FREE KIC - NO. 20 MAY 07


In recent weeks there has been an awful lot of talk about benchmarking. Whenever the nurses’ strike was mentioned so was the benchmarking process. Politicians and the HSE kept on saying that benchmarking was the only way to end the dispute while the nursing unions pointed out that other groups had arranged deals outside benchmarking.

Throughout the whole dispute I sensed that most people did not have a real understanding of the theory behind benchmarking, or the reality of how it had been put into practice in Ireland. On a number of occasions I found myself in long discussions with people because I felt that I had a different perspective from the consensus being trotted out in the media. This different perspective came from a combination of things. It came from a meeting with a member of the original benchmarking body and it came from being married to a nurse who had been a nursing union representative for a short period of time.

The meeting with a member of the first benchmarking body occurred back in early 2002. At that time Jim O’Leary was chief economist with Davy Stockbrokers and was also a member of the benchmarking body. During one of his regular visits to Setanta Asset Management he mentioned that he was worried about public sector pay. He mentioned that the research findings of the benchmarking body suggested that public sector workers were in many cases better off than private sector workers. In other words the reality of public sector pay was that some workers should see reductions in salary rather than increases. He then went on to say that no politician would dare suggest pay cuts and therefore a political decision had been made to give all public sector workers a pay increase. The government had decided how much they felt could be given away and it was just a question of how that money would be divided out. The original theory had been dropped because there was no political will to face up to the reality.
I was not surprised to see that a few weeks later Jim O’Leary resigned from the benchmarking body. I sensed that he was unhappy with the whole process and just felt he was better off away from it. At the time the media spin said that he resigned due to the pressure of work.

At this stage you may be wondering how the government managed to keep this so quiet and why there has not been a media outcry. Well part of the reason why the government could get away with it is because the work of the benchmarking body is completely secret. The freedom of information act does not apply. We cannot look at the detailed work and therefore we cannot discuss the findings.

Jim O’Leary went on to become an academic in Maynooth University. As part of his research work he has looked at the whole area of public sector pay. He has published findings that suggest that in 2001 the public sector on average was 13% better off. His work highlights how the work of the first benchmarking body needed to be kept secret.

Ever since that meeting in 2002 I have known that benchmarking is a flawed process and that potentially it could be a source of major problems because it could never be transparent.
In order to link this knowledge of benchmarking into the nurses dispute I need to go back in time to a time before benchmarking.

Before benchmarking, nurses tended to judge their position relative to other public sector workers. In particular they compared themselves to other health sector workers. They would look at occupational therapists, speech therapists, physiotherapists etc. That comparison made them feel as if they were being treated unequally. They saw that these professionals worked shorter hours and received more pay. They felt that this needed to be dealt with. In particular the 35 hour week for other health professionals seemed unfair when nurses worked 39 hours.

Negotiations on these issues had dragged on through the 1980s and 1990s culminating in a short strike in 1999. This strike had ended when a commission on nursing was proposed as a way of looking at all issues involved in nursing.

The commission on nursing did not give specific recommendations on the 35 hour week so the nurses felt that they had been exploited.

They then hoped that benchmarking would deal with these issues. In theory you would imagine that benchmarking would have to look at these issues. Benchmarking would have to compare occupational therapists, speech therapists etc with somebody in the private sector and pay them accordingly. Benchmarking should compare nurses to somebody similar in the private sector and on that logic the gap between nurses and other health professionals would be eliminated or at least significantly reduced.

The reality was quite different and unfortunately as I have already mentioned there is no way of telling how the benchmarking body reached its conclusions.

At a union meeting to discuss the recommendations of the benchmarking body my wife asked Liam Doran (General Secretary INO) why he had agreed to go into a process where he knew that there was no way of finding out how they had reached their conclusions. Unfortunately Liam gave a garbled answer and in hindsight it probably indicates that he was unhappy with benchmarking.

The nursing unions therefore brought their complaints to the labour court and of course we know that the labour court recommended that the nurses return to benchmarking. In my mind this raises interesting questions about the labour court. Do they realise that benchmarking is so flawed? If they do realise its flaws why are they so prepared to support it? If they don’t realise how flawed it is well then it shows how out of touch with reality the labour court must be because there is plenty of research to support the idea that public sector workers are better off than the private sector.

If you try to put yourself in the position of the nurses I think that you will understand why they became militant. They had felt let down by the commission on nursing, they faced a benchmarking process that was not transparent and a labour court that was forcing them back into that hidden world of benchmarking. I don’t think that it takes too much imagination to understand why they tried to work outside benchmarking.

For the period of the industrial action we heard the union leadership talking about keeping away from benchmarking and yet the settlement reached brings them back into benchmarking. It all smells fishy to me. I am guessing that a significant pay increase will be awarded by the benchmarking body and it will be justified on the basis that the role of the nurse is changing. There will be no transparency. We will not know anything about the comparisons that are supposed to take place with the private sector. All we will know is that industrial peace has been achieved and the partnership process will continue.

I have looked for other articles that have highlighted these problems with benchmarking. I found one opinion piece on the finfacts website. It can be accessed at: Just go to the Finfacts Blog April 2nd 07 opinion piece titled Irish Nurses.

Apart from this one item there has been very little to highlight the monster that has been created called benchmarking. I hope that it does not undermine the Irish economy too much in the long run but I have to say that this whole thing gives me the “benchmarking blues”.

< Previous opinion piece | Return to index | Next opinion piece >

Killeevan Investment Consultants Ltd, trading as KIC, is regulated by the Central Bank as an Investment Intermediary.
VAT No IE 6415351U Registered Number 395351
Directors: Kenneth Power (Managing) B.Comm, MBS, ASIP, Regular Member of the CFA Institute.
Siobhan Power