89% of people in senior finance roles from higher socio-economic backgrounds – study
Written by Rother Radio News on 24/11/2020
Nearly nine in ten senior roles in financial services are held by people from the higher third of socio-economic backgrounds, according to a study.
The figures were published at the same time as the launch of a government-backed taskforce to improve diversity in the sector.
They also showed that employees from lower socio-economic backgrounds took 25% longer to progress through the ranks at a company.
This gap could not be explained by performance – and increased to 32% for people from those backgrounds who also identified as black.
The study drew on data from nearly 8,000 staff at eight major employers in the sector including the Bank of England, BlackRock and Santander.
It identified people from a higher socio-economic background by main parental occupations covering a broad group including senior managers, professionals such as doctors, accountants and lawyers as well as teachers and nurses.
Intermediate backgrounds included secretaries and call centre workers while the remaining soci-economic group included labourers, security guards, cleaners and sales assistants.
The report showed 51% of people employed in financial services were from the higher background, compared with 33% of the wider working population. This rose to 89% for senior levels.
It also found 16% of those employed went to a private school, compared to 7% for the wider population. This rose to 25% at more senior levels within the organisations.
The Treasury and the department of business, energy and industrial strategy (BEIS) have commissioned a task force to tackle the issue to be run by the City of London Corporation.
It will lead a consultation on how to incentivise socioeconomic diversity, create a membership body where employers can share best practice and produce an analysis to help build the business case for improving diversity.
City minister John Glen said: “It’s vital that firms have the right leadership to grasp the opportunities ahead.
“That means taking action to ensure that talented people from all backgrounds and parts of the country can reach their full potential.
“By breaking down socio-economic barriers to progression, our financial services sector will become more innovative and competitive, and help to level up the UK.”
Catherine McGuinness, policy chair at the City of London Corporation, said: “Talented individuals should be able to succeed in financial and professional services on their own merit regardless of socio-economic background.
“Unfortunately, for many people that does not yet seem to be a reality.
“We hope that firms will seize the opportunity the taskforce provides to develop a more diverse pipeline by ensuring they are truly recruiting and promoting on merit.”
© Sky News 2020