When she began her list quest in the 1990s, Edward Jones had a 15 percentgrowth rate. "When we started to see the pace of consolidation accelerate, werealized that we would have to grow even more quickly--25 percent a year," shesays. "I wondered, what could we [in public relations] do to support this?With Jones not being a household name, we saw that rankings--with thatthird-party endorsement--would be very powerful as a recruiting tool."
The path to the top was rocky. The first three times that Heying tried to getEdward Jones on Working Mother magazine’s 100 Best Companies for WorkingMothers list, she failed. (Jones has made that list only once.) She tried tomake contact with various list researchers, but somehow was overlooked whenMilton Moskowitz and Robert Levering, now of the Great Place to Work Institute,launched the first Fortune Best Companies list in 1997. Finally, Edward Joneswas invited to participate in the 1998 edition of the project. "My goal,initially, was that if we could be number 99 on the list, I would be reallyhappy," Heying says. The firm debuted at number 11 and has been moving up eversince.
That’s as good as it gets in the high-stakes world of Best Company lists,where companies’ reputations as employers of choice go up and down accordingto their placement on well-publicized lists that are run by self-appointedpanels of journalists, researchers, and industry groups. Inclusion on a list isa great way to showcase a company’s culture, policies, and amenities. Theeffort doesn’t always pay off in a high ranking, but a high ranking alwayspays off in invigorating a company’s reputation among recruits, employees,shareholders, investors, and customers.
Placement on a Best Places to Work list is a sure source of corporate pride,and a low-cost marketing and recruitment tool. "It’s a beauty contest,"says Larry Silver, senior vice president of marketing for Raymond James &Associates, a St. Petersburg, Florida, broker that has been on the Fortune 100Best list. "When you make the list, you can market that on your Web site (and)you can put out information to shareholders. You look pretty good to clients andexisting and prospective employees."
There are risks, however, in the land of lists. The process of applying forlist ranking means that a company is opening itself up to judgment by aself-appointed panel. Companies can’t control the outcome. Falling off a listcan be embarrassing, and can invite unwanted questions. Once a company isestablished as a "best" employer, employees’ expectations continue torise, and there’s the inevitable pressure that comes with living up to anoutstanding reputation. And the application process itself can be a nightmare--takinganywhere from hours to grueling weeks. Publications that are looking for ways tospice up their annual list also can take a potentially less-than-flatteringtack. Boston Magazine, for example, publishes a Best Places to Work list, and in2002 matched that with a cover feature on the Worst Places to Work.
The nature of lists
While it seems obvious that there is a public- and employee-relations bonanzain being named number one on a list, the exact return on the investment of timeand money is fuzzy. Many companies that place on lists say they haven’t triedto measure exactly what they get for the effort--partly because measurementitself can be pricey and partly because it seems self-evident that high rankingsbolster a company’s reputation. Independent evidence that high placement on alist pays off in dollars is hard to come by.
Despite mostly sketchy statistics, there are industry insiders who say thatthe good practices that get companies on lists can significantly bolster acompany’s worth. Daniel Simon, an assistant professor with the Department ofApplied Economics and Management at Cornell University, analyzed the financialperformances of companies on the Working Mother 100 Best Companies for WorkingMothers list. He estimates that companies on the list are worth 3 to 6 percentmore than peers that aren’t. His conclusion is that companies that offerwork/life benefits good enough to earn a ranking on the Working Mother list areworth $12,000 more per employee than stingier peers.
Mark Weiner, CEO of Delahaye, a division of Medialink that tracks corporatereputations, says that lists represent many different things. They are like "theDow Jones industrial average. People don’t know the components or theweighting, but if it’s up, you’re happy. People assume that the lists arecredible." Silver adds that human resources executives who are in charge oflists must examine the underlying methodology to make sure it’s credible. Hesays it’s important to look at the nature of the questions asked, the scoringmethodology, and the reputation of the publication that’s sponsoring the listbefore proceeding.
Experts say that another list plus is the marketing payback. Salespeople,customers, and clients consider list status when scrutinizing potentialsuppliers, especially before signing big long-term contracts. If diversity is akey component of a list, for example, then that list might be used by a companyto find like-minded corporations as suppliers. "More clients are looking for diverse project team members, representing lots of differentthought and backgrounds," says Robert
Sobiech, director of human resources for the Midwest Cluster of Deloitte& Touche, which is on several national lists. "There’s a real interestin the kinds of cultures that [Deloitte] brings to a project. They are assessingwhether they want to work with you and they’re looking for evidence. They willsay, ‘We notice that you’re on this list. We’re interested in that list.Let’s talk about that.’"
Many companies have found out the hard way that you learn more about thevalue of your company’s position on a list when you lose it. Dennis Butler,director of associate relations for Liz Claiborne, which is on Latina Stylemagazine’s list of best companies for Latinas and the National Association forFemale Executives’ Top 30 Companies for Executive Women list, recalls whathappened when the company dropped off the Working Mother list. "We were toocomplacent and we didn’t do a whole lot of new stuff and we slipped off. Howdoes that feel? Really crummy. And that notice goes to the chairman."
