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Viewpoint: The Forgotten Dimension of Diversity

By Paul Ingram February 8, 2021
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Viewpoint: The Forgotten Dimension of Diversity

Editor's Note: SHRM has partnered with Harvard Business Review to bring you relevant articles on key HR topics and strategies.

I once had a student in my executive education class, a managing director at a global bank, who told a heartrending story of her first steps toward professional success. As a teenager she had become a mother, and to make ends meet she'd worked cleaning offices. Even though she was dealing with substantial hardship at home—caring for a young child while defending against an abusive partner—she always brought a spark to her work, and soon she caught the attention of a manager at the bank.

Sensing her potential, the manager encouraged her to apply for an entry-level white-collar job at the bank and to pursue training in finance—developmental steps that won her admission into the bank's professional ranks and then allowed her to start rising up the managerial ladder. By the time she and I met, she held a top job negotiating massive debt deals and was working alongside colleagues who had started in positions right out of elite universities. The work she was doing required grit, courage and a deep human understanding—qualities that I venture are more common among the stars of custodial crews than among the middling members of junior-analyst groups hired each year out of universities.

Unfortunately, her story is the exception, not the rule, as I've learned through years of teaching managers, working with companies and researching the role of lower social-class origins on behaviors and outcomes at work.

When I refer to people of lower social-class origins, I mean those who through the conditions of birth and upbringing have had relatively less access to money, to contacts who promote their upward mobility and to the cultural know-how necessary to get ahead in schools and companies. Those of us who study social class origins often measure them along several dimensions: family income during early years, parents' level of education and parents' occupations.

A person's social class origins leave a cultural imprint that has a lasting effect, even if the individual gains money or status later in life. Class origins certainly have an effect in the workplace. In recent research, my colleague Jean Oh and I found that U.S. workers from lower social-class origins are 32% less likely to become managers than are people from higher origins. This disadvantage is even greater than that experienced by women compared with men (27%) or Blacks compared with whites (25%). And it prevails in every major economy in the world.

The disadvantage matters—for individuals, organizations and society.

It matters for individuals because it materially reduces their career potential and general well-being. We would consider a disadvantage of 32% among equally qualified candidates to be problematic when it comes to pay; we should also find it problematic when it comes to promotions. Researchers have found that promotion to a managerial role creates substantial job satisfaction—as much as a 60% raise in pay would, according to my own analysis. Managerial roles are also associated with better health: Managers experience less stress and live longer than nonmanagers do. Top managers, for example, are one-third less likely to die from coronary heart disease than are those on the bottom rung of an organization. One study found that simply labeling a participant as a "leader" rather than a "support person" before a task produced a better physiological response and better performance under pressure. Overall, the well-being benefits of hierarchical advantage are even greater than those of the accompanying boost in income.

The class disadvantage matters for organizations because it excludes from the management ranks a group that may produce better-than-average leaders. A study using data from the U.S. military, for example, suggests that individuals with lower social-class origins are less self-centered, which sets them up to be more effective as leaders. Similarly, a UK study found that lawyers from less-elite backgrounds are more motivated and capable than their privileged peers. Not surprisingly, too, research shows that when a disadvantaged group is well represented among company managers, it receives more-effective advocacy. This suggests a trickle-down effect: If firms had more managers from lower social-class origins, employees and customers with similar origins could expect more-equitable treatment. Managers have an outsize influence on their companies, so inherited privilege in the promotion process can be a source of durable inequality.

Any hopes we might have of addressing racial inequity in the workplace require a clear-eyed analysis of its root causes—and these are increasingly connected to social class.

The class disadvantage matters for society because it means that many workers do not have the opportunity to contribute to economic growth to their full potential. This is true of any disadvantaged group, but it's notably so in the case of social class, given that the majority of people in the workforce have lower social-class origins. In representative samples, more Americans identify as "lower or working" class than "middle or upper" class. Only a quarter of American adults today were raised by a parent with a degree, and by that measure three-quarters of adults fall into the lower social-class origins category. That's a startling figure. In discriminating against people who come from a lower social class, we're discriminating against a majority of the eligible workforce—a grossly harmful indulgence, especially when you consider what happens if you don't discriminate. According to our research, GDP is higher per capita in countries where more managers come from lower social-class origins.

We've learned a good deal in recent years about how social class inequities affect access to jobs and promotions, but what we've learned is still mostly ignored by U.S. companies—even those celebrated for their diversity and inclusion efforts. In 2020, for example, not one of the companies on DiversityInc's "Top 50 Companies for Diversity" mentioned social class in their diversity, inclusion and equity (DIE) goals and programs.

