Finance and the professions are amongst the highest-paid jobs in the UK. They are also gateways to the most influential positions in UK boardrooms. Many C-suite corporate executives have a background in one or more professions, such as consulting, accounting, or the law, making these sectors a significant talent pool for senior leadership positions in many industries.
However, these sectors have some of the lowest representation of Black talent in the UK. In 2021, only about 2% of finance, insurance, and professional, scientific and technical services employees were Black (see Figure 1). This compares poorly with the figures for the UK working-age population, of which 4.4% are Black, according to the 2021 census. It compares even worse with the population of London—where many of these companies are located—which has a Black population of 13.5%. While the reporting of racial identification in corporate organisations is imperfect (only around 60% of people report their race to human resources in the best tracking scenario), the strikingly low figures for Black representation in finance and the professions cannot be explained simply on this basis. The data suggest a real and systemic problem of Black underrepresentation in these sectors.
Disparity starts at junior levels.
Black talent is significantly underrepresented in some of the highest paying, most influential sectors in the UK
University graduates are the main source of junior talent for most finance and professional service firms. Although 8% of the UK’s university population is Black, only about 2% of finance and professional services employees are Black (see Figure 2). Many professional service firms are missing out on a sizeable talent population with the educational background and geographic location of their target talent pools.
The pipeline for Black talent is strong, yet there is great disparity, especially at senior levels
This disparity grows larger when we look at senior levels in these sectors. Less than 1% of senior leadership-level employees are Black. This is particularly stark when looking at investment bankers and equity partners of non-law firms, where average Black representation at senior levels is just 0.5% and 0.4%, respectively. Furthermore, when looking at the largest UK law firms, mid-range Black lawyers are four times more likely to leave than their white and other minority-ethnic peers.
Overall, the number of Black employees have increased by 6% per year since 2011 in professional services firms and by 2% per year in finance and insurance firms. However, the total number of employees in these sectors has grown even faster, outpacing growth in Black representation (see Figure 3).
While the percentage of Black employees in finance and professional services has increased since 2011, underrepresentation is still a problem
If this pace of change continues at the same rate in the future, it will take about 50 years for some manner of proportionality. The number of Black employees in finance and professional services would have the same proportional representation (4.4%) as Black employees in the UK’s working-age population, based on the 2021 UK census (see Figure 4). It will take another 90 years to have the same proportional representation (8%) as the percentage of Black students in UK universities from which these sectors largely recruit. A further 125 years beyond that will pass before they have the same proportional representation (13.5%) as the Black percentage of the population of London, the centre of the financial and professional services sectors. These are sobering statistics.
At this rate, it would take over 50 years to reach proportional representation of Black talent in finance and professional services
Moreover, representation figures from 2022 Office of National Statistics UK population data show that the pace of change has slowed: 50 years could become up to 70 years. The percentage of Black people in the UK working-age population has grown steadily from 2.2% in the 2001 census to 3.4% in the 2011 census and 4% in the 2021 census. These percentages are projected to be even larger in the future, as is the gap between the UK working-age population and the finance and professional services sectors, even if one considers people of mixed-Black heritage.
Firms that wish to accelerate change in this area must hold themselves accountable for their recruitment and talent promotion. Above all, firms must actively cultivate and grow a culture where Black talent can thrive. By creating an inclusive environment, Black talent will be attracted to your firm and will choose to stay long term.
The challenge for British businesses to accelerate the recruitment and retention of Black talent cannot be solved by individual firms acting in isolation. Creating a reservoir and pipelines of Black talent across whole business sectors is necessary. The Black Talent Charter (BTC) seeks to build race equity for Black talent into the DNA of British businesses, using collaborative and innovative evidence-based solutions. BTC brings British businesses together to inspire a movement for change by challenging the perceptions and structures that perpetuate inequities for Black talent in three ways:
- Continuously challenge the status quo with innovative, evidence-based solutions.
- Create cross-sectoral networks to support business leaders’ exploring solutions together without fear.
- Empower Black talent through access, insights, and a cross-sectoral network of peers.
About the Black Talent Charter
The BTC Signatories include some of the leading law firms in the UK, all of the Big Four global accounting companies, and some leading UK retail banks and top UK wealth management firms, among others. Bain is a longstanding BTC signatory and an example of the collaborative contribution and expertise that our signatories can bring to this joint endeavour. Bain and BTC have produced leading research and thought-provoking events that benefits all signatories. The BTC is proud to have Bain & Company as one of its signatories, work with colleagues in the firm, and benefit from their expertise in establishing an important evidence base for its programmes.
To become part of the Black Talent Charter and help your organisation thrive, please contact email@example.com. Together, we can accelerate change and progress toward equity in these leading UK business sectors.