Earlier this year, the London Chamber of Commerce and Industry commended the government on its ambitions to ‘level up’ the country, as outlined in the much-anticipated levelling-up white paper. Greater social mobility and the eventual fate of the Government’s levelling up agenda are deeply intertwined. Progress on both is vital to maintaining the competitive edge of British businesses on the global stage and to improve overall economic productivity.
For the financial and professional services sectors in particular, it is widely agreed that tackling representation at senior levels is a critical issue, one which without committed cross-sector action will only flounder. While the sector is a major contributor to the UK’s economy, at the senior levels it is one of the least diverse. Evidence from the Bridge Group reports that individuals from lower socio-economic backgrounds take 25% longer to progress in a financial and professional services career than their peers. When coupled with other characteristics, such as race, gender and sexuality, inequality across the system is unacceptably high. It is staggering that in 2022 the ‘progression gap’ between peers from lower and higher socio-economic backgrounds increases to 32% when considering those from lower socio-economic backgrounds who identify as Black.
This progression gap limits professionals affected by it and impacts productivity, as ambitious individuals strive to conform to dominant cultures. It is a critical problem that is reflected in the upper echelons of the business community and in turn stunts innovation, contributes to ‘group-think’, impacts decision-making and hinders financial performance. While the existing progression gap is still shamefully present, many firms within the sector now recognise that they can and must do better to tackle the issue. There is both a moral acknowledgement, but also recognition that this is a business performance issue too. To drive forward successful businesses, it is crucial that people from all backgrounds perform to their maximum potential and are supported to reach the peak of their abilities.
It was with this imperative in mind that HM Treasury and the Department for Business, Energy & Industrial Strategy commissioned the City of London Corporation to lead an independent taskforce to advise on how the government, regulators, sector bodies and employers can work together to increase socio-economic diversity at senior levels of the sector.
London’s economy is the engine room of the UK, and as a champion for the FPS sector, LCCI supports member businesses with some of the most pressing issues facing their sectors. It is its strong belief that we must work collaboratively to fix processes not people, and it was pleased to host roundtable discussions with senior FPS leaders to input directly into the taskforce, welcoming taskforce co-chairs Sandra Wallace CBE and Andy Haldane, head of the government’s levelling-up taskforce, to participate in the discussions, alongside a diverse range of FPS members.
A key recommendation raised in the discussions was the need for more and better data collection on socio-economic diversity at senior levels, so that the industry is better equipped to drive a lasting change. We all want to create a sector in which employees progress according to performance, not background. To help make this ambition into reality, firms and sector trade bodies need a robust baseline against which to measure progress. As a starting point, the taskforce is encouraging employees across UK financial and professional services to spare a few minutes to anonymously share their socio-economic background, level of seniority, and their views on career progression.
The taskforce is continuing to consult closely with sector bodies, regulators, and HM Government to understand how best to incentivise employer action on this issue, and sector representatives are encouraged to input their views and support the creation of a roadmap to help employers boost socio-economic diversity at senior levels.
If the UK is to boost productivity, deliver on the promises of levelling up, and secure sustainable growth for all, it must be fully committed to improving social mobility and representation within the most important sectors. It’s not enough to simply agree that action is required. We all – as employees, employers, membership bodies, regulators and policymakers – have a stake in creating the conditions that will allow a diverse talent pool to thrive and generate a pipeline of future leaders that reflects our country’s makeup and drives our shared prosperity. This is a pivotal moment to make good on our commitment to delivering tangible change, one we can ill afford to miss.
For more information, and to get involved in either of these initiatives email: socio-economicdiversity@cityoflondon.gov.uk
