Investing

Why The '100 Best Companies' To Work List Is Useless

Great Place does not disclose anywhere which publications actually make money on these listings through advertising or a share in consulting fees. All parties 24/7 interviewed said Fortune does not. The marketing benefits for Fortune are many. Great Place in the US offers a Best Companies Executive Strategies Network. The forum is only open to firms that have been on one of the Fortune lists for the past three years. Membership fees are $7,500 per year for one person. Member companies include American Express (NYSE: AXP), Goldman Sachs (NYSE: GS), and KMPG. When 24/7 Wall St.  raised questions to Fortune about Great Place’s business practices and questionable polling methods, a spokeswomen for Fortune parent Time Inc replied in an email: “We stand by the reporting, extensive methodology and independence of FORTUNE’s Best Companies to Work For List.”

Great Place co-founder Robert Levering told 24/7 Wall St. that Fortune 1000 are invited to participate in the US list each year. Other companies apply without invitation. If Levering and his staff see a media report about a firm that appears to fit with the Insitute’s rules, it is asked to be part of the survey. This last part of the process for getting candidates is random. Levering and an associate write the article for Fortune and are paid as freelancers.  By his reckoning, companies that treat their workers well always apply. “Why would someone who was one of the fastest runners in  the world stand on the sidelines? No company would claim it was among the best and withhold applying for the awards,” Levering says.

Great Place to Work refused to publicly disclose the names of other clients, a stance that puts it at odds with other companies in the survey business.   According to the ethics code of the American Association for Public Opinion Research, information about how publicly released research is being funded should be disclosed.  The Institute’s Web site alludes to its consulting business.  Fortune does not disclose it at all even though its website features job ads from “Best Companies.”

Some contacted by 24/7 Wall St., such as Google,  The Container Store, and Boston Consulting Group, say they had not used the consulting services of Great Place to Work.  Many declined to elaborate further.  Zappos CEO Tony Hsieh is due to address one of the group’s conferences even though his company also is not a consulting client, says spokeswoman Holly Jobbagy.

“While its nice to get outside recognition for what we do at Zappos we still continually survey our entire employee base to ensure that we are always staying on top of our employees needs and concerns,” she says. “We rely much more on the data we collect internally than from that which Great Place to Work provides as part of the process.”

A look at the Fortune 100 shows that only 10 of companies make the Best Places including Google, Goldman Sachs and General Mills.  Twenty-eight companies with under 2,000 workers are on the Best Place to Work list, a remarkable number since the target for invitations is Fortune 100o  companies. Many of these companies are also only barely large enough to make the cut based on number of employees.

Great Place to Work Institute was founded in 1980 by Levering, an author, and Amy Lyman, a former professor a the University of California, Davis.  Levering, the Institute’s board co-chair, boasts of having studied what makes workplaces great for more than three decades.  He was a co-author of the 1984 best-seller The 100 Best Companies to Work for in America and has been cited in the New York Times, Newsweek and USA Today.  In addition, he has appeared on CNN, CBS Evening News and Oprah.  Lyman serves as director of corporate research and is a frequent speaker at Institute conferences.

The San Francisco-based company began providing the list for Fortune in 1998.   Its website says it now produces Great Place lists in more than 40 countries.  The list is a money-maker for some of the media companies that publish it.  In Canada, the list appears as an advertorial in the Globe & Mail, the country’s largest newspaper.  Brian Trotter, the G&M business editor, told 24/7 that his paper would not run the list if it did not make the newspaper a profit. The winners in the G&M are notified weeks in advance of the list’s publication and are solicited to advertise in the insert in which they are praised. In the UK, the Best Places list is published by an annual publication  distributed by The Sunday Times and distributed through British Airways.  The Financial Times, used to run the insert but told 24/7 Wall St. that it was dropping the list this year as is The Guardian.

“The Best Workplaces in the UK” was an independent supplement which we used to have in the paper, but our relationship with them is now discontinued,” says Esther Kissiedu, an FT spokeswoman.   Adds Helen Hodgson, Assistant Readers’ editor, The Guardian: “The answer is, that although we ran it in 2009 and 2010, we will not produce this supplement in the future.”   Neither publication would elaborate further. Levering says he had no idea why the papers dropped the list.

Jonathan Berr,  Douglas McIntyre

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.