There is a strong case for finance and other elite professions to become more socially diverse and tap into a much larger pool of potential talent.
Research commissioned by the City of London Corporation in November 2020 found that 89 per cent of senior-level employees in financial services were from a higher socioeconomic background as judged by parental occupation.1
Socioeconomic diversity is only just starting to be considered as part of companies’ diversity and inclusion (D&I) initiatives, both because it is a less visible trait than gender or ethnicity (meaning it is easy to overlook) and because – shockingly – discrimination based on class tends to remain socially accepted to this day.2
There is, however, a strong case for finance and other elite professions to become more socially diverse.
Mirza Baig, global head of ESG investments at Aviva Investors, says that, since there is no link between a person’s talent and their socioeconomic background, employers are likely to hire a much stronger set of candidates if they look at those with the highest potential across a wide social spectrum.
However, changing hiring practices to broaden the talent pool and transforming company cultures to foster constructive conflict is fraught with difficulties.
Corporate D&I initiatives can make people feel exposed, when what they want is to blend in
For example, corporate D&I initiatives can make people feel exposed, when what they want is to blend in. “When you’re from an ethnic minority, you’re already incredibly visible. D&I initiatives can intensify that feeling of being different,” says Vaidehee Sachdev, people pillar lead and senior impact analyst at Aviva Investors.
Secondly, managers often feel annoyed by those who express different viewpoints, which in large part explains their tendency to hire, sponsor and promote those most like themselves, and to put often unconscious pressure on people with different views to conform. Furthermore, people from different backgrounds who make it in elite professions tend to shed their identity to fit in.
Support for greater social mobility is also hindered by a lack of clear and simple definitions around socioeconomic status and any consensus on how to measure socioeconomic diversity in the workplace. A lack of data in the UK adds to the difficulties.
In a recent Investment Week article, James Whiteman and David Aujla, co-leads of the Diversity Project’s social mobility workstream, say a good start for employers is to ask the four key questions suggested by the Social Mobility Commission: main household earner parental occupation at age 14; type of school attended at age 11–16; free-school-meal eligibility; and highest parental qualification.4
Companies should ensure employees from diverse socioeconomic backgrounds can flourish
As for new recruits, Whiteman and Aujla recommend 80 per cent of firms’ intern and graduate intake should be from state schools, which still allows for over-representation of privately educated graduates of just under three times.
Once on board, companies should ensure that employees from diverse socioeconomic backgrounds get the right support to allow their careers to flourish.
Three points to remember
- Around 89 per cent of senior-level employees in financial services are from a higher socioeconomic background as judged by parental occupation4
- Employers are likely to hire a much stronger set of candidates if they look at those with the highest potential across a wide social spectrum
- Companies need to do more to support the career progression of employees from disadvantaged socioeconomic backgrounds