A just and inclusive society has long been a strength of European countries. The continent is a world leader in advancing social imperatives such as gender equality and, historically, socioeconomic mobility. Yet progress on the latter has stalled in recent years, limiting the economic growth that is vital for Europe’s competitiveness. Research shows that social mobility can accelerate productivity—including through greater workforce participation, better skills matching, higher consumer spending, fewer talent constraints on corporate growth, and lower healthcare costs.
More than one-third of Europeans face significant barriers today, with lower employment, less-productive jobs, and slower career progress than people from higher socioeconomic backgrounds (SEBs). Ultimately, these individuals’ futures are constrained by their parents’ economic past. Both they and society suffer as a result.
This is a challenge, and not just for governments. Businesses have a critical role to play in fostering a more inclusive, meritocratic, and productive workplace—and a great deal to gain from the more dynamic economy that results. As Europe’s population ages and businesses need new skills, the pools of available skilled employees are rapidly becoming insufficient. Companies that act now can capture significant advantages, our research suggests, including not only better access to talent but higher value creation per worker, stronger employee retention, and improved decision-making. By setting strategic objectives, leveraging data-driven insights, and implementing targeted initiatives related to recruitment, retention, and career progression, companies of all sizes and in all sectors can contribute to Europe’s social mobility.
The societal impact could be profound: a boost to the continent’s GDP of as much as 9 percent. In addition, if Europe became more socially mobile, it has the theoretical potential to close the 2030 skills gap without any new training or reskilling. This could be the next frontier of European productivity growth.
While social mobility has national and sector nuances that businesses should heed, particularly when choosing interventions, our research shows that the underuse of talent from lower SEBs and those employees’ poorer workplace experiences are consistent across European countries and across businesses of different sizes and skill levels.
Our report analyzes social mobility through the lenses of three stakeholder groups: society, employers, and employees (see sidebar “Methodology”). We outline the challenges that exist today, demonstrate the potential economic benefits of improving social mobility, and suggest actions that different types of European businesses could take to boost productivity through social mobility.
Impact of lower social mobility: Society
Europe’s GDP growth has long lagged behind that of the United States, and the gap is widening. Between 2012 and 2028, the differential between the GDP of Euro area 17 countries (members of the European Union and the OECD)1 and the United States is projected to increase from 26 to 43 percent (Exhibit 1). In other words, the difference in GDP between this subset of European countries and the United States will increase by 17 percentage points over this period. Finding new levers that can boost Europe’s growth has thus become an imperative.
The primary reason for the growth gap, accounting for about 70 percent of the difference between the two economies, is Europe’s lower productivity.2 This divergence is largely due to factors such as the continent’s lower R&D spending and a smaller share of high-productivity industries such as technology.3 Enhancing social mobility could be a powerful lever for boosting Europe’s productivity.
A large body of research supports the link between social mobility and productivity-driven growth. The positive effects of social mobility include the following:
- Increased workforce participation. More socially mobile countries provide better access to employment for people of all backgrounds with skills for different roles. With more individuals participating in the economy, average per capita productivity grows.4
- Improved skills matching. In more socially mobile countries, people from low SEBs are more likely to find positions that fit their capabilities, which enables them to create more value than they could working in less value-creating roles for which they were overqualified.5
- Increased consumer spending. Higher workforce participation and better skills matching combine to produce a higher-earning workforce, which has spillover benefits for the wider economy.6
- Reduced talent shortages. More socially mobile countries have larger and more fluid talent pools for companies to tap, which can mitigate the potential of talent scarcity limiting corporate growth.7
- Reduced disparities in health. Higher social mobility correlates with lower systemic health disparities, resulting in lower societal costs and higher worker productivity.8
If European societies made social mobility a priority, they would be building on a strong foundation. The continent has an impressive record of improving diversity, meritocracy, and inclusion. It is a leader in gender equality—12 of the top 20 countries in the Global Gender Gap Index, a World Economic Forum (WEF) benchmark of gender parity, are based in Europe (the United States ranks a distant 43).9 Further, Europe’s 2020 Gini index score10 of 30 testifies to its more equitable distribution of income than in the United States, whose Gini score is 49.
Europe also has historically demonstrated strong progress on social mobility. It is home to 16 of the top 20 countries in the WEF’s Global Social Mobility Index (including all of the top ten)11 and has higher levels of intergenerational mobility than the United States.12 However, that momentum has stalled over the past decade (Exhibit 2). Social mobility is difficult to measure, and there is no perfect metric. But metrics such as wealth distribution,13 educational progress, 14 and indirect proxies show that Europe is making minimal progress. For example, the Social Progress Index15 reveals a decline of 0.9 percentage points in the United Kingdom during that time, while Germany has eked out a marginal increase of 0.2 percentage points. Italy’s score has risen 4.5 percentage points, but this is likely because the country had a lower starting point. These patterns imply significant room for improvement across the continent.
The result of this social-mobility stagnation is that the socioeconomic circumstances into which Europeans are born heavily influence their economic outcomes in adulthood. The impact of that background manifests across at least four dimensions of educational and professional achievement.
