Why is the socio-economic diversity taskforce needed?
This taskforce is an opportunity to change UK financial and professional services. But why is it needed?
There is a lack of socio-economic diversity at the top in UK Financial and Professional Services (FPS).
- Across eight financial services organisations, 89% of senior level employees are from professional backgrounds*. This compares to 47% at junior levels, 52% of UK CEOs economy wide and 37% of the UK’s working population. (The Bridge Group, 2020)
- Across UK FPS, 52% of employees at all levels of seniority are from professional backgrounds (58% Legal, 56% Management Consulting, 50% Finance, 43% Accounting. (Social Mobility Commission, 2020
- In law, 60% of Partners are from professional backgrounds. (Solicitors Regulation Authority, 2019)
However, greater socio-economic diversity provides an opportunity to:
Meet broader diversity and inclusion objectives.
- Across eight financial services organisations, 8% of Black employees attended an independent school compared to 19% of White employees. (The Bridge Group, 2020)
- There is intersectionality between socio-economic background and other characteristics: Across ten leading law firms, 23% of Black female employees attended an independent school compared to 52% of White males, and 60% of Asian males. (The Bridge Group, 2020) This compares to a national average of 7%.
- Across eight major financial services organisations, employees from non-professional backgrounds* progress 25% slower than peers, with no link to performance (this rises to 32% for employees who also identify as Black). These employees are exhausted by efforts to conform to dominant cultures, impacting individual performance. (The Bridge Group, 2020)
- Across seven law firms, employees educated at state schools are 75% more likely to feature in the top decile of performers than those educated at independent schools. (Social Mobility Commission, 2020)
- Across ten law firms, employees from lower socio-economic backgrounds take a year and a half longer on average to reach partnership, compared to their colleagues form high socio-economic backgrounds. (The Bridge Group, 2020)
Access a wider pool of talent
- There is a risk that high performing talent will migrate to other more inclusive sectors. There is a £5k class pay gap in the tech sector versus £17.5k in financial services. Laurison, D and Friedman S (2020). The Class Ceiling: Why it Pays to be Privileged. Bristol University Press, Policy Press. Edition 1. (ISBN:978-144733610)
Maximise global competitiveness
- The UK is ranked 21st in World Economic Forum’s Global Social Mobility Index - outperformed by rival global centres USA, Singapore, Japan, Germany on lifelong learning. The need to upskill a broad range of talent is promoted by both the Financial Services Skills Commission and the Professional and Business Services Council. Individuals from non-professional backgrounds are less likely to access training. (Social Mobility Commission, 2020)
* Socio-economic diversity defined by Parental Occupation at 14 (recommended metric to use)