We’re proud to announce the launch of our very first sector-specific toolkit – financial & professional services.
Following months of consultation with trade groups, academics and leading employers in law, accountancy, management consultancies and financial services – this new toolkit provides unique insights into how best to level the playing field, whilst driving competitive advantage.
By delving into what best practice looks like for the sector, and being mindful of specific drivers and challenges, it aims to boost your current initiatives and meet your needs as an FPS business. And it is something you have asked for, and indeed many of you have contributed to – a truly tailored approach.
“At a time when those with less access to privilege and opportunities are facing greater challenges than ever, it is vital for organisations to push themselves to increase social mobility. This toolkit provides resources that every organisation – wherever they are in their social mobility journey – can learn from and use to make a positive change.” – says Annette Byron, Partner, Freshfields
You can explore our new toolkit here, or watch the video recording of our launch event, featuring:
- Rt Hon. Justine Greening, former Secretary of State for Education and Minister for Women & Equalities, and founder of the Social Mobility Pledge, discussing their work in this space and ‘levelling up’.
- Catherine McGuinness, Chair of Policy at the City of London Corporation, and Nik Miller, CEO of the Bridge Group, who unpick their latest research and plans to address D&I shortfalls in the sector.
- Sarah Atkinson, CEO, of the Social Mobility Foundation on their Employer Index and the insights this provides – financial services now make up 18% of the top 75 employers in the Index.
What can diversity do for my business?
A great deal, in fact. By reflecting the clients and communities they serve, businesses can gain a competitive advantage. Diverse teams are more creative, more innovative and bring a broader perspective, which in turn enables them to develop better solutions for clients. And many leading firms in the sector have already embedded socio-economic D&I into their culture and values, so it is important to keep pace with your competitors.
- In seven leading law firms, employees educated at state schools are 75% more likely to feature in the top decile of performers than those educated at independent schools.[1]
- Companies in the top quartile for ethnic and cultural diversity on executive teams are 33% more likely to have industry‑leading profitability.[2]
- Regional ‘coldspots’, where movement is less common, offer an untapped talent pool.
- Employers who embed diversity and inclusion into their company values often benefit from higher employee engagement and lower staff turnover.
- And people want to work for you – two out of three candidates now actively seek out companies that have a diverse workforce and take this into account when accepting job offers[3].
Why the sector needs diversity
Let’s start with the class pay gap, which is not exclusive to the industry, but which all employers urgently need to address. Employees from a working-class background are paid an average of 11% less than their peers from a more privileged, professional background in the FPS sector.[4]
The sector is dominated by professional roles – 52% of those occupying them come from a professional background themselves, compared to only 37% in the general working population.
These figures vary by sub-sector, for instance accountancy firms have higher working class representation in professional roles, but management consultancies lag behind.
While access is improving, the sector is still dominated by people from more privileged backgrounds, and that difference becomes more pronounced as people move up the ranks.
Nearly nine in 10 senior roles are held by people from privileged backgrounds, according to new research from the Bridge Group on behalf of the City of London Corporation (CoLC).
To level the playing field, HM Treasury and the Department for Business, Energy and Industrial Strategy have commissioned the CoLC to lead an independent taskforce to boost socio-economic diversity in the sector. It is being led by Catherine McGuinness and three co-chairs, including Sandra Wallace, Co-Chair of the Social Mobility Commission and Joint MD Europe at DLA Piper, who says:
“When I was starting on my legal journey, I was told that I wouldn’t become a lawyer because I didn’t go to the right university and I didn’t get the highest grades. Overcoming these barriers has not been easy. I’m committed to boosting progression for individuals from lower socio-economic backgrounds across the financial and professional sector.”
Location, that old chestnut
It’s worth noting that more than half of all businesses in the sector are located in the south-east and London. This is a sticking point for socio-economic diversity. People from professional backgrounds are three times more likely than those from working class backgrounds to want or be able to move to London, where they can take advantage of this concentration of opportunities.