Access to education.16 Eurostat data shows that having a highly educated parent triples an individual’s odds of receiving a similar level of education compared to those whose parents attended only primary or lower-secondary (or middle) schools (Exhibit 3). The former group is also 15 times less likely to end their education at or before age 16 than individuals whose parents left school at or before age 16.17 This suggests that people from low SEBs have less access to the education necessary to qualify for high-skill, high-income jobs.
Academic achievement. Socioeconomic status also significantly correlates with academic performance. Students from low SEBs are on average six times more likely to have lower learning outcomes than their high-SEB peers (Exhibit 4). While the average varies by country—in some EU nations, high-SEB students outperform their low-SEB counterparts by a factor of ten—every country shows a difference of at least three times.
Employment access. Employment patterns reveal additional systemic challenges for low-SEB individuals. Their unemployment rate exceeds that of their high-SEB counterparts by approximately four percentage points (Exhibit 5). Moreover, their periods of joblessness last, on average, at least five months longer than for those from high SEBs. The reasons for unemployment also differ significantly, with low-SEB workers more likely to experience dismissal and less likely to leave their jobs for education or training opportunities (typically associated with career progression) than peers from high SEBs.18
Access to high-skill jobs. The connection between socioeconomic background and economic opportunity is also evident in job skill levels. Individuals from low SEBs are almost three times as likely to work in low-skill positions as similarly educated individuals from high SEBs (Exhibit 6). Similarly, low-SEB workers who lack university degrees are 3.4 times less likely to hold high-skill jobs than their equivalently educated high-SEB counterparts.19
Impact of lower social mobility: Employers
European businesses face a skills shortage crisis that shows signs of intensifying. In 2023, 75 percent of employers reported difficulties in filling roles—a 34 percentage point increase from 2018.20 Twenty-nine European countries report significant talent constraints, with job vacancy rates rising as much as 50 percent since 2020.21 These problems are particularly pronounced in construction, accommodation and food services, and highly skilled professional, scientific, and technical fields. One study found that 43 percent of European employers face worker shortages in data analytics skills, while 26 percent report talent deficits in IT, web design, and management.22 In the United Kingdom alone, a lack of digital and data skills is reducing annual revenues for affected organizations by an average of 8.5 percent.23
Business leaders expect further declines in the availability of workers with the skills they need. Forecasts indicate that the European workforce will shrink by two million individuals annually until 2040.24 The UN projects a 20 percent increase in Europeans aged 65 and above between 2020 and 2030, which will reduce the available workforce relative to the total population.25 A recent report from the McKinsey Global Institute (MGI) further found that the traditional population-age structure is inverting from a pyramid to an obelisk, with the first wave of this demographic shift already hitting Europe. The authors conclude that relying solely on higher labor intensity or productivity growth will not offset the impact sufficiently to maintain GDP per capita growth.26
Meanwhile, business leaders also expect a shift in the skills needed in the workplace (Exhibit 7).
AI and automation are spurring a shift in the skills that organizations need. Demand for high-skill jobs (requiring technological, social, and emotional capabilities) is expected to increase by ten million positions by 2030. In parallel, by 2030, up to 27 percent of current hours worked in Europe could be automated.27 Our analysis projects that low-skill jobs will precipitously decline—by up to six million positions.28 These job losses will disproportionately hit low-SEB workers, who currently hold 63 percent of those positions (Exhibit 8).
Social mobility initiatives can mitigate the impact of these converging trends. As noted above, highly skilled workers from low SEBs appear to have fewer opportunities to apply their skills than their higher-SEB peers. This is matched with other observations about skill utilization more broadly. In England, for instance, 22 percent of surveyed workers in low- to mid-skill positions reported that their skills are significantly underused, compared with only 7 percent of those in high-skill roles.29 European countries in general score low on a skills matching index,30 with the three countries we studied in detail (the United Kingdom, Germany, and Italy) ranging between 30 and 60 out of 100.31 They also register high rates of worker overqualification, ranging from 36 to 70 out of 100.32 Underutilization is thus most notable in lower-skill jobs, where individuals from low SEBs are more likely to work. By enabling underemployed talent from low SEBs to access, and thrive in, higher-skill jobs, European companies can both ease their skill shortages and improve the economic prospects of a large section of the European population.
