Companies naturally like benchmarks as a measure of how they’re performing against the competition and against businesses they might aspire to emulate. However, does benchmarking your employee engagement or customer experience programme really lead you to the golden egg, that is, the best insights?

People want to know if they’re doing well or not – we all like to feel good about ourselves and our businesses. Wanting to know how others score against us is natural and using benchmarks, which provide a score of how other companies measure up, is seen as a useful comparator for your own business.

Using a benchmark

In basic terms, a benchmark is simply an average score across a number of companies. However, scores will differ because of the type of company, sector, size, where it is on the business cycle, the make-up of employees, the types of job they do and their geographical spread. This last element can make the biggest difference of all.

There are some fundamental issues that you should consider when planning to use benchmarks as a measurement, to ensure you’re not wasting time and are getting the important metrics.

Culture and business dynamics

Consider North America, Europe and Asia-Pacific. Businesses in these regions have very different scores because of cultural differences – our data shows that engagement is 16% higher in Asia and 10% higher in North America compared to Europe*. Furthermore, each country differs within these groupings. It can be helpful to know the average differences between countries and cultures but that’s when benchmarking stops being useful. And it’s important to consider the impact of a team with different cultures within it – how will those individuals respond to a survey, will questions be interpreted in the same way across that team?  

Many other factors influence how individuals reply, such as the industry they are in and the actual job they do (think about the variations in the way HR, Sales or Finance teams may operate). The size of your organisation, its operating units and its industry will impact your survey as will where the company is in its business cycle: are you expanding, is growth slowing, are you dealing with a takeover or an acquisition?

Interpretation

If you are using a benchmark, you need to exercise caution. Typically people are happy when their scores are above the benchmark but when they’re below the benchmark they will want to take action and understand why. However, the interpretation might be problematic – what if that benchmark isn’t a good comparison for your company? If it’s not, you may be making incorrect decisions and focusing your efforts on the wrong places, wasting time and resources.

So, which companies do you compare yourself against? Around four allows reasonable measurement - if you can think of four businesses that would be good benchmarks for yourself, we’d be happy to approach those businesses and create a bespoke benchmark for you. We believe this may be hard to achieve but are happy to stand corrected!

Finding the golden egg

Benchmarks may be misleading – they tell you you’re different but don’t show what the important factors in those difference are. In short, we believe that to have any comparable benchmark you need to be compared to companies that are like yours in all of the relevant aspects and that’s hard, and often impossible to find.

The best benchmark is your own business! The key is to make your organisation, and the teams within it, perform better. These teams will flex and change, and every business is unique, so the most valuable measure is a company’s own performance over time. Where are you now and where do you want to get to in the future? It may be time to look at the golden egg within your own company to help achieve this.

any-3

Talk to any-3 about your benchmarking requirements, and how we can help identify what the important factors are that your business needs to consider to improve engagement, and the performance of every team within the organisation, so that managers are focused on the right things.

*Source: any-3, averages across various clients, 2019-2024