What is the American Opportunity Index?
The American Opportunity Index measures how well America’s largest companies drive economic mobility and positive career outcomes for their employees—actions that also can help fuel business performance. The Index is the only measure of employer quality to evaluate what really happens to workers at America’s largest employers over time. For more information about the Index, see the About page
How is the Index assembled?
We use a range of labor-market data sources to assess the progress of a company’s employees over five years, from 2018 through 2022.
We assembled career histories of individual workers based on profiles and resumes they uploaded to career sites such as LinkedIn, analyzed pay data from sites such as Glassdoor, and leveraged job postings data from Lightcast.
Unlike most other measures that seek to identify good jobs and places to work, the Index does not rely upon data provided or self-reported by companies. Instead, it is based on objective external sources. Firms cannot choose to opt out of the Index.
Which companies does the Index include?
the Index includes
of America’s largest employers
we studied the
largest companies headquartered in the United States
firms because we did not have enough data to measure them (102) or those firms went out of business in 2023 (2)
How many workers does the Index assess?
The Index tracks the experience of 4.72 million U.S. workers at the firms we measured.
We focus on jobs open to those without a degree by excluding occupations in which 70 percent or more of workers nationally hold at least a bachelor’s degree.
What does the Index measure?
The Index measures five core elements of corporate performance that we believe are central to effective talent management and drive business growth and opportunity-creation for employees:
How are companies ranked?
For each metric, we start by calculating a score for each of the 12 metrics at each occupation at a company, such as the retention rate for customer service representatives. That allows us to assign a score to every metric by occupation at each company.
We then compare that score to the score for that same metric and occupation at other companies—in this case, the retention scores for customer service representatives across all companies.
We then weight those scores based on the prevalence of certain occupations at a company, as observed in job postings. If a company has twice as many customer-service representatives as administrative assistants, the customer-service representatives receive greater weighting when calculating a company’s total score for each of the 12 metrics. Each metric accounts for half of its relevant category score.
To calculate a company’s overall score, we have weighted the relative importance of each of the five categories based on surveys totaling 1,000 workers at large firms and input from a panel of expert economists. Both the worker survey and expert panel assigned significant priority to metrics of worker mobility and wage. As such, for simplicity, we assign double weighting to pay and promotion, and single weight to hiring, parity and culture.
What might the Index miss?
Online career histories are self-reported, which can yield embellishments and inaccuracies, but our analysis also suggests that those that might occur are shared across firms. There is no reason to believe that Walmart’s employees are any more likely to misrepresent career progress than their counterparts at Target, for instance.
Further, this is a complex exercise involving multiple hard-to-account-for variables. Even the extensive data-driven analysis used to create the Index cannot account for every nuance that shapes real-world worker outcomes and opportunities. Geography may limit workers’ job choices, for example. Very short stints may go underreported on résumés and in online career profiles. Pursuit of additional education or skill development outside of the workplace is not measured here.
On the employer side, companies that rely extensively on contract employees may rank higher than they otherwise might if these contractors were considered employees. We present our methodology with humility, aware of certain limitations yet certain that the core strengths of the analysis will make it useful to business leaders and employees.
Why are some 2023 company rankings different from the 2022 Index?
There are four principal reasons why some companies’ scores—and ranks—have changed significantly from last year’s Index:
The overall pool of companies assessed has expanded to 396 from 242. The increase affects firms’ relative placement on the Index.
We have added new metrics this year, including wage growth, gender parity and racial parity, which can impact companies’ overall scores.
We have adjusted the overall weighting to give equal prominence to pay and promotion; both receive greater weight than other categories.
We have rearchitected how we calculate several of the metrics, in part through deeper integration of mobility and wage data.
We have given added weight to changes in pay, promotion and hiring experienced by employees in 2022. In calculating retention, for instance, the 2022 Index assessed how many workers who were employed at a company at the beginning of the five-year tracking window were still employed at the end. This year, however, we look at retention across three overlapping three-year cohorts: 2017-20, 2018-21, and 2019-22. More recent periods are given greater weight
We believe these changes make this year’s Index more nuanced and more accurate, creating more sophisticated data tool for businesses and their employees. While some firms’ scores have increased this year, others have dropped. This is not necessarily due to significant changes in their internal practices in 2022; rather, it reflects how their practices compare to a larger pool of companies when analyzed with more comprehensive metrics. We do not envision making such significant changes to our methodology in future years.
Want to go deeper?
Download a detailed description of the Index’s methodology here.