HR metrics for business benchmarking

World-class HR organizations continue to outperform the peer group by a wide margin up to $11 million in cost savings for the typical large company. They deliver services at 23% lower cost (FIG. 1) but with greater effectiveness. Their cost advantage has grown since 2012, yet they require 32% fewer FTEs per employee served (FIG. 2). Furthermore, those FTEs devote their time mostly to very high-value processes like strategic workforce planning.

Unrivaled insights that drive process improvement and HR transformation

Our HR benchmarking services provide access to the unparalleled benchmarking information and resources that are part of The Hackett Group's proprietary Best Practice Intelligence Center™ – a repository of processes, benchmark data and business best practices developed from more than 11,000 projects conducted at the world's leading companies. Our HR benchmark studies provide a fast and objective way for executives to:

  • Understand current capabilities
  • Assess performance relative to business value and strategy
  • Identify and prioritize improvement opportunities that offer the greatest potential return
  • Highlight and address areas of risk
  • Plan, manage and accelerate your journey to world-class performance

What makes the difference?

Two characteristics distinguish The Hackett Group's HR benchmark studies: The world's largest repository of empirically proven best practices, and our proven approach for assessing performance and value. Our business benchmarking services focus on three drivers of world-class HR performance:

  • Factors that drive demand for HR function services, such as complexity (geographies, legal entities, regulatory environment) and volatility (rate of change, M&A activity)
  • Structural factors such as business practices, strategies, service delivery model, staffing levels, skill sets, and technologies used
  • Execution/realization of value, including performance as measured by costs, productivity, resource allocation and value

Then, we use proprietary best practices benchmarking methodology to quantify your gap to world class – comparing your HR function's ability to execute efficiently (cost and productivity) and effectively (quality and value). We examine comparable organizations so you can see how the best do it and define business process reengineering steps relevant to your own HR function.

Our analysts use HR metrics such as these to calculate world-class performance
Efficiency Effectiveness
  • Functional and process costs and staffing levels
  • HR automation
  • HR cost
  • Talent management
  • Days to fill a position
  • Payroll efficiency
  • Turnover
  • Percent of internal promotions/transfers
  • Quality of transactions
  • Linkage between employee development and business strategy
  • Role of strategic workforce planning
  • Retention of key employees

Impact beyond HR function borders

Business processes and systems inextricably link your HR function with other enterprise functions. continuous process improvement in one area may have a ripple effect on others; for example, improved IT controls may result in more reliable data for decision-making in HR.

Our business benchmarking approach examines efficiency and effectiveness not just within the HR function, but also with a view toward the impact across your enterprise.

The Hackett Performance Exchange™ automatically leverages data from SAP® or Oracle® systems to calculate a cost improvement opportunity, compare performance across the enterprise, and produce timely end-to-end process insights – overnight.

Key deliverables:

  • An executive summary that highlights key findings and recommendations
  • A detailed comparison of finance performance to the statistical median and world-class organizations, across the processes measured
  • Analysis of the root causes of complexity and assessment of the value of finance services delivered, drawing from benchmark comparisons and stakeholder feedback
  • Identification of best practices required to achieve targeted efficiencies and identification of areas at risk due to under- and over-investment
  • Targeted recommendations presented in boardroom-level, results-oriented business terms

Learn More

Depending on objectives, approach and business complexity, a benchmark can typically be conducted in about seven to 10 weeks. To learn about The Hackett Group's HR process benchmarking services, contact us.