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Benchmarking Training


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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:

Preparation

In the preparation phase you plan your benchmarking process and identify:

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.

Diagnosis

In the diagnosis phase you collect and analyse the data by:

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.

Integration

In the integration phase you apply the results of the diagnosis to your own business by:

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

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:

Earnings, where applicable, look at:

Figure 1 Hours of training per employee per year

Figure 2 Training investment as percentage of employment costs

Process measures

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:

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:

Figure 3 Example of a training process

Examples of process questions are:


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