‘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-economic backgrounds are 30 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 be found in the most influential roles in UK financial services.
“The evidence is clear. Progression and hiring are heavily influenced by attributes that have little or no correlation with job performance, but which are more available to those from higher socio-economic backgrounds. This includes drawing on family and alumni networks, and on cultural preferences that have currency in a profession that has been shaped over many years by this dominant group.
“This research also highlights important relationships between socio-economic background and gender. Women typically experience the negative effects of being from a lower socio-economic background more significantly than men – who are more often able to use their working-class roots as an asset in the workplace.”
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 know greater workforce socio-economic diversity fits squarely within the 'S' in the ESG. But to evidence this to investors, standards setters, regulators and clients, the sector needs more data.
“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.
"We are confident that the financial services regulators’ expected diversity and inclusion consultation will incentivise firms who are not already engaged with this issue.”
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.