Who Is Really The Best Employer? Making Sense Of ‘Best Place To Work’ Lists
There’s nothing that excites a CEO or CHRO more than being listed on a “Best Place to Work” list. These lists, which are being published by more companies every year, seem to have something for everyone. This week I noticed that Facebook was the #1 rated company by Indeed, Salesforce was the #1 company rated by Fortune, Amazon was the No. 1 rated company based on LinkedIn, and Google (Alphabet) was the #1 rated company in Fortune/SurveyMonkey.
What’s going on? Are tech companies the only good place to work left?
The answer is no, because each of these lists is different, and in many ways they can be misleading. What’s a great employer to one individual is not necessarily a great employer to another, and remember that most of these lists are really marketing programs designed by survey providers to promote events where they sell advertising paraphernalia such as magnetic signs and other various essentials used for promotional purposes. (And remember that Tech only makes up about 5% of the workforce!)
In this article I’ll try to make a little sense of all this, and give you some insights on what all these lists are really telling you. And my basic message is this: every company is different, and for you as a job seeker, you have to find “the right fit for you.”
Let me explain.
1. Employee Ratings Follows A Bell Curve: No Company is #1.
The first thing I’ve noticed is that among the tens of thousands of employers around the world, there is a very normal bell curve to the data, and there is no company rated #1 in every possible way.
If you look at Glassdoor data, which is a good source since it’s employee-based and fairly randomly collected, the “overall company rating” is almost a perfect bell curve. And while there are some very highly rated companies, none score high in all dimensions.
I’ve analyzed this data in great detail, and what you find is that those on the right are often the fastest growing, best managed companies in each industry – and they are not all tech companies at all. If you look at leaders relative to their industry averages, companies like Bain, Four Foods Group, DPR Construction, and Hubspot stand out as leaders. These are not the biggest companies, but they rate well above average in their categories.
If you look at the data on company rating itself, you find few statistical patterns. Some tech companies (ie. Facebook, Google) are very highly rated, and others (I wont mention names) are really crummy places to work. Some retailers are wonderful (Starbucks, Wegman’s, Costco), and others rate very poorly. So any company in any industry can push itself to the right if they try.
2. Industry Really Matters – And Tech Is Not The Highest Rated
The second thing I realized is that comparisons across industry can often be unfair. Yes Tech companies rate fairly well (it’s because they pay well and people get huge stock options), but in reality there are other industries people like more. If you look at the data below, you’ll see that industry itself accounts for as much as 20% of the difference in ratings.
So if you really want these lists to be useful, look at “top rated tech companies” or “top rated retailers” so you can compare them against their peers. Most of us don’t change industries that often, so we often just want to know how companies compare in our personal world of opportunity. I can’t really work for Amazon, for example, because there are no jobs near me, so why would I care that they’re LinkedIn’s most in-demand employer across the country?
You may also ask yourself, based on the data above, why would anyone ever go to work in Consumer Services, Retail, Transportation, Telecommunications, or Consulting when they are guaranteed to be lower rated than education or forestry? There are many reasons: the job may be one you like, the money may be better, and it may be a perfect fit for your skills, location, or interests. So if you’re a truck driver, when you read that “Facebook” or “Google” is the best rated employer in the world, it isn’t really relevant.
3. Employers Have Different Personas or Archetypes, Making Ratings Too Simplistic
The third thing I discovered is that within an industry, there are different archetypes of employers, making these ratings lists far less useful.
For example, small, fast-growing companies offer career opportunities, upward sloping pay, and lots of personal growth. They don’t always have the best culture, sometimes their management is slightly in over their heads, and the total benefits package is often lacking. But they are fun, exciting, and offer lots of personal growth. Should they be “lower rated” than a traditional, slow growing company with lots of benefits? It just depends on what you’re looking for.
I analyzed all the retailers in the Glassdoor database, for example, and used cluster analysis to group them into five groups. We found four statistical archetypes, each of which has very different Glassdoor characteristics:
- Broad based, highly competitive retailers, which often are changing constantly (ie. Macy’s)
- High margin, higher priced, service oriented retailers (ie. Nordstrom)
- Low margin, low cost, operational focused retailers (ie. Costco or Wal-Mart)
- Retailers heavily focused on the employee and customer experience (ie. Wegman’s)
- Specialty retailers (ie. IKEA, Home Depot)
I wont list the brands in each cluster, but you’d recognize them. Are they all “great” or “terrible” places to work? It depends. Costco, for example, is more highly rated in Glassdoor than Nordstrom, but that doesn’t mean it’s for everybody. You may enjoy the type of work you do at Nordstrom more, depending on your job goals.
