The British Opportunity Index is a novel tool designed to evaluate companies in the UK based on their ability to foster worker advancement. It uses data from platforms such as LinkedIn and Glassdoor to assess firms on promotion, pay, access (hiring practices), and culture. The Index aims to provide workers with insights into where they can build successful careers, while also encouraging businesses to improve their practices.
Key findings suggest corporate practices significantly impact worker mobility, industry is not a limiting factor, and companies have agency in shaping opportunities. Ultimately, the Index seeks to promote a more inclusive and dynamic labour market by highlighting best practices and empowering workers to make informed career decisions.
Methodology: The Index uses a unique "outside-in" approach, leveraging big data analytics of career history data from sources like LinkedIn and Glassdoor. This allows for a reasonably objective assessment of worker advancement, by occupation to allow for accurate comparisons. The Index builds on the methodology of the American Opportunity Index.
This Index is the first-of-its-kind, outside-in assessment of British firms drawn from real-world data on workers’ outcomes. Firms do not opt in or out of the Index and no employee surveys are involved.
Four Key Categories
The index assesses firms across four categories:
Promotion: Measures internal promotions and the quality of opportunities workers find when leaving the firm. We assess companies based on both on how workers are promoted internally (how often are workers moving up and are they receiving material pay bumps when they do?) and on how they find strong opportunities when they leave the firm.
Pay: Assesses how well workers are paid relative to others in the same role and how much their pay has grown over time. This category measures both how well workers are paid relative to those in the same role elsewhere and how much their pay has grown over time.
Access: Measures how open firms are to hiring workers without experience or bachelor's degrees. We measure how open firms are to hiring workers without experience, and whether they hire workers without bachelor’s degrees.
Culture: Evaluates retention rates and the share of leaders drawn from within the company. Finally, we assess the Retention rates at a firm to test whether the firm has built a culture in which people want to build a career, as well as the share of Leaders Drawn from Within, as a proxy for whether the firm’s culture is oriented toward advancement.
Findings
Corporate Practice Matters: A major finding is that employer significantly impacts worker mobility and opportunity, even within the same occupation. The differences between top and bottom firms are substantial. The major finding in this work is that workers can experience vastly different sets of opportunities based on their employer – even relative to those in the same role at other firms. As an example of the differences between top and bottom firms, the document states, Top quintile firms are 2.3x more likely to promote workers internally than bottom quintile firms.
Industry is Not Destiny: The Index shows that strong performance on worker mobility is possible across various sectors, challenging the assumption that industry economics solely determine a firm's ability to invest in its workforce. Firms across a range of sectors demonstrated strong performance on various Index metrics, indicating that business models and industry economics are not as much of a constraint on investing in workers as many assume. The Retail sector is used as an example to show that even in a sector known for thin margins, some companies show strength in workforce advancement.
Firms Have Agency: There is minimal correlation between performance on the different metrics, suggesting that firms are making conscious choices about their talent investments. Intriguingly, we found minimal correlation between firm performance across metrics… That each choice is independent underscores that firms have agency in shaping opportunity for their workers.
Every Firm Has Room to Improve: Even top-performing firms have areas for development. No single company excels across all dimensions.
Consistency Across Borders: There is some consistency in performance between the British and American Opportunity Indices for large conglomerates, suggesting that some opportunity creation practices are transferable across national borders.
This study makes a significant contribution to the knowledge on workforce management and development, by boldly challenging the entrenched stereotypes e.g. that blame thin margins and tough economic conditions for poor workforce practices.
By embracing leading practices and fostering open-minded talent development, firms can not only create a rewarding experience for their employees thereby improving retention rates but also their attractiveness to top talent.