The lack of social mobility in the UK’s financial and professional services sector poses a major threat to Britain’s “competitiveness and productivity,” the head of the Law Society has warned.
The Law Society president’s warning comes after a new report from the City of London Socio-Economic Diversity Taskforce showed those from working class backgrounds are significantly underrepresented in the UK’s professional services industry – particularly at the most senior levels.
All in all, more than two-thirds (64 per cent) of senior leaders in the UK’s major law firms, accountnacy firms, and financial services companies come from professional family backgrounds, compared to just 37 per cent of the country’s workforce, the report says.
Meanwhile, just 21 per cent of senior professional services industry leaders come from families in which their highest earning parent worked in a manual job, compared to 39 per cent of the UK’s workforce.
More than a quarter (26 per cent) of senior employees working in the UK’s professional services sector went to fee paying schools compared to just 7.5 per cent of the UK’s population, the research shows.
Employees from working class backgrounds were also twice as likely than those from professional backgrounds to say their family background has negatively impacted their career, the survey of 9,000 employees working 49 major companies shows.
The report says the lack of diversity in the financial and professional services sector threatens the UK’s productivity and competitiveness, whilst at same time reinforcing the country’s existing inequalities.
The paper highlights research showing firms that focus on social mobility have 1.4 times higher profits than their competitors, due to the positive impacts social mobility initiatives have on widening companies’ talent pools.
Law Society president I. Stephanie Boyce, said: “The report confirms what many already suspected, that socio-economic diversity and inclusion in financial and professional services is still severely lacking. This threatens the competitiveness and productivity of the UK.”
The report comes after the UK’s Financial Conduct Authority (FCA) last year said it expects to take an increasingly interventionist stance in regulating “diversity and inclusion” in the financial services sector.