Insights into Fortune’s Best Companies to Work For, 2014: Part 1
Each year Fortune publishes the 100 Best Companies to Work For in the U.S. They do this ranking with Great Place to Work Institute. While the bulk of the company evaluation rests on a comprehensive employee survey (two-thirds of the evaluation in fact), Fortune publishes a wealth of employer statistics about benefits, diversity and jobs. Weber Shandwick has been cataloguing this data since 2006, enabling us to look at how each factor may be changing over time. This year, we decided to also start tracking the number of employees commenting on their company’s Best Company profile on the Fortune website as a measure of employee engagement (look for in Part 2 of my blog).
Overall, there were subtle changes in the Best Company statistics for jobs, diversity and benefits in the past year. Perhaps the Best Companies have hit a ceiling in terms of improvement. Unless the job market undergoes great change, we think that the Best Companies may post similar statistics during the next several years.
Here’s what has changed at Best Companies since 2013:
- The rate of companies reporting negative job growth increased from 12% to 23%
- The average percentage of minority employees working at Best Companies hit a high (31%)
- The rate of companies offering subsidized gym memberships fell from 63% to 57%
- The rate of companies offering compressed workweeks increased from 73% to 77%
Below are insights into these jobs, diversity and benefits trends:
Despite a consistent job growth rate, the number of companies reporting negative job growth increased in 2014. After hitting lows in 2012 (11%) and 2013 (12%), the number of 2014 Best Companies reporting negative job growth jumped to 23%. Despite this increase, the number of companies experiencing negative job growth is still an improvement from 2011 when just under half (45%) of Best Companies reported negative job growth. The number of companies reporting negative growth has greatly fluctuated since we first began tracking this statistic in 2009, suggesting that cutting jobs is not an indicator of which companies will qualify for the Best Companies list.
While negative job growth increased over the past year, median job growth was unaffected (5%). With the exception of 2010 and 2011, median job growth has remained steady since 2006. Last year we hypothesized that the Best Company job growth standard may range between 5% and 7%. This year’s growth rate supports this hypothesis.
According to U.S. government data on the jobs market, the rate of Americans quitting their jobs is rising. An increased quit rate in the U.S. job market in general suggests a strengthening American economy because it implies that workers feel confident in quitting their jobs to find work elsewhere. But Best Companies continue to report a steady median voluntary turnover rate (6% in 2013 and 5% in 2014). Like last year, we think the difference between these two trends may reflect the impact that a Best Company’s good reputation can have on retaining its workforce.
Diversity initiatives continue to remain mostly unchanged at Best Companies. For the third year in a row, women comprise 47% of the Best Company workforce. This supports our hypothesis from 2013, which was that because women make up half of the U.S. population and already comprise nearly half of the Best Companies’ workforces, we may not see this rate increase much more over the next few years.
The average percentage of minorities working at Best Companies has not fluctuated much since 2008, though it did hit a high this year (31%). This rate is nearly in-line with the percentage of minorities making up the American population, which is approximately 37% according to the United States Census Bureau. It is possible that the average percentage of minorities at Best Companies may follow U.S. minority population trends in the coming years.
Although rates have slightly decreased since last year, 2014 was another strong year for gay-friendly policies and benefits. Nearly all Best Companies have gay-friendly policies (98%) and the rate of companies offering gay-friendly benefits hit the 90% mark for the second year in a row.
Overall, there was not much change in the benefits offered by Best Companies in the past year. Two benefits – fully paid sabbaticals and 100% health care – did not fluctuate at all.
The most noticeable change in benefits, and also the largest decrease, is the number of companies offering subsidized gym memberships, which fell from 63% in 2013 to 57% this year. The benefit with the greatest improvement is compressed workweeks, which rose to 77% after hitting a low last year (73%).
Fortune does not provide statistics on other perks Best Companies offer to employees, which may be enhancing (or even taking the place of) more traditional benefits. It does, however, have a “Top 10 perks from Best Companies 2014” list. Included in the list is a brief workout session in which one company’s employees may participate during long work days. A perk like this one provides the opportunity for employees to be active without the employer necessarily offering an on-site gym or subsidized gym membership (though this company happens to offer those benefits, too). Another Best Company rewards employees who do a good job with the option to come in two hours late or leave two hours early on a day of their choosing. This company does not offer benefits such as onsite childcare or an on-site fitness center, but awarding these flexible hours allows employees more time to tend to their personal lives.