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Ask the Expert: Benchmarking


Benchmarking L&D in your organisation against an 'industry standard' can be a tricky process - who wants to reveal such sensitive information to their competitors? None-the-less it's a frequent topic on Any Answers and this week our expert Graham O'Connell looks at how to set about a benchmarking exercise.

Question: Having completed an analysis of 06/07 spend on our leadership programmes. I am looking for some top level benchmark data in relation to the average level of invesment for senior managers per annum (general manager and director level). I recollect some figures quoting a percentage of the individuals salary? Can anyone help?

Answer: Benchmarking can be a really useful activity, especially if you use it to help you think new thoughts. However, even the benchmarking of metrics, as you are considering, can be complex and confusing. Let me talk generally at first and then I'll do my best to address your specific query.

Benchmarking processes - how people do things - can be particularly revealing in L&D. All you have to do is find another organisation that is a leader in its field, get them to agree to give away their secrets, and then talk to those involved to get right beneath the skin of the processes to find out exactly how and why they work. Then you have to work out what might translate to your situation and what general principles you have learnt that can inform your own bespoke processes. Easy!

Alternatively, you could look at parallel benchmarking - finding a completely different process but one that has a parallel to the one you are interested in. For example, some airlines benchmarked against formula one teams. The cars come into the pit-stop and are refuelled, re-tyred, checked and back on the track in seconds. Now as planes come on to stand, the luggage collection vehicle approaches from one side while the catering lorry pulls up the other side, all before you have come to a halt. We benchmarked our course booking system with an airport parking company - think laterally and you may be able to transform your processes not just tweak them.

Benchmarking metrics - costs, cancellation rates, delivery days and the like - is a common request. It is as if there are some magic numbers out there that we can compare ourselves against, but sadly that is not the case. There are some averages. For example, the average spend on training has been estimated at an amount roughly equivalent to 3% of the salary bill. I suspect that is the figure you may have come across before. Now, here is a question for you: is it best to be spending more or less than this figure? Spending less, for example, may suggest you are under-investing or that you are really cost efficient. The benchmark in itself doesn't help you very much. And it gets worse. Because each organisational context is unique, you might find yourself spending significantly more (or less) than the average - anything from 1% to 8% (depending on how you calculate it, which is another minefield). If you recruit experienced, qualified leaders then maybe your focus is on short top-up development. If you have diagnosed that your organisation needs to transform the calibre of leader in your organisation to the highest level, then you may find yourself shelling out big bucks to get the best on the market (modesty prevents me from suggesting who that might be!)

I know the amounts spent on top managers can be significantly above that spent on junior staff but in either case the key issue is to make sure you are getting value. And that can't be done by benchmarking alone.

Graham O'Connell MA Chartered FCIPD FITOL FInstCPD ACIM: Graham is head of organisational learning and standards at the National School for Government. He has particular responsibility for developing and promoting best practices in learning and development. A regular feature writer for professional magazines, he has had numerous articles published on topics such as organisational learning, training strategy, coaching and facilitation. You have probably seen Graham presenting at conferences too.


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