Privilege Preference: Socio-Economic Diversity Falls the Higher Up You Look, says Progress Together

The proportion of people working in senior financial services roles from a lower socio-economic background in the UK has increased to 28 per cent, according to Progress Together, the organisation representing 55 member firms from the UK financial services sector. However, it says many important steps are still yet to be taken.

A two per cent rise in socio-economic workers since 2023 represents a marginal improvement in societal considerations when it comes to senior appointments in financial services. Response rates to the key questions on socio-economic background from the sector have also risen significantly. The average proportion of employees submitting socio-economic data has increased to 58 per cent, up from 49 per cent in 2023.

However, the data from 200,000 employees, analysed by the Bridge Group, a charitable consultancy that advises on social equality, found that levels of socio-economic diversity reduce as seniority increases: 58 per cent of those at senior levels are from a higher socio-economic background, compared with 45 per cent at junior levels.

The proportion who attended an independent school is also higher among those in senior positions – 21 per cent against the national percentage of 6.5 per cent. Meanwhile, white men from higher socio-economic backgrounds are thirty-three times more likely to be found in senior roles in financial services compared with women with an ethnic minority background who are also from a lower socio-economic background.

Sophie Hulm, CEO at Progress Together

“Senior leaders in this critical sector create organisational cultures that shape societal standards about the ownership of capital – and guide the investment of personal and business assets,” explained Sophie Hulm, CEO at Progress Together. “Appointments to these roles should be based wholly on competence and efficacy – rather than on factors related to background. Today, nearly two thirds (58 per cent) of those working at senior levels in UK financial services are from a higher socio-economic background.

“More than 1.1 million people in the UK work in financial services, and the industry paid over £110billion in taxes last year. The sector’s contribution to economic output totalled £244billion in 2023.”

Privilege prevalent at all levels

Progress Together also found that the pipeline of talent for senior financial services roles lacks diversity, especially at the middle level of seniority, where on average 51 per cent of employees are from a higher socio-economic background.

People from a higher socio-economic background are promoted on average six months faster than those from a lower socio-economic background from junior to mid-level roles for mid to senior roles this gap is slightly smaller at three months.

Among all combinations of gender and ethnicity, those from higher socio-economic backgrounds are much more likely to be found in senior roles compared with their peers from lower socio-economic backgrounds. White females from higher socio-economic backgrounds are over two times more likely (2.1x) to be found in senior roles compared with this same group from lower socio-economic backgrounds.

Those from an ethnic minority background and also from a higher socio-economic background are more than two times as likely (2.3x) to be in senior roles compared with this same group from lower socio-economic backgrounds.

Taking action

“We strongly believe the FCA and PRA should mandate the collection and reporting of socio-economic background data, as the Solicitors Regulation Authority (SRA) has successfully done for several years,” Hulm explains.

Now, Progress Together is advising its members to:

• Set goals and be accountable for change, work towards parity, where the socio-economic backgrounds at senior levels mirror the rest of the workforce.
• Explore the relationship between socio-economic background and performance.
• Develop talent and leadership programmes targeted at those from a lower socio-economic background.
• Implement policies and approaches that measure and ensure greater equality in work/client/project distribution.
• Explore the experiences and perspectives of employees to help inform action.
• Engage with Executive Search firms. Experienced hiring demands greater focus since this aspect of recruitment risks undermining the gains realised at entry-level hiring and progression.

“Achieving lasting change in this important area is a marathon, not a sprint. We are grateful to our members for submitting their data and for their continued efforts to improve access and opportunities for everyone in one of the UK’s most strategically important sectors. However, there is still a huge amount of work to do to ensure that people from lower socio-economic backgrounds are not excluded from progressing to the highest levels of the UK financial services sector,” Hulm concluded.

Tackling deep-rooted societal issues

Mark Hoban, chair at the Financial Services Skills Commission, comments: “The demographics of the UK financial services sector do not reflect society as a whole. This impacts the sector’s ability to relate to a wide range of consumers, sound decision-making, and innovation. As the demand for tech and AI skills rises, companies that embrace diversity will be best positioned to ‘win the war’ for talent. To maintain its global competitiveness and to meet its obligations to society, the sector must improve.”

Nationwide has funded a pilot Accelerated Progress Programme (APP), delivered by TLC Lions, where employees from lower socio-economic backgrounds join a cohort with others from Coventry Building Society, Paragon Bank, and Yorkshire Building Society. These employees can benefit from learning and development opportunities, a mentor, a sponsor, and the opportunity to be seconded to another employer for six months.

Richard Oldfield, chief financial officer at Progress Together, also adds: “We have seen a significant increase in enquiries from investors about socio-economic diversity in the last 12 months. Importantly, our focus on broadening talent has positively impacted our culture within the firm. Everyone should feel they belong and that they can progress in their careers, regardless of their starting point in life.”

A report published by The Inclusion Initiative (TII), in partnership with Progress Together and sponsored by HSBC, also highlights that workers in finance from lower socio-economic backgrounds do not have equal voice in their organisations. It also includes selected actions that individuals, managers, and firms can take to progress talent from lower socio-economic backgrounds in their firm.

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