The value of enhancing socioeconomic diversity goes beyond addressing talent gaps. Research shows that diversity among senior leaders improves decision-making; highly diverse teams make 87 percent better business decisions than individual decision-makers.33 Yet corporate leadership in Europe remains highly concentrated among people from affluent backgrounds. In France, half of the CEOs leading SBF 120 companies34 graduated from just four prestigious institutions.35 In addition, 48 percent of CEOs leading FTSE 350 companies (of those educated in the United Kingdom) graduated from independent (tuition-charging) schools, whereas just 6 percent of UK schoolchildren experience this education.36 Boards of directors are similarly skewed toward high SEBs. In Germany, for example, children of managing directors or board members are 17 times more likely to secure a board position at one of the top 400 companies than those without such connections.37 Another study found that while individuals from low SEBs represent 39 percent of the UK population, they occupy only 15 percent of board seats at FTSE 350 companies.38
Despite these compelling reasons for advancing socioeconomic diversity, few businesses prioritize it today. For example, only one of the top ten SBF 120 companies in France and 12 of the top 100 FTSE companies in the United Kingdom communicate about socioeconomic diversity initiatives in their annual reports.39 In part, that may be because increasing socioeconomic opportunities can be more challenging than other aspects of diversity. Social and economic status is highly relative, multifaceted, nationally nuanced, and often invisible. Understanding the socioeconomic profiles of the workforce also requires managers to delve into sensitive issues such as upbringing and social networks, with few best practices to guide them (see sidebar “The challenges around advancing socioeconomic diversity”).
Ultimately, businesses are a powerful force for advancing social mobility. When companies practice meritocratic recruitment and advancement, they enable high-performing workers of all social backgrounds to maximize their economic value creation.40 Fair access to employment allows talented employees from low SEBs to refine their skills and gain relevant experience, helping them build on past successes by seeking increasingly value-creative positions, thus forging fulfilling careers.41 As these workers accumulate wealth, their financial security helps them transition to better jobs, invest in educational or vocational improvements, and potentially launch their own ventures. These compounding effects allow people to climb up the socioeconomic ladder.
Impact of lower social mobility: Employees
People from lower socioeconomic backgrounds consistently report poorer workplace experiences and outcomes than their counterparts from higher SEBs. This manifests both in quantitative metrics such as earnings and career progression and in qualitative studies of employees’ working lives.
Earnings patterns show persistent differences between individuals from different SEBs performing equivalent work. In the United Kingdom, a student who qualifies for state-funded school meals with similar characteristics as a fee-paying student would still earn around 20 percent less on average.42 This disparity becomes more pronounced when the analysis factors in other aspects of inequality, such as race or gender. For example, in the United Kingdom, working-class people earn on average £6,800 less annually than those from privileged backgrounds, but women and ethnic minorities experience a “double disadvantage” in earnings.43
Additionally, in a survey we conducted with more than 3,000 European workers, respondents from lower SEBs44 reported lower satisfaction with their employment across a wide range of dimensions than peers from more affluent backgrounds (Exhibit 9). These challenges span the entire work life cycle, from recruitment to advancement to employment tenure.
Recruitment. Individuals from lower SEBs across all skill levels report difficulties in securing suitable employment. Our survey reveals at least four issues:
- Lack of personal connections. Lower-SEB candidates were 1.5 times more likely than their higher-SEB counterparts to report that they lack the connections necessary to identify job opportunities (a challenge particularly acute for those seeking high-skill jobs).
- Lack of confidence. Lower-SEB individuals were 1.6 times more likely than their higher-SEB counterparts to report thinking that “someone like me” would have a low chance of securing a given position.
- Perceived bias. Thirty-four percent of lower-SEB respondents reported experiencing bias related to their socioeconomic background during the recruitment process. This is especially true for young (under 35) and high-skill individuals. For example, young people from lower SEBs were twice as likely to say they experienced bias related to their background than the average for the lower SEB cohort.
- Overqualification. Likely because the above factors make it difficult for low-SEB individuals to secure well-matched employment, they are 1.4 times more likely to accept positions for which they are overqualified.
Advancement. Individuals from lower SEBs progress more slowly along equivalent career paths than their higher-SEB counterparts. Our survey found this reflected in several metrics. People from lower SEBs are three times more likely than their higher-SEB peers to feel that they have to work harder than others to advance, 1.6 times more likely to report having been explicitly told to work longer hours to get a promotion, 2.1 times more likely to indicate a lack of the connections within the company needed to get ahead, and 1.4 times more likely to report having discouraging conversations with direct supervisors. As in recruitment, lower-SEB workers under 35 were especially likely to report encountering bias related to promotions. UK research further indicates that low-SEB professionals take 15 to 25 percent longer to advance than peers from high SEBs in similar roles. 45
Workplace experience and retention. Many lower-SEB employees say challenges they attribute to their socioeconomic backgrounds affect their work satisfaction. For example, 57 percent of all surveyed employees reported seeing noninclusive behaviors explicitly linked to socioeconomic background (such as mocking someone’s accent or commenting on their lifestyle) directed at lower-SEB colleagues over the previous three months (Exhibit 10). Not surprisingly, poor workplace experiences affect lower-SEB employees’ desire to stay in their jobs, with 52 percent saying they would consider leaving their current positions for organizations demonstrating greater socioeconomic inclusivity, compared with 31 percent of employees from higher SEBs.
These workers appear likely to follow through on their stated intentions—particularly lower-SEB men, who were twice as likely to report an intention of leaving their positions within a year compared with their higher-SEB counterparts. Nevertheless, economic reasons require many lower-SEB workers to stay in jobs in which they are unhappy. This is especially true for women and young people in our survey, who were 26 percent and 50 percent more likely, respectively, than their higher-SEB counterparts to state that they cannot afford to leave their jobs.
