The CEO of Robert W. Baird & Co., a wealth management firm based in Milwaukee, called his human resources chief from an airport with a directive. On the flight, CEO Paul Purcell had read “100 Best Companies to Work For” in Fortune magazine, and he wanted his firm to be on the list.
“Leslie, these are some really great names on this list, and I’d love to be associated with these companies,’ ” Chief Human Capital Officer Leslie Dixon remembers Purcell telling her. “It fits with our mission of trying to be a great place to work at for our employees, so I think we should go for it.”
After that call in 2000, the company practiced by entering “best places” contests in Milwaukee before applying to the Fortune list. In its first try for Fortune’s list, Baird didn’t make it. But the firm has since been on the Fortune list for the past 11 years, placing ninth on the most recent one.
The kudos paid dividends. Clients have said the recognition makes them feel good about working with Baird, Dixon said. And Baird, which has some 3,000 employees worldwide and manages more than $125 billion in client assets, now receives about 100 applications for every open position, she said. That was not the case 10 years ago.
“Recruiting is a little easier, and we have more top talent wanting to get into an organization that’s known for being a best place to work,” she said.
Not all lists are created equally, and experts question whether some lists truly capture what makes a workplace great.
Fortune’s best-companies list, first published in 1998, has inspired imitators and emulators. There’s Best Places to Work in Arkansas, Best Places to Work in Collections, the Vault Consulting 50 and Glassdoor’s Employees’ Choice Awards to name just a few. (Full disclosure: Workforce this year launched the Workforce 100, which ranks the best companies for HR.) But not all lists are created equally, and experts question whether some lists truly capture what makes a workplace great.
“In the last 10 or 15 years, there certainly has been a bigger wave of more ‘100 Best’ kind of opportunities,” Dixon said. “We’ve had to be discerning because they do take time, and we want to be mindful why we’re here — and it’s not to do surveys all the time.”
The lists have grown in popularity, in part, because they provide a new stream of revenue to publications and websites. Peter Burke recognized that as associate publisher for Central Penn Business Journal. In 2000, his publication decided to take what Fortune did nationally and create a statewide list.
It proved to be a success, editorially and financially. The magazine sold sponsorships, advertising and tickets for the event at which it recognized winners.
Burke saw another opportunity. In 2004, he co-founded Best Companies Group, whose principal purpose is to help publishers create and manage “best places to work” competitions. Best Companies Group now manages about 50 lists based on geography or industry and has expanded into Algeria, Morocco and Tanzania.
His company partners with publications. Best Companies Group makes money by selling reports detailing feedback gleaned from employee surveys completed as part of the competition. His company’s media partners get editorial content — lists — that generates revenue through advertising in special supplements devoted to the lists or sponsorships and ticket sales for events recognizing that year’s “best companies.” Employers like the recognition, and Best Companies Group and the publishers make money off it.
In most cases, the publications don’t pay anything for the rankings. Instead, companies pay a $600 to $900 fee to enter. In exchange, they get the feedback report. Like the Fortune list, Best Companies Group ranks participants based primarily on employer-provided information and employee-engagement surveys. In only a few states do applicants not pay a fee. In those cases, if Best Companies Group doesn’t sell enough reports to make money, it charges publishers with an agreed-upon maximum. “The fee is not buying a spot on the list,” Burke said. “What they are paying for is an employee engagement survey.”
They’ll Be the Judge of That
A growing number of media organizations and service providers award workplaces that they deem great. Some use engagement surveys; others have hand-picked panels that review information submitted by organizations. Barry Gerhart, a professor at the Wisconsin School of Business, said the “gold standard” is a ranking such as the Great Place to Work Institute, which incorporates what employees think. “I don’t think you can coach unhappy people to respond happily,” said Gerhart, whose research found that Fortune100 outperformed their peers and the market.
Great Place to Work Institute
Media partner: Fortune magazine
Evaluation: A culture audit, based on information provided by employers, forms one-third of the score; a survey completed during a two-week window by employees forms the other two-thirds. “It really has to authentically be great because that employee experience is such an extensive part of our methodology,” said Leslie Caccamese, associate vice president of U.S. marketing. Last year, 256 organizations applied to be on the 100 Best list. Rules forbid participants from providing incentives for completing surveys or rewarding managers for how the company places. “If you want to be on this list, you have to apply,” said Caccamese, who acknowledged that some companies never apply because they don’t seek accolades.
