Find Your Sweet Spot:
How Benchmarking Can Help You Hit it Out of the Park

Did you ever throw spaghetti at the wall and if it sticks, it’s done? That’s the approach many managers take when it comes to hiring, even though they know there are better ways.

If you’re continually struggling with turnover or finding the right candidates for your business, you’re dealing with issues that are common to all companies, arge and small. According to Xerox HR Services (now Conduent), 53% of employers say retaining talent is a top priority.1

If you’re tired of merely guessing and are ready to uncover actionable facts, take these three steps to enhance the future of your business.

ASSESS 

Before blaming your hiring woes on the marketplace, the economy and other factors beyond your control, take a look at the things you can control.

For starters, ask yourself questions:

  • What’s the average age and tenure of our workforce?
  • What is our turnover rate?
  • What’s our average pay increase schedule and how often do we evaluate performance?
  • What benefits do we offer?
  • Do employees have a career path and opportunities for advancement?
  • Do we communicate regularly with our workers?

Answering these kinds of questions will give you a good snapshot of your business based on your workforce data and your perceptions.2

Poll your employees to learn whether their opinions sync up with your perspective. You may think you communicate plenty, but maybe your workers don’t agree. Determine what’s unique and compelling about the environment you provide and use it to your advantage. Here are some sample questions to include in a survey of your employees:

  • Do your managers communicate too much, enough, or not enough?
  • Does the information you receive have value?
  • What is your preferred means of communication (e.g., email, text, phone, face-to-face)?
  • What do you like best about working here?
  • What do you like least about working here?
  • On a scale from 1 to 10, how satisfied are you with your job?
  • Is there anything missing from your employee experience?

One caution: Surveying your workers sets up an expectation that their employment experience will improve. If you take no action as a result of the survey, your credibility could take a hit.

Perhaps the most important discovery you can make is whether those things you believe are valuable to your workers actually are. According to Aon Hewitt’s 2016 Workforce Mindset™ study, the top characteristics employees seek in an employer are:3

  • Rewards
  • Fun
  • Flexibility
  • Fit with their values
  • Stimulating work
  • Innovation

COMPARE 

Do you know how you stack up against other employers in your industry or area? Is the salary you’re offering competitive enough to entice new employees to join and current workers to stay? Are your benefits in line with those offered by other employers? Could you provide perks such as flexible hours, virtual work options, paid volunteer hours, or employee discount programs?

To find out what other employers are doing, benchmarking is your best bet. Benchmarking compares the operation of your business with similar businesses and establishes a performance level to shoot for. It starts with identifying measurable business processes that exist in other businesses.4

First, decide who you want to benchmark against. Pick firms of a similar size and with similar objectives. Consider benchmarking against firms outside your sector if there are areas they excel in.

You can work with an HR solutions provider that offers benchmarking services. If you do it on your own, your local trade association should be able to suggest benchmarking partners. Another approach is to contact businesses and offer to swap data so you can gain insights into their strategies. Continue to collect data until you have a large enough pool from which to confidently draw conclusions.5

PLAN

So you’ve assessed your business and performed your benchmarking. Now it’s time to analyze the data.

Use the information you’ve gathered to find the gaps. Where are you low when you should be high? Where possible, bring your numbers in line with companies that are having greater success with hiring and retention. See what benefits are valued most, how compensation compares, and which voluntary benefits are trending.

If you can’t offer the same salary range as peer companies, that’s okay. According to recent ADP research, 47% of employees would consider taking another job that pays the same or less, proving money isn’t everything.6 Adding low-cost perks and rewards such as flexible schedules, a fun work environment, family-inclusive activities, and lunch and learn programs may capture the imagination of top talent and enhance the package.

In completing these three steps, you'll realize that becoming more competitive is easier than you thought. Businesses of your size have distinct advantages over large corporations: you typically don’t have a lot of bureaucracy, so you can react more quickly to trends, implement changes faster, and have the power to make the big decisions.

ADP® eliminates the guesswork

There’s a new benchmarking tool in town and it’s helping businesses like yours become more competitive across the HR spectrum. From talent to compensation and benefits to risk mitigation, ADP’s benchmarking capabilities allow you to develop the strategies that can lead your business to greater success.

1 Xerox Services Survey Finds Retention Tops Cost Management for Employers’ 2017 Priorities, Business Wire, October 18, 2016.
2 The Competitive Advantage of Benchmarking: How Do You Measure Up?, ADP Spark blog, February 21, 2017.
3 2016 Workforce Mindset™ Study, Aon Hewitt, November 2015.
4 How to Benchmark Your Business, Bert Markgraf, Retrieved from http://smallbusiness.chron.com/benchmark-business-23855.html on 6/13/17.
5 10 ways to...benchmark your business, Institute of Chartered Accountants in England and Wales, February 2008.
6 Midsized Businesses: Poised to Lose Balance in Time of Uncertainty, ADP Research Institute, 2017.

Keywords:
HR Management
,
Human Capital Management
,
Talent Management
Roles:
Research for Human Resources Professionals