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The opportunity and risk in ranking on employer lists

Brian Kropp, group vice president of Gartner’s HR practice

 

In recent years, “best employer” lists have become increasingly prolific, with examples such as the Glassdoor ‘Best Places to Work’ list, or The Sunday Times ‘100 Best Companies To Work For’ report touting their assessments of the employer landscape on an annual basis.

 

Within such lists, business publications and research organisations take the opportunity to rank employers on their employees’ reported job satisfaction, the perceived value and breadth of their benefits offerings, development opportunities, and other selling points of the employee experience – effectively itemising the individual components of a company’s employee value proposition (EVP), and cataloguing their strengths and weaknesses.

 

Such lists are usually opt-in; on the face of it, it has seemed a win-win for both employers and publishers, with the former getting a brand boost (particularly if they place in the top ten or 20), and the latter getting an annual stream of big-name content.

 

With more and more information about organisations’ talent policies becoming publicly available, these lists have broadened significantly in remit, allowing space to focus on issues that really matter to the talent of today – diversity and inclusion, corporate social responsibility, and work-life balance, for instance.

 

However, the sheer proliferation of “best-of” lists has led to diminishing returns in their reputational value. Indeed, Gartner research has found that only seven percent of candidates say “best employer lists” are an important factor for them, in deciding whether to accept an offer from an employer.

 

The rise of the naughty list

 

On the opposite end of the spectrum, investors, government and media outlets have begun to compile more consequential “naughty lists,” comprised of companies that fail to live up to expectations around fairness, inclusion, transparency, and/or social responsibility.

 

Gender pay equity, executive compensation, the handling of sexual harassment claims, discrimination of diverse employees – all of these topics fall under the scope of such lists, with inclusion often being a brutal wake-up call for those involved. In the UK, for example, one might note how high-profile multinational employers in the finance and professional services sectors are being exposed under mandatory gender pay gap reporting; elsewhere, the UK government’s new “name and shame” strategy to rein in excessive sums of executive compensation might serve as a case in point. 

 

For employers today, earning a spot on a list has transformed from an opportunity to a risk.

 

HR leaders should understandably be concerned about their organisation placing on such prospectuses: Often, the problems being highlighted show systematic failures across the organisation to engage, attract and safeguard talent within a business.

 

HR leaders must take the lead

 

In the event that an employer receives such a dubious honour, the temptation may be to simply ignore the issue and leave it undiscussed with current or prospective employees. Doing so, however, leaves control of the narrative outside of an employer’s grasp.

 

With employer information being more readily accessible than ever before, employees and candidates are guaranteed to be able to see the list, react to it, and discuss it among themselves. Communicating with employees about the ranking – however negative – establishes the employer as pragmatic and willing to engage and collaborate with its workforce, even on tough issues. The goal, primarily, is to resolve these issues - however, mitigating the damage to your reputation and employer brand also remains a key concern.

 

More sceptical readers may argue that, in opening up the issue for discussion, employers run the risk of calling attention to problems many employees or candidates were not aware of. At Gartner, however, we perceive there to be more value in taking a seat at the table of that discussion. Proactive transparency will be the best choice for many employers – if only because it is best employees hear the truth of the matter from their employer, rather than receive piecemeal or factually incorrect information from a second-hand source, or worse, believe their employer is hiding something.

 

How deep does the problem run?

 

Another consideration for HR leaders facing the prospect of showing up on a “naughty list” is that this externally-imposed transparency enhances the urgency of addressing the underlying issues. HR policies that didn’t look like problems before are cast in a new light when third parties are making lists of “bad” companies. In many cases, the changes you’d need to make are things HR wants to do anyway. Now, however, achieving and surpassing such goals brings an additional longer-term strategic benefit of keeping you off the next edition of the naughty list.

 

Engaging with the list makers

 

Employers’ responses needn’t be entirely reactive. Carefully managed communications are key to navigating this new territory. If HR leaders wish for their organisations to be recognised positively, they must start to engage with the third parties that are creating these lists whenever you have the opportunity. This is critical, not least because the data underlying their rankings may not be accurate, and will fail to tell the whole story of what your organisation does and why. Communicating directly with the list-makers will help them make better-informed decisions about how to evaluate your practices in the proper context.

 

Governments, consumers and employees are scrutinising the practices of organisations more than ever. It is vital that HR leaders recognise the increasing weight of such “naughty lists”, reining their companies into line before their name hits the press - for all the wrong reasons.

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