Workplace index will help track progress
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
An intense debate is under way on the underlying causes of rising populism. In simple terms, do its roots lie in the fears of the “left-behinds” for their economic future or in xenophobia?
Alan Milburn, chairman of the UK’s government-sponsored Social Mobility Commission, leans towards the first explanation.
He says that policymakers everywhere have been slow to respond to the worries of voters who feel they are losing out to a privileged elite.
The commission has just published its latest State of the Nation assessment. “In our previous annual reports, we warned that without a dramatic change in approach to how we tackle issues of poverty and mobility, Britain would become a permanently divided nation,” he says.
The commission’s Social Mobility Index, published earlier this year, separates England into 65 areas, with the lowest 20 — which have the poorest education and employment prospects — ranked as social mobility “coldspots”. Of these, only three areas voted to remain in the EU.
Research in the report shows that the UK remains a “deeply elitist nation” where the chances of entry to a top profession are strongly correlated with social background.
When people from less privileged backgrounds do join the professions, they hit a “class ceiling”, according to Sam Friedman, an assistant professor at London School of Economics, who is researching the subject for the commission. “Our research demonstrates that while people from working-class backgrounds may get in, they don’t necessarily get on,” says Prof Friedman, adding that on average they earn 17 per cent less than their professional colleagues from privileged backgrounds.
“Even when we compare those with the same level of education, experience and a host of other measures, those from working-class backgrounds still earn on average 7 per cent less,” he says.
This is one reason why the UK commission in October launched the Social Mobility Employer Index, which enables big companies to measure their progress against their peers. The index will publish its first ranking of companies’ performance next year.
“I don’t know of any other countries who have tried to construct a similar index, so I think the UK is leading the way with this,” says Prof Friedman.
Lack of mobility is not unique to the UK. Two Italian economists found this year that the richest families in Florence, Italy, in 1427 are still the richest today. Another paper published by academics in the US suggests that mobility when measured across several generations has been overestimated.
The lack of social mobility in the workplace means employers miss out on the skills and insights of those from less advantaged backgrounds. However, there is evidence that if employers act to address inequities they can see immediate effects.
In 2015, PwC, the professional services firm, removed Ucas scores (a standardised school-leaving exam score used for university entry in the UK) as entry criteria for the majority of its graduate roles. It believes it is the first big employer in the UK to do so.
“We know that a strong correlation exists in the UK between social class and school academic performance, and recognised that by previously placing too much emphasis on Ucas scores . . . we were potentially missing out on talented young people,” says Richard Irwin, PwC’s head of student recruitment. He says that in the 2015 intake — the first since removing the university entrance score — 71 per cent had attended state school, rather than an independent or fee-paying school, up from 66 per cent the previous year.
When the UK government announced its social mobility strategy in 2011, it called for companies to sign up to a Social Mobility Business Compact. The signatories pledged to adopt certain measures that would improve access for those from less privileged backgrounds. These included dropping names and schools attended from job application forms, and paying interns.
More than 190 companies signed up and two years ago a “champion tier” was introduced to develop examples for other companies to emulate.
Among them is law firm Baker & McKenzie, which has been looking at how to improve social mobility since before the financial crisis, says Sarah Gregory, its inclusion and diversity partner.
Some of its broader measures were adopted too recently to allow for evidence of their effectiveness, she says. However, it instituted a black, Asian and minority ethnic network 10 years ago: at that time 4 per cent of trainees were from such backgrounds, but they accounted for 36 per cent of the firm’s latest intake.
“Employers have a key role in opening up opportunities for people not just to have a job but to progress in a career,” says Mr Milburn.
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