New research shows that greater social mobility in the workplace could improve productivity and the economy as a whole. Sarah Atkinson explains that it’s time for employers and HR professionals to do something about this.
Few would dispute that PS19 billion could give our economy the boost it desperately needs. According to a recent study by Demos and Co-op, the UK’s GDP is estimated to increase annually as a result of promoting social mobility at work. HR professionals need to take note: Many of the suggested interventions are right at their fingertips, from fostering a more inclusive workplace culture to encouraging more equitable hiring and promotions.
It’s well established that economies with higher social mobility have higher productivity. This is due to better match between jobs and people in society, and to fewer barriers for realizing potential. Accenture’s research shows that businesses who focus on social mobility enjoy profits 1.4 times greater than their competitors.
There is a growing expectation among consumers that businesses will be the drivers of social change. Removing barriers to entry can also bring benefits such as a larger talent pool, more diversity in thought and better customer understanding.
Data and guidance
It is not surprising that more and more companies are taking into account socioeconomic disadvantages in their hiring practices, career progression, and workplace culture. The Social Mobility Employer Index, the world’s leading authority in workplace social mobility is where the leaders of the field benchmark themselves and are advised how to improve. The top employers of this year, law firm Browne Jacobson as well as professional services giant PwC, are showing what’s possible when you use the Index’s expert advice. The 150 employers who entered the Index, including Co-op and Amazon, Aviva, and Santander, are demonstrating what is possible with the help of the expert guidance.
The collection of socioeconomic data has become the norm. Employers recognize the importance of expanding their talent pools and increasing access for underrepresented group, particularly at a time when skills shortages are affecting businesses and social scrutiny is on them. One question on the job of the household’s main earner when someone was 14 is enough to measure diversity. It can be easily added to surveys. To get a better picture, you can ask extra questions such as the type of school they attended, if they were eligible for free meals at school and if their parent went to university. Nearly three quarters of Index participants now collect three to four socioeconomic data for their employees and report high response rates on questionnaires. The Solicitors Regulation Authority made the collection and reporting of this data mandatory for all regulated law firms. We hope other regulators in the sector will follow suit.
Publication gaps
Many employers go further by measuring and publicizing their socioeconomic pay gap. Over one-sixth (26) of the 150 employers that entered the Index now collect this data. And 19 employers, such as Co-op PwC, Teach First, publish it along with their gender pay gap. They are showing leadership by holding themselves accountable, and paving the way for other companies to follow.
In addition, this year saw improvements in the tech and creative industries. These sectors are not representative of their customer base. Only 26% of creative industry workers come from low socioeconomic backgrounds compared to 39% of UK working population. This can even drop below 8% in some areas like film, TV and radio. However, only 9% of tech workers come from these backgrounds despite its huge resources and growing influence across society. It was encouraging to see the tech sector increase its entrants by 60% and the creative industry increase theirs by 43%. These industries follow other industries who have taken action to combat elitism, like finance and law. Next year, we look forward to welcoming employers from these industries.
The UK position
Despite these positive developments, barriers for people with lower socioeconomic backgrounds still remain. Social mobility in the UK is lower than that of almost all major European economies. Our research shows that professionals with working-class backgrounds earn an average PS6,287 (or 12%) less than their more privileged colleagues.
The new government is right to identify improving opportunities for this group as a key factor for growth. They have committed to “ensure there is no limit on ambitions for young people in Britain based on class”. They are taking action with their plans to implement the socioeconomic duty under the Equality Act. This will require public bodies to address inequalities resulting from socioeconomic status. It is expected that this will have a knock-on effect on the private sector. This includes organisations who do business with the government. Those who are already addressing socioeconomic barriers may gain a competitive advantage. In order to prepare for the new Equality (Race and Disability) Bill which will include ethnicity and disability pay gaps reporting, it is worth including socioeconomic information in diversity surveys and action planning.
Now is the perfect time to start a social mobility program for organizations without one. Signing up for the Index and collecting data within their organisation are excellent first steps. Most of the people who entered have made significant changes. They’ve paid for travel expenses for work experience. They’ve restricted some internships to those with lower socioeconomic backgrounds. Now that they have raised the bar, it is time for employers to surpass it.
