Louise Ashley
The City of London makes an important contribution to the UK economy, contributing £49.2 billion to national income in 2016.[i]
Over the past 40 years, it has experienced multiple transitions including deregulation in the 1980s and regulatory adjustments following the financial crisis of 2008.
Yet while characterised by constant flux in some respects, in others it is more accurately defined by stasis and the status quo, especially in relation to its demographic composition which, over the same period, has hardly changed at all.
Focusing on educational background, one study examining the financial services sector as a whole found for example that 60 per cent of leaders who were from the UK were educated privately[ii], which compares to about seven per cent of the population. While this represents some diversification compared to 1971, when 80 per cent of directors of financial firms had attended fee-paying schools[iii], this is perhaps marginal at best.
The same study found that again, across the sector, almost 40 per cent of new entrants were educated privately while in private equity firms this figure rises to 60 per cent. In leading law firms in the City, typically more than 50 per cent of new entrants have been educated privately and while the figures at leading accountancy firms vary, privately educated professionals are over-represented overall.
To some extent these statistics reflect a puzzle. On the one hand, City institutions such as these tend to position themselves as both technocratic and meritocratic, which is apparently enabled via formal recruitment and selection processes designed to measure exceptional talent on an objective basis. Yet over the thirty-year period during which these practices have been introduced, it has become more rather than less difficult for individuals from less privileged backgrounds to access so-called ‘top jobs[iv].’
One study found that professionals born in 1970 typically grew up in a family with an income 27 per cent above that of the average family, compared with 17 per cent for professionals born in 1958. This change can be explained in part because the growth in professional and managerial jobs post World War Two which created more ‘room at the top’ in absolute terms, has not been maintained over the past three decades. Instead, during that period the affluent middle-classes have remained highly effective at monopolising the opportunities that exist.
To determine how this situation might be addressed, it is though helpful to understand in further detail not only how but critically why exclusion on the basis of social class is maintained.
The elite university problem
One explanation can be found in the relationship between elite employers and higher education institutions in the UK. Large graduate employers tend to select the majority of new entrants from those Russell Group universities which are the least inclusive on the basis of education and social class[v]. This strategy has historically been presented as a rational choice by employers and one that is merit-based and therefore ‘fair.’ Elite educational institutions have higher entrance requirements and this, employers claim, is critical where individuals are employed to undertake especially complex and difficult work.
This narrative is now being challenged as data continues to underline the extent to which performance at school and therefore entry to university is a function of available teaching, information and resources, rather than aptitude or intellect alone. Arguments such as these have been absorbed within the diversity and inclusion agenda across the City, which is increasingly focused on widening access on the basis of educational privilege and social class, often positioned as part of a business case for talent. Yet while progressive in one sense, my research would suggest that related initiatives may have only a limited effect.
One reason for this pessimism is that the costs of widening access are often considered within firms to outweigh the potential business benefits derived. For example, on average, uniform screening of applicants against A-level scores (or their equivalents) disadvantages those who have attended poorly performing schools, and advantages their privately educated peers. Nevertheless, this is seen within many organisations as an efficient way to reduce large numbers of applicants to more manageable proportions.
The need for ‘expensive sounding’ advisors
Another cause for pessimism is the challenge of overcoming hiring managers’ tendency to recruit in their own image which, as many in the City were privately educated themselves, has the effect of reproducing the current elite[vi].
It is also important to note the possibility that exclusion of this type may not be solely an accident of structural conditions in wider society or factors such as ‘unconscious bias.’ Instead, multiple studies have demonstrated that, for elite organisations and occupations, exclusion of this sort forms part of a more or less conscious project to maintain status and prestige, especially in relation to clients, which in turn helps to justify the highest fees.
Several points are critical here. First, studies have repeatedly shown that occupational status is tied partly to the nature and complexity of the work, but also to the status of those most commonly associated with the work. Occupations and job roles populated by and/or closely associated with middle or upper-class people (and especially those who are white and male), tend to enjoy higher status. In contrast, those populated by and/or associated with people from lower social classes, women and ethnic minorities, tend to enjoy much less. Despite counter arguments in favour of wider access to talent, this may act as a disincentive to meaningful diversification, which for many occupations and organisations represents a considerable risk[vii].