The benefits of corporate action on social mobility: Three stakeholder lenses
Greater social mobility presents a transformative opportunity across Europe. Improving employment access and work experiences for people from lower socioeconomic backgrounds has the potential to significantly benefit not only workers but their employers and society at large.
For society, improving social mobility could increase the GDP of European countries by between 3 and 9 percent. The OECD estimates that its 24 European member countries lose an average of 3.4 percent in GDP because of childhood disadvantage.46 This estimate is based on a relatively narrow study that considered the monetary value of lost employment and earnings47 and higher healthcare costs of 25- to 59-year-olds who grow up at an economic disadvantage.48 It does not, for example, consider the impact of unequal access to opportunities for people with equivalent education.
We strove to create a more holistic estimate that takes those factors into account. Based on our calculations, social mobility could increase the combined GDP of EU-27 countries by €1.3 trillion, or 9 percent.49 This economic uplift derives from increased worker participation, more effective use of available talent across jobs at all skill levels, and faster progression up the ranks for low-SEB employees, resulting in their higher value creation. We estimated the potential impact as follows:
- Low-SEB workers have a higher unemployment rate than their high-SEB counterparts (9.4 percent versus 5.3 percent). Raising their employment rate to match that of their high-SEB peers could add 2.1 million people to the workforce, according to our analysis. Assuming that each extra person employed results in €74,692 of added value (in average worker GDP),50 GDP would increase by approximately €160 billion.
- Low-SEB workers are less likely to be in high-skill jobs than similarly educated people from high SEBs. Adjusting the skills mix of jobs that low-SEB graduates pursue to match that of high-SEB graduates (see Exhibit 7) with the same education level brings an additional €590 billion in GDP.
- Low-SEB workers tend to progress more slowly in their careers than their high-SEB peers in jobs of the same skill level, despite a lack of statistical evidence linking this pattern to performance.51 If their pace of career progression were accelerated to match that of high-SEB workers, particularly in jobs requiring high- and higher-medium-level skills,52 the result would be a 44 percent uplift in value creation for those in high-skill jobs and 13 percent for those in higher-medium-skill jobs. This third element adds €570 billion to the combined GDP.
For employers, improved social mobility has the potential to close the EU skills gap while enhancing organizational productivity. Our analysis suggests that if low-SEB workers held high-skill jobs in the same proportion as their similarly educated high-SEB peers, an additional 13 million employees would be available for high-skill roles in 2030 (Exhibit 11), more than the anticipated need.53 Interestingly, 80 percent of this impact would come from the low-SEB population lacking university education, both due to their large total number and the wide difference in high-skill job participation among the three socioeconomic cohorts in this education bracket.54
Moreover, organizations pursuing social-mobility initiatives can benefit from stronger employee retention and higher employee value. Companies that lack inclusive promotion practices fail to capture the full potential of their low-SEB workers, particularly in high-skilled positions (Exhibit 12). Because these employees experience 15 to 25 percent slower career progression than their high-SEB counterparts,55 our analysis indicates that they generate 25 to 35 percent less value for employers over the first 12 years of their careers than high-SEB workers. (The two sets of figures differ because employees create more value per unit time the higher they advance.)
Employers can gain additional value by improving lower-SEB employees’ work experiences, thus boosting retention, and by tapping into their career aspirations. More than half of the lower-SEB respondents to our survey reported that they would consider leaving their jobs for workplaces that are more socioeconomically inclusive. Additionally, based on our survey, employees from disadvantaged backgrounds are 20 percent more likely to aspire to leadership positions than their higher-SEB peers. Employees of all backgrounds are also seven times more likely to describe their companies as high performing when the organizations demonstrate commitment to socioeconomic inclusivity,56 suggesting yet another benefit of advancing social mobility: a higher perception of organizational performance.
Last, employees from low SEBs materially benefit when businesses embrace a social-mobility agenda. Our survey found that policies that support lower-SEB workers at all stages of their tenure have a notable impact on morale—lower-SEB employees whose organizations lack such programs were 2.8 times more likely to report that they are unhappy than those who have access to such support. This is especially true for women (3.3 times more likely) and highly skilled employees (5.1 times more likely). For example, lower-SEB workers with access to mentorship or sponsorship programs were 1.4 times more likely to report job satisfaction than those without this support and 1.5 times more likely to recommend their organizations to other lower-SEB candidates. Such career support affects the views of employees from all backgrounds, research suggests, because those who feel they have an equal opportunity for advancement within a fair promotion environment are more likely than others to recommend their company as an employer.57
How businesses can improve socioeconomic diversity and social mobility
Companies that hope to gain the benefits of social mobility—not only for themselves but their employees and society at large—need to create a comprehensive agenda. Fulfilling this ambition typically entails five steps: developing a clear strategy and defining objectives, building a robust fact base to inform decisions and metrics, identifying and implementing initiatives, defining accountability, and tracking impact (see sidebar “Organizational strategy for social mobility”).