Like other human resources executives who see an upside to falling off,Butler says that there’s a perverse power in losing. Embarrassment can be apowerful tool in the hands of reform-minded human resources staffers who arepushing for updated practices and policies. He says that he tries to leverageClaiborne’s position--no matter what it is--as proof of the importance ofconstantly refreshing human resources policies and programs. "Lists like the Working Mother one are lists that an awful lot of companies want a space on.Unless you improve the programs you offer, you won’t stay on," he says. "Onceyou get on, there’s no gracious way to exit. You get bounced off."
The value of ranking well on a prestigious list resonates most strongly withcurrent and potential employees. The high-fives that ripple through a winningcompany often translate to a "who knew?" attitude among employees who didn’trealize that the workplace was as good as it was. The same news often joltsmanagers into a stronger sense of commitment to the policies and practices thatwere cited in the award. They realize that they are the ones responsible formaintaining what is now an officially excellent place to work. Butler pushes formore management training and education on the heels of every "we made the list"announcement. "We are trying to give managers a positive reason to change--torise to the level of an award-winning company," he says.
Recruiters are the first to see the direct impact of a company’s new spoton a top list. "It’s huge in terms of being able to pick the best of thebest," Heying says. At Edward Jones, a 30,000-employee enterprise,applications have gone from 7,000 in the year before it first landed on the Fortune list to 400,000 annually now. Heying says that’s all the proof sheneeds to know that she has achieved the goal she originally set out toaccomplish: fuel the company’s ability to attract top talent.
Specialty lists deliver a lift in inquiries, too. Companies that appear onComputerworld magazines’s annual Best Places to Work for IT Professionalslist, for example, are inundated with inquiries from people who are motivated bynurturing, challenging corporate cultures, says Ellen Fanning, special projectseditor. She’s in charge of the list and says she always warns winners thatonce the news gets out, the company must be prepared to respond to the flurry ofinquiries in a manner befitting an outstanding organization.
Of all the scores of lists that have cropped up in the past few decades,Fortune magazine runs the granddaddy of them all with its Best Companies to WorkFor, much-coveted rankings that are published every January. For the past 18years, Working Mother magazine has been putting out 100 Best Companies forWorking Mothers. Then there’s the Best 50 Companies for Latinas to Work For inthe U.S., the Best 100 Companies for IT Workers, and the Best Companies forWorkers over 50. Think of a niche and there’s probably a list.
The latest list twist: regional business associations are starting to launchlists of their own. Just two years ago, the Michigan Business and ProfessionalAssociation created a 101 Best and Brightest Companies to Work For list. Chicagomagazine periodically publishes its list of the best employers in thatmetropolitan area. Reed Residential Group, a trade publisher, puts out 101 BestCompanies to Work For in the Residential Construction Industry.
With so much at stake--not to mention the actual hours and effort it takes tocompile the requested information--human resources executives need to carefullyweigh each list opportunity, industry insiders say. Lists typically aresponsored by magazines or associations. Few charge application fees. The bigexception is the Great Place to Work Institute of San Francisco, which producesthe Fortune 100 Best Companies to Work For in America and similar regional listsfor Pennsylvania and Omaha. There’s no fee to apply for the Fortune project,but it costs $325 for medium-sized employers and $525 for large employers toapply for the regional lists. For that, participating companies get a basic,confidential scorecard that shows their company’s results and a few othermetrics for comparison’s sake. A full-fledged, customized report from theinstitute costs $3,000.
The real investment in list projects is time. Heying estimates that it takes300 hours to apply for the Fortune Best Companies list. Executives at otherwinning companies say that regional lists can take as little as 20 hours, if therequested statistics are readily available. Every list has its own point ofview, and often statistics and essay questions must be generated from scratchfor each one.
Getting everybody in the company on board with the project gets them thinkingpositively about the company and can cut the research time. Many list managerswant to interview some employees to get a sense of the company’s culture. TheGreat Place to Work methodology calls for questionnaires on the quality of worklife to be sent to a random selection of employees. That makes it even morecritical to get employees excited about the process.
Sobiech broadcasts information about Deloitte’s in-process listapplications through its company e-mail system and asks employees to submitvignettes that can be used to illustrate the benefits of the firm’s policiesand culture. Last year, he got 16,000 responses to requests for personalstories, such as anecdotes about managers generously granting spontaneous timeoff for minor family crises. Sobiech uses these internal testimonials throughoutall list applications.
The celebration that accompanies the announcement that your company hasgained a spot on a list is soon followed by the realization that people willnever look at you the same way again. "There’s no coasting," says PaulDavis, president of the Scanlon Leadership Network, a nonprofit research andadvisory group based in Lansing, Michigan. "The biggest downside is not thetime to apply, but the [danger] that the reality is not quite as good as thepublicity. People can live with a little bit of a gap, but if it’s too wide,if you stop trying, it will turn into a joke. Expectations get pretty high andit’s easy to slip up. You do a layoff and make mistakes [in the process] andpeople hold you to it."
It can be like keeping up with the corporate Joneses. Every edition of a liststarts with a clean slate, and every company has to prove its case all overagain. "The bar is always getting higher. It’s just because other employerscontinue to roll out imaginative benefits," Sobiech says. "You’re alwayswondering, what is the next thing and how can we keep up?"
Workforce, May 2003, pp. 44-48 -- Subscribe Now!