Social class is the biggest barrier to career progression, KPMG research finds

Socio-economic background has the strongest effect on an individual’s career progression, compared to any other diversity characteristic, according to ground-breaking research published by KPMG UK.

In the biggest ‘progression gap’ analysis ever published by a business, experts from the Bridge Group analysed the career paths of over 16,500 partners and employees at KPMG over a five-year period. The team examined the average time it took individuals to be promoted, looking at their gender, ethnicity, disability, sexual orientation as well as socio-economic background.

The data showed that socio-economic background, measured by parental occupation, had the strongest effect on how quickly an individual progressed through the firm. Individuals from lower socio-economic backgrounds took on average 19% longer to progress to the next grade, when compared to those from higher socio-economic backgrounds.

The study is the latest advancement by KPMG to deepen understanding of social inequalities in the workplace, while sharing its insights with the wider business community. In 2021 it became the first organisation to report socio-economic background pay gaps and committed to increase the number of its leaders from low socio-economic backgrounds to 29% by 2030. A quarter of KPMG’s partners (25%) now come from low socio-economic backgrounds, up from 23% last year.

Nik Miller, Chief Executive at the Bridge Group, said:

“Driving greater social equality is the defining societal and economic challenge of our time. There remains a proven link between someone’s social background and their educational and employment outcomes and social inequality is estimated to cost the UK £39 billion per year. It is exacerbating lower levels of productivity, poor mental health, and diminishing people’s life expectancy.

“Progression is one of the truest indicators of inclusion in an organisation, across all and any diversity characteristics. KPMG’s research is pioneering, and we commend the firm for its leading-edge approach. The more we can highlight and understand the impacts of socio-economic background, including how it affects progression, the more we can create more equal outcomes for all. Talent and productivity must always be the basis for hiring and progression, and certainly prioritised over background.”

Jon Holt, Chief Executive of KPMG in the UK, said:

“This study is pioneering in its scope, and I hope adds value and rigour to the debate around social mobility. As a firm these insights are enabling us to take targeted action and we are publishing our findings so other organisations can draw insights from them and use it as a blueprint to measure and address barriers in their own businesses.

“Socio-economic background is complex and emotive. It requires us to confront how our upbringing shapes the opportunities we have access to later in life. But as businesses we need to lean into this discomfort if we are to make progress. Career advancement should be about realising potential, and not someone’s background or ‘polish’.”

The research has enabled the firm to pinpoint the bottlenecks employees face at different points in their career and take additional action. It found that its senior and junior colleagues are its most socio-economically diverse cohorts, but middle management grades are comparatively less diverse, suggesting colleagues from a low socio-economic background face a bottleneck as they try to progress to middle-management roles.

It also revealed that as people became more senior, the trend reversed. Those from lower socio-economic backgrounds who were promoted from director to partner actually progressed more quickly, compared to higher socio-economic background.

This complete reversal of the progression gap between director and partner level mirrors the findings of KPMG’s socio-economic background pay gaps analysis, published in 2021 which revealed that the socio-economic background diversity of its workforce was ‘hourglass’ in shape.

Using the insight from the data, the firm is launching a targeted plan to:

• Review the firm’s approach to work allocation, which we know plays a vital role in progression readiness by providing stretching, developmental opportunities which bolster an individual’s expertise. In the coming year we will be looking to see what more we can do to augment our current skills matching technology.
• Enhance the data insights relating to the progression of the firm’s talent, using new reporting technology which will enable employee data to be analysed in an intersectional way. This will provide detailed insights which will measure how effectively new interventions put in place by the firm fully support all colleagues.
• Tackle the bottleneck through piloting a new promotion readiness programme designed to support individuals at a manager grade, who are from historically underrepresented groups and have been identified as ready for promotion in the near-term.

The findings were also compared to research carried out for the firm in 2018 by the Bridge Group, to assess progress and areas of focus. This showed that initiatives and interventions the firm has put in place since 2018 to support historically underrepresented groups are working. Colleagues who are from an ethnic minority background or are women now progress faster than the average rate of progression, at 12% and 2% faster respectively (compared to 2% and 8% slower in 2018), and there were no significant progression gaps relating to sexual orientation or disability.

The progression gap for colleagues from a lower socio-economic background had also improved, from 22% in 2018 to 19% in 2022.

The report also found a recurring ‘hierarchy of progression’ based on combined characteristics. Where there are intersections between lower socio-economic background and other characteristics, this has a significant effect. Lower socio-economic background combined with female gender identity and/or ethnic minority background is associated with the slowest progression.

If comparing the fastest progressing combination (Asian males from high socio-economic backgrounds) with the slowest (White females from low socio-economic backgrounds), the progression gap is 32%.

Progression across the professions

While KPMG’s analysis of progression rates is the most comprehensive of any single organisation to date, studies by other organisations have revealed similar findings, emphasising just how prevalent progression inequalities are across different sectors. In 2018, the BBC supported by the Bridge Group published its report – Reflecting the socio-economic diversity of the UK within the BBC workforce – which revealed a progression gap of 20% between those from ‘working class backgrounds’ and ‘professional backgrounds’ for middle management grades.

To read KPMG’s Social Mobility Progression Report: Mind the Gap in full, please click here

-ENDS-

Notes to editors:

Research methodology:

• KPMG’s progression analysis analysed the career paths of 16,500 of the firm’s partners and colleagues over a five-year period. This data was then compared to a previous similar study conducted in 2018. Across the two studies, over 25,000 partners and colleagues were studied over a ten-year period.
• The study examines the average time taken for an employee to progress to the next grade at the firm, looking at gender, ethnicity, socio-economic background, and in the most recent analysis, sexual orientation and disability too.
• Those in scope of the research are client-facing, which represents the majority of KPMG’s workforce. Among these colleagues, there are clear linear progression expectations, with experience and strong performance being the key drivers of career progression.

Defining socio-economic background:

• KPMG follows definitive guidance, provided by the Bridge Group and Social Mobility Commission in 2021, around how best to define and measure socio-economic background. Our firm uses parental occupation (i.e. the occupation of the highest earner in your household at age 14), which is widely considered the most robust indicator.
• KPMG’s progression analysis uses simple binary categorisation of individuals as being either ‘higher’ or ‘lower’ socio-economic background. Higher socio-economic background means the individual’s highest earning parent at the age of 14 was in a professional or intermediate background, whereas lower socio-economic background means the individual’s highest earning parent at the age of 13 was in a manual or blue-collar role.

 

For additional details, please contact:

Simon Wilson, KPMG Corporate Communications

T: 0207 311 6651 / 07785 373397

E: simon.wilson@kpmg.co.uk  

 

About KPMG UK

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.