Oliver Smith / 05 June
Socioeconomic mobility and financial services recruitment
Last year, the City of London and the Social Mobility Foundation released their key findings about social mobility in financial services in the City of London in 2018. It made for interesting, and potentially sobering, reading for both recruiters and candidates.
A key finding for recruiting companies and other HR professionals is that people from working class backgrounds are much less likely to feel that “the senior leadership of their organisation wants to diversify the class backgrounds of their organisation’s staff”. They are also much more likely to feel out of place because of their background and believe that people get ahead because of who they know (The Social Mobility Employer Index 2018: Key Findings). Work by Deloitte has also noted that
“54% of FTSE-100 CEOs, 54% of top journalists and 70% of High Court Judges went to an independent school, compared to 7% of the population”, and that “the UK has one of the poorest rates of social mobility in the developed world”.
Should hiring firms care about this?
Hiring firms missing out on talent
A traditional narrow recruitment focus, such as requiring a specific degree from a top-ranked university, means firms can risk missing out on a wealth of talent. A focus on ensuring class diversity in a workplace has advantages beyond just helping to ensure merit-based social mobility. It also opens the firm to new untapped sources of talent, lateral thinking and diversity of thought that can make the firm much stronger as a whole.
Indeed, several innovative companies and government departments are finding that selection based on grades or university degrees does not accurately predict success or level of contribution in the organisation.
An interesting case of how this can benefit a firm occurred with a content marketing candidate we placed at an active asset manager in the City. The firm runs high conviction concentrated actively managed equity, bond and multi-asset portfolios across all geographies. Its clients rely on it for timely and prescient commentary on those portfolios and the markets in which they invest.
We placed a highly talented candidate in the firm in 2016 in the lead-up to the Brexit referendum. She came from a rural agriculture worker family who had earned her way to a university education in economic history, based purely on merit. She went to what she describes as a “third-rate obscure university” where she earned a first class degree.
Her excellent ability to analyse data, alongside her exposure to different perspectives and opinions than her peers, meant that she believed the referendum had a good chance of passing. She convinced her bosses and, despite scepticism, convinced the firm to be prepared to communicate with clients and the press in the event of a ‘yes’ vote. As a result, it was easily one of the first asset managers to comment, reassuring its investors that the firm had prepared portfolios to help mitigate the potential risks.
This is just one example of how diversity of thought can have substantial, real-world financial benefits to hiring firms.
What can we do?
A good place to start for HR and recruitment professionals might be the CIPD publication called ‘Social Mobility – Top Tips for HR Professionals’. It’s packed with guidance and tools for HR professionals of all types, from how to measure socioeconomic backgrounds in a workforce, to ideas on helping staff from less traditional economic backgrounds to progress their careers. When speaking to both clients and candidates, we’ve also uncovered some ideas of our own.
As we all know, CVs matter and provide a wealth of clues that can trigger biases in hiring managers. This may result in missing out on a talented candidate who could make a real contribution to the firm. Some of our more adventurous clients are removing the candidates’ names, addresses, school and university names and even grades from the CV before asking hiring managers to pick a short list.
Manager training also has a place, with HR policies and training in place that informs hiring managers about the benefits to the firm of hiring a diverse set of perspectives. Even the most gender and ethnically diverse company may fall foul of ‘groupthink’ if most of the senior people in the firm have similar degrees from similar elite universities. Line manager training that focuses on ensuring that candidates are assessed on ability and potential, rather than background, might help.
Some truly innovative firms and organisations from outside finance could be showing the way. Some are scrapping formal qualification requirements altogether. Organisations like Nestle, Grant Thornton and the Ministry of Justice are finding that strengths and potential based selection for new young entrants into the firm are more predictive of success than grades or university.
Some larger UK investment management firms, such as LGIM, are taking notice as well. It has formed a socio-economic mobility committee specifically to reach more candidates with non-traditional backgrounds. We’re hearing about this more and more among our investment management clients and it looks like the beginning of a powerful trend.
Share your stories about social mobility.
One of the CIPD guidelines is to work with “recruitment agencies committed to improving social mobility”. We couldn’t agree more! Tell us what you think. Are you a candidate who would like some help advancing your career? Are you a hiring manager who would like to hire from a more diverse economic range of candidates? If so, please get in touch.
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