Things need to change in the UK. How can we live in a place where people are paid less based on their background?
Unfortunately, recent research by the Social Mobility Foundation has revealed that a ‘class pay gap’ persists in workplaces across the country. Professionals from working-class backgrounds are found to be earning £6,291 (12%) less annually than their more privileged counterparts in the same occupation, reflecting a stark inequality that permeates the professional landscape. The Social Mobility Commission’s State of the Nation 2023 report demonstrates how the pay gap further widens for those of marginalised genders, races, ethnicities and disabilities, eg. the class pay gap is compounded by the gender pay gap, seeing women from working-class backgrounds earn 16% less annually than their professional equals. It’s a sorry state of affairs.
The class pay gap is caused by a multitude of factors, but is perhaps exacerbated most by the lack of attention placed on it. For example, many understand the concept of the gender pay gap, and conversations surrounding the unfair opportunities gap for those of different races, ethnicities and disabilities. Yet it feels like few are speaking about class discrimination and how to improve social mobility.
Understanding Social Mobility
Social mobility is a concept gauging the extent to which individuals can change their socioeconomic circumstances over a lifetime and across generations. Unfortunately, it reveals a disheartening reality that your access to opportunity more often than not depends on your parents, your class, your education, and your place of upbringing.
Although perhaps not familiar with the term ‘social mobility’, many young people unknowingly are affected by it. For instance, 85% of young people believe they must leave their area to succeed, displaying a desire to make an upward move out of the opportunity pool they were born into (Social Mobility Foundation). 85% is a shockingly high statistic, demonstrating an urgent need for comprehensive redistribution, and improvement of educational and job opportunities across the country to enable young people to make different choices. Otherwise, the UK’s talent pool will be left to stagnate.
The Business Imperative for Social Mobility
Supporting social mobility isn’t just socially necessary - it’s commercially important. Businesses cannot afford to overlook the issue of social mobility, and the data supports this assertion.
McKinsey's Diversity Wins report indicates a correlation between diversity and company performance. Companies with greater gender and ethnic diversity on executive teams are more likely to achieve above-average profits. The London Business School's findings reinforce this, showing that top-performing companies in Fortune’s ‘100 Best Companies to Work For’ list generate higher stock returns. Largely, this is because widening the talent pool improves customer orientation, employee satisfaction, and decision making which all contribute to a stronger performance. Selecting candidates from a diverse range of backgrounds doesn’t just bring commercial success to large professional firms; SME businesses can also generate opportunity to improve social mobility that could add £39 billion to the UK economy (Hidden talent: the economic benefits of social mobility - Oxera)
Beyond financial motivation, there is a strong moral impetus for social mobility in business. Largely, it’s to keep up with the times. The top businesses in the UK already have social mobility as a priority. Increasingly, businesses with strong environmental, social, and governance (ESG) motivations look at how they can promote diversity, equity, and inclusion as part of their ’S’, or social agenda. While not yet a protected characteristic, socioeconomic diversity merits inclusion alongside other diversity dimensions, particularly when social class is being cited as a common form of discrimination in the workplace. By placing social inclusion at the heart of their strategy, businesses not only improve commercially, but are seen to play a pivotal role in disrupting social mobility hierarchies. In turn, the public is likely to reward businesses which represent their moral interests.
A business which is seen to be forging equitable paths is likely to become consumer choice. After all, since 2020, the UK has experienced economic and societal shocks such as COVID-19 and the rapidly increasing cost of living. This has not only led to a disenfranchised public, but has worsened conditions for candidates, aggravating existing socioeconomic disadvantages and restricting social mobility across the whole business ecosystem impacting employees, candidates, suppliers, customers, and communities.
Challenges and Solutions
Understanding socio-economic diversity is complex. Sample indicators can be used to gauge an individual’s background, such as postcodes during childhood, eligibility for free school meals, first in generation to attend university and parental or caregiver occupation at age 14. Collecting accurate data is challenging, particularly as sharing such personal data can be seen as invasive.
However, there are several practical steps businesses can take without access to data. Examining recruitment practices, engaging with schools to offer meaningful work placements, adopting apprenticeship and paid internship schemes, creating clearer career pathways and reviewing internal processes for unintended exclusion of certain individuals based on their socio-economic background are great places to start.
Engaging with third party experts can be helpful. Zero Gravity can work with you on early career strategies, the Social Mobility Foundation's Employer Index Report provides useful case studies, and the Social Mobility Commission offers a toolkit to help build a social mobility strategy.
Committing to Socio-Economic Diversity: A Win-Win
Embracing socio-economic diversity is not only a moral requirement for a fairer society, but contributes to a thriving economy and enhances a company's performance.
The post-pandemic era provides an opportune moment for businesses to re-evaluate their people management processes, ensuring they create innovative and productive work cultures ready for the future. By addressing the Class Pay Gap and committing to socio-economic diversity, businesses unlock a wealth of untapped talent, driving success in the ever-evolving professional landscape. As the call for inclusive career opportunities grows louder, businesses must lead the way as economic and equitable leaders.