UK banks given new targets to boost working class senior hires

New targets have been set for the UK financial services sector to have at least half of senior executives come from working-class or lower socio-economic backgrounds by 2030.

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LONDON – The UK financial services industry needs to do more to break the ‘class’ ceiling, according to a government-backed taskforce, with new targets requiring at least half of senior leaders to come from working-class or lower socio-economic backgrounds by 2030.

The City of London Corporation, the governing body that oversees Britain’s financial industry, said on Wednesday that the moves were important not only to improve diversity in boardrooms but also to spur growth in the sector.

In a new report, the governing body’s “socio-economic diversity task force”, launched in 2020, has outlined a way forward for companies to ensure that emphasis and background do not dictate progress in the workplace.

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“We must break the ceiling of “class”. removing unfair barriers to progress is not only the right thing to do, but it will also enable companies to increase productivity, retention and innovation,” said taskforce chair Catherine McGuinness.

Lack of diversity

According to the study, around half of all financial services employees in the UK currently come from a non-professional background, defined as working class and middle class. However, they tend to progress 25% slower than their peers.

Only a third of those employees (36%) succeed in climbing the ladder to senior levels, the report said. Meanwhile, employees from non-professional backgrounds tend to earn up to £17,500 ($20,890) less per year, with zero correlation to their professional performance.

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The report also says the UK has one of the poorest social mobility rates in the developed world, meaning “those who are already economically advantaged tend to stay at the top”.

For too long, personal growth has been limited by people’s socioeconomic backgrounds.

Andy Haldane

Co-Chair of the City of London Corporation’s Socio-Economic Diversity Working Group

Under the targets, banks and other financial and professional services companies are expected to collect data on the socio-economic backgrounds of their employees to provide an accurate baseline as they work towards the 2030 targets.

The task force, which worked on the report with more than 100 industry representatives, will review the sector targets for 2025 to ensure they are realistic.

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The report did not specify what consequences companies could face for not meeting the thresholds.

The goals coincide with the launch of a separate task force report outlining the business benefits of increasing socio-economic diversity. As well as boosting productivity and innovation, socio-economic diversity can also boost company profits by 1.4 times, the report says.

“We cannot grow as a country until people grow. For too long, personal growth has been limited by people’s socioeconomic background. Today’s proposals signal a break from the past,” Socio-Economic Diversity Task Force Co-Chair Andy Haldane. strength, said.

It comes as the UK’s financial services sector struggles to reassert its position as a global financial center following a series of post-Brexit company moves and a drop in international ratings.

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