What is Benchmarking?

Benchmarking is a process at which organisations conduct self-evaluations on their performance and compare them against their competitors within the same industry (Business Victoria 2022). It is the opportunity for an organisation to better understand themselves and how their competitors were doing better than them.

In general, benchmarking process can vary significantly from an organisation to another. According to Hacker and Kleiner (2000), the key phases involve in a benchmarking process are:

Planning

Planning phase includes identifying measures to be benchmarked, comparative organisations to be benchmarked against, data collection method as well as collecting relevant data needed for benchmarking.

Analysis

Analysis phase includes analysing data collected and generate insights to understand organisation’s current performance and identify areas for improvement.

Integration

Integration phase involves organisations communicating their findings to relevant stakeholders such as employees and investors. Organisations also establish functional and achievable goals.

Action

Action phase includes developing and implementing action plans, aiming to drive organisation towards goals established in the Integration phase. Organisation monitors and recalibrates the benchmark.

In business context, performance indicators that organisations often benchmark includes, but not limited to operating costs, number of sales and customers and gross profit margins. For human resource, some of the important key metrices for organisation includes turnover rate, staffing ratio et cetera.

Organisations can benefit from benchmarking as the process highlights the weakness of the organisation and potential area for further improvements (Scott n.d.). These information are often the drive for change in an organisation, helping managers in setting targets and formulating strategies to achieve organisational growth.

References

Business Victoria (2022) Benchmark your Business, Business Victoria, accessed 25 January 2024. https://business.vic.gov.au/business-information/marketing-and-sales/increasing-sales-through-marketing/benchmark-your-business

Hacker K & Kleiner (2000) ‘12 Steps to better benchmarking’, Industrial Management, 42(2):20-23

Scott R (n.d.) ‘Benchmarking: A Literature Review’, Edith Cowan University, accessed 25 January 2024. https://intranet.ecu.edu.au/__data/assets/pdf_file/0010/357193/Benchmarking-Literature-Review.pdf

The AHEIA HR Benchmarking program is unique. HR Benchmarking participants will receive an easy to read yet comprehensive report with results for a variety of HR performance measure. The report clearly outlines the definition and purpose of each measure as well as tips for interpretation. The results are presented in both tabular and graphical manner.

Industry-specific

The Australian university sector is unique on its own. The intricacies of attracting and managing an academic workforce have many implications for the HR department of the respective universities. The challenges faced by HR departments in managing academic workforce cannot be compared directly to an organisation of a similar workforce size in a different industry.

‘The key benefit of the university sector benchmarking program is that it provides the perfect basis for strategic discussions between universities’ HR department’.

HR Benchmarking enables you as a university to:

• Identify staffing trends and issues within your university and the university sector as a whole.
• Setting appropriate staffing goals.
• Evaluate effectiveness of HR initiatives.
• Identify key areas of improvement.
• Guide your HR departmental strategic plan and allow greater HR input to the University’s strategic planning.

The Universities’ HR Benchmarking Program examines nine main measures that relate to the Higher Education Sector. These include:

National Advisory Standards for the Professional Practice of HR in Australian Universities

Background

QUT received DEEWR funding in November 2007 under the Workplace Productivity Programme (WPP) to form a project in conjunction with Talent2 and Bond University that was charged with the development and delivery of national HR practice standards. This project has now been successfully completed.

The objective of this project was to develop a consistent set of National Advisory Standards for the Professional Practice of Human Resources (HR) in Australian universities. The Standards will also be used for international comparative benchmarking purposes. Standards set the basis for quality assessment, performance examination and for demonstrating to stakeholders that value for money is being achieved.

At the time that these standards were developed, there were no national standards for the professional practice of human resource activities in Australian universities. Thus each university independently established the standards that it ‘expected to see’. The Universities HR Benchmarking Group identified a number of HR measures and metrics relevant to the university sector and these were used to inform the research base in establishing standards. For example, the ratio of academic to non academic staff had a wide range of results across the sector but benchmarking could identify the mean, median and shape of the results. From this we estimated “what we would expect to see” and, importantly, variances could be justified on the basis of institutional diversity.

Similarly, the standards established “what we expect to see” in relation to individual universities by reference to the national advisory standards but also treat each university separately by understanding the reasons for adopting different standards. To have each university independently establish human resource standards would be manifestly inefficient (priority differences, time frame differences, format differences and common language would present obvious issues).

The intent of this project was to develop a consistent set of standards to address these issues.

In Scope areas

The five In Scope areas that were identified for progressing with the development of the HR Standards were:

• Learning and Development
• Remuneration, Benefits and Recognition
• Workforce Planning
• Attraction and Selection
• Performance Management

These Standards were finalised in January 2011 and endorsed by the Project Sponsor in March 2011.

The five Standards were developed by subject matter experts from the participating Australian Universities.

University HR Activity Framework

The QUT/Talent2 Workplace Productivity Programme (WPP) project on ‘HR Standards in Australian Universities’ built a collection of HR Standards for five university HR activity areas.

One element missing from the initial analysis of HR activities was the overall framework within which university human resources operate. It was recognised that this is not an easy task but it potentially establishes the context in which university HR operates.

There is a growing recognition of the need for a HR framework. There are models available from other sources, including overseas.

The HR Framework, developed in conjunction with several Australian Universities and reliant on a selective literature review, sets out a potential format and content for a HR framework for the Australian Higher Education sector.

HR Benchmarking Measures mapped against the WPP University HR Advisory Standards

The final piece of the project was to align the Universities HR Benchmarking Program measures to the HR Advisory Standards, identifying whether the measures are (measures of) Inputs, Processes, Outputs or Outcomes, and whether they are measures of economy, efficiency or effectiveness.

The HR Benchmarking program undertakes data collection on an annual basis commencing 1 April through to 30 April.

Member universities can input their data via the Online Portal which is available here.

Henry Wong
HR Benchmarking and Events Manager
henry.wong@aheia.edu.au