Benchmarking how competitors compensate their employees is an important tool when engaged in collective bargaining. How can you make sure you are conducting an “apples-to-apples” comparison? You need to identify a comparable group of companies in your industry. Here are some important benchmarks:
- Comparable Annual Revenues. It is not useful to compare a company that generates $5B to one generating $40B.
- Profitability. It is hard to compare a company with profit margins of 20 percent to one generating 5 percent.
- Total Number of Employees. Employees help to generate revenues, so comparability in number of employees is important.
- Type of Equipment. The size of your equipment can determine how much revenue is generated by each piece of equipment.
- Marketing. Does your company generate revenue by selling a similar product?
- Markets Served. The breadth and depth of how many markets you operate in is also a key to generating revenues.
- Niche in the Marketplace. How does the consumer identify your product—are you selling low cost/high value or premium services?