In the UK, it still pays to be privileged. Parental wealth has become an increasingly important factor in determining an individual’s future earnings and moving up the social ladder is now harder than at any point in the past 50 years, according to the Institute for Fiscal Studies.
While much work has been done by businesses to address gender and ethnic inequalities, one area that has been consistently overlooked is social mobility.
The lack of attention on improving social mobility is holding the country back, according to Co-op chief people and inclusion officer Claire Costello. “If we don’t address this challenge today, we’re selling ourselves short both as an organisation and, more importantly, as a nation,” she says.
Last month, Co-op became the first UK retailer, and one of the largest employers, to publish its socioeconomic pay gap and has committed to remove the barriers that are preventing people from moving up the social ladder.
From the initial report, it found its mean pay gap between those from a lower and higher socioeconomic background to be 5.2%. Those from a higher socioeconomic background were also more likely to occupy senior positions. Two-thirds (67%) of Co-op’s executive team are classed as coming from the highest socioeconomic strata.
Addressing this imbalance has become a priority for Co-op. As a member-owned business, Co-op needs to better reflect the communities it serves, believes Costello. And the company’s staff seems to agree. At its annual general meeting in 2021, Co-op’s membership called for the company to do more to enable social mobility.
“We know it’s the right thing to do,” Costello says. “There’s amazing talent out there who can bring skills, experience, growth and productivity. The only way we’re going to develop as a country is by recognising we’re not getting the most out of this talent pool.”
Solving the social mobility challenge
But identifying and removing the barriers that increase social mobility is difficult. It’s a challenge that is “multifaceted”, according to Costello. “Unless we have a groundswell of people who are prepared to face the multitude of reasons we have this issue, it really isn’t going to improve,” she says.
For businesses, Costello advises breaking the issue down into “smaller pieces”. “We’re not going to fix the world, the economy or society, but there are the things that are within our power to change today,” she says.
Financial security is the factor most likely to improve someone’s chances of changing their socioeconomic status, according to Co-op’s findings. “Having some savings under your belt and stability in your working hours allows people to make future plans,” Costello explains.
We’re not going to fix the world but there are the things that are within our power to change today
In order to improve staff financial security at Co-op, Costello has sought to give employees greater clarity around their core hours. The company has also worked with financial wellbeing platform Wagestream to introduce an opt-out savings scheme that has helped employees build up a pot of savings while they earn.
Through the scheme, which has also been trialled at Bupa and rubbish collection company Suez, a portion of monthly wages are automatically transferred to a separate savings account in the employee’s name. The scheme has been shown to be effective in encouraging people to increase the amount they have saved for a rainy day and Costello describes it as a “game-changer”.
Costello has also made changes to Co-op’s recruitment process in a bid to make them more inclusive. This has included using behavioural and situational assessments for front-line roles, instead of asking for CVs, and also stopping the use of video in recruitment.
“There’s a lot of unwitting bias when assessing someone on a video interview,” Costello says. “We want to move away from judging people on what you can see and focus more on the skills of the individual.”
Costello counts herself as a major beneficiary of skills-based assessments. Her “squiggly” career has seen her move between finance, procurement and HR roles. “If you look at my CV, I wouldn’t have been a natural fit for the people function but, if you look at the skills I’ve developed in my previous roles, they absolutely line up,” she says.
The impact of social capital
Social capital is another factor that can stymie social mobility. This refers to an individual’s social network and the important role it can play in determining someone’s career prospects.
Those with higher social capital are more likely to get opportunities to progress their career through their network or to know someone they can ask for advice. Costello asks: “Who’s going to be that person that taps you on the shoulder and says you could do that job, why don’t you go and give it a go?”
The important role social capital plays caused Costello to review the way Co-op offered its development programmes. Using the data gathered from its social mobility report, the company is targeting support at the levels where there is greatest drop-off in applicants from specific under-represented groups.
People’s background continues to influence the careers they go into and the roles they hold
Costello adds: “We’re trying to remove the barriers that stop people from these groups from applying for certain roles. It could be a lack of confidence, social capital or a fear of the unknown.”
The intersectionality of social mobility is another major challenge. Women from working-class backgrounds face the biggest pay gaps at Co-op, while ethnicity can also impact social mobility.
“For an organisation like ours, where the percentage of women who work for us is heavily skewed towards our shop floor employees, making sure that women are represented through all levels of the business is really important,” Costello says.
Sharing the stories of others who have successfully moved up the career ladder can be beneficial for opening pathways. “In retail, there are many good examples of individuals who’ve started on the shop floor and worked their way up,” Costello says. “At Co-op, we share the stories of leaders who talk about their careers on video and podcasts. If you can see it, you can be it.”
Costello hopes that other companies follow Co-op’s lead in seeking to improve social mobility in the UK and the company is campaigning for socioeconomic background to be made a protected characteristic under the 2010 Equality Act.
Costello asks: “People’s background continues to influence the careers they go into and the roles they hold, but why should your background be important?”
As the work of Costello shows, employers play an important role in making it easier for those from all backgrounds to move up the social ladder.
