First of its kind report highlights stark lack of socio-economic diversity across senior leadership in UK financial and professional services sector
A new report published today (11 August) finds that working-class employees are far less likely to reach the top of UK financial and professional services firms.
Employees from professional backgrounds in the sector are 43% more likely to be senior level compared to their working-class peers. Of all the senior leaders surveyed, 64% are from higher socio-economic backgrounds. This is in stark contrast to the rest of the UK working population, where the figure is only 37%.
The report is the first of its kind to baseline socio-economic diversity at senior levels across the UK’s financial and professional services. Produced through cross-industry collaboration, its findings are based on a survey of over 9,000 employees across 49 financial and professional services organisations and a secondary data analysis which covers over 300k employees in the sector.
Produced by a Government commissioned Socio-Economic Diversity Taskforce, led by the City of London Corporation, the report calls for urgent action to address barriers blocking employees from working-class backgrounds reaching senior level positions in the financial and professional services sector.
Researchers found that whilst progress has been made in certain areas, there are still significant barriers for people from working-class backgrounds in reaching their full potential. Key findings from the report include:
· 64% of senior leaders were male, and 88% of these male leaders are white and 66% from professional backgrounds
· 36% of senior leaders were female, and 86% of these leaders are white and 61% from professional backgrounds.
· Ethnic minority females from a working-class background account for just 1% of senior positions
· Employees from working-class backgrounds are twice as likely to report that their background has negatively impacted their career, more likely to feel like they do not have the same chance of success in the workplace as their colleagues, more likely to feel dissatisfied with their pace of career progression, and more likely to feel like an outsider (when compared to their peers from professional backgrounds).
The results indicate that, at senior levels financial and professional services employers are out of kilter with the total financial and professional services workforce, and are deeply unrepresentative of the wider UK population. These inequalities threaten the productivity and competitiveness of the sector as it means that vital talent is being missed, especially at senior leadership level. The lack of inclusion felt by employees from working-class backgrounds is a risk to staff retention.
It also calls for employers to take action to address the lack of socio-economic diversity at senior levels. One way to do this is by joining the newly launched membership body, Progress Together.
Progress Together invites UK financial services firms of all sizes to become a member. In doing so, organisations join a community of peers to share resources with and benchmark against. Members are given access toolkits, best practice guides, workshops, and firm-to-firm mentoring while raising their profiles as leading voices driving changes in diversity and inclusion across the industry.
Chair of the City of London Corporation-led Socio-Economic Diversity Taskforce, Catherine McGuinness, said:
“This ground-breaking survey underlines the need for urgent action to break down barriers preventing people from working-class backgrounds reaching the top across UK financial and professional services.
“The City’s competitiveness, productivity, and capacity to innovate all depend on its ability to attract and retain the best talent. This is undermined if senior leaders in the sector are overwhelmingly drawn from a shallow pool and do not reflect the communities that they serve.
“This data provides a robust baseline by which the sector can begin to track its progress on socio-economic diversity and address gaps. We urge firms to collect data, set stretching targets and ensure they provide a level playing field for all.”
CEO of RSA and Co-Chair of the Socio-Economic Diversity Taskforce, Andy Haldane, said:
“Stalling or retreating rates of social mobility across most regions and sectors of the economy is costing the economy in unfilled potential among a large and rising share of our workforce. As well as being socially unjust, these forgone opportunities for growth, personal and national, are something we can ill-afford at a time of stagnant incomes and a high and rising cost of living.
We now know all we need to know about the scale and source of the socio-economic inequities facing the FPS sector. Now is the time to act on the data set out in this report, to turn words and now numbers into an action plan that does more than salve the consciences of those in the FPS sector; it moves the metrics and turns the tide, durably, inclusively, dramatically.”
The Building the Baseline Report comes two years on from the Bridge Group’s ‘Who Gets Ahead and How’ report which showed that almost nine in ten senior roles in financial services are held by people from higher socio-economic backgrounds.
The financial and professional services sector is an integral part of the UK economy, employing over 2.3m jobs – two thirds of which are based outside of London – and contributing over £100bn annually to UK GDP.
The independent Socio-Economic Diversity Taskforce – which was commissioned by HM Treasury and Department for Business, Energy and Industrial Strategy – is run by City of London Corporation and launched in November 2020.
The full research is available to download at https://www.cityoflondon.gov.uk/supporting-businesses/business-support-and-advice/socio-economic-diversity-taskforce/building-the-baseline
Notes to editors
About the City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk