A new index analyzes and ranks the 250 largest U.S. public companies based upon the level of opportunity they afford their workers, both within the firm and beyond it. The Index focuses solely on assessing worker outcomes—not policies and practice.
The American Opportunity Index seeks to “empower workers to make better decisions as to what positions to seek and what firms to prioritize in their job searches; to recognize firms that are setting an example of how to create opportunity; and to arm executives and HR leaders alike with the data they need to take meaningful action to boost the competitiveness of their workforce.”
The index was developed by Harvard Business School, the Burning Glass Institute, and the Schultz Family Foundation.
The overall scores are a weighted average of nine measurements in three “dimensions of opportunity” (access to work, upward mobility, and median wages), including:
- The fraction of employees hired in a given time period who were entry-level as opposed to experienced.
- A measure of the extent to which the firm, relative to others, hires workers for any given role who have a bachelor’s degree.
- The median wage for each occupation studied.
- Number of promotions a typical worker in any given occupation received over the five-year period. A promotion is defined as moving from one role to a different, better-paying position.
- The average time it takes an employee in any given occupation to move up one level within the company.
- The frequency with which a company fills open roles in any given occupation by promoting an employee from another lower-paying occupation within the company.
- The percentage of employees in each occupation who receive a promotion after leaving the company.
- The percentage of a firm’s workforce in any given occupation still with the same company after five years.
- The percentage of senior management (director and above) who were promoted from within the company.
Outlook: The 2022 LinkedIn Global Trends Talent Report found that employees rank professional development as the top way to improve corporate culture. Professional development has also been consistently correlated with higher levels of employee engagement and retention. According to a BCG survey of deskless workers (e.g., front line workers), 50% are not satisfied with job flexibility and 48% do not feel they have an opportunity for career growth/advancement, and thus as many as a third of them are at risk of leaving in the next six months. Whether the Index will provide a roadmap remains to be seen, but companies remain highly interested in how to facilitate career development, particularly as high inflation and near-record quit rates continue.