Britain's love for tradition is well known. From retaining the monarchy, even if just as a very expensive figurehead, to maintaining an all-white dress code during Wimbledon, Britain manages to hold on to some of its cherished traditions in an otherwise fast-changing world.
Test cricket still enjoys primacy in England, even as the rest of the world has embraced T20. Evening tea, the Royal Ascot horse race, the Queen's Guard, and the iconic black taxis in London are part of a long list of lovable traditions that endure.
Investment banking is a cosy circle with stiff barriers to entry for anyone who isn't from the "right" social background.
While these are traditions that are usually seen in a positive light, there is another side to British tradition that is a little less palatable. The class divide is a very tangible reality, even in modern day Britain. In fact research has shown that there are now seven distinct social classes in Britain, and not the traditional three.
Therefore while generally British society has become more progressive and cosmopolitan, it has not been able to shrug off the class divide. Like with most societies, the higher classes in Britain also seem more fixated on class, and strive to retain their distinctiveness and advantages versus the other social groups.
A bastion of the elite and established sections of British society is banking, especially the world of high finance and investment banking. It is a lucrative career and despite the demands it places on workers, it is a highly sought after profession. The investment banking industry typically relies on networks and connections as much as sheer ability and hard work. It is therefore a cosy circle with stiff barriers to entry for anyone who isn't from the "right" background, so while many aspire to it, only a few are able to get in.
According to a recent report, something as trivial as the colour of shoes being worn by a candidate can result in them being refused an investment banking job in London. In addition to the shoes a person is wearing, their clothing, accent, and mannerisms are also major factors in determining whether they get accepted, especially in client-facing roles.
Essentially what this means is that people from less affluent backgrounds are being denied the opportunity to work in one of the most prestigious sectors not because of a lack of skill or ability, but because they don't have the right pedigree. As a result, social mobility is further hampered in class-conscious Britain.
Essentially, people from less affluent backgrounds are being denied opportunities not because of a lack of skill or ability, but because they don't have the right pedigree.
Some industry insiders may argue that employees from an affluent background are more likely to have the kind of networks and access that are essential in the world of corporate finance and are more likely to be better cultural fits in the organization. However, it is also true that restricting the selection pool keeps the industry more insular and less in tune with the evolving world.
The global recession of 2008 made a big dent on the image of investment banking and led to some serious efforts from regulators and citizens to make the industry more transparent and responsible. The "Occupy Wall Street" movement was an outpouring of the average citizen's resentment at the perceived insularity and greed prevalent in the industry. The kind of restrictive hiring practices highlighted in the report further heighten this perception about investment banking and in the long run could be damaging to not only the industry, but also global finance as a whole.
Investment banking undoubtedly has a unique operating environment and unlike the world of technology and start-ups, it demands certain standards of appearance and comportment. The stakes are high and building trust and relationships with clients often requires more than just operational skills and high potential. In certain deals, pedigree has the power to open doors that would otherwise remain shut and investment banks are acutely aware of this. The discipline and discretion requires in this profession also make it safer to go with a candidate whose lineage can vouch for him.
Restricting intake to certain sections of society discourages the kind blue sky thinking that's needed for the industry to evolve.
With that said, investment banking can benefit from fresh ideas that can help it better reflect the society it operates in. Restricting intake to certain sections of society discourages the kind blue sky thinking that's needed for the industry to evolve. Good candidates with the right skills can easily be groomed to adhere to the expected standards. As long as the organization provides new hires from diverse backgrounds an environment that enables them to learn the ways of the industry, they will be able to adapt and thrive.
There is an incredible amount of talent in the world and with better access to quality education, information and opportunity, young people today are breaking through many barriers of ethnicity, economic status and gender to make meaningful contributions. They bring in unique insights and new perspectives that enable innovation and growth, ultimately strengthening the organizations they work in.
With its rigid stance on hiring only from a select group, the investment banking just might be missing out on a lot of great talent that can add exponential value to the industry and take it on a different trajectory.
Britain must ensure that it does not allow the interests of its aspiring classes to be sacrificed at the altar of elite snobbery.
For Britain too, this is will be an important step. As a nation, it professes to stand for equal opportunity and tolerance. However, allowing discriminatory practices to continue on its soil tarnishes this image that it seeks to project. It also leads to greater dissatisfaction in the general population that feels that it is being denied the opportunity to grow. The recent Brexit vote reflected the growing divide in the aspirations and expectations of the country's elite and the rest. As it looks ahead to an increasingly more competitive future, Britain must also ensure that it does not allow the interests of its aspiring classes to be sacrificed at the altar of elite snobbery.