Unveiling the Hidden Barriers to Socioeconomic Diversity in the Workplace
When we think about diversity in the workplace, what often comes to mind is gender or race. What a lot of us tend to forget is socioeconomic diversity. Socioeconomic diversity refers specifically to diversity in an individual’s financial status and educational background, over which they have little control. This often prevents young adults who are trying to enter the job market and even individuals in senior positions achieve similar progress to those who had a more privileged background. Studies have shown that in the financial and professional services sector, employees from lower socioeconomic backgrounds progress 25% slower than their peers and earn up to £17,500 less.
In recent times, companies have made significant progress in diversifying their organisations by increasing racial and gender diversity, but why is socioeconomic diversity often overlooked when it comes to having a more diversified workforce?
What leads to a lack of socioeconomic diversity in the workplace?
Let’s begin by discussing why there is a lack of socioeconomic diversity in the workplace. It stems primarily from the inequality of opportunity that an individual is subject to throughout their academic and professional life.
From a young age, a child from a lower socioeconomic status (SES) receives fewer opportunities than their privileged peers. For example, limited access to career education and lack of mentorship. This means that from the very beginning, individuals from lower SES are often behind their more privileged counterparts. According to Inclusive Employers, children from low SES are estimated to be an average of nine months behind children from more wealthy backgrounds in terms of learning development, by the age of three.
Once in the workforce, individuals from higher SES have access to wider networks established from school, university, or even through family and friends. This can open job opportunities from the hidden job market, for instance. The hidden job market refers to jobs that employers choose not to advertise and are not found on company websites or recruitment platforms. In fact, more than 60% of job openings are not officially posted online, according to the UK Careers Fair. Therefore, individuals from higher SES are more likely to advance into senior positions (as they have access to wider connections) while those from a lower SES will lag behind.
Unfortunately, this cycle has existed for a long time, but why?
Social mobility is the main cause of a lack of socioeconomic diversity. It prevents an individual from breaking out of the cycle and hinders them from making similar progress as those from a higher SES. The Social Mobility Commission defines social mobility as “the link between a person’s occupation or income and the occupation or income of their parents”. When a society has low social mobility, individuals from lower socioeconomic backgrounds have fewer opportunities to achieve higher social and economic status. According to a study by KPMG,
“The UK has low income mobility compared with other developed countries, making it harder to climb the income ladder if you are from a poorer background.”
Policy discussions often emphasise education to equalise opportunities, but attention should also be given to work environments.
Despite having lower academic achievements, students from higher SES are frequently hired over those from lower socioeconomic backgrounds with higher academic success. This is due to employers and their preconceived notions about individuals from less privileged backgrounds. Employers may believe that individuals from lower socioeconomic backgrounds are less dedicated to their jobs compared to those from higher SES. However, this belief ignores the reality that many individuals from lower SES are motivated to improve their circumstances and can therefore be very committed and hardworking employees. Employers may also believe these individuals are content with their current roles and lack the ambition or desire to pursue growth opportunities. This stereotype overlooks the potential barriers these employees might face such as limited access to resources, or lack of mentorship. Employers may also harbour biases that individuals from lower socioeconomic backgrounds are less educated or intelligent than their higher SES counterparts. These assumptions result in unfair hiring practices.
Why is socioeconomic diversity important?
Like other forms of diversity, socioeconomic diversity encourages creativity, innovation, and a wider array of insights that can help business success. Research shows that a workforce that lacks diversity may struggle to understand and empathise with people from various socioeconomic backgrounds, potentially leading to feelings of exclusion and discrimination among those individuals. They may also find it challenging to grasp the needs and perspectives of clients and customers from various backgrounds.
Having a range of socioeconomic backgrounds in the workplace can benefit an organisation by introducing a variety of ideas and experiences, leading to more innovative problem-solving and decision-making.
How do we create a more socioeconomically diverse workplace?
A company can implement hiring processes that ensure all candidates are evaluated fairly and reduce biases in recruitment. An example of a socio-economic bias is speech patterns/accents, where recruiters may unconsciously favour those with specific accents. Using standardised assessment tools, conducting blind CV reviews, and ensuring interview panels are diverse to minimise unconscious biases are ways fairer hiring processes can be achieved.
