Senda Kavindele of KPMG on closing socio-economic pay gaps

KPMG UK has been a long-term champion of social mobility and has spent several years working with local communities to raise skills and aspirations, as well as challenging its own recruitment and promotion processes. In September 2021, it was one of the first organisations to publish its socio-economic background pay gaps, measuring the differences in pay between colleagues from different socio-economic backgrounds, and set out ambitious targets to increase the number of senior employees from working class backgrounds.

KPMG’s socio-economic pay gap

We spoke to Senda Kavindele, interim head of inclusion, diversity and equity at KPMG in the UK, about its socio-economic pay gaps, why tackling this issue is a business imperative and what it is doing to shift the dial.

“We recognise that social mobility is the defining challenge for the UK, with the link between socio-economic background and adult outcomes stronger here than in any other developed country,” says Kavindele. “Research continues to show that where you come from and what your parents do for a living has an impact on the opportunities that are available to you in life; from work experience and career aspirations through to hobbies and interests.

“We have been collecting data on parental occupation since 2016, so once we reached a sufficiently high disclosure rate, we wanted to publish our data to further the conversation on this important topic,” Kavindele says.

The organisation aims to see 29% of its partners and directors come from a low socio-economic background by 2030, compared with 23% of the firm’s partners and 20% of its directors currently.

For Kavindele, the reasons for the business to take these steps are clear. “Building a diverse business is a commercial imperative for us. By having a diverse workforce, we benefit from the wide range of experiences and perspectives that our people bring to their day-to-day work, and this helps deliver better outcomes for both our own business and our clients.”

Calculating KPMG’s socio-economic pay gaps

The organisation use parental occupation as a measure of its socio-economic background pay gaps, which was identified by social mobility experts Bridge Group as the most robust and reliable indicator. “It is primarily because of the strong evidence base that this is an accurate measure, including the link between this indicator and access to opportunities and adult outcomes,” says Kavindele.

In addition, parental occupation is a well-established measure. The Office for National Statistics and the Census use this measure with their data, enabling KPMG to reliably benchmark against it.

“Another complexity of socio-economic background pay gap reporting is the fact that we detail three pay gaps,” says Kavindele. “While traditional pay gaps like gender and race have just one binary measure, socio-economic background spans professional, intermediate and working class, so we needed to illustrate the gap between each.”

Collating socio-economic pay gap information

There are three key challenges that the organisation had to overcome to produce the data:

1. Getting the methodology right, which is why they chose to work with Bridge Group.
2. Achieving sufficient response from its employees to ensure an accurate reflection of socio-economic backgrounds across different grades and functions.
3. Establishing what it would do with the data.

Once the methodology was determined, getting parental background information from its employees took time. The organisation needed to ensure that it fully explained what social mobility means and why it was asking the question.

“Our push on central communications to our colleagues was vital in achieving this [response], combined with the fact that we’ve been collating data on parental occupation since 2016,” says Kavindele.

Now it has the information needed to produce an accurate illustration of its socio-economic pay gaps, the organisation has set out targets and communicated its social mobility action plan.

“To address our socio-economic pay gaps and reach our representation targets, our focus will be on colleague paths into and through the organisation, from recruitment to progression – removing any potential barriers facing those from lower socio-economic backgrounds,” says Kavindele.

Its work includes:

• new recruitment programmes dedicated to bringing in talent from lower socio-economic backgrounds at middle management and senior levels;
• the introduction of mandatory training to all colleagues on inclusion, diversity and equity that is inclusive of socio-economic background;
• a talent development programme aimed at colleagues from lower socio-economic backgrounds; and
• using parental occupation as a key measure within HR processes.

The importance of social mobility

“Alongside acknowledging the socio-economic backgrounds of our own people and the critical role they play in our approach to inclusion, diversity and equity, we also wanted to further the conversation on this important topic externally,” says Kavindele.

“All businesses have a role to play in creating truly diverse and inclusive cultures, so we hope that the publication of our socio-economic pay gaps will prompt other business to do the same. As was clear with our own approach, it starts with collecting the insights and recognising the importance of social mobility more broadly.”

Addressing pay gaps within organisations is an issue that is gaining momentum. Just last week, the Women and Equalities Committee recommended that ethnicity pay gap reporting should be made mandatory for all businesses that currently have to report their gender pay gap. As such, it stands to reason that pay gap reporting on other characteristics, such as disability and socio-economic background, may also soon be required.

With workplace culture and purpose becoming increasingly important to employees and candidates, ensuring that workplaces offer equal opportunities has never been more important.

The author is Dawn Lewis, content editor at REBA.