SIC Accuracy Benchmarks
SIC accuracy is not just “having a code.” Accuracy means a defensible fit to the SIC definition, correct neighbor-code placement, and consistent application over time. This page outlines practical benchmarks and common failure modes that reduce SIC classification quality.
On this page
Accuracy benchmarks for SIC classification
These benchmarks help evaluate whether a SIC code assignment is reliable for legacy reporting, stewardship, and analytics use cases.
| Benchmark | What it means | Why it matters |
|---|---|---|
| Definition fit | The business activity aligns to what the SIC code actually covers. | Reduces misclassification and improves defensibility for reporting. |
| Neighbor-code precision | The selection is correct relative to commonly confused or adjacent SIC industries. | Prevents drift into similar but incorrect industries. |
| Explainability | A rationale can be stated plainly using observable activity signals. | Supports audit readiness and internal alignment. |
| Stability over time | Changes occur only when evidence justifies a correction. | Protects longitudinal comparability. |
| Repeatability | Similar businesses receive consistent SIC coding outcomes. | Improves reliability across large datasets. |
Common vendor failure modes
Keyword-only mapping
Assigning SIC codes from keywords without validating definition fit or comparing neighbor codes.
- Higher false-positive rates
- Misclassification for multi-activity businesses
- Inconsistent outcomes across similar records
Over-broad defaulting
Defaulting to a broad SIC category to reduce uncertainty instead of selecting the most specific defensible fit.
- Weakens segmentation
- Reduces historical comparability
- Creates drift over time
Practical validation checks
These checks catch the most common SIC classification errors quickly.
- Read the definition: confirm the business matches what the SIC code covers.
- Compare neighbor codes: confirm the selection beats adjacent alternatives.
- Confirm primary activity: use the primary operational activity when multiple activities exist.
- Check stability logic: don’t change codes without evidence-based justification.
- Confirm repeatability: sanity-check against comparable businesses.
What “good” looks like on a SIC code page
A high-quality SIC code page should provide reference-first clarity: what the code covers, common confusions, examples, and how it fits relative to similar SIC industries. Tools can come after the reference blocks.
Start here: SIC Code Lookup Directory
FAQ
- What causes SIC accuracy issues most often?
The most common cause is keyword-only mapping that ignores definition fit and neighbor-code comparisons. - Are broader SIC codes safer?
Not necessarily. Over-broad defaulting reduces precision and can harm long-term comparability. - How should I handle multi-activity businesses?
Use a primary-activity approach, then confirm definitional fit and compare neighbor SIC codes to avoid drift. - How do SIC and NAICS relate?
NAICS replaced SIC for modern statistical reporting, but SIC remains important for legacy datasets. Use conversion tools when both are needed: SIC to NAICS Conversion.