Putting Social Mobility on the Corporate Agenda

Richard V. Reeves
Reeves headshot
Richard V. Reeves President - American Institute for Boys and Men

September 3, 2013

Promoting social mobility is typically seen as a job for government. But it must be on the business agenda too. Social mobility is a critical ingredient of corporate social responsibility – but, more importantly, of competitiveness.

The economy will be strongest when the best people get the most important jobs. Most firms now accept the logic of this proposition when it comes to gender and race, but it is equally true of social class. Hiring and promoting more women and ethnic minorities is a necessary goal in itself. If they are all from privileged backgrounds, however, the gains are limited (as I’ve argued this month in the UK journal Management Today)

Back in 1975, US economist Arthur Okun famously posed a ‘Big Trade-off’ between efficiency and equality. Okun’s presumption was that actions to promote greater equality – higher taxes, more redistribution, more state intervention in business – would lower productivity and competitiveness.

But if fairness means social mobility – if the equality we are talking about is equality of opportunity – then the trade-off may not be so big after all. Efficiency is served by those with the greatest ability doing the most complex and important jobs. Equality is served by everyone, regardless of background, having a fair shot at getting those jobs.

If that’s right, social mobility is not a sub-category of social responsibility. It is a core business imperative. Hire the best, promote on the basis of merit, win in the marketplace.

So how can firms do more on the social mobility front? Some suggestions:

  1. Collect data on class background as well as race and gender. Of course there are multiple ways to do this, and no measure will be perfect. But a good-enough proxy question would be: ‘Do either of your parents have a BA?’ 
  2.  Report class diversity in the company’s annual report, alongside gender and race. Transparency is a powerful driver for change.
  3.  Modernize the allocation of internships and other unpaid work experience opportunities. If these are filled using personal connections, rather than fair and open competition, the talent pool is likely to be shallower.

Promoting social mobility is, to adopt a business cliche, a ‘win-win’. It will help to create a more equal society. By helping to ensure that talent is recognized and rewarded, it will also create a more enterprising economy.