Could benchmarking improve employment relations and reduce tribunal claims?

01 July 2019

This article was featured in the July/August 2019 issue of the magazine.

Jade Linton, senior employment law associate for Thursfields, explores whether and how benchmarking could reduce the risk of successful claims and improve employee relations

Form ET1 is the document no employer wants to see, as it particularises a worker’s complaint. Even in circumstances where the employer is above reproach, the process of defending claims in an employment tribunal can cause a great deal of inconvenience, unwanted publicity and financial loss. Could benchmarking be the answer?


What is benchmarking?

A benchmark is a standard against which something can be measured. Through benchmarking, an employer can find the best performing businesses in their industry and compare processes such as key performance indicators. 

Benchmarking enables employers to monitor the performance of businesses in industries similar to theirs and, if necessary, adopt their processes to achieve better results. 

Benchmarking can work to expose weaknesses and celebrate strengths, and supporters hail it as a pivotal tool for continuous improvement and market resilience. 


... monitor the performance of businesses in industries similar to theirs and, if necessary, adopt their processes 


Tribunal claims

Benchmarking can highlight areas of concern which could trigger employment tribunal claims. By being aware of this information an employer can take action to resolve the issues exposed.  

For example, long-term sickness absence of employees can make an employer particularly exposed to claims of disability discrimination, constructive unfair dismissal and disputes over pay. By understanding that in comparison to their competitors there is an issue in a particular area such as sickness absence means an employer can focus on best practice including contact management, reasonable adjustments and absence trends. Of course, this success is dependant on those areas of risks once identified being corrected quickly.

That said, not all claims are foreseeable and often claims are based on unique circumstances unavoidable by any scrutiny of trends amongst peer groups. Benchmarking is certainly not a cure for all but when used properly can provide data driven insight revealing peaks, trends and areas of weakness which if ignored could expose a business to claims. 


Employee relations

Benchmarking can also help with employee relations in a number of ways:

  • Ensuring alignment with best practice – An employer that advertises commitment to ensuring staff benefits are the ‘best in the industry’ would be expected to take a regular or at least annual review of what their industry peers are doing with benefits. 

In an age where staff can compare potential employers against matters such as salary, staff satisfaction and benefits, benchmarking can help employers ensure they are in line with best practice and that they attract and retain impressive talent pools. 

Though achieving best practice may not be possible for a business in financial difficulty an idea of what its peers are doing may assist it in making small, inexpensive changes to ensure staff are being given a fair deal across the market. 

  • Tracking relevant data to ensure the maintenance of good employee relations – Human resources (HR) and payroll departments are usually the focal point for employee relations, navigating employment law and solving workplace issues, ensuring staff get paid and communicating core issues and values. 

With such a big responsibility it is easy to forfeit proactivity whilst trying to resolve issues such as absenteeism and pay. Ensuring that relevant data is recorded, reviewed and managed systematically is always a good place to start. Tracking HR matters by spreadsheets has its benefits but being able to compare data across a pre-selected field (e.g. peer groups, companies of similar size or in the same industry) can ensure key decisions about staff are not made using only basic information.

Benchmarking can reveal the most common case types an employer faces and reveal how close each case is to completion. This level of transparency can help employers maintain good employee relations whilst providing easy access to crucial data to influence and support decision making. 

Using case management systems to monitor and track issues such as attendance can help HR managers pinpoint trends and future problems within the business. Recording employee data in this way enables the department to track patterns of behavior and thus provide teams with advanced warning and help them to make changes to internal processes. 


... employers can harness data in a way which highlights areas of risk and safeguards the wellbeing of staff 


Benchmarking and beyond

A benchmarking exercise is only as good as the team willing to learn from the data. A periodic review of staff satisfaction every year will achieve little if in the intervening period the data from the exercise is not scrutinised, weaknesses identified, and strategies implemented to aid improvement on an ongoing basis. 

Benchmarking is a useful facilitator, encouraging employers to think differently about the challenges they face and to prepare for challenge(s) on the horizon, by learning from similar organisations that have gone through comparable pressures. 

By examining employee relation cases across the board, employers can harness data in a way which highlights areas of risk and safeguards the wellbeing of staff.  Interrogating the data derived from benchmarking not only assists proactivity but helps to create a solid employee experience where issues can be identified before they come to a head.

While there is no guarantee benchmarking will stop an ET1 from haunting your desk, it can ensure matters are dealt with proactively and not reactively. Benchmarking can expose weaknesses limiting exposure to employment breaches and manage employees making it a useful tool, but not a complete cure for all.