CAMBRIDGE, Mass. & PHILADELPHIA & SEATTLE--(BUSINESS WIRE)--The Burning Glass Institute, Harvard Business School's Managing the Future of Work Project, and the Schultz Family Foundation today launched the 2023 American Opportunity Index, a groundbreaking ranking that measures how effective companies are at developing talent to drive business performance and advance individual employees’ careers.
The Index is the only measure of employer quality evaluating what really happens to workers at America’s largest employers over time, assessing how well companies manage their most important asset—their people. The Index is unprecedented in this approach: based not on corporate surveys but on an independent, big-data analysis of the career trajectories of nearly five million workers from 2018 to 2022. The results are drawn from how employees reported changes in their work history on social media and online resume platforms, as well as comprehensive salary and job-posting data.
Topping this year’s ranking are Coca-Cola Co., J.M. Smucker Co., W.W. Grainger Inc., PNC Financial Services Group, ServiceNow Inc., Meta Platforms Inc., Capital One Financial Corp., Bank of America Corp., Costco Wholesale Corp. and Intuit Inc.
The Index reveals that workers at top-performing companies are two-and-a-half times more likely to receive promotions, and they are paid, on average, 68 percent more for the same jobs. Firms that deliver for their employees are not confined to just a few sectors: The Index’s top-100 companies represent more than three-quarters of the industries evaluated.
An analysis of Index results also finds large companies that significantly outperform their peers in retaining employees are saving as much as $400 million a year on turnover costs. Many of those firms succeed in keeping their people by offering ample opportunities for promotions in addition to competitive wages.
This year’s Index has been expanded to assess 400 of the largest U.S. companies who publicly report their financial performance. All firms are rated across multiple metrics and by sector. The highest-scoring 100 firms overall are recognized as top employers, and companies are also rated in five ways:
- Hiring: How well do companies hire people without degrees and those with little experience?
- Pay: How well do companies pay their employees and increase compensation over time?
- Promotion: How well do companies move people up and prepare them for better jobs elsewhere?
- Parity: How well do companies move all people up, regardless of race or gender?
- Culture: How well do companies retain their employees and build their careers?
The 2023 American Opportunity Index reveals several powerful insights for companies navigating a dynamic labor market:
- Corporate practice has a major impact on workers. Employees of higher performing companies on the Index have remarkably different career trajectories – in terms of promotion, pay, and retention, among other key metrics.
- Driving better outcomes for workers helps companies, too. Being in the top quartile of retention vs. the bottom quartile can add approximately a half-point to the bottom line — between $101 million and $424 million for the average Fortune 500 company — as firms benefit from reduced costs associated with attrition.
- Promotion is a powerful lever for boosting employee retention. Companies know that retaining their workers improves productivity and business performance. Having a strong track record of promotion is almost as important at driving retention as pay itself.
- Promotion and parity often – but not always – go hand in hand. Companies that do well at moving employees up might not move up everyone with parity. Firms that want to advance workers fairly must be purposeful in their approach to advancing women, as well as Black and Hispanic workers.
- Companies have considerable control over their performance. Competitors in the same industries with similar workforces and business models can have very different results based on how they manage talent.
The Index was designed to fill a key void in the marketplace: an outcomes-focused tool employees, employers, and policymakers can use to benchmark corporate progress in advancing opportunity across their workforce. It is rooted in the belief that when employers enable the full potential of their people—by providing good jobs and opportunities for advancement—their business does better. In recognizing the companies where workers and firms thrive symbiotically, and showing areas where each company can continue to improve, the Index seeks to spark a new focus on sustainable talent management across American business.
Explore the Index and read the full report at www.AmericanOpportunityIndex.org
Quotes:
“At a time when so many are questioning the vitality of the American promise, it’s crucial that CEOs and corporate directors look inward and examine how effectively they are nurturing and developing their people. Companies have a crucial role to play in creating opportunity and upward mobility for American workers and their families. The American Opportunity Index demonstrates the greatest lesson I have learned in business: When you invest in your people, you’re investing in the future of your company.”
- Howard Schultz, co-founder of the Schultz Family Foundation and former ceo and chairman emeritus of Starbucks Corporation
“Companies do better when their employees rise. When workers are moving ahead, they are learning and growing while becoming more valuable to their employers, with direct impact to the bottom line. The American Opportunity Index represents a big step forward both in defining what it means to be a quality employer and in showing why that matters to everyone.”
- Matt Sigelman, President of the Burning Glass Institute.