Best Companies Group
Media partners: Crain Communications Inc., Outside magazine and Texas Monthly magazine, among others.
Evaluation:Twenty-five percent of the evaluation comes from data provided by employers; 75 percent from an employee engagement and satisfaction survey.
The magazine reviews and approves each list before publishing. “They know their market, and they can tell us that XYZ Co. was just bought out or just filed for bankruptcy or something else that would make it superembarrassing to have on the list,” said Peter Burke, president of Best Companies Group.
The Glassdoor Employees’ Choice Awards
Media partner: None
Evaluation: Glassdoor uses a proprietary algorithm that culls its company reviews for the past 12 months, looking for consistency across job titles and at the detail of the review. “We don’t want to make it completely visible because we don’t want people to game the list,” said Samantha Zupan, director of corporate communications at Glassdoor.
A few others:
• 101 Best & Brightest Companies to Work For by Corp magazine
• Achievers 50 Most Engaged Workplaces
• DiversityInc Top 50 by DiversityInc magazine
• North America’s Most InDemand Employers by LinkedIn Corp.
Many of Burke’s firm’s lists are endorsed by the state council of the Society for Human Resource Management for the state in which the list is prepared.
For example, the South Carolina SHRM State Council endorses the Best Places to Work in South Carolina, whose 50 winners appear in the quarterly magazine SC Biz. Colonial Life & Accident Insurance Co. made the list and paid $4,000 to be listed as presenting sponsor at the recognition event held Aug. 7 in Columbia, South Carolina. Spirit Communications also made the list and paid $3,000 to be a platinum sponsor. Companies that made the list also could order “best companies” water bottles, pens and other merchandise sold by the Advertising Specialty Institute.
Burke emphasized that his firm offers no workplace consulting services.
“We are not faced with a conflict in interest with having list-makers being consulting clients,” he said.
Burke is referring to the fact that many organizations behind “best workplace” lists also have divisions that advise companies on how to be a better place to work.
Pennsylvania-based WorkplaceDynamics, for example, creates “Top Workplaces” in partnership with the Boston Globe, Washington Post and more than 40 other newspapers. It also offers workplace-improvement training. Nebraska-based Quantum Workplace manages a separate set of lists and offers advisement services. Even the venerable Great Place to Work Institute, which develops the Fortune lists, has a consulting division.
But having a consultancy doesn’t compromise the lists, others argue.
The for-profit Great Place to Work Institute has a church-state separation between its best-companies team and its consultants, said Leslie Caccamese, associate vice president of U.S. marketing. Evaluators do not work for the institute; they’re seasonal contract employees who come from the fields of HR, organizational psychology and journalism. Every application is reviewed three times: twice by independent evaluators and then by list authors Robert Levering, who is also the co-founder of the institute, and Milton Moskowitz.
“People who evaluate have no insight whether a company is working” with institute consultants, Caccamese said.
Its rankings raise some eyebrows for including companies in controversial lines of work. For example, this year’s list includes energy companies that tap oil and gas through a process called hydraulic fracturing, or “fracking.”
“We don’t pass value judgments on the business that people are in,” Caccamese said.
However, the San Francisco-based institute’s safeguards include what Caccamese calls a “scandal check,” reviewing news reports for large layoffs or product recalls. If something appears, it contacts the applicant for more information.
Companies pay nothing to apply to the Great Place to Work Institute. Applicants receive free summaries of their scores on the Trust Index, the employee survey that assesses things like workplace respect, camaraderie and managerial credibility. They may buy a detailed report for $1,750.
The institute’s cost of running the competition is covered by the sale of the reports and money shared by the consulting services, Caccamese said.
Ken Charles is vice president of global inclusion and staffing at food-maker General Mills Inc., which ranks No. 64 on Fortune’s list. He said the Great Place to Work data help with what he calls “management by survey.”
