Zurich UK makes first industry move to publish socioeconomic pay gap data

By Rebecca Delaney

Feb 13 - (The Insurer) - Zurich UK publish its socioeconomic pay gap data on Thursday in what it described as a first for the UK insurance sector.

According to Zurich's data, the organisation's median pay gap between UK employees from professional and lower socioeconomic backgrounds is -4.2 percent. This represents the difference in hourly rate of pay of the middle person in each group.

The mean average pay gap stands at 10.5 percent.

Of Zurich's analysis of 73 percent of its UK workforce, the majority (28 percent) said they are from professional backgrounds. Intermediate and lower socioeconomic backgrounds make up 10 percent and 23 percent of the surveyed workforce, respectively.

According to the most recent data from the Social Mobility Commission for the Department of Education, 45 percent of workers in the UK financial services sector come from professional backgrounds, with intermediate and lower socioeconomic backgrounds representing 21 percent and 34 percent of employees respectively.

The work of the commission included guidance that recommends that UK employers measure socioeconomic background according to parental occupation, highest parental qualification, type of school attended, and eligibility for free school meals.

As well as disclosing its pay gap data, Zurich UK identified a "class ceiling", in which socioeconomic diversity at senior levels in financial services does not match that at junior levels, meaning that employees are joining the insurance industry but lack the sufficient opportunities to progress.

Employees were asked to voluntarily share information, with one in five senior leaders at Zurich UK disclosing that they are from lower socioeconomic backgrounds.

A report by Bridge Group and Progress Together last year found that almost 90 percent of senior roles in financial services are held by people from high socioeconomic backgrounds, compared to just one-third of the UK working population.

Zurich UK has launched a social capital programme to help new starters from non-corporate backgrounds to navigate the corporate environment, with the aim to enable career progression through inward mobility, upskilling and network building.

The carrier has also pledged to take a more skills-based approach in its hiring practices by placing less emphasis on qualifications and work experience. For example, Zurich UK said it will remove qualifications such as university degrees if they are not necessary to the role.

“Sharing these pay gaps, alongside the measures implemented to enable social mobility, is a great way to shine a light on what is currently the best kept secret in DEI; social mobility is the linchpin of shifting the dial on multiple diversity characteristics,” commented Steve Collinson, chief HR officer at Zurich UK.

“Whilst 'chipping away’ at the class ceiling is certainly a step in the right direction, smashing it is the ultimate goal. Social mobility is the next step in achieving a truly diverse workplace.”

Last year's Dive In Festival included a panel on social mobility in the UK (re)insurance sector, with speakers agreeing that socioeconomic consensus is more subtle in the workplace than other diversity characteristics, particularly if a sector has an elitist reputation.

Key cultural differences include accents, dress code, exclusive hobbies and holidays, visiting expensive restaurants/bars after work, and the ability to take on fixed-term contracts and unpaid internships.

Social mobility and socioeconomic differences may come into greater focus for UK firms in future, with the upcoming Equality (Race and Disability) Bill including proposals to make ethnicity and disability pay gap reporting compulsory for all large employers.

The draft bill is aimed to address structural barriers and disparities that lead to pay discrimination.

The Social Mobility Foundation has called for the introduction of mandatory socioeconomic background reporting at the same time, after its 2024 Class Gap Report found that people from working-class backgrounds are paid 12 percent less (£6,287) than those from middle-class backgrounds despite being in the same professional occupation.