We must take responsibility and encourage equity of progression in financial services
We live in an uneven – some might say unfair – society where equity of progression has been long out of reach for those who need it most.
In last week’s Queen’s Speech, the government outlined steps to address this – including the Levelling Up and Regeneration Bill, as well as related legislation to quash modern slavery and improve social housing.
These are welcome steps forward, and a reminder to all of us that we should be doing whatever we can to support everyone in our society to achieve their very best.
But as well as increasing opportunities across regions, it is also vital to spur progress within industries and firms to ensure a level playing field.
The UK’s financial sector employs over 2.3 million people – two-thirds outside of London – and makes up ten percent of the country’s GDP. This should be an industry where, if you work hard, you can steadily work your way to a senior position. That may be the case for some, but it is by no means universal. When we take account of the socio-economic diversity of the financial sector specifically, the results are striking.
Just over 50 per cent of all British CEOs come from a professional background – meaning that when they were young, their parents had jobs such as an accountant, solicitor, teacher, or software designer. In financial services instead, 89 per cent of senior roles are held by people from higher socio-economic backgrounds.
Research has also found that those from non-professional backgrounds in financial services take 25 per cent longer to progress than their peers, without any evidence of poor job performance. When these backgrounds are combined with other characteristics – like gender or ethnicity – this disadvantage sharply increases.
It might take a black woman from a non-professional background five years to achieve what her white male colleagues do in four. This is wrong, and unfair. That is why I have made it a priority in my year to boost progression and retention of people from different socio-economic backgrounds, help them achieve their full potential to become senior leaders of financial firms, and support firms to fix their processes to do so.
Solving the sector’s socio-economic gap will not only improve working life for all employees, but also business performance. We have seen time and time again that when a business’s senior team is both gender and ethnically diverse, it is more likely to outperform less diverse peers on profitability.
Later this week, I will be launching a new membership body to improve socio-economic diversity in our financial services. It will bring employers together, enabling them to share best practice with peers and clients, benchmark against each other in a safe environment, and boost collective efforts. I look forward to working with financial leaders to remove the barriers to progression, releasing regular data on this work to measure progress.
As we continue to rebuild after the pandemic, we have the best opportunity available to make British business the social leveller we all know it can be. Driving growth up and down the country is more important than ever; but if we want real success, there needs to be an equity of progression across our industries as well as across regions. By embracing this opportunity, we will be able to progress together.