Organizations can implement initiatives across all three horizons of the employee life cycle: recruitment (for example, covering policies ensuring fair assessment of candidate capabilities), retention (including mentorship and sponsorship programs), and advancement (for example, skill development courses). In addition, employers may consider engagement beyond the employment cycle—for example, outreach to low-SEB university students can provide early guidance and help set aspirations.
Today, most organizations’ diversity efforts, including those focused specifically on social mobility, tend to focus on recruitment. Expanding that focus to cover advancement initiatives could deliver more impact. In the United Kingdom, for example, more than 80 percent of organizations have initiatives addressing recruitment, while only roughly one-third have such initiatives regarding employee retention.58 This disparity is even stronger in initiatives that focus specifically on social mobility. One indicator is that recruitment-focused programs appear three times more frequently than advancement initiatives among UK Social Mobility Awards entries.
We have identified 21 initiatives that can help companies advance social mobility at all three employment stages (see sidebar “Initiatives to foster socioeconomic diversity”). While our list is not exhaustive, it does cover programs most frequently mentioned in our literature review and our work with clients. Below, we explore seven types of initiatives in more detail: paid internships, data-assisted programs to identify low-SEB talent, inclusive recruitment practices, mentorships and sponsorships, skill development journeys, inclusive promotion policies, and lifelong learning programs.
Paid internship programs. A recent survey found that more than 70 percent of young Europeans would be unwilling to pursue unpaid internships.59 Among low-SEB respondents, 86 percent indicated that they could not afford to accept unpaid internships, compared with 36 percent of those from higher SEBs (Exhibit 13). In the United Kingdom, however, one in five internships today provide no remuneration.60 Programs offered by media and arts organizations have some of the highest rates of unpaid or underpaid placements (83 percent unpaid in media and 86 percent paid at below minimum wage in the arts).61 The education and research sectors, meanwhile, are dominated by internships that only cover expenses. The implementation of paid internships would allow a significantly larger and more diverse pool of candidates to access such opportunities.
Making internships more widely accessible can produce long-term rewards for employers. An EU survey found that 39 percent of intern respondents continued working for the same employer after the program ended, suggesting that a diverse pool of interns can help foster a diverse workforce.62 LVMH’s Institute of Métiers d’Excellence, for example, offers fashion and business training to participants as part of paid apprenticeships and skill development programs.63
Data-assisted recruitment. Candidates from low SEBs who don’t attend top-ranked universities can be less visible to corporate recruiters. They may also lack connections in professions they aspire to enter. For example, state-school-educated individuals in the United Kingdom are two times less likely to know an accountant or a doctor and seven times less likely to know a banker or a politician than individuals who attended fee-paying schools.64
Data analytics tools can help address both issues by enabling universities and employers to identify and connect with high performers from low SEBs. The British organization Zero Gravity, for instance, uses a proprietary algorithm to identify the top 15 percent of talent (based on academic performance) from the bottom 40 percent of socioeconomic backgrounds,65 and then promotes these individuals to top universities and companies. The organization states that it has worked with HSBC, for example, to identify more than 130 high-potential low-SEB students and then mentor them before they applied to HSBC’s Head Start program. Those who had received mentoring were twice as likely to be accepted as those who had not. Zero Gravity also helps low-SEB students prepare university applications, reporting that those who engage weekly almost double their chances of getting into top-ranked universities and are 2.3 times more likely to secure an internship with a Zero Gravity employer partner than comparable candidates.
Inclusive recruitment practices. Using objective measures of candidate capabilities in the recruitment process can help companies mitigate the potential for socioeconomic bias. For example, the Skills Builder Partnership, a UK not-for-profit, offers a framework of eight essential skills (such as creativity and problem-solving) that organizations can use to supplement criteria that can be affected by socioeconomic background, such as educational credentials or work experience. Using the Universal Framework for Essential Skills developed by Skills Builder Partnership, the Heathrow Employment and Skills Academy has helped thousands of young people in local schools and colleges, and job seekers of all ages understand how skills are applied across a wide range of roles at the airport. As a result, Heathrow reports it has seen an increase in job applications translating into job offers, a critical outcome, particularly for people affected by unemployment.66 Other British organizations have removed the 2:1 minimum grade requirement67 to account for the potential impact of socioeconomic background on educational history. For example, the law firm Browne Jacobson removed this requirement after an internal survey revealed that some successful solicitors currently at the firm did not meet it.68
Mentorship and sponsorship programs. Such programs serve distinct but complementary purposes, with mentorship providing guidance and support to colleagues while sponsorship focuses on opportunity creation. Both have shown to be highly effective in advancing social mobility objectives. Our survey found that employees from lower SEBs who have access to mentorship or sponsorship programs are 1.4 times more likely to report increased job satisfaction and twice as likely to aspire to executive positions than those who do not. Companies are realizing the value of such programs. When bp established a social mobility business resource group in 2022, one of its first initiatives was the creation of a global mentoring program.69
However, the survey highlighted that higher-SEB employees may not fully appreciate the value of mentorship and sponsorship. While 43 percent of this cohort identify themselves as potential allies to lower-SEB colleagues, only 36 percent report actively providing support (Exhibit 14). What’s more, the actions allies take don’t always align with lower-SEB colleagues’ priorities. For example, educating oneself about the experiences of employees from lower SEBs is the fourth-most-common action that allies report taking, but workers from lower SEBs ranked this as the least-effective activity. On the other hand, mentorship and sponsorship—which are highly valued by lower-SEB employees, especially those 35 years of age and younger—are practiced by the fewest allies in our survey.
