Employers have been urged to take steps to support social mobility, after research from NextGen Pensions raised concerns about "diversity-washing", with some suggesting that diversity, equity and inclusivity (DEI) initiatives may not effectively support all underrepresented groups.

As part of its latest report, Supporting socioeconomic diversity in the pensions industry, the group looked at the current levels of socioeconomic diversity, highlighting the main themes that can impact career opportunities in the pensions space.

In particular, education was found to be a key theme, as some 16 per cent of participants attended independent or fee-paying schools, compared to 7 per cent of the UK population overall, while 77 per cent were state educated.

In addition to this, almost all (96 per cent) privately-educated survey participants went on to higher education, compared to 81 per cent of respondents overall, while 25 per cent went on to attain a Master’s degree or Doctorate postgraduate qualifications.

Family occupations was another key theme, as around 60 per cent of participants have parents who worked in a professional or managerial role, which NextGen Pensions noted was "much higher" than the general UK population, despite being similar to the demographics of the civil service.

"Interestingly", however, the research also found that those whose parents worked in manual or technical roles or were long-term unemployed were more likely to feel their background influenced their career, at 26 per cent compared with 17 per cent with parents in professional roles.

Focus groups conducted as part of the research also provided further insight, revealing that the biggest differences identified by those who grew up working class were not just a lack of opportunities or network, but also lower confidence levels as a result of having larger penalties for failure in comparison to middle class peers.

"Participants who identified as coming from working-class households deemed the biggest challenges when entering the industry to be a difference in self-expression – such as being told they are being ‘too direct’ - and not having a network," NextGen research and insights sub-committee chair, Mark Ormston, also pointed out.

Focus groups also highlighted the extent to which expectations can differ among children from different backgrounds, leading to different levels of attainment. For example, whether an individual is encouraged, or even expected, to go to university.

Whilst Ormston admitted that the findings around education are "unsurprising" given that the pensions industry is notoriously technical, he argued that they do raise questions around how pension careers are being presented to potential candidates, "which should give employers real food for thought".

He also highlighted this trend and the findings around family occupation as evidence of the need to enhance entry-level roles to ensure the pensions industry is nurturing all future employees and improving visibility of the progression opportunities.

"This is crucial to attracting and retaining diverse talent," he stated.

This was echoed by Pension Protection Fund (PPF) chief operating officer, Katherine Easter, who argued in that "the key thing is recruiting and retaining people that don’t all have the same background and life experience".

Commenting in the foreword of the report, Easter said: "By breaking down barriers - whether that’s rethinking how we advertise roles, opening doors through apprenticeships, or creating clearer pathways for progression - we can ensure we’re attracting people from all walks of life.

"Educating the wider population on the important work our industry does will also have benefits across new hires and those who we serve. We can introduce careers to people that might not otherwise have known how fundamental the pensions industry is to our population and our economy."

But whilst many industry organisations have been undertaking work to improve DEI, the focus group discussions in the research revealed that some felt that these DEI initiatives within the pensions industry lacked intersectionality and may not effectively support all underrepresented groups, expressing concerns about "diversity-washing."

Given this, Ormston stressed the need for employers to take more action, calling on employers to collect relevant socio-economic information about their workforce and stand ready to support them in driving positive change across their organisations.

"Even small changes and efforts to be more consciously aware of social economic factors on a daily basis would likely go a long way to help the pensions industry become a more inclusive and thriving environment for us all," he stated.

"Just like recognising the importance of diversity in gender, race and disability, understanding the socio-economic make-up of our industry is crucial for identifying opportunities for growth, and promoting equality.

"Enhancing social mobility is vital not just for the benefit of individuals, but also for the health and productivity of the industry as a whole."

Easter agreed, admitting that one of the challenges with really understanding the issue of social mobility is how organisations collect data.

"Collecting data is essential to show where progress is being made – what gets measured, gets managed," she continued.

“In this sense, studies like this are a critical part of driving change. They spark the conversations we need to have and offer real, actionable advice we can use. Together, we can make the pensions industry a place where everyone has the opportunity to succeed and make a difference.”

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