Companies vying for entry-level positions should take a cue from AT&T and American Express and offer aggressive advancement opportunities to workers without a college degree to help expand the talent pool, according to a new report.
According to “The American Opportunity Index: A Corporate Scorecard of Worker Advancement”, the choice of a company by a worker has a significant influence on the speed at which he moves up the ladder, the likelihood of him landing a better job elsewhere and his he will be hired. and promoted. The study specifically examines the roles that were open to people without a college degree and rates the 250 largest U.S. public companies ranked by Fortune magazine.
“Not all employers are created equal when it comes to the type of stepping stone they provide for advancement and this is something workers, employment counselors and local educators need to be aware of.
The results show that workers, even those without traditional hiring credentials, should be selective about where to work. And companies looking to attract, retain and develop talent need to make sure they provide their employees with opportunities for advancement, says Harvard Business School professor Joseph Fuller, one of the dashboard’s authors. .
“Not all employers are created equal in terms of the kind of springboard they provide for advancement,” says Fuller, who co-leads the Managing the Future of Work project at HBS. “And that’s something workers, employment counselors and local educators need to be aware of.”
The index ranks the top 50 companies on several criteria, including promoting from within, career stability, and providing early experiences that allow employees to land better jobs with future employers. The top three companies were AT&T, American Express and Cisco Systems. The report was co-authored by Matt Sigelman, Nik Dawson and Gad Levanon of the Burning Glass Institute and supported by the Schultz Family Foundation.
The scorecard comes as employers struggle to find skilled workers in a stagnant labor pool, trends that are likely to worsen in the future, researchers say. Companies are also facing greater scrutiny from regulators and investors who increasingly assess how employers treat workers. And they are blamed for creating economic conditions that mean that half of American workers born in the 1980s earn less than their parents, while 90% of those born in the 1940s earn more.
“There are a number of fairly clear and inflexible considerations that make focusing on issues like this worthy of the attention of even the most profit-oriented and value-maximizing leader,” says Fuller.
Employees do better in some companies than in others
Fuller and his colleagues looked at data from 3 million employees who started working at Fortune 250 companies between 2017 and 2021, as well as the job requirements from more than 40 million online job postings. They focused on roles such as office manager or customer service representative, for which about 30% of workers do not have a college degree.
Combining this data from Lightcast, a labor market analytics company, with about 20 million self-reported salary records on Glassdoor, the authors tracked how workers in these positions fared over five years. They focused on nine key areas, including how easily workers were hired, what they earned, how quickly they progressed, how often they got better jobs elsewhere, how many workers who remained in a company and the number of them who rose to managerial positions.
Employees working at some companies were much more likely to grow and succeed than employees working at others, leading to startling disparities between companies ranked in the top 50 and those ranked in the bottom 50:
- Some employees wait longer for promotions. Employees of a company that is slow to advance workers must work a year longer to be promoted than those of a company known for accelerating employee climbs.
- Five-year career prospects vary widely. After five years, workers at companies that excel at promoting workers are almost three times further along in their careers than those working at companies where promotions are few and far between.
- The salary differences add up. Workers at the best-paying companies earn nearly 2.5 times more than their peers in the same positions at the worst companies, earning them $1.5 million or more over a career.
- The future looks brighter for some. Employees at companies that are good at launching careers are more than 60% more likely to land a better job elsewhere than those working at the worst companies.
“There are very profound implications for economic security, advancement, and learning,” Fuller says. “If you join a less successful company, it doesn’t condemn you to a bad result, but your chances of obtaining a good result are considerably reduced.”
Which companies are known to help workers?
The authors profile five companies that stand out.
- IBM. The tech company has removed the college requirement for 50% of its jobs, like software development, for example, expanding opportunities for advancement. The company has also developed apprenticeship programs, allowing employees to earn money while learning.
- South West Airlines. In 51 years of history, the company has never had a layoff, offering employees remarkable stability.
- WESCO International. The industrial company is notorious for moving entry-level employees into new roles.
- American bank. More than 45% of the bank’s hires in 2022 were non-college graduates, and the company fills nearly 40% of its positions with internal candidates.
- Mutual Liberty. The insurer fills more than 80% of management positions with internal candidates.
“It’s not a name-and-shame exercise,” Fuller says. “It’s about trying to get better information into the hands of more aspiring workers and provocative information into the hands of decision makers and company boards.”
How to advance more workers
Business leaders can systematically provide better opportunities for workers by:
- Create metrics to track their business performance. Companies can closely monitor salaries, promotions, education and training opportunities, and retention.
- Set concrete and achievable goals to advance workers. This can force a company to start by focusing on a single parameter first.
- Ask questions to drive an internal mobility strategy. If, for example, a company is struggling to find entry-level workers, it can look for ways to tap into a broader pool of talent.
Workers and potential employees can also take control by:
- Be realistic about the jobs available where they live. Too often, says Fuller, young workers will study in fields like video game programming that sound exciting but aren’t available locally.
- Beyond the initial conditions of employment. Most workers take on a new job thinking about the basics like salary, title, and vacation time. But, says Fuller, they also need to consider the long term. Where do the employees end up? Are they promoted?
The American Opportunity Index is a tool to help level the playing field, he says.
“We want people to have, on both the employer side and the worker side, a better basis to exercise their judgment,” says Fuller.
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