In a world where healthy competition marks the success of any organization, certain standards and criteria are key factors used to measure this contest.
Similarly, companies set work standards for their employees to stay up-to-date with the competition, called benchmarking. Parallely, talent benchmarking refers to comparing recruitment-related practices such as talent acquisition and retaining it against standards set by the talent management industry.
About 80% of companies admit that talent benchmarking practices prove beneficial concerning workplace and workforce quality, while more than 90% find it productive to use during the recruiting process.
This blog will guide you through talent benchmarking and its benefits followed by how to utilize it in an effective way to achieve the overall growth of the organization.
What is Talent Benchmarking?
Talent benchmarking is the process where an organization measures the employees’ skill level based on the standards established by the talent management services is called talent benchmarking.
“To win in the marketplace you must first win in the workplace.”
- Douglas Conant
An employee’s skills and abilities need to be assessed and evaluated before and after hiring. Their performance is a key factor determining the organization’s success. These key performance indicators (KPIs) need to be matched to the standard set by the organization to attain overall growth.
Talent benchmarking can be said to be an organizational tool that is proving to be beneficial for continuous improvement and increased efficacy, especially among employees.
Benchmarking can also be used to measure the performance of the entire organization or a team, and not only employees, such as customer satisfaction rate, sales, turnover rates, and retention.
This entire process is conducted to aid the organization in understanding how the whole team or group is performing, and where they are lacking. The analysis can further guide them to identify any gaps and fill them via strategies like training needs assessments.
Types of Talent Benchmarking
There are four types of talent benchmarking. They are -
Internal Benchmarking
Benchmarks where the standards set are compared internally between different groups or teams within the organization. This type of benchmarking provides a better view and understanding of where the organization lies in the competition regarding sales and business practices.
External Benchmarking
External benchmarking is the comparison of performance between the organization and a specific industry or across industries, in a nutshell outside of an organization. It is carried out by comparing the metrics of your organization to a competitor, however, compliance from the said competitor is necessary to conduct the benchmarking.
Performance Benchmarking
The standard of performance is compared by gathering and evaluating quantitative data. Here, the employees or teams work on certain KPIs and keep a record of all data, thus, keeping tabs on performance metrics further to fill any discrepancies.
Practice Benchmarking
Performance and practice benchmarking work on parallel objectives, practice benchmarking is focused more on qualitative ones while performance is on quantitative performance. Also, this type is helpful at a smaller scale by evaluating any challenges faced using a specific set of activities.
Benefits of Talent Benchmarking
Improve The Quality of Hire
The most important aspect when recruiting new employees is to maintain the quality of hire, and talent benchmarking provides the same.
It costs an average of $1400 for the onboarding process and companies cannot afford a bad hire. A good hire proves to be the best bet to achieve business success, as it improves productivity, increases employee engagement, and reduces company turnover.
By incorporating benchmarking metrics while assessing candidates recruiters can gain the best employees, and therefore, talent quality has become an integral part of achieving business success.
Identify Skill Gaps within The Organization
Talent benchmarking has one major advantage wherein the skill gaps present within the organization, whether at the employee or organizational level are identified and assessed.
This can be achieved through assessing the skills and performance of employees and comparing the results with the standards set by the organization. If the analysis reports any gap then it can be closed via training needs assessment.
This further provides the necessary employee growth and retention, thus achieving the organization’s goals. Such onboarding programs prove beneficial, where 77% of new hires have proven to hit their first performance milestone.
Reduce Bias During Recruitment
When employees are hired via traditional methods, unconscious or conscious bias-based hiring practices follow through.
This unfair practice is a major challenge during the recruitment process. However, with various recruitment assessment tools such challenges are slowly disappearing.
When talent benchmarking practices are further applied during recruitment, bias-based hiring practices are completely removed, thus, enhancing the organization’s growth as well as work culture.
👉 Read More: How to Ensure Fair Hiring Practices in Your Organization?
Reduce The Cost of Hire
Recruiting a new employee requires the organization to spend on resources and time, and if a bad hire is recruited, it would cost not only the company but also the other employees.
It costs around 33% of an employee’s salary to replace them, thus affecting the turnover rate of the organization.
However, talent benchmarking comes in handy during such situations, as previously mentioned, the benchmarking process improves the quality of hire thereby reducing the cost of hire.
Expand The Talent Pipeline and Create New Job Opportunities
The organization does not and should not withhold in acquiring new employees, especially those with varied skills and experience.
Such diversity proves to be beneficial for the future growth of an organization and also, provides job roles thus, expanding the talent pool.
Talent benchmarking sets a standard to attain the perfect talent pipeline that may include employees with the required specific skills and reduce the other team members' workload.
Examples of Talent Benchmarking
Some examples of talent benchmarking are as follows -
Employee Turnover Rate
The employee turnover rate is the measure of how many employees leave the company over a set period. A benchmark is set by the company to measure the rate by comparing it with its peers.
This allows the company to identify any potential challenges related to employee retention and can further implement effective strategies to improve the turnover rate.
This helps the company to understand how stable is their workforce as well as how efficient is their talent retention strategies.
