HRE’s annual list highlights companies based on four criteria: management quality, product/service quality, innovation and people management.
For the second year in a row, Apple tops the list of HRE’s “Most Admired for HR” companies. The Cupertino, Calif.-based electronics maker is followed on this year’s list by Netflix, Walt Disney Co., Target and Nordstrom.
Apple, with its HR Attributes Average score of 8.51, is no stranger to the top of this list, now in its 15th year. It attained the No. 1 ranking in 2016 and No. 3 in 2015.
This year’s list reflects a few changes from previous years. In 2018, attribute scores were not generated for the general-merchandisers and food-services industries due to low response. As a result, only the aggregate industry scores and ranks are published in food services, general merchandisers, construction and farm machinery, and network and other communications equipment.
With scores available for these industries in 2019, several companies have cracked the top 50, including the aforementioned Target, Nordstrom (general merchandisers), Starbucks (food services), Costco Wholesale (general merchandisers) and Walmart Inc. (general merchandisers).
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Likewise, several companies fell off last year’s top 50 list due to attribute scores that were not generated in 2019. Because of the weak distribution of responses, only the aggregate industry scores and ranks are published in construction and farm machinery; internet services and retailing; network and other communications equipment; metals, packaging and containers; and telecommunications.
Among these casualties is Alphabet (internet services and retailing), which ranked No. 2 on last year’s list; Amazon.com (internet services and retailing), which ranked No. 5; Facebook (internet services and retailing) at 10; Nucor (metals) at 37; and AT&T (telecommunications), which was 42 on last year’s list.
The companies that made this year’s list show that it is possible to overcome the many challenges inherent in today’s business world while still retaining the admiration of competitors, says Mark Royal, senior director at Korn Ferry.
“Today’s HR leaders face pressures to attract and retain talent amid tight labor markets and shifting workforce expectations—and to develop leadership and organizational capabilities to respond in agile ways to increasingly dynamic and competitive business environments,” Royal says. “The companies on this year’s Most Admired for HR list are exemplary in navigating these challenges across industries and geographies.”
This year’s list includes a number of new entries, including: Bosch Group, Raytheon, Toyota Industries, 3M, CVS Health, The Estee Lauder Cos., Activision Blizzard, BMW, Procter & Gamble, Taiwan Semiconductor, Michelin, Siemens, Hilton Worldwide Holdings and Samsung Electronics.
The process of developing this definitive report card on corporate reputations begins when Los Angeles-based management-consulting firm Korn Ferry teams up with Fortune to determine the “World’s Most Admired Companies,” which they’ve done since 1997. They started with the Fortune 1000—the 1,000 largest U.S. companies ranked by revenue—and non-U.S. companies in Fortune’s Global 500 database with revenues of $10 billion or more. They then selected the highest-revenue companies in each industry, surveying a total of 680 companies from 30 countries.
To create the 52 industry lists, Korn Ferry asked executives, directors and analysts to rate companies in their own industries on nine criteria, from investment value to social responsibility. To arrive at HRE’s “Most Admired for HR” rankings, Korn Ferry recalibrated the Fortune attribute scores, isolating four criteria that have a bearing on HR—management quality, product/service quality, innovation and people management.
Of the companies in the Top 50 in 2018 and 2019, the biggest upward moves come from: Adobe Systems, Johnson & Johnson, Nvidia, BlackRock, Boeing, W.W. Grainger, Charles Schwab and Merck.
The HR organization at global pharmaceutical maker Merck, which rose 11 spots from 44 on last year’s list to 33 this year, is made up of professionals with strong business acumen who are seen as effective and trusted business partners, says Steven C. Mizell, executive vice president and chief human resources officer.
“Alignment between our talent strategy and business strategy is what ensures that we have the right programs, policies and processes in place to best serve our people and our company,” he says.
To that end, Mizell says, Merck is continuing to increase its use of data and analytics, as well as talent-development initiatives and is also “remaining unrelentless in our pursuit of a diverse and inclusive work environment.”
Mizell has some simple advice for companies looking to make next year’s list.
“Having deep knowledge and understanding of your company’s core business is critical to the success of any HR team looking to improve their ability to deliver on business objectives, and [it’s] our critical mission.”