Bill Kerr: In late 2023, it’s tempting to assume that generative AI is making all of us expert adjacent. We should be just a few prompts away from deep insights into complex issues like economic mobility. Any proficient user—be it a worker, employer, academic, or reporter—should be able to answer fundamental questions like, “Which firms provide noncollege graduates with opportunities for advancement?” and, “Which promote women and minorities equitably?” We’re not quite there yet, so it’s fortunate that we have the human intelligence behind the American Opportunity Index, which ranks corporate employers according to how well they foster talent from across the socioeconomic spectrum. The 2023 index draws on almost 5 million career histories, job postings, and salary information on workers At Fortune 500 firms. The index evaluates employers based upon hiring, pay, promotion, parity, retention, and advancement from within. It illustrates the bottom-line benefits of supporting upward mobility. What does this opportunity snapshot reveal about the U.S. labor market, and what impact is the index having?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Bill Kerr. The index, launched in 2022, is a joint production of HBS’s Managing the Future of Work Project, the Burning Glass Institute, and the Schultz Family Foundation. To mark the index’s debut last year, I was joined on the podcast by Matt Sigelman, President of the Burning Glass Institute, and my HBS Co-chair, Joe Fuller. This year Matt joins me with Rajiv Chandrasekaran, Managing Director of the Schultz Family Foundation. Matt, welcome back. And, Rajiv, welcome to our podcast.

Matt Sigelman: Great to be back together again.

Rajiv Chandrasekaran: Good to be with you, Bill.

Kerr: Matt, let’s begin with you. And remind us a bit of the background and what does the Burning Glass Institute do in producing the index?

Sigelman: So the Burning Glass Institute is a research center that advances data-driven solutions at the intersection of the future of work and the future of learning. We work with a whole host of novel data sets to be able to understand what’s going on in our economy. And so we’ve worked closely together with Joe and the project, as well as with Rajiv and his colleagues at the Schultz Family Foundation, to be able to track what actually bears out in real people’s careers, millions at a time.

Kerr: And, Rajiv, maybe we’ll go over to you. Welcome to the podcast, and tell us a bit about your foundation and work.

Chandrasekaran: The Schultz Family Foundation, Bill, was founded by Howard and Sheri Schultz. Howard’s the Chairman Emeritus of the Starbucks Coffee Company, and his wife Sheri has been working in the space of helping those less privileged for more than a quarter century. This work with the Burning Glass Institute and the HBS Managing the Future Work Project is really consistent with what we are seeking to do on a broad scale, which is to create the tools and the resources to enable more people to achieve the American dream.

Kerr: Thank you. Matt. We always have both new listeners, and also with the passing of a year, sometimes things fade a bit. Walk us back to the beginning. What was the impetus for the index?

Sigelman: So this work grew out of some of the research that we had been doing, looking at how people rise out of poverty. And we found a number of things, and that’s both work that we undertook together with Joe, as well as work with the Schultz Family Foundation, on two separate projects. But both of them told us something very similar: that when it comes to whether somebody’s able to move up into the middle class and escape the poverty trap of low-wage, high-turnover jobs, so much of it comes back to not only the things that you do as a worker, but where you work and what your employer does for you. We found that you can have two workers who are in the exact same role at directly competing firms who have entirely different prospects for moving up. And so what we wanted to do was to be able to measure that and understand what are the practices that are moving people ahead, not by studying the practices to start, but by creating a yardstick for seeing who is moving up, who’s not, so that we can understand what practices move the needle.

Kerr: And, Rajiv, maybe from your side, tell us a little bit about why this “yardstick,” as Matt phrased it, was an attractive thing to build and invest in and what you saw as the missing data that we needed for this important work.

Chandrasekaran: So the Schultz Family Foundation for some years has been engaged in trying to connect young adults to first jobs in America. But over time, we asked ourselves a question, “Well, what’s really happening to them?” And it was because of research that Burning Glass did with us that really helped to open our eyes to the fact that employer practice truly does matter, particularly for those who are entering the workforce, for those who are low- and mid-skilled workers. And in some ways that’s a very counterintuitive finding. Most of us think that it’s our work ethic, our intelligence, our gumption that really is determinative as to whether we’re getting ahead or not. But the reality is, for many low- and mid-skilled workers, it’s the practice of the employer. And so we started to ask ourselves, “Well, if that is the case, who’s doing this well?” And it turns out that Matt and team were asking a similar question at a similar time. And so it was a really fortuitous joining of forces—with Burning Glass and then with Harvard here—and it really designed in ranking these companies, in assessing them to understand who’s doing well in creating greater opportunity for their entire workforces.

