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The UK’s financial services sector has been told it must do more to “break the ‘class’ ceiling” with new targets for at least half of senior leaders to come from working-class or lower socioeconomic backgrounds by 2030.
A new report by The Socio-Economic Diversity Taskforce, launched in 2020, outlines a path for companies to ensure that accents and parentage do not dictate workplace progress. The City of London Corporation, the governing body that oversees the UK’s finance industry, said the targets were crucial not only to improving boardroom diversity but also to spur growth in the sector. Task force chair Catherine McGuinness said: ‘We need to break the ‘class’ ceiling – removing unfair barriers to progress is not only the right thing to do, it will enable companies to increase productivity, retention levels and innovation.’
The report shows that around half of UK financial services employees are currently from non-professional backgrounds, defined as working class and middle class backgrounds. However, they progress 25% slower than their peers. Only a third (36%) of those employees have managed to climb the ladder to a senior level. Meanwhile, employees from non-professional backgrounds are paid less, up to £17,500 per year, with zero links to their professional performance.
The report includes a five point pathway aimed at addressing the lack of socio-economic diversity at the senior level. The five points (or steps) on the pathway are: leadership, evaluation, taking action, setting goals, and publishing and incorporating different processes depending on the type of organization the organization belongs to.
Point 2 is what we will highlight. Employers need to understand their current makeup and levels of diversity in order to make progress. The report sets a target for that – they say: ‘UK financial and professional services employers should collect data on the socioeconomic background of their workforce by 2025.’
While this report focuses on the FS sector, the issue of social mobility cuts across sectors and we are currently working with a number of clients to help address this issue. Laura Starrett joins me by phone from Manchester to discuss the announcement earlier:
Laura Starrett: “In our experience, if, employers are at a very early stage of social mobility. It’s becoming a growing area of focus, especially now that class gaps are believed to be widening as a result of the pandemic, and I think a key starting point for employers, as is the case with all diversity strands, is an effective data collection exercise. So that the employer can really understand the demographics of his employees. Now, that would involve thinking about how the data collection exercise would work, including the categories of data the employer might want to collect, and the type of secondary school the person attended, from a social mobility point of view. of university, the type of job held by their parents and whether they attend university and eligibility for free school meals. These categories of data are important because they essentially help measure the economic disadvantage that individuals may then face in securing roles within the organization, but also progressing within the organization. Once that data is collected, the next step is to develop strategies to address any gaps identified, along with clear goals. In terms of what that strategy looks like, it will vary from organization to organization.
Joe Glavina: “Can I turn to practical steps employers can take? What kinds of things are your customers doing to make progress with this?”
Laura Starrett: “Yes, so there are a number of practical steps that employers can consider. The first thing to look at is recruiting talent and thinking about creating diverse pathways into the workplace. So that could include, for example, attracting a more diverse range of candidates to the business. to use apprenticeships with a formal progression structure attached to them. Also, in terms of retaining talent, so review promotion and work allocation processes to ensure that these are as inclusive as possible otherwise there is a risk that the diverse talent recruited into the business will leave later because The path to the next stage is not clear to them. Another aspect that we are advising employers to look at is wider relationships outside the institution. So what we are doing to work with young people in schools, universities and further education colleges, the horizons. To help expand, which, over time, opens up opportunities to recruit from a wider pool of talent, there needs to be a constant level of engagement with these relationships. is so that such partnerships are meaningful both for the individual and the business but also contribute to the organization’s broader ESG strategy in the local community. I think it is very beneficial to have an employee network engaged in advancing social mobility issues with any of these measures. So, for example, I’m the current co-chair of the Social Mobility Champions Network at Pinsent Masons and I believe that employee networks help create a sense of community and play an important role in helping shape the D&I journey in organizations and also long-lasting change. Help ensure and ultimately, they act as the first port of call for support initiatives within the business and even outside the business.”
Joe Glavina: “What about legal compliance, Laura? There is no legal obligation to collect data and report on the class but, if you do, GDPR is an example to think about.
Laura Starrett: “There are good reasons to collect social mobility data to demonstrate diversity and inclusion in an organization. However, there is currently no legal requirement to do this, which adds a layer of complexity. So when we’re talking about tracking data involved in helping an organization assess social mobility, a business will be dealing with sensitive information that should be treated as special category data under the GDPR and what that means for processing relevant data. . Social mobility must satisfy sensitive data conditions. So, for example, the collection and processing of data is necessary for the performance of rights and obligations under employment law. However, there is often no legal requirement for employers to monitor this type of data, for example, gender, making it difficult to fall within one of the required data processing conditions. Having said that, the data will help to establish, for example, whether an employer’s equality policy is effective in practice, highlighting potential inequalities and ultimately helping to create a comprehensive equality strategy. These reasons usually rely on the collection and processing of data being anonymised and then, in general, access to this data should be restricted and apparently also securely stored.”
Joe Glavina: “Last question, Laura. If there is one message for HR, what is it?”
Laura Starrett: “Communication is absolutely key when you’re asking individuals to engage with providing data from a social dynamics perspective so they understand the broader context of why you’re collecting data. Come up with a clear D&I strategy to move forward if you have an effective communication strategy that will elicit more feedback from your employees and, ultimately, help you.”
That report by the Socio-Economic Diversity Taskforce is called: ‘Breaking the Class Ceiling – Recommendations for Creating a More Socio-Economically Diverse Financial and Professional Services Sector’. We have placed a link to it in the transcript of this program.
Links
– Link to report: ‘Breaking the Class Ceiling – Recommendations for Creating a More Socio-Economically Diverse Financial and Professional Services Sector’.
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