Benchmarking
Definition
A process of comparing your HR practices, metrics, and outcomes to industry standards or competitors.
What is Benchmarking?
Benchmarking in HR involves measuring your company’s key HR metrics like compensation, benefits, turnover rates, or time-to-hire against similar organizations. This can be internal (across departments or locations) or external (across your industry or market).
Why is Benchmarking Important for Employers?
Benchmarking helps businesses:
- Stay competitive in talent attraction and retention
- Set data-driven goals for HR performance
- Identify gaps in compensation or benefits offerings
- Support strategic workforce planning
FAQs
Is benchmarking only useful for large companies?
Not at all. SMBs benefit greatly from knowing where they stand in the market.
What’s the difference between internal and external benchmarking?
Internal compares within your organization. External compares your organization to peers or competitors.
Can benchmarking help reduce turnover?
Yes. Benchmarking provides valuable insights into how your compensation and benefits compare within your industry, helping you stay competitive and better retain talent.
How ExtensisHR Can Help
ExtensisHR offers clients access to real-time benchmarking data through our HR consulting and compensation analysis services. We help you:
- Compare compensation ranges by role, region, and industry
- Evaluate your benefits offerings against market norms
- Set salary bands that align with compliance and competitiveness
- Guide executive and bonus compensation planning