Second, a high-status social identity is often considered by professionals to act as a useful proxy for quality. This may be especially important in job roles and work where knowledge is relatively ambiguous and where the client may find it difficult to assess the quality of the service they receive, on either an absolute or relative basis. Put another way, when aiming to sell expensive but somewhat subjective advice, it is helpful if advisors look and sound reassuringly expensive. ‘Polish’ is an important term here, in relation to which confidence is especially highly prized as a means to inspire trust in colleagues and clients. Many commentators believe that ‘polish’ is more available to the middle and upper classes and that confidence of the sort that is valued and recognised within the City is cultivated especially effectively at private schools[viii].
Set private school reform within a larger agenda
The key question in the current context is, of course, what this tells us about the necessity for private school policy reform?
Based on the arguments above, it is difficult to claim that the dominance of privately educated people in many of the UK’s most lucrative and prestigious jobs is entirely fair. Neither is it necessarily rational – if access to objectively measured talent is indeed the key concern. We might consider here that recruiting according to current definitions of ‘merit’ did not prevent the financial crash of 2008 and for some commentators, the homogeneity of City elites coupled with a sense of entitlement bred from privilege were in fact possible contributory causes[ix].
Yet it is unlikely that current leaders will act spontaneously to address this situation in a transformative sense precisely because current practices offer certain other advantages to the organisations in which they work.
Clearly, the abolition of private schools or their significant reform would, by definition, end or reduce the dominance of the privately educated in these institutions. Critically however, this does not mean that these jobs would become more representative of society at large, if firms remained motivated by the drivers towards exclusivity outlined above and where the affluent middle-classes remain best placed to leverage these opportunities.
These points do not negate the potential wider benefits of private school reform for our economy and society but do, on the other hand, underline that interventions here would ideally be situated within a much wider programme of change.
The broader aim of such a programme would include addressing stratification within the education system and organisations more generally, while also tackling deep and widening inequality across the UK, to ensure that over time the ladder from the top to bottom of society has far fewer rungs.
Dr Louise Ashley lectures in organisation studies at Royal Holloway, University of London. Her research explores diversity and inclusion in the professions and other elite employers. Louise has led research studies for the government’s Social Mobility Commission and her work has been widely covered in national and international media including BBC Radio 4, New York Times, Sydney Herald, The Times, Financial Times and The Guardian. She sits on several advisory committees including for the charity UpReach and for the Social Mobility Index, an initiative operated by the Social Mobility Foundation and the Cabinet Office. She is a research fellow for the Bridge Group, a leading charity providing consultancy on diversity and equality in UK workplaces.
[i] https://www.cityoflondon.gov.uk/business/economic-research-and-information/Pages/economic-statistics.aspx
[ii] https://www.suttontrust.com/research-paper/pathways-banking-education-background-finance/
Whitley R (1974) The city and industry. In: Stanworth P and Giddens A (eds) Elites and Power in British Society Cambridge University Press: Cambridge. 65-80.
[iv] https://www.gov.uk/government/publications/fair-access-to-professional-careers-a-progress-report
[v] See: Ashley, L., Duberley, J., Sommerlad, H., & Scholarios, D. (2015). A qualitative evaluation of non-educational barriers to the elite professions. London: Social Mobility and Child Poverty Commission.
[vi] As above. For an explanation of these processes in the US see: Rivera, L. A. (2016). Pedigree: How elite students get elite jobs. Princeton University Press.
[vii] See: Ashcraft, Karen Lee. “The glass slipper:“Incorporating” occupational identity in management studies.” Academy of management review 38, no. 1 (2013): 6-31.
[viii] Ashley, Louise, and Laura Empson. “Differentiation and discrimination: Understanding social class and social exclusion in leading law firms.” Human Relations 66, no. 2 (2013): 219-244.; Ashley, L., & Empson, L. (2017). Understanding social exclusion in elite professional service firms: Field level dynamics and the ‘professional project’. Work, employment and society, 31(2), 211-229.
[ix] See for example: Prügl, E. (2012). “If Lehman Brothers had been Lehman Sisters…”: Gender and myth in the aftermath of the financial crisis. International Political Sociology, 6(1), 21-35.
