UK finance sector needs greater social mobility: study
published : 30 Nov 2022 at 21:45
LONDON - Britain's financial and professional services sector must boost socio-economic diversity in boardrooms, helping to bridge big differences in pay, a study commissioned by the government concluded Wednesday.
Having at least half of senior leaders in the sector coming from a "non-professional" background by 2030 would help to achieve the goal, said the report by the Socio-Economic Diversity Taskforce.
Around half of all employees in the sector are from non-professional backgrounds but these workers progress 25 percent slower than their "professional" peers, it added.
"It is vital that UK financial and professional services firms act now to enable talented people to rise to the top whatever their background," said Catherine McGuinness, chair of the taskforce.
"We need to break the 'class' ceiling -- removing unfair barriers to progression is not only the right thing to do, it will enable firms to boost productivity, retention levels and innovation."
The taskforce is led by the City of London Corporation, the authority running the British capital's financial district.
It found that just over one-third of sector staff from non-professional backgrounds, described as working class and intermediate employees, have climbed the ladder to senior levels.
Employees from non-professional backgrounds are also likely to earn up to pound sterling17,500 ($21,000) less per year.
"The industry's willingness to collaborate on tackling the barriers to promote people from lower socio-economic backgrounds into senior levels is unprecedented," said taskforce co-chair Sandra Wallace.
"It marks a long-awaited shift in the priorities of our sector and recognises the business and moral imperative to change."
In response, Louise Ashley from Queen Mary University of London said while the "taskforce report sets important goals", improved social mobility "isn't a conversation that financial and professional service firms really want to have".
"Action is needed to address class pay and progression gaps, but this can't just be a vague commitment to meritocracy and social mobility, offering an illusion of change while justifying the bumper rewards given to a select few."
Ashley, a professor at the university's business school, added that "social mobility is less likely in countries with steep inequalities of income and wealth", such as the UK.