Our September report The Long Shadow of Deprivation: Differences in opportunities across England was the most detailed study of regional social mobility ever conducted in the UK. And it confirmed what many of us have long suspected – that where you grow up truly does matter.
We would always encourage any employer to expand the geographical diversity of their workforce, by recruiting beyond their physical headquarters, setting up regional hubs or allowing for flexible working arrangements. This enables people to continue working in their local area, or from home, so that they don’t have to choose care duties or support networks over their career.
“Our social background frames our life experiences and (…) we are all enriched by the varied perspectives a diverse workplace brings.” – Emma Turnbull, Community Investment Officer Allen & Overy.
I’m sold on the idea, so how do we fix this?
Once you have worked out where your business may not be fairly represented – and data is key in that respect – you can then set about putting in place the right interventions. There are lots of things you can do, in a number of key areas, and this toolkit will provide you with a step-by-step guide on each of these.
For those at the very beginning of their journey, a good place to start is by watching our videos, which highlight our top tips for employers:
- Data drives smart recruitment – any forward-looking socio-economic diversity and inclusion strategy begins with data and this will help shape your plans at every step.
- Outreach– are you reaching the widest possible pool of talent? You could look to explore partnerships with Further Education colleges or target geographic ‘coldspots’.
- Many common Hiring practices create artificial barriers for people from lower socio-economic backgrounds. Do candidates really need traditional academic qualifications in order to do the job?
- Social mobility is not just about who gets in, it’s also about who gets on – Progression. Have a defined list of skills required for each promotion – and build flexibility into job specifications.
- Culture and Leadership – a diverse workforce is a more productive workforce, so embed this ambition into your culture. And ensure your employees’ voices are heard, by encouraging people to share their ideas and experiences.
The toolkit will of course provide you with the detail you need to reach beyond good intentions and truly embed a programme of change. It also includes a host of case-studies to inspire you on this journey.
Case-study
Linklaters are a great example of how to create a more diverse and inclusive culture.
The firm was aware of the potential for employees from lower socio-economic backgrounds to feel like they weren’t truly fitting in at work and might not be able to identify with anyone else from a similar background. So they launched storytelling campaigns to raise awareness of people from less privileged backgrounds succeeding in the firm.
‘Know my Name, Know my Story’ is one of several campaigns featuring employees from all levels, across both law and business functions. The campaign highlighted people’s social mobility journey – the type of school they came from, what they felt coming into the profession and what their career journey has been. Senior partners and lawyers were also presented as role models.
The campaign helped shed light on the existing diversity at the firm and inspire others to pursue progression opportunities. It was a powerful way of showing what is possible – an inspiring initiative for both existing and potential employees alike.
“You need [the legal profession] to reflect the communities that it is serving. It’s important that people are judged and represented by people with diverse points of view and outlooks on life.” – Jenny Lloyd, Diversity and Wellbeing Manager at Linklaters.
Hopefully this has given you a good snapshot of the rich content in your new toolkit. It aims to be a pragmatic and straight-forward guide, set in the ‘real world’ context of your sector. Despite the challenges businesses have faced in 2020, we are immensely appreciative of the support many leading financial and professional service firms have provided in creating the guidance. This clearly demonstrates how committed the sector is to improving economic diversity and driving positive change.
Together, let’s promote meaningful paths of opportunity, so that everyone has a decent chance of a better future
[1] Data from research underpinning the Social Mobility Commission’s cross-industry toolkit: www.socialmobilityworks-v8.mystagingwebsite.com
[2] McKinsey & Company, Delivering through diversity, accessed 2020.
[3] Glassdoor, What Job Seekers Really Think About Your Diversity and Inclusion Stats, 2014
[4] This model was run using 837 respondents from the July to September quarter of the Labour Force Survey and controls for explanatory factors such as education, age, etc.