IT seems that Nick Clegg specialises in making unsubstantiated statements. He said yesterday that “who you know is increasingly becoming more important that what you know” when it comes to securing a job in the City as well as in politics, the media and other professions. The key phrase here is “becoming increasingly important.”
We all know that it helps to know people to get a job. Clegg may be right that politics has become even less meritocratic; the coalition, for instance, is now dominated by a tiny elite from similar backgrounds. Chunks of the media are no better. But the deputy prime minister isn’t right that this is getting worse in the City and in business: while recruitment practices still leave much to be desired in some respects, they are getting more meritocratic, not less.
Headhunters are frequently used. Big firms have professionalised their graduate recruitment. Crucially, graduates as well as executives are now recruited from all over the world. The talent pool has gone global. This has all but eradicated the grip of the British middle class, especially in finance. US law firms are only interested in results, as are the multinationals that dominate the economy. Old British school ties mean nothing to them.
A few dinosaur firms remain, where family or friendships are the main way in, including some property firms, traditional law firms, a few minor PR agencies and the like. But for most companies, especially successful ones, the old days when the sons of partners were automatically hired after university – and in turn became partners – are long since over. Of course, there is still plenty of nepotism, as there has always been. Clegg could justifiably have said that there are still too many second rate people in positions of power – or that there is too much cronyism at non-exec director level – or even that the relationship between fund managers and top execs is too cosy. But his failure to understand the modern, globalised City destroys his argument.
Take Barclays Capital, the UK’s biggest investment bank. Its executive committee counts 11 people – just two are British. The CEOs of the Prudential and the London Stock Exchange, once bastions of the old ruling class, are French. Among top women, the trend is even more pronounced. Of the five female FTSE 100 CEOs in 2011, just two are British and three American (and if Santander UK floats, the sixth would be Spanish). Of the 23 women appointed to directorships of FTSE 100 firms in 2009, 14 had not previously held such posts – yet just one of these was a UK citizen.
Clegg is also wrong about something else. The Social Market Foundation has actually done some real research on internships. Remarkably, its polls reveal that 57 per cent of young people from a low socio-economic group report not being put off from a career that requires unpaid work to get into, compared to 59 per cent from a high socio-economic group. There is no real difference. The issue is not free internships, it is that the poor are not aware of opportunities or don’t know how to access them.
Britain is not a closed society. Our tragic, urgent problem is that those with inadequate education and skills stand little hope in today’s ultra-competitive world. Clegg should stop moralising about things he doesn’t understand and focus on improving government policies.
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