"Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities."
This is the view of Bank of England Governor Mark Carney in a recent speech lamenting a lost decade and the unequal gains from trade and technology.
Such inequality is rightly receiving an increasing amount of attention, partly due to the divisions highlighted by the EU referendum, but also thanks to the Government's consultation on executive pay and the introduction of gender pay legislation. Yet there's another, much less talked about pay gap that warrants attention and action.
The social mobility pay gap is the difference in starting salaries between students from the most and the least advantaged backgrounds, six months after graduating from the same subject. Our research shows that this stands at approximately 10 per cent, but can go as high as 15 per cent, depending on the subject studied. Worryingly, this suggests the least advantaged graduates are still facing considerable barriers to employment after graduation, even if they perform as well as their most advantaged peers.
Improving social mobility remains a huge challenge for the UK and tackling it is one of the objectives of Deloitte's wider social impact strategy, One Million Futures. This is aimed at helping one million people get to where they want to be; whether it's in the classroom, the workplace or the boardroom, by raising their aspirations, improving skills and developing leaders.
Through our One Million Futures programme and our Fair access to work research, we've sought to highlight the difficulties faced by young people in accessing education and employment and propose a series of recommendations to confront those issues.
Forty months after graduation, the most advantaged graduates were nearly 11 percentage points more likely to be employed in professional occupations than their least advantaged peers. We also found that applications to university from the least advantaged students can be up to ten times lower than those from the wealthiest backgrounds. Given our research has shown university graduates are less likely to be in jobs affected by the onslaught of automation, this mismatch raises serious concerns that the disparity of economic opportunity could widen further still.
In his speech, Carney pointed out that for societies to prosper they must "re-distribute some of the gains from trade and technology, and then re-skill and reconnect all of their citizens". Indeed, the future of our country's economic success hinges on having a workforce equipped to make the most of the advances in technology, recognising the need not just for technical skills, but aptitudes such as reasoning, critical thinking and complex problem-solving. Through our research we found that the least advantaged graduates were more likely to be employed in jobs that require these essential talents and social skills, meaning there is a whole untapped talent pool being overlooked by businesses.
To remove unconscious bias and the perception that the rewards of economic prosperity are reserved for a privileged few, we need targeted measures from business, educators and policymakers and a commitment to work together for the benefit of society. From the potential actions outlined in our research, I've highlighted three that I believe could go some way to narrowing the social mobility pay gap.
1) Business leaders should invest more in school leaver programmes and apprenticeships as part of a wider reform of their recruitment processes, giving more emphasis to cognitive and problem-solving skills and social aptitude.
2) Educators should place more emphasis on general purpose and foundational skills and use technology to improve the way essential talents are taught.
3) Policymakers should consider introducing new regulations to encourage the use of contextual information in recruitment and promote greater transparency around the recruitment and progression of disadvantaged young people.
With continuing concerns that the benefits of globalisation and technology aren't being shared across our nation, business, educators and policymakers must find opportunities to work together on ways to build inclusive growth, helping create policies and solutions that can answer the demands and needs of our society. Providing fair access to higher education and employment is not just about correcting a long-standing social injustice, it's about unleashing the economic potential of all of our country's talented workers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
