Employee benchmarking has become the cornerstone of modern workforce strategy. No longer limited to manual comparisons or broad industry reports, today’s benchmarking platforms give HR leaders and consultants the data they need to evaluate employee performance in real time.
Looking for employee benchmarks? Access database now
In this guide, we'll cover the following aspects of employee benchmarking:
Employee benchmarking involves comparing metrics and processes from your organization to peer companies. It provides valuable insights into how well a company's workforce is performing relative to others in the same industry, highlighting areas of strength and also those areas needing improvement. Here we'll look at the various types of benchmarking for employee performance and organizational effectiveness, including:
This involves comparing key metrics such as output per employee, units produced per hour, or revenue per employee. These measures provide a clear view of how effectively a workforce is contributing to overall business performance.
Efficiency benchmarking focuses on processes and workflows, helping organizations identify bottlenecks and streamline operations. Functional benchmarking is also a widely used method, assessing metrics like revenue per functional employee or the percentage of employees allocated to specific functions.
Employee engagement and retention are critical to long-term success. Benchmarking in this area typically involves analyzing engagement survey results, turnover rates, and average tenure against industry standards.
HR teams frequently evaluate costs associated with hiring, training, and retaining employees. Tracking these metrics quarterly helps ensure cost controls are effective and aligned with strategic workforce plans.
This type of benchmarking compares workforce skill sets and capabilities to industry peers, highlighting gaps and opportunities for development. It becomes especially important during strategic reviews or when the organization is preparing for a major shift in direction.
By benchmarking these areas, organizations gain actionable insights that enable them to make informed decisions, drive performance improvements, and stay ahead of the competition.
Compare your company to trusted employee benchmarks
HR teams, consultants, and business leaders rely on employee benchmarking to strengthen performance and guide decision-making. The five most common reasons include:
Benchmarking highlights best practices and performance gaps, helping organizations boost productivity, efficiency, and overall results. HR professionals often use it to evaluate a company’s current state and recommend targeted improvements.
By comparing against industry standards and competitor performance, benchmarking informs smarter strategic choices. It helps leaders understand the type and scale of resources required to successfully execute their plans.
Recruitment, retention, and talent development all benefit from benchmarks. Measuring how effectively employees are attracted and retained has a direct impact on costs and, ultimately, company performance.
People are both the greatest asset and the largest expense in most organizations. Benchmarking supports cost planning and management exercises by revealing opportunities to reallocate resources, especially the workforce.
Skill gaps and competency needs become clearer when measured against industry benchmarks. This enables organizations to tailor learning and development programs and align them with market expectations - improving both employee capability and retention.
In short, employee benchmarking gives professionals the data and insights they need to evaluate performance, sharpen strategy, and achieve many business goals.
In 2025, a mid-sized European automotive manufacturing company faced rising SG&A costs, with Finance and HR teams expanding faster than revenue. Leadership questioned whether the growth in headcount was justified but lacked a clear benchmark to guide decisions.
The company turned to functional benchmarking and compared itself against industry peers. The analysis revealed Finance represented 5% of total employees, compared to the industry median of 4%, and HR represented 2%, above the 1.5% benchmark. At the same time, Revenue per IT employee lagged behind industry norms, highlighting process inefficiencies.
Armed with these insights, the company took several actions:
Within twelve months, the company reduced SG&A headcount by 12%, saving approximately $3M annually while maintaining employee engagement scores above industry averages. More importantly, the benchmarking exercise became a recurring input into annual strategic planning, ensuring staffing remained aligned with revenue growth and market realities.
This case demonstrates how functional benchmarking goes beyond abstract ratios - it provides actionable insights that drive cost savings, improve efficiency, and align the workforce with strategic goals.
Accessing reliable employee benchmarking data is crucial for a successful benchmarking exercise. There are several sources where organizations can find relevant benchmarking data, as follows:
Many industry associations and trade organizations compile and publish benchmarking data specific to their industry. These benchmarks often provide valuable insights into industry norms, trends, and best practices. However, a limitation to these industry reports is that they may not necessarily be relevant to the size or specific geography of your organization.
Consulting firms specializing in HR, management, or industry-specific domains often conduct benchmarking studies and provide access to benchmarking data and reports. One key constraint with consulting firms is that they usually are quite expensive to engage for a benchmarking exercise. Example consulting firms include McKinsey, Bain, and BCG.
Online platforms and databases dedicated to benchmarking provide access to a wide range of benchmarking data, metrics, and industry comparisons. One such provider is CompanySights, who specialize in providing employee benchmarking data for HR teams and consultants.
It's essential to ensure the credibility, relevance, and accuracy of benchmarking data obtained from these sources to derive meaningful insights that are trusted by all stakeholders involved. Without company-specific data, people shrug off benchmarks as “not relevant to our company”.
Skip the guesswork - Benchmark your workforce today
To gain a competitive edge, companies are increasingly turning to benchmarking as a proven tool for success. Here are 10 tips, strategies, and best practices to make benchmarking work in 2025:
Start by clarifying the purpose and scope of your benchmarking initiative. Pinpoint the performance metrics, focus areas, and outcomes you want to achieve. Clear objectives keep the process aligned and measurable.
Choose benchmarks that are directly comparable to your organization’s size, sector, geography, and structure. The closer the fit, the more actionable the insights.
Quality in means quality out. Use trustworthy sources, standardized metrics, and consistent methods to ensure data integrity. (Pro tip: work with a third-party provider like CompanySights to save time and improve accuracy.)
Involve senior leaders, department heads, and even frontline employees in the process. Their buy-in builds transparency, alignment, and commitment - all critical factors for benchmarking success.
Don’t stop at the numbers. Explore deeper into trends, patterns, and underlying causes of performance differences. Benchmarks steer you in the right direction, they don’t give you the answer.
Study what high performers do differently. Translate those practices into opportunities for your organization to adapt, adopt, and improve.
Use benchmarking insights to define achievable goals. Break them into milestones, set timelines, and assign accountability to track progress with precision.
Build concrete strategies based on the findings. Prioritize initiatives, allocate resources, and ensure implementation plans are monitored closely.
Benchmarking isn’t one-and-done. Revisit data frequently to track progress and recalibrate strategies. For most organizations, quarterly employee benchmarking is best practice - though cadence may vary depending on size and volatility.
Encourage feedback, innovation, and learning at every level. A culture that embraces continuous improvement ensures benchmarking delivers long-term value.
By putting these practices into motion, organizations can transform benchmarking into a powerful strategic tool - one that drives performance, fuels innovation, and enables sustainable growth in 2025 and beyond.
Ready to benchmark your workforce? Start your search
Employee benchmarking is a tool that many forward-thinking companies employ to improve their performance and get ahead of their competition. It plays a pivotal role in helping organizations understand their performance relative to industry peers, identify areas for improvement, and drive strategic decision-making.
As we look beyond 2025, we think that gaining insights through employee benchmarking will not just remain, but become an increasingly critical tool for organizations to boost employee performance and productivity.
.svg)
Download a copy of our latest all industry report with data to benchmark the Finance, HR, IT and Marketing functions.
Insights are just around the corner.
.svg)
.svg)
