Why does the City of London, despite an apparent commitment to recruitment and progression based on objective merit within its hiring practices, continue to reproduce the status quo?
Written by a leading expert on diversity and elite professions, this book examines issues of equality in the City, what its practitioners say in public, and what they think behind closed doors.
Drawing on research, interviews, practitioner literature and internal reports, it argues that hiring practices in the City are highly discriminating in favour of a narrow pool of affluent applicants, and future progress may only be achieved by the state taking a greater role in organisational life. It calls for a policy shift at both the organisational and governmental level to the implications of widening inequality in the UK.
This chapter provides context for the analysis that follows, including to define the City of London and the roles which comprise its ‘top jobs’, and introduce key debates including its role in driving steep inequalities of income and wealth, controversies surrounding social mobility and myths of merit, and how these factors relate. It also introduces the theoretical framework that provides the structure for the book, showing how Bourdieusian and Weberian approaches to social class are combined with neo-institutional theory to explain how labour markets reproduce inequalities while simultaneously helping to affirm hierarchies of occupational status. Finally, it outlines the book’s contribution to recent academic debates, introduces the data on which it is based, and considers questions of confidentiality, ethics, including as they relate to and the author’s own background and position.
This chapter examines the origins of the meritocratic myth by tracing a (very) brief history of the City over the twentieth century and exploring continuity and change in its demographics. It shows that following an upper-class past where access to the City depended on family connections and did not require qualifications, deregulation in 1986 ushered in numerous changes, including a more comprehensive move toward graduate-only entry, which suggested that entry was available to any body, on the basis of ability and effort. In practice, the impact on the City’s demographics was limited, but this chapter shows how this myth continued to circulate, often relying on the elevation of working class entrants into the City as legendary figures, and was deployed by financial and professional elites to legitimate their growing financial and symbolic rewards.
This chapter explores how the City sustained an impression of merit in the decades following Big Bang and expands on the purposes it served. It shows how a move to graduate-only entry and a tendency to appoint from a small group of elite universities helped confirm that new entrants to the City were exceptionally smart. This focus on ability helped cement the City’s claims to the most complex work, providing further legitimation for its growing rewards, but this chapter shows that meritocratic narratives rest on three main myths. First, that selecting on qualifications allows talent to be identified on an impartial basis. Second, that all similarly qualified applicants have an equal chance of getting in. Third, that scientific selection techniques eliminate bias. This chapter busts these myths to demonstrate that while new entrants often had strong qualifications, recruitment processes were not, on the other hand, impartial or fair. Where City leaders have leveraged narratives of merit, this has relied on a rather contorted definition of the term.
The previous chapter explored how the City encouraged internal and external audiences to believe hiring works as the right people are allocated to the right jobs using qualifications as a neutral form of ‘human capital’. Chapter 4 shows how as higher education expanded during the 1990s, there was a considerable over-supply of suitably qualified candidates for the City’s ‘top jobs’. Having defined talent in narrow terms, City firms struggled to appoint from this small group, contributing to impressions that skills were scarce. In response, firms moved recruitment cycles earlier in students’ academic careers, placing a renewed emphasis on aspirant workers’ ‘social capital’, as these opportunities were more visible and available where networks of friends and family could provide information and advice. Firms also sought to leverage status by appointing high numbers of new entrants from elite universities, whose credentials represent a form of ‘institutional capital’. These exclusionary practices represent a considerable deviation from the merit principle but interactions between firms in the City field meant they became institutionalized and ‘locked-in’.
Chapter 5 continues to explore how in contrast to meritocratic narratives which suggest objectivity and neutrality, hiring managers in the City appoint on the basis of tradition and culturally embedded frameworks instead. While previous chapters have explained a considerable homogeneity in the composition of City elites, this chapter focuses on how and why demographics differ between these jobs. With particular reference to corporate finance and trading in investment banks, it explains how hiring managers appoint and promote on the basis of embodied forms of cultural capital which suggest ‘fit’ and according to stereotypes around who has historically occupied key jobs. While not always efficient from a strictly economic perspective, hiring and promoting on this basis is rational from an alternative perspective, as it helps to compensate for the ambiguity of knowledge in key roles. The chapter ends by suggesting that as expertise and authority continue to be ‘read’ off the social identities of people in ‘top jobs’, this has facilitated a situation in which City leaders have got away with bullshit and bluff.
Having explained why the City is not fair, Part II of the book turns to why diversity and social mobility agendas implemented in response do not achieve their stated aims. This starts in Chapter 6 by tracing the introduction of the diversity and inclusion agenda (called here ‘diversity’) in the City during the late 1990s and into the 2000s. It argues that diversity’s widespread take-up, and the use of the business case, can be explained less as a result of its proven efficacy in addressing persistent inequalities, and more as a result of diffusion, imitation and corporate fashion. Once again, this suggests a key driver was legitimacy in relation to which the primary challenge posed by evidence of unequal outcomes was how firms could manage associated reputational threats. The chapter shows why the business case is a ‘busted flush’ and explains how diversity has managed pressures toward inclusivity and associated costs, resulting in a largely cosmetic effect. For the most part, this project is not strategically planned, and relies on the work of many City workers, often in quite ‘ordinary’ jobs, who do the work of legitimation on behalf of elites, albeit inadvertently perhaps.
The previous chapter expanded the discussion to consider the failures of the diversity agenda as they apply not only to social class, but also to ethnicity and sex. Chapter 7 narrows the focus a little more to consider the role of organizational social mobility programmes in opening access to the City’s elite firms. These programmes aim to support young working class people with appropriate qualifications by providing them with training, mentoring and internships, to provide them with crucial information and advice, build their networks, and persuade them that they ‘fit’. Chapter 7 explores the experience of young people engaged in these programmes and argues that while these programmes are often positioned by firms as benevolent means to level the playing field to help working class young people get middle class jobs, they can also be seen as representative of unequal power and as more problematic forms of corporate control.
Chapter 7 explored the experiences of young working class aspirant City workers as they engaged in organizational social mobility programmes. Chapter 8 considers what happens next, as many attempt to secure a permanent graduate role. During initial introductions to the City they are immersed in the meritocratic myth but as they take part in graduate recruitment processes they realize they have been sold highly partial truths. Many experience stigma and shame, especially through painful everyday encounters that suggest that their very presence in the City elicits disgust. Following sociologist Imogen Tyler, the chapter focuses on the political function of stigma, to show how stigma ensures the boundaries of elite professions are managed and contained, so that people who threaten the ‘respectability’ of these jobs are kept out and ‘in their place’.
Chapter 8 explored how organizational social mobility programmes have a limited effect including as young people from working class backgrounds feel stigmatized and indelibly marked. Chapter 9 moves on to consider in further detail how they respond, to underline that while these young people have agency, it is exercised within considerable constraints. Remaining with legitimacy as the central theme of the book, the chapter explores how they experience considerable pressures to conform with dominant norms in order to become ‘legitimate’ City workers. While this is relatively straightforward to those who are closer to this dominant group, others adopt a variety of strategies in response, for example, to comply with these pressures, defy them, or try to compartmentalize or combine competing demands that push them away from an authentic self. The chapter concludes that as they are asked to meet this world on its terms, this can lead to a deeply divided self.