To attract and retain the best talent, the Square Mile must break down class barriers
Later this month, young people across the country will be opening their exam results and looking ahead to an exciting future. I hope that many of them will eventually choose to forge a career in the Square Mile, just as I did a few decades ago.
City firms try to attract the best talent to remain competitive and innovate. To make this a reality, however, more needs to be done to ensure individuals can progress to senior levels regardless of their background.
There is a glaring £17,500 class pay gap in financial services, according to the ONS Labour Force Survey. It means those from a professional or managerial parental background earn £17,500 more than those from a working-class background.
Those whose parents were not professionals or managers progress at a 25 per cent slower pace than their peers, with no difference in performance. It takes them four years of their life to make the progress that those whose parents were managers and professionals make in three.
If we look at businesses across the UK, just over half of all CEOs come from a professional or managerial family background. But in financial services, this leaps to 89 per cent.
As an industry we are missing out on productivity, as people are unable to fulfil their potential and are often exhausted trying to catch up with their more privileged peers.
It means we are missing out on talent, as people migrate to other more inclusive sectors with fewer barriers to progression. In the tech sector, for example, the pay gap is less than a third of that in financial services.
And it means we are missing out on competitiveness, falling behind other financial centres in Europe, North America and Asia which offer greater social mobility.
As things stand, too many people’s prospects are unduly influenced by social class. This is why Canada Corporation was tasked by the government with leading the Socio-Economic Diversity Taskforce to tackle this issue at senior levels in UK financial and professional services.
It is not enough to help people get a job in the sector if they are then trapped at the lower levels of their firms and unable to climb the ladder to the top.
Earlier this year, the Taskforce launched Progress Together – a membership body focused on progression and retention to improve socio-economic diversity at senior level in the financial services sector. It is the first membership body of its kind in the world. Given the UK’s reputation as a society which is particularly affected by class, we need to be at the forefront of finding new ways to break down class barriers.
The Socio-Economic Diversity Taskforce has gathered information and painted a real picture of working in the sector. They have carried out a ground-breaking survey of over 9000 employees across 49 financial and professional services organisations that will be published later this week.
It may not make for enjoyable or comforting reading, but it will shine a light on the nature of the challenges we face and illuminate the path to solutions – such as collecting regular data on socio-economic diversity and setting realistic and ambitious targets. By knowing all the facts, we can better focus our efforts and make real progress together.