Bridging the Social Mobility Gap: A Strategic Imperative for Financial and Tech Sectors
Recent insights from The Times and Core-Asset Consulting’s 2024-25 Salary Guide highlight a pressing issue: the stark social mobility gaps within the financial and tech sectors. The tech sector is currently the most unequal in the UK regarding socioeconomic diversity: despite advancements, only 9% of its employees come from lower socioeconomic backgrounds, compared to 39% overall in the UK workforce. These figures underscore the significant work that remains to be done in ensuring that these sectors are truly reflective of broader society.
The statistics are clear—change is not just necessary; it's urgent.
Let’s ensure that the tech sector doesn't just grow, but grows inclusively. The potential for innovation and progress is enormous, but it will only be fully realised when everyone has a fair chance to contribute. A recruitment process that champions equity at every stage is critical for a better future. We've seen first-hand how some of our clients are leading the way in this area, demonstrating that meaningful and lasting change is not only possible but essential.Louise Powrie Managing Director at Core-Asset Consulting
What would inclusive growth look like?
The financial and tech sectors both have much to gain by focusing on social mobility. Organisations that invest in inclusive recruitment practices can unlock a wider talent pool, driving innovation and long-term success. The goal is to create opportunities that enable individuals from all backgrounds to progress and contribute meaningfully within their roles.
How can we get there?
Rethinking recruitment: Emphasising the importance of accessible recruitment processes that value diverse socioeconomic backgrounds is crucial. In the tech industry, this could involve removing biases in the hiring process and focusing on skills over formal qualifications. In finance, this approach is already beginning to take root, with socio-economic status increasingly being considered during shortlisting.
- Leverage ESG Frameworks: Both sectors can benefit from integrating socio-economic diversity into their ESG (Environmental, Social, and Governance) strategies. Financial regulators in the UK are already encouraging this, and tech companies could follow suit to ensure they are not only meeting societal expectations but also mitigating non-financial risks.
Utilise external expertise: Implementing new DE&I processes can be complex, particularly in rapidly changing environments like tech. Leveraging external providers to help embed these practices can be crucial for widening candidate pools and ensuring that diversity initiatives are successful.
- Retention and development: Beyond recruitment, supporting the career progression of employees from underrepresented backgrounds is essential. This can be achieved through mentorship programs, professional development opportunities, and creating an inclusive workplace culture.
Betsy Williamson, CEO of Core-Asset Consulting, highlights the importance of diversity at the highest levels of decision-making:
Socio-economic diversity is a relatively new concept for many in the professional and financial services sector. Only in the last year or so have we started to see real interest from clients to consider someone’s social status as a factor when it comes to shortlisting and the talent pipeline.
At a senior level, there are more questions being raised around whether board members with a privileged background really understand their end consumers.Betsy Williamson Chief Executive Officer
These findings align closely with the need for greater social mobility in the tech and financial sectors. By expanding opportunities and creating inclusive environments, companies can tap into underutilised talent, driving better financial outcomes and fostering innovation.
Addressing social mobility is not just a moral imperative but a strategic one for both the tech and financial sectors. Diversity is a proven driver of financial performance, with research showing that companies with the most diverse workforces outperformed their peers by almost 30% in return on assets (RoA) annually over a 10-year period. Similarly, companies with a strong alignment between middle management diversity and overall workforce diversity generated 36 basis points higher risk-adjusted monthly returns compared to less diverse peers from 2016 to 2022. This demonstrates that diversity, including socio-economic diversity, is not just a moral imperative but a business one as well.
By prioritising inclusive practices, companies can build more diverse and innovative workforces, ensuring long-term success and a more equitable society. As industries continue to evolve, the need for genuine, sustained efforts to improve social mobility will only become more critical.
For more insights into diversity, equity and inclusion in the industry, and how social mobility can transform your organisation, refer to the Core-Asset Consulting Salary Guide.
Attribution: This article references a report by The Times regarding social mobility statistics in the UK. For more details, please refer to the original article on The Times website.