HR Benchmarking: Turning Insight into Action

Benchmarking is one of the most powerful—but underused—tools in HR strategy. Done well, it provides objective, comparative insight into how your HR function performs, where it lags behind, and where it can lead.

But benchmarking isn’t about chasing averages. It’s about turning external comparisons into internal advantage.

What Is HR Benchmarking?

It can include:

• Quantitative benchmarking (e.g., cost per hire, turnover rate)
• Qualitative benchmarking (e.g., onboarding experience quality)
• Best practice benchmarking (e.g., process design, policy coverage)

Why Benchmarking Matters for HR

Benchmarking enables:

• Data-driven decisions – You move from opinion to evidence.
• Prioritization – Focus on the areas that matter most competitively.
• External validation – Gain credibility with executives.
• Continuous improvement – Spot trends and adjust before problems grow.

What to Benchmark in HR

Benchmarking can cover:

But metrics are only half the story. Process design, tech maturity, and employee experience can also be benchmarked qualitatively.

Sources of Benchmark Data

You can benchmark against:

• External benchmarks:

  • Industry reports (e.g., SHRM, CIPD, Gartner, Bersin)
  • Government labor statistics
  • Vendor benchmark reports (e.g., from LinkedIn, Workday, SAP)

• Peer organizations:

  • HR networks and consortiums
  • Informal benchmarking partnerships
  • Cross-industry learning labs

• Internal benchmarks:

  • Between business units, regions, or job families
  • Over time (longitudinal tracking)

How to Conduct Effective Benchmarking

1. Define the Purpose

Are you trying to:

• Justify a change?
• Set realistic targets?
• Identify root causes?

Your purpose will define the scope.

2. Select the Right Metrics

Choose relevant, comparable, and actionable metrics. Avoid vanity numbers that don’t drive decision-making.

3. Normalize the Data

Ensure apples-to-apples comparison. Adjust for:

• Organization size
• Geography
• Industry norms
• Time periods

4. Analyze the Gaps

Focus on:

• Where you’re significantly below peers
• Where you outperform (and why)
• Where variance is highest internally

5. Engage Stakeholders

Share findings with HR and business leaders. Discuss:

• What’s surprising?
• What needs action?
• What trade-offs are acceptable?

From Benchmark to Action Plan

Benchmarking should lead directly to strategic moves:

• Redesigning processes (e.g., faster onboarding)
• Investing in tools (e.g., recruiting tech)
• Upskilling HR (e.g., data analysis, facilitation)
• Changing roles (e.g., creating people analytics lead)

Benchmarking and HR Maturity

Benchmarking is also a lens into maturity:

• Are processes standardized and scalable?
• Are metrics tracked consistently?
• Do business leaders trust HR data?

Low maturity often shows up as data gaps or inconsistent measurement, making benchmarking harder—but also more necessary.

Pitfalls to Avoid

• Using outdated benchmarks
• Chasing irrelevant comparisons (e.g., benchmarking against Google when you’re a 200-person nonprofit)
• Over-interpreting small gaps
• Failing to translate insights into action

Embedding Benchmarking into HR Practice

Don’t treat it as a one-off. Build benchmarking into:

• Annual HR planning
• Quarterly reviews
• Talent strategy sessions
• Capability assessments

Benchmarking is most powerful when it leads to better decisions. It’s not about being perfect—it’s about getting better, faster, and more focused on what matters.