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The Importance of HR Benchmarking

The Importance of HR Benchmarking

In a working world where employee retention and engagement are key areas of focus for HR leaders it is important to factor HR benchmarking into your processes.

To get a complete picture of things you need to look at things outside of your organisation, as well as in. What trends are there within your specific industry and the wider working world? And how does your organisation stack up against others? 

You need to know this as, let’s be honest, some of your employees may be looking to see if a competitor can offer better conditions, culture and working environment. It’s important to see where you stand so you can make any changes before you lose key talent. Having this data can also help you make sure your policies are having the desired impact in your organisation.

What is HR benchmarking?

There are many definitions of HR benchmarking but one that I think sums it up well is, “Benchmarking is a mechanism for measuring processes, practices and results for comparison to improve performance,” (source: SHRM). 

There are two sides to benchmarking –  internal and external.

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Internal comparison

This involves using data to compare different departments and teams within your organisation. The most common of which is looking at engagement scores so you can identify which teams might need help or are at risk of potentially leaving due to being unhappy.

Internal comparisons can often be overlooked as the idea of seeing how you’re doing compared to other organisations can be more appealing, especially to the C suite. But you shouldn’t dismiss these internal comparisons. Firstly it’s easier to collect various data points from within your own organisation and you can collect specific data on areas which might not be available externally.

Secondly, it’s important to get your own house in order (so to speak) before worrying about others. Are there any big issues internally that you’re missing through lack of data comparison that could lead to problems down the line? For example, if you find that engagement is really high during employees’ first six months and then it drops off, you’ll need to make adjustments to prevent the workforce becoming more disengaged the longer they stay with you. 

Being aware of situations like this, lets you make changes to policies which will benefit both employees and the organisation. If you have access to specialists like our People Science team then you can use their expertise to design surveys or reports which will really get to the heart of any trends or issues you have identified.

External benchmarking

This is when you look outside of your organisation and see how you’re doing compared to others within your industry or of a similar size. Again, engagement scores are commonly looked at here.  If your engagement scores are higher than competitors, it is likely that you’ll be seen by workers as an employer-of-choice and it’ll make recruitment and retention easier. However on the other side of the coin, if people seem happier and more engaged elsewhere then it’s time to use your employee voice channels to see what your people need.

The benefits of HR benchmarking

We’ve looked at what you can do with regards to benchmarking but you might be wondering why and what’s in it for you? Here are four benefits it’ll bring you…

1. Your people strategies can be more data-driven

The first benefit relates to awareness. The collection of data either internally or externally gives you real insight into how your organisation is performing and whether the policies you have put in place are working. From this you can make data-informed decisions, which will give your people strategy further credibility. 

2. Improved recruitment and retention

Benchmarking will also enable you to see how you are doing on the recruitment and retention side of things compared to others in your industry. This is especially vital right now as we find ourselves in the midst of ‘The Great Resignation.’ Do you offer competitive salaries, benefits, holidays, remote working etc? From this you can make the necessary adjustments and ultimately improve the quality of people you’re hiring and it’ll also enable you to retain your best talent.

3. You can identify key trends

Regularly benchmarking will allow you to see developing trends within your organisation which you can use to affect your decision making. For example, if your industry’s engagement rate is rising but yours isn’t, you can look at what other companies are doing and implement employee surveys (like those our People Science team can help with). The results will help you uncover why it’s an issue in your organisation.

4. Continuous improvement

Ongoing benchmarking can lead to continuous improvement, if the data collected is used correctly and acted on. Take this example; you notice that your eNPS scores are quite far behind the industry average, this gives you an area to focus on and improve and, as you know it’s based on data and not just a gut feeling, you are more likely to see positive results. 

This approach to continuous improvement will also ultimately benefit the organisation in meeting their overall goals. For example, if a goal is to reduce overheads, then retaining employees and lowering turnover will be a big contributor to this goal.

How Hive can help with HR Benchmarking

Within our Hive platform we now offer benchmarking functionality for our customers so they can see how they stack up against others.

Hive provides an abundance of benchmarking data from a variety of sectors and we can easily provide comparisons where our question banks are used. We also provide you with your own survey comparison benchmarking data to track and measure progress over time.

benchmarking feature

Key metrics that we use to benchmark are:

  • Engagement Index: 3 core questions to measure Pride, Advocacy and Loyalty across your organisation, with the ability to separate out the scores for each question.
  • eNPS: employee Net Promoter Score – an internationally recognised measure of engagement using the question ‘How likely are you to recommend our organisation as a good place to work?’ with detractors, passives and promoters. You’re able to drill down into your different employee demographics using the Hive platform.
  • Response rate %: gauge how responsive your people are to your surveying strategy and identify times to target or avoid.


Being able to benchmark on the above three areas allows our customer to be able to: 

  • Track their progress overtime and understand key themes and trends   
  • Compare with a Hive benchmark from the last 3, 6 or 12 months
  • Get a clear picture of what’s happening now vs last year in their industry
  • Understand how they score compared to the Hive community 
  • Download the comparisons


We are able to provide breakdowns for the following industries at present:

  • Construction and Heavy Industry
  • Creative and Media
  • Education
  • Entertainment and Recreation
  • Government
  • Health
  • Hospitality
  • Logistics and Transport
  • Manufacturing
  • Retail
  • Technology
  • Nonprofit
  • Professional Services


And in terms of organisation sizes, we use the following segments:  

  • 0-250
  • 251-500
  • 501-1000
  • 1001-5000
  • 5001+

We firmly believe benchmarking should be used only to provide an indication of how results compare to the general working population. Ultimately, what matters is that you define what a good employee experience looks like for your people and pursue making that a reality. By working with our experienced People Science team to set clear goals for what good looks like, you will have the direction and focus to keep working towards improving engagement and making better days at work for your people.

To find out more about our benchmarking, get in touch with us today.

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