Once hired, these employees need to feel supported and valued within the organisation. Organisations must actively work to reduce stereotypes and biases that can negatively impact the workplace. This involves regular training on diversity, equity, and inclusion (DEI) topics.
Another way an organisation can create a more socioeconomically diverse workforce is through providing apprenticeships. Unlike traditional academic settings, where access to higher education is often hindered by financial and resource limitations, apprenticeships can provide an alternative pathway to access education, especially for those from low SES. According to a 2015 CIPD survey, employers view apprenticeships as an ideal way to prepare young people for work, with 55% of large employers offering such programmes. By providing apprenticeship opportunities at a career entry point, it can allow an organisation to reach a more diverse range of candidates. A study conducted by the UK government found that “learners from disadvantaged socio-economic backgrounds benefit more from apprenticeships than those from non-disadvantaged backgrounds”. Therefore, apprenticeships must be targeted at individuals from lower SES to effectively promote socioeconomic diversity in the workplace and reduce the gap in career progression between low SES and high SES individuals.
One example of an organisation that is taking steps to improve socioeconomic diversity is one of the big four accounting firms, EY. They introduced a 12 month programme for Year 12 students called ‘Smart Futures’. It includes mentoring, employability skills training and paid work experience for a variety of sectors. This programme is exclusive to individuals who meet a certain criteria such as being eligible for free school meals, eligible for a college bursary, and attending a state school. The programme aims to provide individuals from lower SES access to those necessary employable skills whilst also being paid. Jacob Ayenamayi, now a consultant at EY, completed the Smart Futures programme and said he had really benefited from having a mentor:
‘[he] gave me the confidence to think that I could make it to the same level that he [his mentor] did because I noticed that he did have the same sort of path.’
EY provides the networking opportunities that individuals from lower SES often do not have access to and provides them with the skills that can help them secure a job later.
Implementing fair hiring processes is essential for organisations seeking to build a diverse and inclusive workforce. By focusing on candidates’ skills and reducing biases related to socio-economic factors, companies can create a more equitable recruitment process. Providing apprenticeships and programmes for individuals from lower SES further enhances socio-economic diversity by removing barriers to entry and progression. By focusing on these areas, organisations can create a more inclusive and equitable work environment that attracts a diverse workforce and ensures all employees can thrive and contribute to the organisation’s success.
Written by:
Sources:
- Connectr. (n.d.). Socio-Economic Diversity — the DE&I Secret. [online] Available at: https://www.connectr.com/early-engagement/resources/insights/articles/socio-economic-diversity-taskforce
- Ali, Z. (2021). Why social mobility is often overlooked. [online] Inclusive Employers. Available at: https://www.inclusiveemployers.co.uk/blog/why-social-mobility-is-often-overlooked
- GOV.UK. (n.d.). About us. [online] Available at: https://www.gov.uk/government/organisations/social-mobility-commission/about#:~:text=Street%20Press%20Office.-.
- KPMG. (2023). Social mobility — KPMG United Kingdom. [online] Available at: https://kpmg.com/uk/en/home/about/our-impact/our-people/inclusion--diversity-and-equity/social-mobility.html.
- easyllama.com. (n.d.). Socioeconomic Diversity in the workplace. [online] Available at: https://www.easyllama.com/chapter/socioeconomic-diversity-in-the-workplace.
- Diversity in Tech 2021 Report. (n.d.). Available at: https://www.techtalentcharter.co.uk/hubfs/2021%20Diversity%20in%20Tech%20Report/PDF%20downloadable%20version/Diversity%20in%20Tech%202021%20Report.pdf.
- Breaking the Class Barrier: Recommendations for Building a More Socio-Economically Diverse Financial and Professional Services Sector. (2022). Available at: https://www.cityoflondon.gov.uk/assets/Business/breaking-the-class-barrier-december-2022.pdf.
- lifetimetraining.co.uk. (n.d.). Supporting Social Mobility Through Apprenticeships | Lifetime. [online] Available at: https://lifetimetraining.co.uk/insights/supporting-social-mobility-through-apprenticeships/ [Accessed 27 Jun. 2024].
- www.ey.com. (n.d.). How understanding social mobility can bring us together. [online] Available at: https://www.ey.com/en_uk/podcasts/strong-when-we-belong/how-understanding-social-mobility-can-bring-us-together [Accessed 27 Jun. 2024].