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City taskforce to tackle socio-economic diversity

30 November 2020: ICAEW has welcomed the creation of a new taskforce to tackle socio-economic diversity across financial and professional services.

New research shows that nine out of ten senior roles in financial services are held by individuals from high socio-economic backgrounds, three times higher than the UK working population as a whole.

In an attempt to tackle this ongoing issue, a new independent taskforce commissioned by HM Treasury and BEIS is being established to understand socio-economic barriers to progression.

As part of its remit, the taskforce will lead an industry consultation on how government, regulators and sector bodies can incentivise firms to take action to improve socio-economic diversity. It will also produce ammunition for the sector in the form of productivity data to support the business case for socio-economic diversity. Plans are also afoot for the creation of a membership body for financial services, where employers can share best practice on boosting senior-level socio-economic diversity and benchmark their performance in this area. 

Commenting on the launch, business Minister Nadhim Zahawi said: “No sector of the economy should be closed off to people from less privileged backgrounds, which is why we are building a Britain that is open to talent and helps people from all walks of life to excel in their career.”

The taskforce will be chaired by Catherine McGuinness, Policy Chair at the City of London Corporation and three Co-Chairs: Sandra Wallace, Interim Chair of the Social Mobility Commission, Andy Haldane, Chief Economist at the Bank of England and Alderman Vincent Keaveny, Senior Alderman at the City of London Corporation. Announcements about taskforce members are expected in early Spring.

John Glen, City Minister and Economic Secretary to the Treasury, said it was vital that firms have the right leadership to grasp the opportunities ahead as we enter a new chapter for UK financial services. “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.”

New research by the Bridge Group published to coincide with the launch of the taskforce finds that a glass ceiling for employees from less privileged backgrounds is alive and well: they take 25% longer to progress, despite no evidence of poorer performance. Its analysis of data from eight major financial services employers commissioned by the City of London Corporation. This finds that almost nine in ten senior roles in financial services are held by people from higher socio-economic backgrounds. This compares with a third of the UK working population as a whole.

Sharon Spice, Director of Global Student Recruitment at ICAEW, said she was delighted to see greater focus on ensuring equal access to progression opportunities throughout an individual’s career, irrespective of their starting point. “Although the research findings make for uncomfortable reading, this clearly provides a useful benchmark for us all to learn from, irrespective of the sector we work in.”

Spice added that the accountancy profession was continuing to work hard to improve social mobility through industry-wide programmes such as Access Accountancy. “There is also a great deal of work already underway in improving progression opportunities for all, with many organisations we support and work with. However, we all need to do more, and the accountancy profession is certainly up for the challenge.”

Some of the UK’s largest accountancy firms were earlier this month recognised for their attempts to tackle the lack of social mobility in the sector after they dominated the podium at this year’s Social Mobility Index. PwC, Grant Thornton and KPMG took first, second and third places in the index, created by the Social Mobility Foundation, to identify Britain’s employers that have taken the most action to improve social mobility in the workplace. 

Despite good work already underway, it is the responsibility of the whole sector and its clients to address what Bridge Group Chief Executive Nik Miller described as the “corrosive social dynamics” that impact on individual performance and wellbeing, and organisational productivity. “If we are to be led by performance rather than polish, we must develop transparent processes – including project allocation, promotion and senior sponsorship. “To feel proud of the sector that they will leave behind, senior leaders must play their role in creating change.” 

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