How the best British employers find and promote their staff

To land aCEOITHRGAIBAEBAEBAEBAEHSBCEUAES job at Schroders, one of Britain’s oldest and most venerable fund managers, it helps to avoid certain universities. “We’ve moved away from hiring Oxbridge history graduates,” says Peter Harrison, Schroders’ just-departed , who joined the fund manager in the 1980s as one of its first non-Oxbridge graduates. These days the firm is casting its net wider, opening its doors to non-degree-holders with skills in and data-wrangling.Schroders is not alone in moving towards what types call “skills-based hiring”. Nearly half of British employers say a degree is no longer important, according to Hays, a recruitment firm. That widens the applicant pool and boosts retention; hires without degrees are more likely to stay than their university-educated peers, according to research done in America.But plenty of firms take a more traditional approach. The , a new dataset produced by the Burning Glass Institute, a non-profit research organisation, in partnership with , looks at how well British employers do at helping people to move on and up. Among other things it finds that individual firms differ widely on their criteria for hiring: there is a 67% chance that a job will not require a degree among the top quintile of employers, compared with only a 36% chance among the bottom fifth (see chart).The challenge of finding and keeping good employees is particularly salient right now. The first budget of the Labour government jacked up employers’ national-insurance contributions. Poor health has driven millions out of the workforce: Britain is the only 7 country whose economic-inactivity rate is still above its pre-covid level. Bosses noisily lament skills shortages in and beyond. All of these problems can be improved or worsened by the government. But when people are costlier to hire and skills are lacking, firms can also do a lot to help themselves.The Burning Glass Institute has analysed 20m professional profiles, along with job adverts and salary data, to identify career data in four categories—access to jobs, promotions, pay and retention—for 151 British employers. Between them, these firms employ nearly one in ten workers in the country. In order to compare companies on a like-for-like basis, the index controls for the occupational make-up of a firm. Coca-Cola’s British unit comes top of the pay metric, for instance, not because it pays the absolute highest salaries but because it does best given the occupational mix of workers that it employs.This methodology is not perfect. Public data are not always reliable, for example; the index does not control for financial performance. But the essential point holds. “There’s a span of performance across companies, even within the same sector,” says Matt Sigelman, president of the Burning Glass Institute. “That says you’re not prisoner to your business model.”Take the area where Schroders has changed its approach: the accessibility of jobs. The index rates British firms on two measures: the share of new hires who have fewer than three years’ work experience and the share of employees in the firm without a university degree. As well as variations within industries—Chanel, a luxury retailer, hires more people without degrees or experience than Burberry does—there are disparities within roles. Software developers without degrees are more likely to get hired by Amazon than Meta; non-graduates seeking customer-service roles have a better chance of success at Aviva, an insurer, than at its rival, Legal & General., Britain’s largest defence contractor, allows youngsters to earn a wage and a degree at the same time. Activities such as submarine-welding and aircraft maintenance, both essential for filling ’s order book, are challenging to recruit for in the open marketplace. So in fields where Britain is short on graduates, such as aerospace engineering, it fills the gap itself by offering degree apprenticeships. Over 20,000 applicants applied for less than 1,300 such roles this year. more than doubled its spending on training to £230m between 2019 and 2023, says Richard Hamer, ’s director for education and skills.The second measure in the index is promotions. It consists of four indicators: how likely employees are to be promoted and how frequently, how much more they are paid as a result and the chances of finding a job elsewhere with a decent salary bump. Again, some firms offer much more scope for advancement than others. The probability that someone is promoted within three years is twice as great at top-quintile firms as at bottom-quintile firms.The size of the local workforce doubtless has some bearing on this. British-headquartered banks like and Lloyds do better than foreign ones such as Société Générale and Deutsche Bank; retailers like Marks & Spencer and Next rank higher than Zara. But management also has an impact. Information about career opportunities is not always available: an analysis of global job-seekers in 2021 by Gartner, a research outfit, found that nearly half of them were not aware of internal vacancies.Training also helps people’s promotion prospects, inside firms and beyond. British firms do not have a great record on training. They spend half the average per worker on it; a badly designed apprenticeships levy which came into force in 2017 seems to have made things worse. But some employers see the upside. Chris Rea, founder of Engineering, a mid-sized manufacturer of mechanical seals, says that he has seen a “substantial return” from upgrading the skills of his workforce.It’s a similar story of divergence with pay and retention. The index calculates how much the median employee in any given occupation at a company is paid, alongside changes in that salary over the past year. The top fifth of British employers pay data scientists an average of £73,000 ($92,000) annually, compared with £38,000 for those at the bottom quintile. Unsurprisingly, low-margin industries like hospitality and retail tend to pay less than high-margin ones but competitors still differ greatly. Marketing managers at Ocado, a supermarket, rank in the top fifth for pay in their occupation; those at Marks & Spencer rank in the bottom fifth.Whereas some employers churn through staff, others emphasise retention. The likelihood of remaining employed after three years at the best performers in this category is 71%, compared with 45% for the worst. High turnover is costly, even for low-wage workers. Replacing them can cost employers up to 35% of the departing person’s annual earnings, according to Joseph Fuller of Harvard Business School.Beazley, a specialist insurer in the City of London, works hard to keep its people satisfied. “Insurance isn’t on the [vision] boards of many school leavers,” admits Liz Ashford, Beazley’s chief people officer. It offers various benefits: paid lunches and commutes; a £100 monthly allowance for wellbeing activities; study leave and completion bonuses for any qualifications attained; and three-month sabbaticals for every ten years of service. The firm claims an annual attrition rate of 8.3% compared with an industry average of 12%.This disparate behaviour leaves a problem for jobseekers: working out which employer does what well. “There are no nutrition labels for jobs,” says Mr Sigelman. You could ask prospective employers how they perform on the categories in the index. Or you can explore the data yourself in our .