Get a quick lesson in benchmarking from an experienced HR professional.
Are you getting the full value out of your HR data? You may think you are, but if you aren’t benchmarking, you probably aren’t.
HR Benchmarking is a strategy that contextualizes your organization’s HR metrics by comparing them to another competitor’s, an industry standard, or your own results from years prior. It’s one of the most effective ways to put your organization’s performance into perspective, which is why many HR professionals undergo the benchmarking process at least once a year.
One of those HR professionals is Alexander Strubbe, the Chief Communication and People Officer for Enamel Dentistry, a dental service organization, or DSO, with seven locations (and counting) in the Austin, Texas area. I interviewed Strubbe in order to get an idea of how he approaches benchmarking and uses it to inform his organization’s business decisions.
Over the course of his nearly three years with the organization, Strubbe has ushered in changes that have had a positive impact on Enamel’s employee value proposition (EVP), all of which were informed by the practice of benchmarking.
Whether you’ve been benchmarking for years and need a refresher, or you’re just learning about benchmarking and all of its benefits, the three examples below from Strubbe’s successful process will help you fine-tune your own benchmarking strategy.
Transform qualitative information into quantitative data
On the first Friday of every month, Strubbe sends out an employee satisfaction survey:
Employees choose a number on a scale to indicate how they feel about different aspects of their work environment, thus turning a typically qualitative piece of information into quantitative data. Strubbe then compares the responses across each of Enamel’s locations, allowing him to clearly see which employees’ responses deviate enough from the average to prompt further investigation.
Typically, HR KPIs like absenteeism rate, cost-per-hire, and turnover rate are the first things that come to mind when planning out the benchmarking process, but there’s something very valuable missing from these metrics: employee input.
You see, while it’s easy to compare numerical figures to one another, they don’t tell the full story.
For example, a high absenteeism rate is often connected to low employee engagement, but in actuality, it could mean that last month the flu broke out in your office and many workers had to call out sick. Or, if there are a handful of working parents in your organization, they may need to call out due to unexpected events like snow days at school or their child getting exposed to COVID-19 and having to quarantine at home for 10-14 days.
All this to say you won’t truly understand the state of your workforce without qualitative information. And if you’re wondering how you can benchmark this kind of subjective data, take a page out of Strubbe’s book: Transform it into quantifiable metrics.
Source comparative data from wherever you can
As we mentioned above, Strubbe compares results from employee satisfaction surveys between each of Enamel’s locations. In this example, Strubbe is creating a comparative set by aggregating together information from his DSO’s multiple locations—which is much more effective than trying to compare these survey results to external benchmarking data that comes out of another’s organization’s entirely different surveying process.
Strubbe also taps into his professional network to glean information about other dental practice’s performance and processes in order to judge how Enamel measures up:
“We are also a part of an executive support group called DEO, Dentist Entrepreneur Organization, and we meet on a monthly basis with leaders from other multi-location dental practices.”
Finding relevant, accurate external benchmarking data is one of the biggest challenges for HR pros navigating the benchmarking process. Most businesses keep their HR metrics under lock and key, which makes it difficult to go down the route of competitive benchmarking.
Alternatively, you can shell out for a benchmarking report from a reputable research institution or use information provided to you by your HR analytics software vendor (if you have one). But both of these options can be costly, and there’s also no promise that the data you receive will be from a comparable organization in the same region, of a similar size, and with a business model akin to your own.
Fortunately, as is evidenced by Strubbe’s practices, there are no hard rules about how or where you should source comparative benchmarking data from.We’ve mentioned a few options for collecting comparative data above including from competitors, sister locations, benchmarking reports, or via your professional network. If none of these options work for you, there is an easy solution: Use your organization’s internal data from previous years. Most
Deviate from what your competitors are doing (when it makes sense to)
If Strubbe used his competitors’ data as the standard of comparison when benchmarking, one thing would stand out right away: the cost of Enamel’s total rewardsis much higher than that of a typical dental practice.
At face value, this could be alarming—what HR leader would be okay with having significantly higher (and seemingly unnecessary) expenses than their competitors?
When Strubbe first joined Enamel, he went out of his way to have a 1×1 with every single employee. From those conversations he learned a few things, one of which was that their current benefits package left something to be desired.
Coming from a background in tech, Strubbe was familiar with all of the perks that make a job worth staying at, such as paid time off (PTO) and retirement plans, but also things like company outings and an office stocked with snacks.
“A lot of these ‘standardized’ benefits are very unique in dentistry.”
So, Strubbe pushed for better employee benefits, and through his efforts Enamel introduced 13 new perks including a sick leave pool, 401(k) plans, flexible working arrangements for admin workers, and quarterly organization-wide events. Plus, every new hire gets a swag bag on their first day and employees are gifted a free teeth whitening on their birthday.
The results? Lower turnover, a lengthier average employee tenure, and Enamel tripling the size of their business over the last three years.The idea behind benchmarking is to find areas of your business that can be improved, and sometimes that means doing things a little differently than the status quo. When significant deviations arise between your benchmarking data and the comparative set, further analysis is needed to determine why that is and what it actually means.
Strubbe’s approach to benchmarking proves that there isn’t a one-size-fits-all process that every business can adopt and find success with. Use the examples from Strubbe’s process to inspire your own approach, and for more help creating your own benchmarking process, check out this related content on our blog:
- Human Resources Benchmarking: A Beginner’s Guide
- 8 HR Benchmarks You Should Be Tracking and How to Calculate Them
Benchmarking is a whole lot easier with the right HR software in place—for instance, Strubbe uses ADP Workforce Now for help keeping track of Enamel’s people analytics. And some HR platforms even offer you access to industry benchmarking data that you wouldn’t have otherwise.