Skills development programs. Targeting training programs specifically at employees from lower SEBs can have an outsize impact. Five out of ten employees in declining professions come from low SEBs,70 making skills-training initiatives critical to improving this population’s lives. Training initiatives aimed at unemployed youth are particularly important to promote economic empowerment.71
Businesses can help low-SEB employees build the skills they need by orchestrating “skills journeys,” in which workers in low-skill, declining jobs undertake a series of gradual moves to more value-creating roles, each time maintaining some overlap with their previous roles. As employees acquire new skills, they take on higher-skill positions that upgrade their career prospects. In this way, employers can enable workers to improve their skills and make significant career shifts without fully pausing their productivity. MGI research on career pathways shows that, for example, cashiers have skills that, with training, can put them on a path to sales manager positions, an occupation set to grow by 22 percent over the next decade and offering six times the median annual income of a cashier (Exhibit 15).72
At each step of the journey, the employee should continue to use at least half the skills of their previous position to make the transition viable without substantive career breaks and retraining. According to Generation, a McKinsey not-for-profit organization that partners with employers on this type of staged training, 82 percent of employers find that program graduates perform their jobs better than peers who didn’t receive the training.73
Inclusive promotion practices. In our survey, lower-SEB employees were twice as likely as their higher-SEB colleagues to report feeling that they missed promotional opportunities or raises because of their socioeconomic background. Additionally, as noted earlier, UK research demonstrates that low-SEB employees in high-skill positions advance considerably more slowly than their peers from more affluent backgrounds.74 Companies can mitigate this disparity by defining progression pathways for all roles—including the training and experience necessary for each stage of advancement—and discussing these requirements early in an employee’s tenure. Technology consultancy Opencast, for example, has partnered with Skills Builder to increase clarity about role requirements and advancement paths. Now, two-thirds of the company’s workers have professional development plans in place.75
Ensuring that performance reviews apply objective measures and fair processes further reinforces inclusivity in promotion. That includes being mindful of cultural and interpersonal barriers that low-SEB workers face. For example, research suggests they often lack experience in networking and commonly place lower value on what they bring to relationships with colleagues than those from affluent backgrounds.76 Low-SEB individuals are also more likely to attribute their success to luck and to suffer from imposter syndrome than their more affluent coworkers—who, conversely, tend to attribute their achievements to their own talent and hard work. Additionally, at times of stress or uncertainty, people from disadvantaged backgrounds tend to lean on a few trusted individuals, whereas high-SEB workers are more likely to widen their networks in seeking support. Those networks, in turn, tend to be more willing to help high-SEB individuals than those with lower socioeconomic status.77
As a result, high-SEB employees develop relationships—which frequently take the form of sponsorship—that can give them an advantage at promotion time. To even the playing field, employers could consider providing bias awareness training for senior managers and networking and interpersonal or communication skills training for low-SEB employees.
Lifelong-learning partnerships with educational institutions. Access to educational and training opportunities can help advance anyone’s career, but it is particularly valuable to low-SEB individuals, roughly half of whom report receiving no job-related training since leaving school.78 Companies can partner with numerous universities that offer programs aimed at adult students. For example, Masaryk University in the Czech Republic offers micro-certificate programs that teach skills across numerous domains, from economics to law. (The credits are recognized under the European Credit Transfer and Accumulation System).79 Meanwhile, the United Kingdom’s Open University partners with employers—including 72 of the FTSE 100 companies—to provide courses for workers throughout their careers.