Sigelman: If I could just add to what Rajiv just shared, I’ve spent most of my career charting the landscape of opportunity, collecting lots and lots of data about what’s the demand side of the equation, where are workers needed, what are the skills that it takes to unlock good quality jobs? Very often, you can have pools of talent who are stuck right alongside sets of opportunities that are screaming out for talent. And often they’re only a few skills away. And the problem is that neither party sees the other. Workers aren’t being given the information about how they can continue to rise—both within the firm and beyond the firm. Likewise, employers are looking for people with that title already. They aren’t necessarily seeing what Joe charted as “hidden talent.” And so the Opportunity Index for me is about moving beyond just understanding the landscape of opportunity to being able to understand the core mechanisms for people rising to opportunity.

Kerr: I think both of your vantage points are really important. I’ll just add in, from an academic perspective, a lot of us have approached it, as Rajiv described, for decades and learned about individual traits—be they education or be they the personality and noncognitive factors that they can bring into the roles that they’re doing and their importance for doing well. And we’re just now being able to think about and have data to support these questions about the environment and the firms that they’re working with and how they can help enhance their careers there. So I think it’s hitting on a number of dimensions. I want to continue, though, on your data-development process, because it’s not that the Fortune 500 companies have given you all their internal data to work on this. So tell us a little bit about where the data comes from and how it gets formulated into these important inputs that you’re providing.

Sigelman: We’re not relying on the data from companies for a couple of reasons. One, because maybe they probably wouldn’t give it to us—or at least a number of them might not to start. But two, I think, more significantly, because we want to be able to compare apples to apples. We want to have a common set of measures and a common language and vocabulary for describing economic mobility in America. So much of the work that we did, together with Joe and Rajiv and his whole team, has been about “dimensionalizing” mobility and creating a set of underlying algorithmics for describing it. So the ability to look at people’s careers at scale is pretty new. And it’s new because, whereas in the past you would’ve had to interview thousands of people—in this case, 5 million people—today, you can realize that most people have some kind of career history online. At the Burning Glass Institute, we’ve developed a database that includes the career histories of 65 million U.S. workers. Just put that in perspective, that’s 40 percent of the U.S. workforce. And so we’ve been able to use that to actually track what happens to people over time. And so, instead of relying on the one side, on employers, to provide data about the practices that they’re undertaking, we can look at what happens because of those practices. And on the other side, the same way that we don’t have to rely on workers to tell us what they’re experiencing; we can see what actually bears out in their careers.

Chandrasekaran: A focus on practices, Bill, is what a lot of other rankings and indices of corporate performance try to do. And there are inherent shortcomings with that. I mean, how do you compare the benefits policy at Walmart with that of Microsoft? Things get very subjective very quickly. And what makes the American Opportunity Index so groundbreaking is that it’s purely empirical. In addition, because it’s focused on workers and looking at them first—not through company-provided data—you can start to see things that even the companies that are most assiduous in tracking HR data may not see. For instance, if somebody starts at a company in our five-year window and moves after two years to another company, we are assessing whether they moved to a job that’s commensurate, better, or worse. How well did the first company prepare them with the skills and training to succeed later in their careers? I can guarantee you almost none of the large companies in America are tracking what happens to their rank-and-file workers once they leave their company and go on somewhere else.

Kerr: I’d love for us to get some depiction of what the index is showing. There’s a lot of range of outcomes and heterogeneity by sectors and geographies, and you have union and not. You have so much in there. But is there a way that you first off give the headline finding how good is the upward mobility that companies generally provide? And then maybe characterize for us a few of the places where you’ve got a lot of positive vibes and results that you’re observing, and then places where the data is saying it could be a lot better.

Sigelman: So I think, first of all, we found that, in fact, most companies in the top quartile of performance are among the top 100 companies in at least one of the categories that you enumerated at the start of the conversation. So I think, when you bring that to a sector level, this is less about saying, “Hey, here’s a sector that is just a bad place to work.” It’s instead about saying, “Hey, there’s actually very different profiles that different companies have.” So, for example, retail firms are very good at removing barriers to entry in hiring—they hire people without degrees, they hire people without experience, they give them skills, and people find promotion beyond the company. That’s very different from a technology company, where it’s hard to break in if you don’t have a degree, but there’s very strong wage growth, there’s very strong promotion rates, they’re very egalitarian. And so understanding those different profiles—those different archetypes, if you will—is very helpful in understanding the different motors that different sectors have for promoting people, for advancing people. But one of the key findings we had was that your business model is not your destiny. In any given sector, there were firms who are top 100 companies; there were firms in the bottom quartile of companies, both overall in any of the given metrics. And so, to me, some of the biggest findings here are about how wide the gaps are between top performance and bottom performance.

