Despite making headway on gender, race and LGBT diversity, the report shows that investment banking has made no progress on the challenge of recruiting people from different social classes – and might have even slipped back.
The report by the government commission showed that 34% of the new intake at investment banks over the past three years had attended fee-paying schools, although just 7% of the children in the UK do so.
There’s a further filter at the university level. Banks are recruiting heavily from just six universities: London School of Economics, University College London, Imperial College London, the Universities of Oxford and Cambridge and the University of Warwick – establishments that are among those with the lowest levels of recruitment from state schools.
Times have changed since the 1980s when the Big Bang saw an influx of “barrow boy” traders from Essex whose degree was from The University of Life. Today those jobs are done by algorithms.
But the report goes deeper than just stating how working-class kids from outside the Home Counties face higher hurdles to accessing a career in investment banking, even if they managed to attend the required institutions.
Class, cultural backgrounds and interests apparently play a significant part in not just the recruitment process, but how the staff member is accepted and progresses through the business.
The term “class” appears 42 times in the report, which heavily quotes industry interviewees, and “dress” appears on 29 occasions. “Aptitude” appears nine times; “intelligence” appears just six.
The report states that “relatively few investment banks measure the socio-economic background of applicants to the firm, new entrants or current staff”. Unlike with other issues focused on gender and race, there is no metric – or statutory obligation – to take account of it.
True, some banks are taking the issue seriously and working to craft programmes that harvest talent from Sunderland as well as Surrey. And so they should. There is plenty of evidence that gathering people with similar backgrounds and experience and asking them the same question will result in a limited range of answers. Groupthink leads to bad decisions.
The blame cannot be left entirely at the banks’ door. Many industries are much easier to enter for those who went to the “right school” or who have been trained to be the “right type of person”.
That’s no excuse. Banks need friends these days. Prime Minister Theresa May – herself a grammar school girl and Oxford graduate – is hardly going to spend political capital defending The City in Brexit negotiations if its public face of the industry is white, male and – frankly – posh.