I had a fascinating talk with the head of HR for IKEA a few months ago and she told me their strategy is very focused on the Swedish values of equality, consensus, group decision-making, environmental impact, and design. These are wonderful qualities in an organization, but they don’t mean highest salaries, fast career growth, or a highly competitive career experience. Is that good or bad? It just depends on what you’re looking for. (IKEA is highly rated also, just not as high as some of its peers.)
4. Ratings Often Reflect A Fast-Growing Company – But This Is Not For Everyone
One of the other things you find in best place to work lists is that the fastest-growing companies always seem to score high. This is because these are companies that have more money, offer more career growth, and often have higher budgets for expenses and other fringe benefits. (And they can often attract the top people.) So people “self-select” into these companies, and then rate them well.
When these companies slow down, lose their edge, or get disrupted by competition will they stay on top? Sometimes yes, sometimes no. I think one of the most important measures of a great company is what they do when times are tough, so try to reflect that information in your job decision. Lots of fantastic tech companies (ie. Yahoo) were great places to work when they were on top of their game, but they don’t make the top of the list now.
Take a look at this data – it shows how the Glassdoor questions are related to each other, and shows how important “business outlook” (or growth rate) can be.
Notice that fast growing companies are not those with the best work-life balance. And they are also not the companies rated highest in “culture and values.” These companies often pay the most, and they have great career growth, but they often are harder places to work. In Glassdoor, where all these factors are easy to analyze, you find “growth” and “great culture” don’t always go together.
By the way, I’m not saying that fast-growing companies aren’t great places to work, but often they are rated highly precisely because they are fast-growing. If you read the comments from people who work there, many talk about long hours, competitive work experiences, and the fact that after 3-5 years they just have to move on. So again, just be careful what you’re looking for.
(Tesla, for example, which is one of LinkedIn’s most in-demand employers, is not as highly rated as other manufacturers, but it’s a very exciting place to learn.)
5. Gender, Age, and Political Leaning Have Huge Impact On Company Ratings
The final point I want to make is the issue of demographics. In the research just released by SurveyMonkey and Fortune, they compared the “most exciting companies to work for” by everyone, women, and various demographics. It’s amazing how the winners vary by respondent type (18,000+ respondents).
Disney, Apple, Amazon, and GE, for example, are more highly rated by women. Republicans want to work for heavy manufacturers and iconic brands like Boeing, Intel, Lockheed Martin, and GE. Democrats seem to like companies with more IP-driven businesses like Google, Microsoft, and Apple. Young people want fast-growing young brands, and Boomers like traditional brands. All these factors should be teased out in these “lists,” and I applaud SurveyMonkey and Fortune for showing us these variations.
6. The Methodologies Of The Surveys Vary Widely
And finally, while I know these lists are very valuable and interesting (I really like to think of them as “contests” not “studies”) , they each have different methodologies.
The Fortune Great Places to Work list is based on a rigorous survey methodology that focuses heavily on trust. The Glassdoor Best Place to Work list and Indeed Top Rated Workplaces lists are based on employee ratings, “how well would you recommend this company as a place to work.” Linked In Most In-Demand Employers list is an algorithmic calculation based on demand for their jobs, employment brand, and retention. And the SurveyMonkey Fortune survey is based on people telling us how “excited” they would be to work for a company. Each is measuring different things.
When you look at them side by side, you see some oddities. Companies like Wegman’s, Ultimate Software, Boston Consulting Group, Edward Jones, Kimpton Hotels, Workday, Genentech, Quicken Loans, and others on the Fortune Great Places to Work list are fantastic organizations. I’ve visited most of them and know many of their HR leaders and employees. But some of them don’t appear on other lists because of the way they are calculated.
Deloitte, where I just spent almost six years of my career, is an incredibly exciting and rewarding place to work, but it rarely scores high (it was #11 in Fortune’s list) because the pace is demanding, the company employs lots of younger people, and the challenge and learning curve is high. Many Deloitte consultants find their real career “love” at Deloitte, then they join a client to do that kind of work. Business Services overall is 4% lower than other industry averages, so it’s hard for Deloitte to win these contests.
In my case, I get to visit and meet people from most of these companies, so I have a very strong sense of how many of these companies compare in culture, brand, and employee opportunity. If you’re an employer, I’d suggest you read these lists and use them to learn what other great companies do. If you’re a job-seeker just don’t take them all too seriously, because there are many factors involved.
The bottom line is this: every employer today wants to be highly rated as an attractive place to work. Let’s not oversimplify the problem with these lists, and take the time to really build the “Irresistible Organization” we all want to be.