Chandrasekaran: Three quarters of the sectors that we looked at are represented on the top 100 list. This is not the usual ranking that just is dominated by financial services and tech firms. In fact, in the top 10 are companies like Smucker, the food and jam company, and W. W. Grainger, an industrial logistics company. So you see a great slice of the American economy here, and you don’t have to be in a certain sector to really thrive at creating opportunity for your workers that also drives business performance.

Kerr: And Matt said that there were some dimensions where an employer would be stronger and other dimensions where an employer would be weaker. And I think there are two versions of that. One is that there’s some inherent tensions or trade-offs on some of these factors or dimensions. And then the other version would be that there’s not those trade-offs, but instead the ones that are weaker on this aspect could become stronger as well. So I’d love your reflection about that.

Chandrasekaran: That’s a great point, Bill. There’s no one magic formula for creating opportunity. Everybody has room for improvement, and a majority of companies are doing well in at least one aspect of opportunity creation. And so the way the index is designed, it’s intended to recognize some of the different models by which companies, based on their sector and business model, create opportunity for their workers. And so that, in many ways, is a strength of the way the index has been compiled and the range of metrics that are assessed to score companies and to rate them.

Sigelman: In this year’s index, we’ve spent a lot more time focusing not only on creating the yardstick, but in understanding what moves it—what are the practices that move people ahead, move companies ahead, in terms of their performance. We have started to see relationships between some of these measures, not so much as trade-offs, but as which measures tend to mutually reinforce. We introduced this year a pretty radical new dimension of the index, which is measuring what we call “parity,” not just whether people are moving ahead, but whether people are moving ahead together—whether Black and Hispanic workers are moving ahead at the same rate as others, or women are moving ahead at the same rate as men. What we found is that the companies that are best at moving, at promoting from within, their Black and Hispanic workers also tend to be the best at promoting women, also tend to, in general, have the highest rates of internal promotion. And so what that says to me is that the companies that are doing best here, at least at that set of dimensions, are ones that have developed a motor for mobility. It’s not just something that’s happening in a haphazard way. They’ve systematized the process of promotion. And so, as a result, they’re not just doing this for one group, they’re doing it for everybody, and they’re doing it for everybody quite well. So we are starting to see those sets of practices that animate performance.

Kerr: I’d love to continue on that, if you have any particular firms or examples that you could share about this parity and what it looks like, best in class, for either the tech sector, the retail sector, or one that sits somewhere in between.

Chandrasekaran: Take Chipotle, the ubiquitous fast-casual Mexican restaurant. They, a few years ago, set an internal goal that 90 percent of their retail management jobs would be filled internally. And it created an intentional culture of providing the pathways and harnessing the mindshare at the company to really create robust internal pathways for growth. Take Coca-Cola, the top-ranked company on the list. They offer many of their workers an ability on a short-term basis to take on projects in other parts of the company, often a little bit beyond their current area of focus, to meet business needs, but also for workers to gain skills in areas of the business they might not otherwise have had, but giving them a form of cross-training that is enabling more workers to move up both up, as well vertically, as well as moving laterally, and then up. At Dell Computer, another top 25 company. They believe in a form of radical transparency with their workers and have these kind of talent cards that they use with their people to help them understand where they’re strong, the skills and training they need to be able to move to the next level that they seek. And it’s used as a device between workers and management to be able to help them see what they need to do to get ahead.

Kerr: Rajiv, I love this notion of using the index to say, “Wow, there is a lot of smoke coming from over there. There must be something good that’s happening. Let’s go and explore.” There could be an opposite side of this, where somebody’s calling you up and saying, “We’re really not that bad,” or “Somehow the index got the wrong data fed into it.” Do you have anyone coming the opposite side and saying that there’s something off base here because we’re doing much better than what’s being shown?

Chandrasekaran: We’ve held briefings with more than 25 companies, diving in to their performance on the index thus far. And with some of them, there are certain metrics, certain categories where they don’t perform as well as they had hoped. And in the confidence of some of these off-the-record discussions, as we’ve delved in more, they’ve actually said in some cases, “You know what? We are not thrilled that we have this score, but actually it does comport with some of what we know about how our business is operating or areas where we need to do better.”

Kerr: And I think those yardsticks and external reviews and so forth are things we all value, and I can see that being really important on the employer side. What are some of the other use cases you’re seeing, in terms of job seekers, recruiters? Are there others that are using the index, in terms of helping people guide to this opportunity at Chipotle or Coca-Cola or some of the other ones you’ve named is really good for upward mobility?

