by Neil Quinn
I get nervous when HR professionals use benchmarks as their primary criteria to determine how much to pay employees or spend on benefits.
Everybody wants to have a number so they’ll know whether they’re overspending or underspending compared with the competition. But those numbers are so rarely relevant to an individual organization.
Benchmarks are averages. They might compare spending among organizations in your industry or size range, but the numbers that they reveal fall far short of what you need to know for effective planning.
• Problem No. 1: Most of the information that benchmarkers use to get to an average isn’t relevant to your organization. Do you hire employees only from your industry or who work at a same-size company? Of course not. To be competitive, look at employers in your area with whom you compete directly for talent.
• Problem No. 2. Benchmarks for benefits spending can be misleading because...(register to read more)