“The Great Place to Work survey is about absolutely the quality of the survey you do with your employees and the insights you get from that,” Charles said.
General Mills only participates in contests with a reasoned, thoughtful and transparent process, Charles said. “If it’s a pay-to-play type of recognition, we don’t have any interest in it,” he said.
A company that wants to become designated a “best place” has a lot of options.
Look at San Diego. WorkplaceDynamics manages daily newspaper U-T San Diego Top Workplaces; Best Companies Group has San Diego Business Journal’s Best Places to Work.
Advocacy groups and demographic-specific publications also have gotten into the list-making business. Working Mother magazine publishes 100 Best Companies for Working Moms, for example.
In response to the proliferation of lists, a cottage industry has developed of vendors who prepare applications.
Sheila Fyfe, a Florida-based writer, has worked on “best company” applications for 11 years. She first worked on them when employed by Baptist Health South Florida, which had made AARP and Fortune lists, among others. When she struck out on her own, her first client asked for help.
For her clients, she writes her own feedback about what questions were asked, what the company was doing and what it was not doing.
“They can generally tell how good their benefits are by the questions that are asked,” she said.
Robin Hardman, president of Robin Hardman Communications in New York, has prepared applications for 14 years. “My motto is: You can’t win if you can’t tell your story,” Hardman said. “Most people who are writing these things aren’t communicators first and foremost. They may have great stuff; they don’t know how to say it.”
Hardman sees two types of rankings: those based exclusively on information provided by the employer and those that rely heavily on employee surveys. Gathering all the employer data and preparing applications can take months, she said.
Do Not Apply
For seven years, career website Glassdoor has produced a list that removes executives and contractors like Hardman from the equation. It also circumvents a criticism of the Fortune lists — that some companies never apply, placing an implicit asterisk by the title “best company to work for.”
Glassdoor uses what it describes as a proprietary algorithm to sift through workplace reviews posted in the past 12 months to form a workplace list.
“It’s unlike any other workplace award out there,” spokeswoman Samantha Zupan said. “There isn’t a formal nomination form. We don’t accept money to get on this list. It’s really all about the contributions that come in day after day from employees.”
Like the Great Place to Work Institute, Glassdoor may disqualify a company that recently had layoffs or other hardships that would change the experience.
But what makes a workplace great?
Tom Stewart, executive director of the National Center for the Middle Market at Ohio State University and a former member of Fortune’s board of editors, says ultimately the question comes down to whether people want to work there and employees don’t want to leave.
“The big picture is: Do you love your job? Do you feel it matters? Do you feel you matter to the people at work and are you making progress?” Stewart said. “If I were an HR person or a CEO, I’d spend a lot more time working on those things, and I’d let somebody’s secretary’s secretary fill out the questionnaire.”
In fact, research by Harvard Business School Professor Teresa Amabile and developmental psychologist Steven Kramer suggests that the best workplaces are those that show employees respect and help them make progress in work they find meaningful.
Amabile worries that “best places” lists place too much emphasis on benefits and perks. Instead, she said, managers should focus on fostering cultures with a free flow of ideas and where employees have clear goals, autonomy, sufficient time and are encouraged to learn from mistakes rather than be punished for them.
“Those lists may focus companies on thinking about the well-being of the people who work there — the physical well-being and the emotional well-being — and that’s positive,” said Amabile, co-author of “The Progress Principle.” “But to the extent that it’s taking time and resources away from basic good management, it could have detrimental effects.”
The Great Place to Work Institute looks at much more than perks, Caccamese said. People sometimes mistake the short write-ups that appear in Fortune for the assessments performed by the institute.
“Fortune publishes what sells,” Caccamese said. “People are fascinated by what’s unusual. They want to know who gets the biggest bonuses. They want to know who has on-site massages and who does your laundry for you. That’s not what the list is about.”
But for companies that apply, it’s also about the data.
At its core, gaining robust data is also why Baird & Co. participates in the Fortune list, said Dixon, the company’s chief human capital officer. The company shares the detailed feedback reports with supervisors and talks about the data and ways to enhance the work experience.
“It clearly helps us do that annual colonoscopy of how we’re doing,” she said.