HR · 30 November 2020

Why UK companies are failing to deliver diversity promise

Socioeconomic diversity

In its latest?reviewof corporate governance, the Financial Reporting Company said that UK listed companies are failing to live up to their diversity promise and treating reporting on their culture and strategy as a “box-ticking exercise.”?

This comes after findings from the City of London Corporation?publishedrecently revealed that nine in ten senior roles in financial services are held by the wealthiest third of households.

Joseph Lappin, head of employment at law firm?Stewarts, has commented on the latest findings. He says:

we think there are two key reasons for the majority of senior roles in financial services being held by those from wealthier households, ” he said, citing two main areas.

Unconscious bias

The majority of decision makers at finance organisations, who make key recruitment decisions, are themselves likely to be in senior roles and from wealthier households. Opinions formed about candidates based on first impressions can influence recruitment decisions.

Senior managers are more likely to prefer a candidate who looks and talks like them. As a result, candidates from poorer backgrounds, lose out.

Socio-economic diversity

Diversity, or the lack of it, means that those from the wealthiest households are more likely to attend a good school, often an independent school, and attend a good university. They are also more likely to have friends and family working in financial services. As a result, they are more likely to meet the recruitment criteria for senior finance roles, have contacts at employers, and be more likely to apply for vacancies than those from poorer backgrounds.

Lip service?

Over the past few years many employers, in particular big corporates, have been taking steps to improve socio-economic diversity in the workforce. Unconscious bias training has been rolled out for senior managers; recruitment targets for those from BAME backgrounds (who are statistically less likely to come from wealthier households) have been set at big institutions, recruitment processes often involve reviewing blind? CVs; and more opportunities are being opened for paid apprenticeships.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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