Those companies paid a lot of attention to gender and race, however, and for very good reason: Researchers have definitively established that being a woman or Black adversely affects the likelihood of being promoted. Consequently, companies such as Google and Bank of America publish extensive statistics every year to document the representation of women and racial minorities in their workforces, including in the ranks of managers. But as a rule, they do not report on social class disadvantage. Twitter, Facebook, Netflix, Google and Amazon have all established employee resource groups (ERGs) to support employees from racial minorities or other underrepresented groups (Google alone has 16), but again, none of them addresses social class. In my own extensive search, I've found only one U.S. company that has an ERG based on social class: Uber.

Companies may feel daunted by the prospect of another battle to fight, but they need not. By attending to social class disadvantage, they reinforce their efforts to combat other forms of disadvantage. As the Harvard sociologist William Julius Wilson points out, racial disadvantages in particular are intertwined with social class disadvantage in such a way that remediation of the former is impossible without attention to the latter. Any hopes we might have of understanding and addressing racial inequity in the workplace require a clear-eyed analysis of its root causes—and these, recent studies suggest, are increasingly connected to social class.

In this article, I'll detail the most promising interventions that are emerging from research and practice to help remediate social class disadvantage. But first we need to explore the causes of the problem.

Cause and Effect

Workers with lower social-class origins tend to be less educated, a factor that, according to our research, explains about 60% of the disadvantage they experience in the workplace. But that disparity in education levels has nothing to do with intelligence. As is the case for women and racial minorities, it has much more to do with context, expectations and what's known as "stereotype threat"—the well-documented phenomenon whereby people perform worse because of negative stereotypes attached to their identity. When people from lower social-class origins are inoculated against negative stereotypes, they perform just as well as others on tests of intelligence.

The real deficit that workers from lower social-class origins suffer in school is not intellectual but cultural: They know less than those from higher class origins about what the pathways to education are and how to make the most of them. Evidence from elite colleges indicates that cultural capital matters more than financial capital in predicting which students will succeed. For example, the sociologist Anthony Abraham Jack identifies a group he calls the "privileged poor," by which he means people with few economic resources who nevertheless understand how to take advantage of the opportunities at college, often because they have been supported in their teen years by nonprofit leadership-development organizations. The privileged poor, he has shown, achieve educational outcomes comparable to those of their economically advantaged peers. Similarly, experiments show that when sufficient effort is made to help first-generation students adjust culturally to college, they achieve the same academic outcomes that other students do.

Fascinating recent research has shown that cultural capital matters in the workplace, too. In one study, Lauren Rivera and András Tilcsik found that interviewers for elite jobs in banking and law use markers of culture associated with social class, such as an interest in sailing or classical music, to screen candidates. A senior leader at my own organization, Columbia University, once informed me that he favored certain candidates for management roles on the basis of the high-status occupations their fathers had held.

Even when workers with a lack of cultural capital manage to get hired, they are hindered in their ability to move into management roles. One study has shown, for example, that workers from lower social-class origins are unwilling to engage in office politics to get promoted, in large part because they tend to be more focused on others than on themselves and thus shy away from what they see as a self-serving pursuit. Even though they understand that playing politics is necessary for getting ahead, they are reluctant to seek advancement in that way—and over time, they become less enthusiastic about working for their organizations. Bias also seeps into everyday workplace interactions: Workers from higher social-class origins tend to distance themselves from those from lower ones, cutting them off from the connections that are essential for job performance and advancement and well-being at work. Although culture creates disadvantages for workers from lower social-class origins, it can be a source of strength if they're able to overcome barriers and attain managerial roles. Many become "social class transitioners"—workers who have managed to move up in the world despite their origins. A 2019 study, for instance, shows that such workers, like the bank managing director whose story I used to open this article, are more creative, more empathetic and uniquely capable of bridging cultural divides, which makes them a precious managerial resource. As such they might be expected to be the focus of intense recruitment, inclusion and development efforts. But so far, that has not been the case.

Why not?

Confronting Inaction

Social stigma is one reason. As Joan Williams and her coauthors put it in a recent HBR.org article, "It's awkward, talking about social class." CEOs and diversity VPs I have interviewed have suggested that some employees are ashamed to put themselves forward for programs designed to include or develop employees from lower social-class origins.

But stigma can—and should—be overcome. One VP of diversity and inclusion, a Black woman, told me that early in her career as a manager she was hesitant to join women's support groups and consciously avoided frequent hallway conversations with Black colleagues, out of concern that such associations might cause her to be negatively stereotyped. Today, the companies where she worked all have corporate programs designed to include and develop women and minority leaders. There's no reason the same can't be done for social class.