Time-To-Fill
The average time required to hire a candidate and fill a vacant position within an organization is called time to fill, and it is considered an important measure in the recruitment process.
A benchmark if adopted can help assess by comparing this time metrics with the industry average and thus, provide an overview of the entire recruitment process of the organization.
The analysis may be beneficial in terms of reducing the cost of hiring as well as time in acquiring top talent.
👉 Read More: How Mindtree Multiplied Its Engineering Talent with 90% Fewer Interviews
Training and Development Funding
The recruitment process is entirely dependent on numerous factors among which the availability of resources is a significant one.
These resources not only are required for hiring but also for employee training and development. If the company keeps a tab on the resources allocated to such initiatives, it will allow it to evaluate how much the company is investing in it.
Benchmarking their investments in employee training and development will make them understand the level of where they stand, and whether they are ahead of their competitors or they need to invest more.
DE&I Metrics
Diversity and Inclusion is one of the most important elements in the recruitment process.
The metrics related to it give an account of how many underrepresented groups are participating in the organization, such as the number of women leaders, the percentage of minority groups, and also how effective is the DEI program.
By comparing with the standards set by the talent industry, the organization can identify any diversity ‘gap’ and further improve it to gain overall success.
Best Practices For Talent Benchmarking
Talent benchmarking has lots of advantages but the process of practicing it and understanding it is crucial for an organization to attain growth and success. Some practices are -
Make Definite Goals and Objectives
A benchmarking process needs to be conducted with a proper understanding of the goals and objectives of the organization. An organization should be aware of the results and should be prepared to undertake the necessary changes in the future as well.
This is to ascertain clear benchmark goals and scopes, whether it is related to the recruitment process or employee retention. They should have a proper understanding of the scope of their benchmarking process so that they will be able to make appropriate comparisons and analyses with relevant industries and competitors.
👉 Read More: Top 15 Objectives of Recruitment and Selection
Identify and Select The Right Benchmarking Metrics
While setting up standards for benchmarking relevant metrics that align with the organization’s objectives should be considered.
Instead of covering large areas within the organization, focus on selected groups to compare, such as relevant roles and departments and which sector or location they work.
Key performance indicators are the most important factors in selecting for benchmarking process, as they affect more on HR effectiveness, employee engagement, and organizational success.
Collect Data Effectively
The benchmarking process consists of comparing an organization’s performance with industry standards, and this is carried out based on accurate and reliable data collected by the same organization.
However, this data collection is very critical for effective benchmarking and should be gathered via standardized and consistent methods and processes.
Various tools such as industry surveys, databases, or nowadays benchmarking services are available to collect accurate and valid data.
Few benchmarking tools such as gamification and code contests are utilized by 15% of organizations, while 80% use feedback and behavioral assessment tools for talent benchmarking.
Platforms such as WeCP which provide skill assessments are mostly preferred (52%) by organizations.
Make The Data Secure
Talent benchmarking should always be conducted with compliance as it is mainly dependent on data sourced from various organizations.
Therefore, data privacy while sharing or accessing should be maintained confidentially as well as strict anonymity of participating organizations should be ensured.
This further makes the organization trustworthy and may lead to other organizations sharing their data readily leading to accurate benchmarking results.
Make Improved Decisions
As benchmarking provides valuable insight into the workings of an organization, it allows the organization to make improved decisions and further implementations if any in their talent management process.
The results add up to providing an organization to enhance its competitiveness and attract and retain top talent.
Communication of Benchmarking Results
Talent benchmarking results should be wisely and accurately communicated to the leaders of the organization so that they can have an understanding of where the company lacks and therefore make improved decisions.
The results should be presented clearly and concisely to stakeholders with specific needs and interests.
Continuous Improvement
Talent benchmarking is an ongoing process and not a one-time event. There should be space for continuous improvement by following up with benchmarks, tracking performance, and constantly updating goals.
Benchmarking should not be limited to collecting data on employee performance but also focusing on employee engagement, as companies are 21% more productive with highly engaged employees.
Challenges of Talent Benchmarking
There are a few challenges while conducting benchmarking such as -
- Benchmarking based on qualitative aspects is more susceptible to bias/ subjectivity and 42% of organizations follow it.
- Lack of knowledge and resources are also one of the few challenges of talent benchmarking.
- Cultural differences (26% of organizations) are the most common barriers in benchmarking.
Conclusion
Companies need to evolve and adopt talent benchmarking to stay upfront in this competitive working environment.
Talent benchmarking is beneficial to organizations in numerous factors such as attaining and retaining top talent all the while increasing the talent pipeline, reducing the cost of hire, increasing the quality of hire, reducing bias, incorporating diversity and inclusion, and last but not least identifying skill gaps further enhancing employee engagement and retention.
The entire process of talent benchmarking is crucial for the overall development and growth of the organization, and therefore best practices should be followed which then cancels out the challenges faced during benchmarking.
Many companies believe assessment are the answer for talent benchmarking and WeCP can be one of them. Thus, to be a worthy winner in this competitive world of talent acquisition, talent benchmarking can be a booster.
Want to know more on how WeCP can help you out? Try WeCP for free or Schedule a Call with us.
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