KPMG recently partnered with social mobility experts, the Bridge Group, to carry out a “progression gap” analysis which examined the career paths of more than 16,500 partners and employees at the company over a five-year period. The analysis concluded that of all the diversity characteristics, class and socio-economic background (measured by parental occupation) have the largest impact on a person’s career progression.
The analysis looked at the average time it takes for someone to be promoted, along with diversity characteristics such as gender, ethnicity, disability, sexual orientation and socio-economic background. It found that those from lower socio-economic backgrounds took on average 19% longer to progress to the next grade compared to their counterparts. The results also identified a “hierarchy of progression”, with those from lower socio-economic backgrounds who were also female and/or from ethnic minority having the slowest rate of progression. Despite this, the report also showed that colleagues who are women or are from an ethnic minority background are progressing faster than the average rate of progression.
So, what steps can businesses take in response to such findings? KPMG has committed to three goals:
- reviewing its approach to work allocation;
- enhancing data collection and analysis using new reporting technology; and
- tackling the bottleneck of talent to senior roles through a new promotion readiness programme.
The report, one of the biggest “progression gap” analyses ever published by a business, highlights the importance of having an effective diversity and inclusion policy which could help mitigate these negative impacts. Nick Miller, chief executive of the Bridge Group, stated that “there remains a proven link between someone’s social background and their educational and employment outcomes, and social inequality is estimated to cost the UK £39 billion per year”.
Many businesses have committed to social mobility initiatives as part of their diversity and inclusion framework. Santander has recently removed its requirement for a 2:1 degree for its graduate scheme to widen the social-economic background of recruits, stating that it believes performance at university is not the only indicator of success and that potential can be found anywhere. However, as acknowledged in KPMG’s Mind the Gap report, a focus on “getting on” is as important as “getting in” if the progression gap is to be closed effectively.
The FCA has also recently published findings following its review of the current state of diversity and inclusion approaches in regulated firms. The review measured multiple factors such as commitment, use of data, specific initiatives, and governance and accountability. It suggests that use of data was important to inform a firm’s strategy and can be used to identify the best remedies or track which remedies were most effective. From the firms interviewed, those with better diversity data had a better understanding of their position and were better placed to decide which actions to take. It also suggests that effectiveness would improve with a developed strategy which had clear focus and set targets specific for each firm’s circumstances. Similar to KPMG’s analysis, the review acknowledged that firms “generally weren’t considering whether there were compounded issues for people belonging to more than one minority group that could lead to disadvantages (‘intersectionality’).” This is an area that businesses will need to address as they evolve their diversity and inclusion efforts going forward.
If you would like to discuss the contents of this article or would like assistance with tailoring a diversity and inclusion policy to the needs of your business, please contact a member of our team.