Research

Why City firms struggle to challenge elitism

Elite City firms are, by their very definition, for the elite. But getting the best talent should not mean only hiring candidates from privileged backgrounds. Not only is diversifying talent good for firms, but it is also important for society - professional jobs play an important role in social mobility by allowing people from less affluent backgrounds opportunities to enjoy a well-paid career.

Yet the make-up of elite firms remains incredibly exclusive of bright working-class applicants. This was made apparent in a study conducted in 2015 for the Social Mobility and Child Poverty Commission, which found that while almost 90% of pupils attend non-selective state schools in the UK, they typically comprise less than 30% of new hires in leading accountancy firms. In many leading corporate law firms, around 40% of new trainees are educated at fee-paying or private schools, compared to around 7% of the population.

Education, education, education

Education is at the heart of why this is the case. But discrimination based on more superficial grounds also plays an important role. These were the findings of new research I carried out with my colleague Laura Empson, professor of management at Cass Business School. We conducted interviews with recruitment specialists and senior management at six elite firms - a management consultancy, two law firms, an investment bank and two accountancy firms - to better understand the problem of social exclusion.

Elite firms tend to recruit from elite universities, in the UK predominantly within the Russell Group. This is in part a response to the expansion of higher education. As firms have received increasing volumes of applications from suitably qualified candidates, they have also found it increasingly difficult to accurately discriminate between them to identify those with the highest potential. Against this backdrop, attendance at an elite university is an efficient shorthand for merit.

This matters in relation to social mobility because Russell Group universities tend to be populated by relatively affluent students who have achieved their position at least in part with the help of previous educational advantages. Plus, students from more modest backgrounds appear to self-select out of the application process to elite firms in relatively high numbers on the basis that they may not fit in.

The hiring process of elite firms then further amplifies this effect by excluding people from working-class backgrounds. Recruiters look for proxies for quality, which comes in the form of "cultural capital" or the "polished" candidate. This includes a "professional" appearance and demeanour, strong communication skills including an "appropriate" accent, and above all, confidence - characteristics more available to people from more affluent backgrounds.

Recruiting individuals with these characteristics is considered important because in a situation where knowledge is somewhat ambiguous, it is thought that they will send the appropriate signals to clients about the status of the firm and the quality of the advice they will receive. Appointing people with the "appropriate" accent, mannerisms and behaviours, is also considered to act as a route to distinction and therefore competitive advantage in comparison to other, less prestigious firms.

Fitting in with firm culture

Questions of cultural fit are also vital. Recruiters seek to ensure a close fit between the person and the organisation. And our research reveals that candidates gain legitimacy through their similarity with those hiring them, which helps to reduce the firms' perceptions of risk.

In sum then, elite firms express a strong preference for people who have been educated at a narrow set of elite universities, and who possess relatively narrow types of "cultural capital", all of which are associated with middle-class status. In order to reach these candidates, firms have coalesced around a narrow recruitment process.

And it's not just the most prestigious firms that do this. Lower status ones may deliberately adopt this version of best recruitment practice in order to gain the same prestige as their elite peers, and so improve their competitive position. As one law firm partner in our study said:

"People feel that … they're more likely to get a quality person if they come from Oxbridge … I disagree. [But] as a law firm doing the sort of work we do, charging the way we charge and our economics and our client base, we have to be seen to be recruiting academically at least at the level of our peers."

It seems that social exclusion is somewhat contagious.

The fact that elite firms have a tendency to imitate and adopt their peer group's approach to best practice in recruitment could have a positive effect, however. As some firms take action to hire more inclusively, this could have a rapid knock-on effect. But until then, the recruitment rationale remains a clear barrier to efforts to improve social mobility.

Louise Ashley, Lecturer in Organisation Studies, Royal Holloway

This article was originally published on The Conversation. Read the original article.