Are your staff too posh?

Just as there seems to be a retreat in some parts of the world away from what appeared to be a wholehearted charge into diversity and inclusion reporting, a group of campaigners is pushing for another level of assessment for those of us in the financial industry – what social class you and your employees are in.

According to a new report in the Financial Times, in a joint letter to the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA), the heads of upReach, the Social Mobility Foundation, and Progress Together called for mandatory reporting on employees’ socio-economic origins, using parental occupation as a benchmark. What that means in layman’s terms, is how well-off were your parents?

The letter, which is due to be delivered today, says: “Growth is at the heart of the new government’s agenda, and it is committed to ‘shattering class ceilings’, recognising the strong link between opportunity and productivity.” The campaigners emphasised that such data is crucial for addressing what they see as entrenched inequities and for driving economic growth.

Unsurprisingly the news has unleashed a torrent of comments on the FT’s site as readers question why someone should be excluded from a job because their parents were too successful. The Labour government’s election earlier this year has raised fears that there may be political backing for greater socio-economic diversity within the City of London. A number of City firms have already been pulling back on their diversity initiatives, cutting back on budgets and staff.

This potential focus on social inclusion comes as a number of US and global companies retreat from diversity and inclusion initiatives amid a backlash from conservative groups emboldened by political changes, including Donald Trump’s presidency. It remains uncertain whether the UK government will back mandatory reporting in the financial sector. A Treasury spokesperson noted they were “looking forward to the next steps” following last year’s regulatory consultation on the issue.

The FCA and PRA have previously suggested voluntary reporting of socio-economic background data, alongside existing mandatory disclosures on characteristics like age, ethnicity, gender, and religion. That consultation closed a year ago, with final rules expected mid-2025.

About one-third of financial services workers already provide anonymised socio-economic data to Progress Together. The organisation claims that employees from working-class families experience career progression rates 25% slower than their more privileged counterparts, despite what the group says is comparable performance levels.

According to the Bridge Group, nearly 90% of senior financial services employees in the UK come from higher socio-economic backgrounds. Furthermore, workers from privileged backgrounds earn an average of £17,500 more annually than colleagues from working-class families, as highlighted in The Class Ceiling: Why It Pays to Be Privileged by Sam Friedman and Daniel Laurison.

Proponents claim that advancing social mobility could deliver significant economic benefits. A recent Demos and Co-operative Group report estimated that improving socio-economic inclusion in the workforce could boost GDP by £19 billion, generate £6.8 billion in annual tax revenue, and increase company profits by £1.8 billion annually.

Law firms in the UK have already been required to report the socio-economic backgrounds of their employees for over a decade, providing a potential model for the financial sector. The Solicitors Regulation Authority (SRA) mandates that all regulated firms collect, report, and publish data about the diversity of their workforce every two years.