London is often seen as a beacon of wealth and privilege, a place where the elites go to prosper. But how did it become so? In this post, we’ll explore the elitism that has been pervasive in the city since the Big Bang of 1986.
We will discuss the lack of diversity in UK financial services, the white male preference in city firms, the city of London’s elite recruiting and diversity and inclusion efforts, the myth of meritocracy in London firms, and the inequality in the financial services industry.
Finally, we will uncover the discrimination behind London’s investment banking culture. By the end of this post, you will better understand the ongoing elitism in the city of London.
Elitism And Lack Of Diversity In The City Of London
Despite the promise of meritocracy, research has found that elitism is endemic in London – and it’s holding back talented employees from achieving their full potential.
According to a recent study done by Senior Lecturer at the Queen Mary University of London, Louise Ashley, nearly half of all partners at leading law firms are white, male, and privately educated, while over 90% of bosses at eight top financial service firms come from privileged backgrounds only representing 30% of the UK population overall.
This lack of employee diversity starkly contrasts the city’s commitment to meritocracy. Furthermore, investigations into major corporations indicate a lack of ethnic diversity among employees, with black lawyers particularly rare and even business advice promoting makeup for “professionalism” mainly aimed towards women workers.
Despite recent efforts to increase socio-economic inclusion through initiatives such as the Socio-economic Diversity Taskforce, findings from this study demonstrate further action still needs to be taken to create more equitable workplaces in the city for people across gender and racial backgrounds.
White Male Preference In City Firms
City firms are traditionally known for being dominated by white middle-class men. This has led to many senior executives in the industry conceding that people with certain accents and mannerisms are seen to be more believable than others, regardless of any actual skill set.
Despite claims of being a money meritocracy where success is based on performance, there is evidence that recruitment decisions often reflect personal favoritism amongst members of elite circles with similar backgrounds and education levels as decision-makers.
Attempts to diversify according to gender and ethnicity in the financial industry appear to have had limited results so far. Males aged mid-40s from white backgrounds remain strongly overrepresented in positions of authority.
This suggests that city firms may still need to do more to promote diversity within their ranks. We must continue to fight for diversity within the city so that everyone – regardless of race or gender – can have an equal chance at success.
Lack Of Diversity In UK Financial Services
As the UK faces its most significant financial crisis in generations, it’s clear that the UK financial services sector lacks diversity. For example, over 60% of bosses in financial services with a UK education come from private schools, compared to 7% of the general population.
This lack of diversity leads to many problems. For starters, women are vastly underrepresented among ‘deal makers’ in investment banks—less than one in ten. Additionally, many efforts to make city firms more diverse and inclusive have been perceived as window dressing, put in place to protect privileged status and rewards.
The outlook for wider diversity at senior levels is further hindered by a narrow definition of the ‘talent’ that city firms recruit, which privileges those who graduated from elite universities despite an oversupply of job applicants generally available.
The City Of London’s Elite Recruiting And Diversity & Inclusion Efforts
London is one of the most prestigious places in the world, and it’s no wonder that many of the world’s biggest banks started recruiting only the best elite university students following the Big Bang.
Despite some efforts at diversity, social class differences are still most tolerated in technical or quantitative roles like trading, where performance is measurable, and success does not depend on personal relationships.
During this time when diversity and inclusion agendas were new, there was much cynicism about the sincerity of these strategies; people felt that firms wanted to find an unproblematic way to ‘do diversity’ while leaving everything else unchanged.
However, over time many companies have made efforts to make their more prestigious positions diverse even as they create access programs for working-class youth from 16-21, generally focused on investment banking and other financial service jobs. This shows that companies are committed to making changes and improving diversity within their ranks, even if progress has been slow.
The Myth Of Meritocracy In London Firms
Internships are vital to any young person’s career path, and London is no exception. Yet, many interns who enter London firms quickly realize that the meritocratic culture they were told about is a myth.
One was told that he would find himself in the heart of the financial world and that he would be working alongside some of the most successful people in the world. However, upon entering some of the firms, he soon discovered that merit is a myth.
In fact, many felt like they had been sold dreams rather than realistic expectations – dreams like making millions overnight or being able to work from anywhere at any time.
Another intern felt she had been sold dreams when her reality turned out different than expected upon entering one of the banks. She was intimidated by her surroundings, where there were 40 middle-aged men and no other women. She had to change her appearance and accent to fit in but was not offered a job anyway.
Assimilation into this world of London can often seem impossible for working-class interns who do not naturally fit this preordained image employed by many for an ideal candidate. As an intern from a lower socio-economic background, “Kasia” often feels like she doesn’t belong or isn’t good enough compared to those who fit into this stereotype – even though she’s just as qualified as them. This can make her feel frustrated and discouraged, ultimately stopping her from achieving her goals.
Inequality In The Financial Services Industry: The Big Bang Effect.
In today’s economy, it is becoming increasingly difficult for employees from less privileged backgrounds to progress in the financial services sector. This is despite consistent performance.
Evidence shows that employees from less privileged backgrounds take 25% longer to progress in the sector, despite having the same skills and qualifications. These barriers affect more than just entry-level recruitment and can cast a shadow over one’s entire career.
Those from marginalized groups face numerous challenges when trying to break into the finance industry, some of which are subtle (e.g., not being told about available opportunities) and some of which are blatant (e.g., discrimination).
This exhausting process often leads to less energy to focus on work, leading to problems such as burnout and decreased productivity. Additionally, there is often fear of being branded the angry black woman if these issues are called out – something that is not only draining but also prevents individuals from progressing in their careers.
Despite the successes of people from humble backgrounds, there persists an emphasis on merit within the city which helps validate large pay packages and proclaims investment bankers’ superiority.
This discourse of smartness has established itself since The Big Bang era, becoming central to how professionals are seen and their place at the top of the social order.
Uncovering The Discrimination Behind London’s Investment Banking Culture
The UK investment banking sector is one of the most competitive in the world, and it has been this way for quite some time. To be successful in this competitive environment, new entrants typically need to have excelled in academic subjects such as mathematics and English.
This leads to a more “intensive, more competitive style” that is a meritocracy rather than allocating resources solely to “only the brightest and best.” However, despite this meritocratic environment, London workers are predominantly white men who have benefited from private school education, indicating an unfair allocation of resources by privileged groups within this area of work.
To explain away any discrepancies between staff makeup or treatment, city firms often claim it’s due to unconscious bias on everyone’s part, which may not be accurate as there are systemic issues at hand instead of individual biases alone.
This allows discrimination cases against investment banks to go unreported, with non-disclosure agreements common in employment contracts helping further contribute to that secrecy.
Legal actions and tribunals can also bring certain instances, such as bullying and sexual harassment (which has led to one firm being fined more than £1 million), into the public light. However, those cases may just scratch the surface regarding actual levels of discrimination occurring within only London’s most powerful circles.
Thus while London’s firms perpetuate an image of desirable elitism for their own benefit, sometimes at great expense for its less advantaged employees, a deeper look reveals tactics designed purposely so we don’t ask too many questions about how they operate under closed doors.
In Short
It is clear that the city of London has a long history of elitism, which is demonstrated through its lack of diversity in UK financial services, preference for white males in city firms, and the myth of meritocracy. This lack of diversity and inclusion leads to inequality within the financial services industry, leaving some people behind due to race or gender.
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