Some companies go further by collaborating with colleges and universities on shaping adult education programs to ensure that they teach skills that are relevant to current and future roles. For example, renewable-energy company Drax worked with the United Kingdom’s Selby College on qualifications and coursework related to bioenergy with carbon capture and storage to train workers for jobs in the green economy.80 Siemens, meanwhile, has partnered with the University of St. Gallen in Switzerland to provide courses for its employees in areas such as digitalization.81
In addition to initiatives aimed at job candidates and employees, businesses can help shape future talent from low SEBs through outreach to secondary-level students as a part of community engagement. Company representatives can visit schools to discuss potential career paths, study options, and in-demand skills with low-SEB students, and they can help schools develop curriculums that equip students with employable skills. The Siemens School Partnership program, for example, works with German secondary schools to prepare students for the workplace by teaching them about technology and innovation.82 In the United Kingdom, the BBC collaborated with the Sutton Trust on a program aimed at leveling the playing field for 16- to 18-year-olds from less privileged backgrounds. The 18-month program prepared participants to apply for BBC apprenticeships and provided training in skills such as interview techniques.83 Some companies seek to develop talent at an even earlier stage. Rolls-Royce, for one, has “STEM ambassadors” who regularly visit primary schools to lead workshops and projects in which older students can learn about Rolls-Royce careers.84
Aside from helping young people from disadvantaged backgrounds set high ambitions and launch their careers, such outreach allows companies to bolster the pipeline of future skilled talent by spreading awareness of the support their industries offer to low-SEB youth. In a study of more than 340 English businesses that work closely with schools, 75 percent of respondents reported a resulting boost in apprenticeship applicants and 78 percent registered an increase in job applications. Those that engaged parents in their outreach saw even better results—they were 30 percent more likely to report progress on finding qualified candidates for job openings than those that didn’t.85
Social-mobility strategies by business archetype
When we analyzed the impact of company size and typical employee skill level on our survey results, we found little high-level difference: Employees from lower SEBs are universally more likely to report lower job satisfaction than their higher-SEB colleagues regardless of corporate context, and they are up to three times more likely to agree that their background has negatively affected their work experience (Exhibit 16). The opportunities discussed above thus apply to companies of all sizes and sectors.
While the broad findings are largely consistent across company types, the best way to address them varies based on organization size and context. A small business with primarily low-skilled employees, for example, should take a different path than a multinational corporation staffed by highly skilled professionals. To get the most value out of interventions—for employees, society, and their own organizations—companies should tailor their approaches to their contexts, which we have grouped into four archetypes.
Small organizations with workforces of all skill levels. Start-ups and small businesses may benefit most from putting fundamental interventions in place. These organizations typically operate under significant resource constraints,86 which may limit their ability to invest in comprehensive sets of social-mobility initiatives. The result is reduced support for career progress, with lower-SEB employees in these organizations reporting 1.2 to 1.8 times lower likelihood of receiving help in advancing to managerial positions than counterparts in larger organizations.87 However, small organizations’ greater operational flexibility can also offer workers more opportunities for rapid progression, giving them the potential to be more powerful enablers of social mobility.88 To capitalize on this advantage, small companies could pursue partnerships with organizations such as IntoUniversity, a UK organization that helps young people from disadvantaged neighborhoods attain education, employment, and work-based training with the ultimate goal of helping them reach their full potential. IntoUniversity’s paid internship program, Big City Bright Future (BCBF), offers highly sought-after work placements at big firms in UK cities. As a part of the program, BCBF hosts résumé and application preparation sessions for candidates. In this way, they can access specialized expertise or training without making substantial resource commitments that may be challenging at their scale.
Medium-size to large organizations with low-skilled workforces. Organizations in this category, such as fast-food chains and hospitality companies, may be best served by prioritizing the creation of clear progression pathways. Companies in this group typically employ higher proportions of low-SEB employees than those in the other archetypes but often lack structured advancement pathways (through which, for example, employees on the shop floor can rise to management) and other mechanisms to support the workforce.89 Our survey suggests that employees in these environments are almost twice as likely as those in high-skill organizations of similar size to report an absence of policies that support socioeconomic diversity. Lower-SEB workers are also 1.3 to 1.7 times less likely than employees from other company archetypes to report that a senior colleague committed to helping them get a promotion.90 Mentorship programs and inclusive promotion practices would further empower low-SEB workers to capitalize on advancement pathways.
Medium-size to large organizations with medium-skilled workforces. Organizations in this category, such as construction companies and industrial manufacturers, are 1.6 times less likely to have policies to support socioeconomic diversity than high-skill organizations of similar size.91 Members of this archetype can best promote social mobility by helping their employees improve their skills. Many of their workers need to meet certification requirements and face pressure from increasing automation and AI implementation. By instituting training programs that align with emerging technological requirements while providing clear pathways for career advancement, these companies can improve worker retention and ensure they have skilled talent available to meet their future needs.
Medium-size to large organizations with high-skilled workforces. Companies in this archetype may be best served by both increasing the diversity of their recruits and improving low-SEB workers’ opportunities to advance through initiatives such as mentorships. Organizations in this group—technology firms, financial institutions, and professional-services providers, among others—tend to have lower socioeconomic workforce diversity than those in other archetypes, with some industries showing pronounced disparities. In the UK technology sector, for example, only 9 percent of employees are from low SEBs.92 While these types of organizations usually have socioeconomic diversity policies and well-defined career paths, advancement often depends heavily on social capital and interpersonal dynamics. In our survey, employees in such organizations are up to 2.7 times more likely than others to report that they had support from a professional network to get their current role than employees in other archetypes.93 It is likely that such effects continue on to workplace progression. By using open recruitment practices and providing mentorship programs that help employees navigate informal organizational structures and build professional networks, corporations can get the most value from all employees.
