Supporting social mobility through apprenticeships

By Amanda Cherry, Aspect Capital

Published: 31 January 2020

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The hedge fund industry, like the financial services industry as a whole, has come under increased scrutiny from stakeholders in recent years for its lack of diversity.

Aspect is proud to support AIMA’s promotion of D&I in ‘The Alternatives’ and we agree with the premise that a genuinely diverse set of perspectives, and a workforce that is a true reflection of our client base and society as a whole, will lead to improved business performance, creativity and innovation, as well as better governance.  

To that end, it has been pleasing to see the progress that has been made across the industry to begin to address gender inequality, with gender pay gap reporting and other initiatives such as the Women in Finance Charter, pushing forward this agenda.  However, while gender disparity has been an area of focus, we see diversity going much further, looking beyond gender to address cultural and social diversity. We believe that encouraging social mobility represents at least as big a challenge to the industry, but it has often taken something of a back seat.

Many of the challenges inherent in fostering social mobility within the industry are deeply-embedded, reducing the pool of talent from which roles can be filled through a combination of old-fashioned attitudes towards recruitment, entrenched perceptions of the industry itself and geographic and socio-economic factors. The following is not an exhaustive list but are among some of the most challenging obstacles to recruiting from a socially - and culturally-diverse - talent pool which we have observed:

  • The widely accepted view that a prestigious university education is a pre-requisite to entry into the industry, whereas young people from disadvantaged families are a third more likely to drop out of education at 16 to pursue lower-skilled, lower-paid and insecure jobs.[1]
  • The perception of the industry as an elitist institution and its tarnished reputation following the financial crisis and subsequent scandals.
  • The fact that the UK hedge fund industry is almost entirely based in central London: a young person’s geographical and socioeconomic background has a profound impact on their prospects for social mobility, with regional disparities in the UK now wider than in any other western European country.[2]
  • A simple lack of visibility and awareness of the roles available among disadvantaged social groups.

In that context, we believe that apprenticeships represent an exciting way to access a vast pool of talented individuals from diverse backgrounds who would otherwise neither consider nor be considered by the financial industry, whilst also creating opportunities for social mobility from which we and the industry can benefit.

It is for these reasons that Aspect has actively embraced the government’s Apprenticeship Levy since the scheme was launched in April 2017, hiring eight apprentices in that time: six across back office functions such as operations, treasury, fund accounting and IT, one into the front office data team and one trading desk assistant.

We partner with whichever apprenticeship provider runs the best-fit course for the role we have on offer, usually sourcing them via the Institute for Apprenticeships. That provider then helps us to recruit the right candidate through various atypical channels, to attract local and national candidates with the right attitude towards learning. 

To date, our most engaging apprentice hiring experience has been with WhiteHat, who recognise that hiring young people based on a CV is somewhat spurious. Instead the candidates film a brief clip of themselves explaining why they wish to study the apprenticeship on offer. We look at the candidates’ energy, motivation, ability to learn and take action, and we make the decision to hire following a brief face to face interview.  Another apprenticeship provider, LDN, asks that we take a small group of potential candidates forward for a one-day work trial (thus allowing candidates to gain a day’s work experience even if they aren’t successful) and choose our apprentice from that group.

We have found Level 3 courses to be basic but well structured, with pastoral support from a coach who helps the apprentices to transition from (usually) school-leaver to full-time employee. The courses at Level 4 are akin to the first year of an undergraduate degree, and often lead to a globally-recognised qualification such as CISI, and the more UK-based IMC or ACCA, whilst the combined Level 4, 5 and 6 courses lead to a bachelor’s degree.

The experience has been challenging at times (teenagers can be hard work!) but we have learned a great deal and are hugely supportive of the scheme. The benefits we have reaped by embracing the levy have materially outweighed the challenges. What we now have is a diverse group of enthusiastic and engaged employees who have different perspectives, a propensity to learn, and are also great ambassadors for the industry.

The challenge of social mobility is a complex one that requires an integrated strategy, active intent and continual effort, alongside a shift in policy involving government, education and employers. Yet, there are many opportunities for investment managers to immediately introduce changes and begin operating in ways that positively influence social mobility.

Given the focus on diversity and inclusion across the hedge fund industry and the wider financial services industry, we believe that the apprenticeship levy provides one such opportunity for firms to tackle their diversity efforts. The levy has been successful in creating jobs for people from all backgrounds, as well as driving greater understanding and interest amongst groups who would not usually consider finance as a career option. This endeavour to improve diversity has ultimately been for the mutual benefit of not only the individuals themselves, but also the firm, our stakeholders and society as a whole.