Social class is key determiner of who secures career progression in financial services

21/09/23

A new report, Shaping our Economy, demonstrates that Socio-economic background is more likely to impact a person’s route to success in financial services than gender or ethnicity.

The research was undertaken by the Bridge Group, commissioned by membership body Progress Together, and is the largest study into socio-economic diversity and progression in financial services ever undertaken.

In all, just under 150,000 people took part in the study, which examined socio-economic background and how it impacts hiring and career progression in some of the biggest financial companies in the UK, including in banking, insurance and asset management.

Key revelations from the report include:

• Women from working class backgrounds experience a significant ‘double disadvantage’, progressing 21% more slowly into senior roles than women from more advantaged families.

• People from higher socio-economic backgrounds are more than twice as likely to be found in senior roles as those from lower socio-economic backgrounds – and half of senior roles in the sector are held by White people from a higher socio-economic background.

• White men from higher socio-economic backgrounds are 30 times more likely to be found in senior positions than working-class women from ethnic minority backgrounds.

• 20% of those in senior roles attended an independent school – more than triple the national percentage of pupils at these schools (6.4%)

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.”

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.”

As well as providing detailed analysis of the data, the report also makes recommendations to help improve socio-economic diversity at senior levels.