“The American Opportunity Index demonstrates the incredible significance of corporate policies in determining economic outcomes for most workers. The variation in outcomes across and, especially, within industries yields an obvious conclusion: What companies choose to do to help workers gain economic security, and how they go about doing it, drives outcomes more than factors like their business model or location. Companies that have implemented more forward-looking policies benefit financially and competitively and so do their workers.”
- Professor Joseph Fuller, Harvard Business School
“The American Opportunity Index shows that how companies invest in talent has a profound impact on the careers of individual employees and a firm’s overall bottom line. By arming boardrooms and c-suites with data about what is actually happening to their employees, and how firms stack up against their competitors in growing internal talent, we believe more business leaders will embrace changes that enable more American workers, especially those without college degrees, to rise into jobs that provide financial security and the ability to realize one’s full potential.”
- Rajiv Chandrasekaran, Managing Director, Schultz Family Foundation
“At Chipotle, our employees are our greatest asset and we believe in investing in their careers by offering opportunities for advancement, as well as robust benefits that address physical, mental and financial health. Developing our people is paramount to running great restaurants and it is an honor to be the leading hospitality company recognized by the American Opportunity Index.”
- Brian Niccol, Chairman and CEO, Chipotle
"People are the soul of every great company. That's why I believe that the best talent is the ultimate competitive advantage. Our success reflects our commitment to investing in our people - so they deliver the best for our customers, our community, and the world. We're humbled by the recognition from The American Opportunity Index; their work to advocate for human happiness and productivity is creating a brighter future for all."
- Bill McDermott, Chairman and CEO, ServiceNow
“Since our founding, what has made Capital One a great place to work has always been our people, our culture, and the way we care for our customers and communities. We continue to invest in our associates, as well as in innovative programs and partnerships that help people from diverse backgrounds unleash their full potential.”
- Andy Navarrete, Executive Vice President and Head of External Affairs, Capital One
ABOUT THE AMERICAN OPPORTUNITY INDEX
The American Opportunity Index is a groundbreaking ranking of how well companies maximize their internal talent to drive business performance and individual employee growth. Unlike most measures of employer performance, the Index is based on real world outcomes, assessing the progress of millions of workers by tracking the progress of their individual careers. The Index measures hiring and promotion practices, pay, race-and-gender parity, and cultural components such as retention and whether companies hire their leaders internally. This ranking is rooted in the belief that when employers enable the full potential of their people—by providing good jobs and opportunities for advancement—their business does better. In recognizing the companies where workers and firms thrive symbiotically, and showing the areas where each company can continue to improve, we seek to spark a new focus on sustainable talent management across American businesses. The American Opportunity Index is a joint project of the Burning Glass Institute, the Managing the Future of Work Project at Harvard Business School, and the Schultz Family Foundation. Explore the Index and see who’s leading the way at: https://americanopportunityindex.org.
ABOUT BURNING GLASS INSTITUTE
The Burning Glass Institute believes that everyone deserves meaningful work and the chance to move up. A fully independent non-profit, we advance data-driven research and practice on the future of work and on the future of learning. We work with employers, public agencies, educators, and policymakers to develop solutions that build mobility, opportunity, and equity through skills. Through our expertise in mining new datasets for actionable insight, the Burning Glass Institute’s discourse-shaping research draws attention to pressing problems and frames the potential for new approaches. Through project-based engagement and collectives, we put ideas into practice, bringing forward solutions that are high-impact and replicable. For more information visit https://www.burningglassinstitute.org/.
ABOUT THE HBS MANAGING THE FUTURE OF WORK PROJECT
Harvard Business School’s Project on Managing the Future of Work pursues research that business and policy leaders can put into action to navigate the complex, fast-changing nature of work. The Project’s current research areas focus on the many forces that are redefining the nature of work in the United States as well as in many other advanced and emerging economies: Technology trends like automation and artificial intelligence; Contingent workforces and the gig economy; Workforce demographics and the “care economy”; The middle-skills gap and worker investments; Global talent access and utilization; Spatial tensions between leading urban centers and rural areas. Learn more at: https://www.hbs.edu/managing-the-future-of-work/.
ABOUT THE SCHULTZ FAMILY FOUNDATION
The Schultz Family Foundation’s mission is to create greater opportunity, accessible to all. Our work is deeply rooted in the lives and values of our co-founders, Sheri and Howard Schultz, who believe talent is everywhere, but opportunity is not. We seek to apply the lessons they have learned over the decades to seed innovations and scale solutions to help young people successfully navigate the transition to adulthood and positively impact the trajectory of their lives. We are investors in unleashing potential and unlocking opportunity, working in partnership with employers, entrepreneurs, non-profits, and governments that share our aspiration of enabling everyone to access the full promise of America. For more information about the Foundation and its work: www.schultzfamilyfoundation.org.
