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'Know your enemy and know yourself; in a hundred battles you will never be in peril.'
— Sun Tzu
What is Benchmarking?
Benchmarking is a process by which you compare yourself to the best of your competitors, or those companies recognised as leaders in the field, with the aim of exceeding or surpassing their performance in all aspects whether it be products, processes or services.
So, if a company in your sector is doing better than you are, it would be reasonable to assume that the quality of its training would be one of the factors that contributed to its business success. Therefore, it would be valid to compare its training to your own.
Benchmarking is a learning experience: observing what the competition is doing now; projecting what that performance might be in the future; understanding how they operate and, where applicable, adapting their practices for your own use.
Comparing yourself against companies who have a known high reputation for their training is one of the best ways to evaluate your training. To do this you will have to decide which are the important indicators you wish to measure yourself against.
How do you 'Benchmark'?
The process comprises three phases:
In the preparation phase you plan your benchmarking process and identify:
- what you will be benchmarking,
- who is the best competitor or leader in the field,
- how the data will be collected.
Every part of every business has 'outputs' — whether it be physical products or intangible services — that it delivers to internal or external customers. It is these outputs, or more precisely measurements of these outputs, that will be the subjects of your benchmarking exercise.
Usually, you will benchmark yourself against competitors in your own field: an engineering company will benchmark itself against another engineering company and a media company will benchmark the best in its field. This is probably the best approach when you are looking at the whole company, but when you are considering a function such as training, you should not allow yourself to be restricted — you should identify the best training organisations no matter in what company they are to be found.
Collecting the data can be done through desk-based research by reading reports, articles and carrying out literature and Internet searches. Google is one of the many search engines that can be used for this purpose.
In the diagnosis phase you collect and analyse the data by:
- determining the current gap,
- identifying what the best competitors or leaders are doing differently,
- projecting future performance levels.
Not only do you need to establish how far the 'benchmark organisations' are ahead of you, but you also need to understand how they have achieved their lead. It is also very important to understand what these companies future levels of performance will be otherwise you will always be playing 'catch up' and will never be in a leadership position.
In the integration phase you apply the results of the diagnosis to your own business by:
- establishing goals,
- developing plans,
- implementing and monitoring actions,
- evaluating results.
Integration is the phase in which benchmarking starts to pay dividends. Once you have established your goals, you can develop and implement plans. Keep a check on implementation to make sure that you are still on track.
Once you have made the changes in your organisation, you will need to evaluate the results which is, in essence, the start of another benchmarking exercise which means that benchmarking really is a continuous process.
What should be measured?
The outputs of a training organization are relatively straightforward and are usually in the form of training courses and training materials. The tricky part is identifying measurements that can be used for benchmarking. Training measurements can be divided into four categories:
The first three categories are quantitative. They are relatively easy to measure but can be perceived as bureaucratic. Quantitative measures have to be used with caution — e.g. one of the most popular of the time measures is the number of hours of training received by each employee per year. Many companies have a blanket target of 40 hours. Although this is useful as a guide, it is possible to imagine a situation where a highly skilled workforce would need only two hours of training a year. Training should always be related to the need.
Getting to the figures can be difficult. This is not because of any reluctance to disclose the figures (many training managers are only too willing to share ideas and information) but because of a lack of systems to retrieve the information. It will also take time to arrange and make these visits.
You may also find that the figures have been calculated on a different basis to your own. For example, if you decide to benchmark training budgets, you may find that differences occur over the inclusion or exclusion of items such as employment costs, overheads and loss of production. You will find that most training managers exclude as many items from the cost of training as they can get away with. The most common difference is the inclusion or exclusion of trainees' wages.
Financial measures cover both costs and earnings and expressing these as ratios allows you to compare your costs and earnings with other companies. For example, the training budget can be expressed as a percentage of employment costs or company revenue. The budget can be divided by the number of employees to give the investment per employee. Other cost measures look at how much it costs to provide:
- a trainer,
- a day of a training course,
- a day of training for one student.
Earnings, where applicable, look at:
- income per trainer,
- income per square metre of training area,
- income as a percentage of the training budget.
Figure 1 Hours of training per employee per year
Figure 2 Training investment as percentage of employment costs
Many organisations have used quantitative measures to improve training effectiveness (and to put training on the business agenda) but there was a feeling that there was more to do beyond what quantitative measures could achieve. Alternative measures used by some of these organisations include:
- extracting employees' opinions on training from the employee satisfaction survey,
- tracking the extent to which training and development plans are achieved,
- collecting student perceptions at the end of the course,
- investigating the extent to which employees have been certified to do their current job,
- locking-in to European Foundation for Quality Management audits (EFQM).
- using Investors in People criteria,
- introducing Business Excellence Certification. Business Excellence Certification is a method in which an organisation's business processes are audited by senior managers from other organisations.
Benchmarking the training process promises to be a fruitful line of research, providing participating organisations agree on philosophy and principles. Process questions allow benchmarking to be carried out without getting bogged down in numbers.
One of the primary questions would be whether the organization has a training process. Figure 3, adapted from Managing the Training Process, gives an example of such a process.
This and other process questions, based on agreed principles, should be included in the training section of the organisation's audit. Some quantitative measures can also be included providing:
- they are selected in consultation with the businesses,
- the organisations being audited find them useful in monitoring their own performance.
Figure 3 Example of a training process
Examples of process questions are:
- Do you have an overall training plan for your business?
- To what extent is the training plan achieved?
- Has a training needs analysis been completed?
- Are training needs linked to the business plan?
- Where do the training needs come from:
- individual requests?
- manager requests?
- corporate mandates?
- job requirements?
- organisational needs?
- departmental needs?
- individual development plans?
- How do you validate these needs to ensure that training is an appropriate solution?
- How do you prioritise these needs?
- How do you select new courses?
- How do you assure the quality of these courses?
- If you develop your own courses, what process do you use to develop them?
- How do you select trainers?
- How do you assure the quality of these trainers?
- Do you have a training budget?
- How often are courses cancelled because of other priorities?
- To what extent are people withdrawn from courses?
- Do you have a dedicated training room?
- If you use external training facilities, how do you ensure that they are of sufficient quality and suitable for your needs?
- Do your courses have behavioural objectives?
- Are these objectives tested?
- Do students complete an end-of-course questionnaire?
- Are these questionnaires kept on file?
- How are they analysed?
- Who receives the analysis?
- What other validation methods do you use?
- Is evaluation carried out after the course is completed?
- Does each employee have a training record?
- Does the record include:
- required courses?
- planned dates?
- date courses completed?
- test results?
- Have training staff been accredited as professional trainers and trainers of the subject matter?
- Do you have people whose job roles specifically include:
- training management?
- training delivery?
- training administration?
- Have training courses been accredited?
- Do people have 'living' development plans?
- Have people been trained to do their job?
- Is their competence certified on the job?
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