Geographic considerations in social-mobility action
Our survey suggests that the level of socioeconomic inclusiveness in the workplace is broadly similar across large Western European countries. Approximately 30 percent of employees in the United Kingdom, Italy, and Germany reported a lack of workplace policies that support socioeconomic diversity, and roughly half of lower-SEB employees said they would consider leaving their jobs for a workplace that is more socioeconomically inclusive. Additionally, between 30 and 40 percent of lower-SEB workers in all three countries agreed that their socioeconomic background has negatively affected their work experiences.
Yet, as with organizational context, each country’s distinct characteristics and social and class systems may influence the best interventions (Exhibit 17). We compared the United Kingdom, Germany, and Italy to highlight how national characteristics could affect the social-mobility actions that businesses may consider.
United Kingdom. While the United Kingdom ranks 21st—below Germany—on the WEF’s Global Social Mobility Index (GSMI), British organizations appear to have more talent development resources than their counterparts in continental Europe: 37 percent of UK workers in our survey reported having access to relevant skills training for lower-SEB employees (such as leadership development) compared with 22 percent in Italy and 24 percent in Germany. Enhanced access to support correlates with greater intergenerational occupational mobility,94 particularly among younger workers: Individuals aged 18 to 34 whose parents had a low level of education are 2.6 times more likely to secure medium-skill positions than their counterparts aged 50 and above. Consequently, UK businesses may gain outsize benefit from training initiatives targeted to workers over age 35.
The United Kingdom also shows less variation than Germany and Italy in employee retention between different socioeconomic groups. Lower-SEB UK employees are only slightly more likely to leave their positions within a year than their higher-SEB colleagues—a significantly lower ratio than in Italy and Germany, where lower-SEB workers are 1.4 and 2.1 more likely, respectively, to leave.95
However, significant challenges remain in the United Kingdom, particularly in disparity of educational access. Only 16 percent of lower-SEB students96 enter university, in sharp contrast to 75 percent of private school attendees.97 Organizations committed to social mobility may therefore wish to prioritize skills rather than educational qualifications in employee recruitment.
Germany. The country presents a complex social-mobility landscape characterized by significant regional variation. Germany ranks 11th on the GSMI (compared with the United Kingdom at 21) and has the European Union’s lowest youth unemployment rate, at 6 percent.98 However, pronounced east-west disparities persist, with western regions demonstrating stronger social-mobility patterns. Also, the most affluent 10 percent of the German population hold 63 percent of the country’s wealth. While this figure is higher than for the United Kingdom and Italy (both at 53 percent), it remains below the European average (67 percent).99
German organizations appear to have fewer social-mobility programs than their UK counterparts. Only 24 percent of German employees we surveyed reported that their companies offer training programs for colleagues from lower SEBs—13 percentage points below the UK figure. Children of low-skilled workers also show 1.6 times higher likelihood of remaining in low-skill occupations than their UK counterparts.100 This implies that businesses in Germany wishing to improve social and occupational mobility may want to prioritize hiring individuals from low SEBs with the intent of training them to qualify for higher-skill roles.
Italy. Italy has a GSMI ranking of 34, suggesting that it has the most significant social-mobility challenges of the three economies. Italy has notable north-south variation in social-mobility patterns, with northern regions demonstrating better outcomes. Youth unemployment presents a singular challenge—at 22 percent, Italy’s rate is among the EU’s highest.101 In addition, economic obstacles and social prejudices appear to pose barriers for low-SEB individuals in accessing top secondary schools and universities. An Italian study found that the type of high school a person attends can influence whether—and where—they go to university. Students who attend scientific schools, for example, are more likely to progress to higher education than those who attend vocational schools; only 16 percent of students from vocational schools go on to attend university.102 Given how early in life students make these decisions, those whose parents are significantly involved in charting an educational path have an advantage.
Wealth concentration in Italy is less pronounced than in Germany, with the richest 10 percent holding 53 percent of national wealth.103 Professional-development access is more constrained, however. Only 22 percent of Italian employees reported having access to relevant training opportunities for workers from low SEBs, and children of low-skilled workers demonstrate 1.8 times higher likelihood of remaining in low-skill occupations than their UK counterparts.104 In light of these findings, Italian organizations may get the most social-mobility impact from prioritizing youth engagement through outreach programs and mentoring to address youth unemployment and promote early career development.
Improving social mobility could give Europe’s economic growth a once-in-a-generation boost, supercharging the region’s competitiveness at a time when it is increasingly falling behind. While governments should continue their efforts to promote social mobility, it is time for businesses to also rise to the challenge. Our research underscores companies’ power to help individuals from low SEBs fulfill their economic potential. By doing so, businesses can not only contribute to a more equitable and prosperous European society but significantly improve their own performance.
The opportunity is not only vast but overwhelmingly consistent across regions and company types. Social mobility is often viewed through a country lens, but our findings show that this is not just a national issue but a continental constraint. Ultimately, the actions we urge companies to take could go a long way toward enabling the economic hopes and dreams of more than a third of Europeans.
Together, societal prosperity, corporate effectiveness, and employee empowerment make a compelling case for business action on European social mobility.
