Class plays leading role in who gets top jobs in financial services, Progress Together report finds
Socio-economic background is more likely to impact a person’s route to success in financial services than gender or ethnicity, according to a report.
‘Shaping our Economy’, commissioned by membership body Progress Together, is the largest study into socio-economic diversity and progression in financial services in the world.
Just under 150,000 people took part in the study, conducted by the Bridge Group, which examined socio-economic background and how it impacts career progression in the sector.
The report also revealed that:
Women from working class backgrounds have a significant ‘double disadvantage’, progressing 21% more slowly than their peers from more advantaged families
White men from higher socio-economic backgrounds are more than 20 times more likely to succeed in financial services than working class ethnic minority women
People from higher socio-economic backgrounds are twice as likely to make it into a senior role than working class ethnic minority women
20% of senior employees attended an independent school – more than triple the national average of 6.4%
Half of all senior roles in the sector were held by white people from a higher socio-economic background
Men from higher socio-economic backgrounds were 2.4 times more likely to be in senior roles than women from a lower socio-economic background
75% of senior roles are filled by people applying from outside the organisation, yet only 25% of these individuals are from working class backgrounds.
Nik Miller, CEO of the Bridge Group, said: “Among all combinations of gender and ethnicity, those from higher socio-economic backgrounds are much more likely to progress to senior roles compared with their peers from lower socio-economic backgrounds.
“We know that progression and hiring is heavily influenced by attributes that have little or no correlation with job performance but are much more available to those from higher socio-economic backgrounds. For example, confidence, self-promotion and having relevant cultural references. These things correlate more often with people from higher socio-economic backgrounds.
“Also, this research indicates an important relationship between socio-economic background and gender, with women from lower socio-economic backgrounds progressing more slowly than their peers.”
Recommendations to help improve socio-economic diversity at senior levels include:
Businesses should collect employee socio-economic data and publish it externally and regulators should strongly advocate for this
Setting targets for socio-economic background diversity
Ensuring that promotion opportunities are advertised widely
Developing targeted talent and leadership programmes that incorporate senior sponsorship
Policies and approaches that ensure greater equality in work distribution by socio-economic background
Firms should have robust impact evaluations in place to understand which practices have the most positive effect on socio-economic diversity and inclusion
Engaging executive search firms to tackle the lack of diversity among new senior level recruits.
Sophie Hulm, CEO of Progress Together, said: “The financial services sector has a lot of work to do to level the playing field so that people from all backgrounds have the opportunity to progress their careers.
“Our members are leading the way in this field and should be congratulated for all their hard work towards improving socio-economic diversity to ensure that people from working class backgrounds are not held back because of where they started out in life.
“We now need firms from all sub-sectors, including private equity, investment banking and wealth management to join the campaign and commit to improving the industry for everyone working in it.
The full report, titled ‘Shaping our Economy: senior roles in financial services and socio-economic diversity’ was the result of a survey of 149,111 employees of Progress Together’s membership organisations, which include some of the biggest financial companies in the UK, including in banking, insurance and asset management.