By: Matt Craig
Director of Crane Community Support
Benchmarking is a process companies use to evaluate various aspects of their processes and results in comparison to best practice companies’ processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans to make improvements or adopt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.
The term benchmark originates from the chisel marks that surveyors made in stone structures, into which an angle-iron could be placed to form a “bench” for a leveling rod, thus ensuring that a leveling rod could be accurately repositioned in the same place in the future.
Benchmarking is mostly used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, or defects per unit of measure) resulting in a metric of performance that is then compared to others. In 1994, one of the first technical journals named “Benchmarking: An International Journal” was published.
In 2008, a comprehensive survey on benchmarking was commissioned by The Global Benchmarking Network, a network of benchmarking centers representing 22 countries.
1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of organizations) of 20 improvement tools, followed by SWOT analysis (strengths, weaknesses, opportunities, and threats) (72%), and Informal Benchmarking (68%). Performance Benchmarking was used by 49% and Best Practice Benchmarking by 39%.
2. The tools that were likely to increase in popularity the most over the next three years were Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking. Over 60% of organizations that were not currently using these tools indicated they were likely to use them in the next three years.
A recent Radius Indiana benchmarking effort was intended to compare our Region to some other regions that have had historical success in growing the federal employment base. By using gold standard Site Selector metrics, we anticipate being able to better set our own targets and learn from other regions. In this way, we learn how well the targets perform and, more importantly, the metrics that explain why these regions are successful.
In 2017, Radius contracted with Hickey & Associates LLC to collect and analyze data comparing the Radius region to four other regions that have a historically large federal employee presence. This Benchmarking case study was to address several common Site Selector metrics of Labor, Taxes, Real estate and Community factors.
The initial step in building the demographics matrix was identification and selection of the workforce categories to be compared. Utilizing the Labor Department Standard Occupational Classification (SOC) categories as the source, 15 specific occupations were selected as the primary data vehicle for wages and population benchmarking. These occupations represent a broad mix present in many federal organizations that have a predominately civilian workforce.
With the labor categories set, it was now necessary to determine the regions for comparison. Here, we were looking for regions of the United States that house a large number of federal government employees. We obtained a matrix of federal employment by state, by agency, from a file that was constructed by Governing Magazine, for an article in that same publication. The source is indicated as the Office of Personnel Management (OPM).
Hickey & Associates and Radius parsed through the matrix in a qualitative/quantitative manner to select the best benchmarking regions. The OPM data showed that the vast majority of federal government workers applicable to our study reside in the Greater Washington DC Metropolitan Statistical Area (MSA), which is inclusive of the Northern Virginia and Southern Maryland Beltway regions. The selection process was repeated to select additional comparative MSA’s of Greater Chicago IL, San Diego CA; and Hampton Roads-Norfolk, VA.
The results of the benchmarking comparisons showed that the Radius region generated a 20%-40% savings in labor and other business climate expenses, versus these heritage federal government employment centers. Though labor availability was obviously less than the heritage federal government employment centers, analysis showed that there is ample volume to service a significant growth in federal government employment in the Radius region.
Matt Craig, Director of Crane Community Support
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