Leading social mobility organisations have called upon UK financial regulators to mandate reporting of employees’ socio-economic backgrounds in a bid to shatter the persistent ‘class ceiling’ within the financial services sector.
The heads of upReach, the Social Mobility Foundation, and Progress Together have penned a compelling letter to the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA). Their message is clear: compulsory reporting of staff members’ socio-economic origins, based on parental occupations, could revolutionise workplace diversity and drive economic growth.
Research indicates that nearly 90 per cent of senior positions in British financial services are held by individuals from privileged backgrounds. The disparity extends to remuneration, with employees from advantaged backgrounds earning £17,500 more annually than their working-class counterparts.
The timing of this initiative appears strategic, with campaigners viewing the prospective Labour government as potentially more receptive to mandatory reporting requirements. This stands in stark contrast to the United States, where diversity initiatives face mounting opposition from conservative quarters.
Progress Together’s data reveals that careers of employees from working-class backgrounds advance 25 per cent more slowly than their privileged peers, despite comparable performance levels. The economic implications are significant, with improved social mobility potentially boosting UK GDP by £19bn and increasing annual tax revenues by £6.8bn.
The regulators’ response remains pending, with final rules expected by mid-2024. The Treasury maintains a watchful stance, while Labour has expressed interest in expanding regulatory focus on socio-economic diversity within financial services.
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