Bridging the gap: The intersection of ESG and social mobility

Becky Mackarel, Adam Gates and Richard Plaistowe from our Financial Services and Professional Services practice hosted a webinar exploring how incorporating individuals from low socio-economic backgrounds into your strategy can enhance ESG initiatives.

In the workplace and more broadly across society, many social mobility issues remain unresolved. There is still a big gap to be bridged, and companies in the Financial Services and Professional Services sectors can play a part in facilitating change for the better.

We hosted a webinar discussion on how incorporating individuals from low socio-economic backgrounds into your strategy can enhance ESG initiatives – and how specific aspects of an ESG strategy can have a positive impact on societal social mobility. In the midst of the cost of living crisis, opening doors for individuals from less advantaged backgrounds is more pertinent than ever. And of course it is clearly the right thing to do.

We were very fortunate to have a trio of expert panellists from the Ladder Group. Dan Ball founded the future talent and social mobility group in 2021 to help HR leaders in forward thinking organisations achieve their objectives through end-to-end career solutions, social value delivery and inclusion advisory. The Ladder Group consists of two operating companies and a fully funded national social mobility charity and now has a team of 35 people across London, New York and Mumbai.

Jody Clark heads up commercial strategy at the Ladder Group, spearheading the adoption of social mobility as a business priority in the corporate landscape. His role entails understanding the priorities and ambitions of organisations and helping align those with practical strategies that move the dial on improving social mobility, both within their workforce and also in society more broadly. Meanwhile, Leah Jones is the Director of the Early Careers Foundation, Ladder Group’s in-house, fully funded social mobility charity that works with young people from low-income backgrounds and underserved communities across the UK, helping upskill them while they are still in school so that they can enter the workforce successfully.

We began by exploring a best practice definition when looking at social mobility from a societal level and in the workplace. A good place to start given, as Leah put it, “social mobility is a lot more nuanced in terms of how we define it compared to most protected characteristics” and many different threads are woven into it.

Definitions can become a bit muddled, Leah explained, because while the phrase social mobility in the workplace is not technically correct – “you can't be socially mobile in work” – it can be unpicked and used as shorthand for how you can help people from lower and intermediate socioeconomic backgrounds apply for, get, and then succeed in roles in your business.

How then is supporting social mobility in the workplace beneficial for businesses? Jody turned this question on its head, observing that those organisations not promoting socioeconomic equity unnecessarily restrict the talent pool from which they fish.

Moreover, due to the widespread intersectionality of social mobility across different underrepresented groups within workforces, focusing on social mobility work often provides employers with an opportunity, in tandem, to execute on DEI objectives. “That's an absolutely critical point around engaging in social mobility,” said Jody. “It doesn't stand on an island. By doing so, you are increasing the representation of all sorts of underrepresented groups in the workforce. There are enormous datasets to show that investment in an equitable environment has enormous payoffs for employee retention, employee engagement and performance, particularly those who have undergone training programmes within employment.”

A lot of financial services companies are waking up to the fact that there is a misalignment between their market-facing branding and how they present themselves to prospective employees. Jody cited NatWest’s employee portal as a good example of a business projecting its brand consistently and avoiding a disconnect between the sort of clientele it is looking to appeal to and the kind of talent it wants to attract.

Another important consideration is that compliance and legal standards are on the horizon. “In the very near future, there will be a legal imperative,” said Jody. “Conversations around setting socioeconomic background as a protected characteristic by the Equalities Act are advancing at an incredibly rapid rate. Most experts in the space expect that sometime in the next decade we will see that enshrined in UK law. While for now it seems like a nice to have for organisations, it won't be that way forever. By acting now, organisations are helping themselves get ahead of that curve.”

Retention is a major issue and cannot be left to luck. Take a common situation where a company makes some entry level hires including, for example, some candidates from low-income backgrounds and some privately-educated candidates from Russell Group universities. Often there is little apparent difference in their behaviours and capabilities for that role, but, Dan observed, “a few steps up the career ladder, the gaps in their behavioural capabilities, the way in which they can operate and present at work become clearer”.

The solution? “Support the [less advantaged] individuals who join at the entry level to develop the behaviours and capabilities and characteristics they will need later on in their career, because they are less likely to have those as pre-existing capabilities.”

There is compelling evidence regarding the need for support and open-mindedness. A recent FCA consultation paper on DEI in the financial sector quoted Bridge research indicating that employees from lower socio-economic backgrounds take 25% longer to progress, despite no evidence of poorer performance.

Companies prepared to take a longer-term view can also make a difference through societal interventions. For instance, the Ladder Group is developing a programme for a major multinational private equity fund which wants to meet ESG goals in this way but typically hires people who already have five years’ corporate finance experience or who come from a top management consultancy.

“We're building them a mentoring programme, setting up school partnerships, and launching a kind of work experience spring week mini-internship for 16–18-year-olds,” explained Dan. “While they can't necessarily hire in a socioeconomically diverse way right now, they can help widen the talent pool from which they will eventually be recruiting.”

Overall, your business should remain agile and open to a greater variety of concepts than would have figured in traditional recruitment channels, allowing you to pick from a broader pool than your competitors. This means bridging gaps that are not only corporate- or discipline-specific, but also around cultural capital.

This is a key dimension that is particularly overlooked. Developing strategies or focused interventions necessitates gathering the authentic perspectives and opinions of those you intend to engage with. Otherwise, there is a risk of things going wrong.

“We spoke to an organisation that included as part of a community outreach programme, shadowing on a client lunch,” said Jody. “One of the attendees on that programme from a low socioeconomic background said that they were absolutely unable to present their authentic selves because they had never been to a restaurant before. What seemed like a fantastic professional development opportunity, actually, given the context, was particularly inappropriate for that young person within that setting, or at least that was their experience of it.”

Companies need to find more holistic ways of approaching social mobility challenges and when engaging with individuals they must ensure they do so with empathy. Yet at the same time social mobility programmes must correlate with commercial value if you are to make a true impact and achieve a level of permanence. For further information on this topic and others, please do get in touch with our Financial Services and Professional Services team.