The state of social mobility around the world is abysmal.
A major determinant of a person’s future and livelihood is the postcode into which they are born. Even in developed countries like the United States (US), it can take five generations for someone born into low socioeconomic circumstances to reach the national mean income. This is not just a problem for those born into the ‘wrong’ postcode. The longer we leave social mobility immobile (pun intended), the more employers miss out.
Employers are uniquely placed to benefit from a win-win situation.
The World Economic Forum (WEF), as part of its work with the UN Sustainable Development Goals for 2030, and national organisations, like the United Kingdom’s (UK) Social Mobility Commission, have recognised that employers can play a pivotal role in increasing social mobility, particularly along the study-to-work pathway. This mobilisation is not only for the greater good of society, with the WEF attributing low social mobility to the loss of institutional trust, disenchantment with political processes and erosion of the social fabric, but it also enables employers to tap into an untouched pool of talent.
What does talent have to do with social mobility?
Social mobility is a multifaceted concept that, at a general level, considers socioeconomic moves ‘up’ or ‘down’ based on factors such as education and work across generations. A significant contributor to low social mobility is the lack of access to opportunities. As individuals try to climb up the ladder of socioeconomic status, they are not necessarily given access to the same tools that enable others to scale faster (or easier). In many instances, they experience myriad unforeseen or insurmountable hurdles along the way.
In the context of access to employment, employers commonly look for particular traits to filter job applications. These include whether the candidate attended university, the type of university, grades, relevant work experience and extracurriculars. This makes sense. A strong educational stance combined with real-world experience would suggest a high performing candidate - and employers need scalable indicators to work through the annual cycles of applications.
But the reality is that:
- University is expensive. It can cost tens of thousands a year in countries like the US and UK – even with government support.
- Top universities like the US ivy leagues still use alumni networks for admissions. In circumstances where low social mobility is fuelled by generational barriers to entry, leveraging such networks inherently perpetuates the cycle of inequality.
- If one can attend university but is of low social mobility, they usually need to support themselves. This means they lose time that could be spent studying or completing extracurriculars to working odd jobs to pay for housing and food.
- Referral systems might be great for employment opportunities, but US LinkedIn data shows that individuals who came from high-income backgrounds are three times more likely to have a strong network than those from low-income backgrounds. When considering the compound privilege that comes from generations of access, networks leave the less socially mobile out in the cold.
Now that we understand the potential impact of these filtering traits, the question must be asked: how many exceptional individuals have been filtered out for reasons that have little to do with their talent, capability or potential? The answer is likely a lot.
Why must employers care about social mobility?
There are a few other reasons why employers should play their part to increase social mobility.
First, empowering more individuals to fully cooperate in all facets that society has to offer buoys the economy – and a stronger economy benefits employers. According to the Global Social Mobility Report (GSM Report), increasing social mobility by 10 points on the Global Social Mobility Index (being the combined scoring of the policies, practices and institutions that determine the extent anyone has a fair chance to fulfill their potential) could increase global GDP by 4.41% before 2030.
Second, increasing social mobility will better enable employers to innovate. The pressure to keep up with the rapid pace of change in today’s global marketplace is increasing and this requires innovation. Frans Johansson, author of ‘The Medici Effect’ and CEO of The Medici Group, which advises companies including Nike on innovation, suggested that innovation occurs when ideas, concepts and cultures come together. If employers rely on the same hiring filters, they will form a mould generating a talent pipeline with similar lived experiences. Employers that embrace a diversity of backgrounds and experiences (socioeconomic, educational or otherwise) can benefit from a workforce that can view complex issues or form creative approaches through a variety of perspectives that could lead to better outcomes.
Third, we are in the age of social enterprise where employers are being assessed on their social impact. Based on a global survey of over 11,000 business leaders, Deloitte’s Global Human Capital Trends report found that the shift towards social enterprise has been driven by frustrations with the inequitable distribution of financial gains since the Global Financial Crisis. Companies that engage on topics like income inequality and diversity have experienced a lift in financial performance. For example, one study by Nielson, an information, data and market measuring firm, found that 55% of consumers would choose to pay extra for products sold by companies committed to positive social impact. However, companies that do not engage with social impact can alienate key audiences and experience reduced brand value.
It's just a matter of a few adjustments
By making a few adjustments, employers could tap into an entire reserve of talent, while playing a powerful social impact role. Consistent with the recommendations from the GSM Report, they should explore:
- Providing free educational opportunities, which would enable those who cannot afford university or struggle to attain work experience to still increase their employability. Companies like Google are already doing this through initiatives like Google’s Career Certificates. And, of course, there are Forage's free and open-access virtual job simulations used by the world's largest employers like Walmart and JPMorgan that increase candidate hireability by 4x.
- Rather than filter for traits like university or grades, considering traits showcasing merit. These could be whether the candidate engaged in additional learning opportunities (similar to the above) or worked throughout their studies, regardless of the role they held. Employers like Merck and IBM have transitioned away from four-year degree requirements and instead look for indicators like the propensity to learn.
- Moving away from referral frameworks. While an internal referral can create confidence in the candidate and a way to streamline the hiring process, it is a generator of low social mobility and does not necessarily lead to better employees.
Employers have a choice: embrace a win-win situation that enables them to benefit from talent that has been empowered to scale the rungs of the social mobility ladder or maintain a status quo that leaves many with their feet still firmly on the ground.