Sigelman: So we’re very focused on empowering not only the companies themselves but their current and potential employees and their investors, we think is going to be very important. So as we look to the months ahead, one of the things that we’re doing is, in fact, building a set of tools for workers. And so I’d like to think about this in a way like a nutrition label for your job. As I approach a company, what can I expect? What does good look like? And how does this company do relative to that? Or, if it’s frankly a company that’s too small to be on the index, what can I expect for people in this kind of role, in this kind of sector, at this size company? Hey, five years from now, if you take this job, you’ll be making this much more than when you start. Here’s how quickly you’re likely to get a promotion. We think—in the same way that data like Glassdoor data have been very empowering to workers to be able to go and sit down with their employers and say, “Hey, I think you should be paying me more,” and for employers to have an earnest conversation with them that contextualizes those findings—we want to see the same sets of conversations happen.

Chandrasekaran: This is so powerful on two levels, Bill. I mean, one is enabling millions of American workers to essentially do a health check on the progress of their careers. Am I moving up? Am I getting ahead on pace with other people in my occupation across the economy? Or am I stagnating? And then, when you think about those seeking jobs—young people who are applying for their first job—imagine somebody applying for a job as a bank teller, and you’re going to a couple of different large banks, right now you’re making that evaluation based on what the starting salary is and maybe some other factors that aren’t necessarily determinative to your career progression. Now imagine a tool where you can select an occupation—bank teller—and then see across the largest of banks where you have the best shot of getting ahead, where you have the best shot of wage growth, of promotion, where, if you are a woman or a person of color, you will rise with parity compared to all other workers. This radical transparency just hasn’t existed for the American worker before.

Kerr: I think it’s amazingly powerful. To continue on this theme, in part because you’re getting into something that companies often want to be able to share some of the good things or some anecdotes or some stories here, and you are bringing, as you described it, radical transparency, not just from inside, but from all the stuff that is now part of our data-laden world and what can bring in. The nutrition label analogy is interesting one, because a lot of those are standardized, in part because of the government and public policy playing a role in saying what should be on the nutrition label. And I’d love for you to think a little bit about where you are, in terms of either involvement of policy makers in what kind of assessments should be a part of this index—even if that’s just informal guidance—and do you longer term see this being something more directly connected to policy?

Chandrasekaran: The very fact that we can do this means that much of this data companies have, and they could disclose some parts of it if they so chose. At some point in the future, quite frankly, we’d like to be out of the American Opportunity Index business. And this broad set of data should be disclosed by companies—like other sorts of data that publicly traded companies are required to disclose. And that will allow not just workers, but investors and other stakeholders, consumers, to make more thoughtful data-driven decisions about where they choose to work, where they choose to invest, where they choose to spend their dollars.

Sigelman: I think there’s another way in which policymakers play a significant role here, as well. And that’s recognizing that there are a lot of impediments today to employers investing in their workers. And so what I think also needs to happen, from a policy landscape, is to come up with new structures for how we can share the burden of training, how we can make sure that companies are getting rewarded for investing in their talent base. Think about something that’s not a value-added tax, but a value-added tax credit, where if I invest in a worker and she moves up and she’s earning more, I earn a tax credit proportionate to how much more she’s earning, whether that’s happening at my company or whether she’s moving up beyond my company. So there’s a range of things that we need to do from a policy perspective that are built around the recognition that employers play a very significant role. And that’s both in terms of the practices that they have, the benefits that they have in place. We have a whole set of policies that are oriented around employer-provided healthcare. But when it comes to learning and development, one of the key engines of promotion, one of the key engines of advancement, both within and beyond companies, we’re still a Wild West.

Kerr: Well, you describe a future that I think we could all welcome, in terms of the disclosure of statistics that are related to workforce development and advancement and so forth, but I think your step here is already significant. We often speak about how leaders should be building the environment that helps employees gain and grow in their skill set, and that if they do that, they’ll be an attractive place to work and you’re providing the receipts that can be very useful for showing that impact for others. There’s a lot of conversation about international differences in upward mobility, and I’d love to reflect some on extensions of this index outside of the U.S., or other ways that the comparisons can be brought in.

Sigelman: So we are actually in talks right now about potentially creating opportunity indices for other economies, tracking economic mobility and benchmarking that across countries, that can give us a window into how effective different economies are at investing in talent and in growing the value of their human-capital stock.

