Employee Benchmarking

What is Employee Benchmarking?

Lead consultant at Test Partnership, Ben Schwencke, explains what is employee benchmarking.

In human resources (HR) management, employee benchmarking involves collecting quantitative data on employees in order to identify averages. For example, HR professionals may be interested in salary, annual leave usage, overtime hours, sickness absence rates, employee tenure, employee engagement, or a multitude of other variables which are integral to organisational effectiveness. By collecting these data, HR practitioners can better understand the distribution of these variables, helping provide evidence based recommendations for improving existing business practices.

In the context of employee selection, employer benchmarking is often used to establish pass marks and cut-scores for applicants. For example, graduate recruiters may wish to know how the wider organisation scores on an ability test, helping them to choose a specific pass mark for graduate trainees. To achieve this, HR practitioners need to collect these data from incumbent employees, giving a realistic picture of the organisation itself. Once these data have been collected, the scores could also be used to create a local norm group, allowing the organisation to explicitly benchmark against their incumbent employees.