How We Ranked the Employers

Identifying the best employers for new college graduates is no easy task. Employers who might be a good fit for one graduate would be a disaster for another. But there are certain characteristics that all great employers share: great pay and benefits, top-notch training programs, and opportunities for rapid advancement. The methodology used for BusinessWeek's Best Places to Launch a Career ranking is designed to identify those employers.

A few things have changed since our 2008 ranking, including a handful of new employers and a modified employer survey. But the biggest change was a shrinking of the ranking itself from 119 ranked employers to 69—a reduction of more than 40%. By purposely raising the criteria for inclusion, BusinessWeek reduced the number of eligible employers and created a ranking that is both more exclusive and more competitive.

What hasn't changed, though, is our basic methodology, a three-part test designed to unearth the best employers for new college graduates.

Raising the Bar To narrow the field, we turn first to the nation's career-services directors. In February we conducted a nationwide survey of directors at top colleges and universities, public and private. The survey asked the directors to identify the top five employers for entry-level workers in 17 industries, and the top 20 employers overall. Of the 262 directors surveyed, 60 replied, for a response rate of 23%.

Using the survey data on individual industries, BusinessWeek compiled a list of 118 companies, nonprofits, and government agencies that were eligible for the final ranking. This was a two-step process. The first step involved identifying the five high scorers in each industry. For every career-services director who ranked a company No. 1 in its industry, the company received five points. Every No. 2 ranking was worth four points, every No. 3 ranking was worth three points, and so on. After tallying the points, including ties, we had a total of 85 companies.

To flesh out the list, we reviewed the remaining employers suggested by the career-services directors and identified those with the highest industry point totals among all the industries. In order to raise the caliber of the final ranking and include only those employers that have the deepest and broadest support among career-services directors, we did something at this stage that we've never done before: We raised the bar. Instead of eliminating from consideration employers with fewer than 10 points, as we did in 2008, we eliminated those with fewer than 15 points. That gave us a total of 118 finalists, down from 174 in 2008.

User-Friendly Survey Next, we invited each employer to answer an extensive survey seeking information on hiring, pay and benefits, training programs, and retention. The survey this year was considerably smaller. We eliminated an entire section on internship hiring that's used for a separate ranking, opting instead to gather that information closer to the publication date. And we eliminated several questions, including a few on benefits and training programs. The goal: a survey that's easier and less time-consuming to complete and that focuses more closely on the things that matter to job-seeking college grads.

Of the 118 finalists, 69 completed the survey, including four that are new to the ranking this year, for a response rate of 58%. We then compared the employers' responses to each question with the responses of others in its industry. For each ranking question on the survey, the best response, such as the highest pay or retention rate, was awarded 10 points. The worst response, or no response at all, received no points. Responses that fell in the middle of the pack were worth five points each.

To complete the ranking, we combined the results of the employer survey with two additional pieces of data. From the survey of career-services directors, we tallied the points for each respondent's overall ranking of employers—20 points for each No. 1 ranking, 19 points for each No. 2 ranking, and so on. From Universum USA, a Philadelphia research firm that surveyed more than 60,000 U.S. undergrads this year, we received the percentage of students who listed each employer among the five for whom they would most like to work. We then convert those percentages to a consecutive student survey rank for each of the employers in the ranking.

An Industry Revamp The employer survey contributes 50% of the final ranking, while the career-services survey and the student survey contribute 25% each.

If no career-services director included an employer among the top 20 overall, or if no students included it among their top five, such employers forfeited the 25% associated with that survey. If data from both surveys were unavailable, the employer was placed at the bottom of the ranking, with its place determined solely by the employer survey. This year, 50 employers had data from all three surveys, 16 had data from two, and three were ranked based on their employer surveys alone.

In all, employers from 14 industries are reflected in the final ranking. Three industries that we ranked last year had only a single employer this year, making comparisons impossible, so they were eliminated. Walt Disney (DIS), a media company which owns resorts and theme parks, was shifted from media to hospitality., the online retailer, was shifted from the Internet category to retailing. And Entergy (ETR), an energy company, was combined with telecommunications companies in a rechristened utilities category.

Tougher Competition This Time As is the case every year, this year's ranking was marked by high volatility. Nearly half the companies in the ranking leaped 10 or more spots, with some jumping nearly 50 spots. This is partly a function of the ranking's smaller size, and some employers who appear to have made big leaps really haven't improved their relative standing. Grant Thornton, for example, ranked 51st this year, an apparent improvement over its No. 76 ranking in 2008. But because the ranking was so much smaller this year, Grant Thornton actually slipped: from the 64th percentile to the 74th.

By contrast, only a half-dozen employers fell precipitously in the ranking this year, including Marriott International (MAR), Lockheed Martin (LMT), Cisco Systems (CSCO), Northrop Grumman (NOC) Siemens (SI), and (AMZN).

In every case, the drop was the result of tougher competition in the employer survey, where many companies this year found either new, more formidable competitors in their industries, or a smaller field with no weak players that made it more difficult for them to shine. Last year, for example, Marriott was up against Wynn Las Vegas, the lowest-ranked employer on the list, but this year it had to contend with Aramark, Hyatt, and Disney.

In technology, Cisco and Siemens had eight other rivals last year; this year, they had the four toughest—IBM (IBM), Microsoft (MSFT), Intel (INTC), and Dell (DELL). Among the five that dropped out were two of the lowest-ranked employers in last year's ranking.

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