Chandrasekaran: In addition to going macro globally, the Burning Glass team and the Schultz team and some other partners are actively working on creating regional opportunity indices for large cities in the United States, recognizing that there is unique power in a more granular level of insight—not just with the largest of employers across the country, but with the largest of employers in a large metropolitan area—and providing powerful new insight to local workforce entities, local employers, and others in cities to help promote more powerful and fair economic growth.

Kerr: So we’ve talked some about the growth opportunities here, and with every data-development project, there are pieces that are of the algorithms or almost the fine print of what we’re producing that need to be refined and developed. And aspects of this work is that it has self-reported career histories, there’s things about worker experiences you don’t observe. I’m sure there are issues with some contingent or gig workers. And you made over the last year in introducing things like the parity metric, you made progress on refining the index, itself. What’s next on that sort of development journey?

Sigelman: We undertook this year a large array of changes to the underlying methodology in order to make it as comprehensive as possible. That meant netting in not only the parity measures, but measures of culture, reengineering our measures of promotion to look at both advancement within and with advancement with beyond firms, and also to be able to evaluate a much broader array of companies. So, as we look to move ahead, a lot of what we’re very focused on right now is two things. One, how do we abstract these measures as measures, and to be able to apply in different contexts? So as Rajiv was just discussing, we’re now looking at, for example, what’s the landscape of mobility within regional contexts, within a city, within a state, because you can use those same measures in other ways. We’re also now very focused on being able to take these kinds of insights and to come up with not just relative measures—how is Walmart doing versus Target—but to look at absolute measures, the kinds of things that are going to give workers the insights they need to navigate their careers. How many months should it take you to get a promotion if you’re a logistician? How much more should you be making five years from now, once you start? And so we’re now undertaking that work to build on these measures to be able to empower a broader set of stakeholders.

Kerr: One can imagine a very powerful user tool you were describing earlier—your advances there—that would give the ROI of very specific courses of action. Like you take this degree at the community college, and then you also pair it with this job at the General Electric plant, and this is what you can expect to earn over that. So the richness of this is extraordinary.

Sigelman: Exactly. And in fact, we’ve been working on a set of projects in parallel that are using a very similar set of measures to be able to evaluate the outcomes of degrees. If you are going to start at this school and this program of study, what’s likely to happen over time? And I love what you’re describing, Bill, of putting that together with what happens inside firms. That’s going to be powerful, not only for workers to be able to understand the different levers they have for reshaping the trajectory, the arc of their careers, but also it’s going to be powerful for employers to understand how they can move talent up more effectively, how the workforce they have can be the workforce they’re going to need for their future.

Kerr: Let’s close with maybe putting the index aside and just talk a little bit about other things that you, personally, and your institutes are working on. What’s exciting for the next couple years ahead? And, Rajiv, maybe we’ll start with you.

Chandrasekaran: Our work on the index with Matt and his team at Burning Glass and Joe and his folks over at HBS have really revealed to us the need for better navigation tools for millions of American workers, particularly for those entering the workforce, those coming out of school. And as we look forward—in both the work we’ll do together with our partners on the Opportunity Index, but in ways that we’re going to seek to really leverage some of the core findings of the Opportunity Index—we are thinking through in some ways where you began this conversation, Bill, the power of AI, the power of this groundbreaking data to really help put new tools in the hands of young people, of all workers, of educators, and employers to help better navigate people to the training, the skill building, the education, and, ultimately, the professional opportunities to help them achieve greater economic mobility.

Kerr: And, Matt, what’s next for you and Burning Glass Institute?

Sigelman: We’ve been increasingly focused on this work of being able to evaluate and measure outcomes. But we’re also very focused on being able to use that to understand how we differentiate the people who are successful from those who are not, and to work backwards to understand what motivates those patterns of success. If we can recognize the patterns of success, then we can replicate the patterns of success. We’re doing a lot of work right now—as I think a number of people are—around generative AI. And for us it’s really an extension of work overall about skills. So as we think about generative AI impacts, we think about how skills can become key to making sure that everyone has a future—and an optimistic future—in the market that lies ahead for us. When you think about a market that has the dynamism that ours does, the increased dynamism that a generative AI future portends. What it says to me is that everyone’s going to need a learning strategy, and every company’s workforce is going to need a learning strategy.

Kerr: It’s a wonderful place for us to wrap this up. The American Opportunity Index is jointly produced by the Burning Glass Institute, the Schultz Family Foundation, and also our project on the Future of Work here at Harvard Business School. Rajiv and Matt, thank you so much for joining us today.

Sigelman: Really enjoyed this, Bill.

Chandrasekaran: Thanks, Bill.

Kerr: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.