The use and effectiveness of benchmarking in SMEs

The aim of this paper is to explore current uses of benchmarking in small‐ and medium sized enterprises SMEs as well as assessing the demand for this practice. A multi‐method approach was adopted involving a telephone survey of 100 companies supplemented with in‐depth interviews with a further 22 companies generating qualitative data which explored the issues in greater detail. The most popular benchmarking indices used were financial performance, customer satisfaction and quality of products / services. Benchmarking of human resource type measures was inconsistent and piecemeal. Where benchmarking was used it was found to be very effective across all of the measures used, though low levels of interest in using benchmarking were shown by companies not already using it. Thus, whilst companies appear hesitant about using benchmarking data, where they do so, they are pleased with the results. Reasons behind this reluctance and the patterns of usage generally are explored.