companies offer (e.g. dental, vision, life, and disability insurance, commuter benefits, etc.) in addition to the federally mandated ones (health insurance for companies with more than 50 full-time employees). Do they provide 401k and retirement accounts and wellness plans? One effective way to do this is by speaking directly with another organization’s leaders or employees. Once you have collected all relevant data, you may begin to analyze it and ultimately compile this information in a report.
After analyzing all of this data, you should decide what concrete actions to take and which changes to make in order to reach your organization’s objectives. After establishing a rough timeline for when to implement these changes, the final phase of benchmarking can begin. This stage involves monitoring results to evaluate the success of your strategy. Depending on what you specifically wish to achieve, the monitoring period may be short (a few weeks) or long (several months to a year).
Examples Of Benchmarking
There are three primary types of benchmarking that organizations can perform:
- Process benchmarking: How do your company’s processes compare to those of your competitors? Are they cost-effective and otherwise efficient?
- Strategic benchmarking: Are your business strategies helping your organization grow and become more competitive in your field?
- Performance benchmarking: Is there any hard, quantifiable data (i.e., metrics) that serves as an indication that your organization has improved in some way?
As an HR manager or executive, it may be possible for you to attempt to perform benchmarking from each of these three standpoints. For example, you may evaluate the process by which your organization provides health insurance and other employee benefits and determine how efficient it is. You may also assess your strategies for providing 401k and retirement plans (e.g., timeline and structure for disbursing funds).
Finally, you may also set key performance indicators (KPIs) to evaluate your company’s success. Performance benchmarking is often extremely difficult to conduct because it involves implementing changes to your business processes on virtually all levels.
Benefits Of Benchmarking
There are many benefits to conducting benchmarking. However, here are three advantages that are especially noteworthy:
- Continuous improvement: The primary purpose of benchmarking is to improve at least one aspect of an organization. Ultimately, your goal should be to ensure that this improvement is continuous.
- Competitive analysis: Many companies are constantly seeking ways to acquire strategic advantages over other businesses in their industry. Benchmarking is an excellent way to accomplish this.
- Monitor performance: A key aspect of benchmarking consists of researching and analyzing current data trends and using these to make projections. Thus, monitoring performance is essential.
Speak To Professional Benefits Consultants
Reach out to the professional benefits consultants at New City Insurance for more information on benchmarking and the benefits of this process. Since our founding in 2008, we have been dedicated to providing our clients with top-quality insurance solutions that are designed to meet their unique needs.
Our insurance agents routinely perform comprehensive surveys of the market for data and analyze how your organization’s processes compare to those of your competitors. We offer customized and competitive plans and benefit packages that are significantly more attractive than your average offerings. The benefits we offer include group health insurance, 401k and retirement plans, wellness plans and executive benefits (deferred compensation, asset allocation, wealth planning, etc.).
Benchmarking can help your organization grow in ways that previously seemed unattainable. It also allows you to measure success based on several different factors and concepts. However, it is important for your business to define “success” before launching any type of benchmarking initiative. Contact New City Insurance today at (888) 210-2759 to learn more about our insurance and employee benefits offerings, or visit us online to request a consultation.