The corporate leaders I work with sometimes raise the question of how to measure social class representation in the workplace. For answers, we can again look at what's been done with other disadvantaged groups. The challenges involved in measuring race, ethnicity and, increasingly, gender are not trivial—but many companies have nonetheless managed to overcome them. In the UK, the government has provided some very practical guidance on how to study social class origins in the workplace, using measures similar to the ones listed above: parents' education level, parents' occupational status, whether workers attended private or public high school and whether they qualified for free meals in their school years. These measures are easy to implement and can translate across contexts. On its employee engagement survey, for example, Spotify has recently added this question: "Did any of your parents or guardians have a college degree?"

One top leader of a global company told me that social class is probably overlooked in corporate DE&I efforts because it's not a protected category in employment law. That represents a flagrant hypocrisy: To genuinely embrace diversity, equity and inclusion, organizations have to embrace it for everybody. Attending only to groups in protected categories would discredit the whole enterprise.

The Way Forward

There are some good examples of well-designed policies and practices that counteract class disadvantage and pursue equity and organizational performance by recruiting, including, developing and promoting individuals from lower social-class origins. Here are a few ways to get started.

Add social class to your DE&I goals. Many companies have successfully increased the representation of women and racial minorities in their managerial ranks by setting specific DE&I goals, backing them up with smart programs and holding themselves accountable for results. The same approach works for social class.

Consider PwC, the number-one-ranked firm in the UK's 2019 Social Mobility Employer Index. In 2017, PwC created a team dedicated to improving social mobility in its workforce; its goal was to apply the same level of attention to the disadvantages of social class that it was already applying to those of gender, ethnicity and race. The company now has a 1,000-member social-mobility support group that serves as a bridge to the community—notably to schools, where it facilitates outreach to students from lower social-class origins. Leveraging a broader effort that's under way in the UK to collect and disseminate data on social class in the workplace, PwC will also soon begin publishing statistics on the social class origins of its employees in its diversity reports. Such reporting helps promote accountability and has been shown to be one of the most effective practices for improving the representation of disadvantaged groups in management. To encourage access and fairness, PwC has also reviewed its recruitment processes and now strives for social class diversity on its interview panels.

Push back against degree inflation. A recent study found that 67% of job postings for "production-worker supervisor" in the United States required a bachelor's degree or higher, even though only 16% of the people who already held the title had that qualification. By demanding an educational credential that was not necessary for performing the job, recruiters were exacerbating social class disadvantage. In the UK, Ernst & Young has taken the bold step of eliminating the requirement of a degree as a qualification for joining the firm, after finding that success at a university has no relationship to achieving professional certifications. A better approach, the firm concluded, would be to measure capabilities directly in the recruiting process through formal tests and assessments. IBM has a kindred initiative that it calls the "new collar" program, which aims to hire for jobs, including software engineering, on the basis of skills rather than degrees. Google's recently announced Career Certificates program provides a noncollege training program to prepare people for jobs in IT throughout the United States.

Promote the best candidates from every department. Departments in organizations tend to be stratified according to social class: People with higher origins cluster in high-status departments; those with lower origins work in less-visible groups. Because companies often seek candidates for managerial roles from only a handful of departments, the odds are stacked against some of the best candidates simply because they work in the wrong place.

Walmart, where 75% of today's salaried store managers began as hourly associates, seeks out leadership talent in overlooked places. The company has recently established more than 100 Walmart Academies at its supercenters around the country. These academies provide developmental training in leadership and management to hourly employees who have moved into supervisory roles. And sometimes the path continues all the way up to senior leadership, as it did for the current COO of Walmart U.S., Dacona Smith, who began as an hourly employee at an Oklahoma Walmart at the age of 17, after his dream of playing college football was ended by a broken hip. That first job was arranged for him by his mother, who was herself a Walmart associate.

Face up to the interdependence of race and social class. As William Julius Wilson noted, it's impossible to understand racial disadvantage in the U.S. workforce without also considering social class. Working with data from the General Social Survey, a comprehensive, representative survey that has been conducted in the United States since 1972, I've found that for workers from higher social-class origins, race is not a factor in determining who becomes a manager. For people with lower social-class origins, however, race does matter: Blacks from lower-class origins are substantially less likely than whites with similar backgrounds to become managers. These people, Wilson points out, are the "truly disadvantaged." Understanding this interdependence is fundamental to improving economic outcomes for Blacks and remedying social class disadvantage.

Few U.S. companies set a goal of establishing equality across social class origins, but those that do often conflate social class origin with race and then make interventions solely on the basis of race. It's possible to justify that approach, given that Black workers are more likely than whites to come from lower social classes and suffer more disadvantage because of those origins. But to the extent that race-based interventions favor Black workers from higher social-class origins, they do little or nothing to resolve the class disadvantage in management. For example, although historically Black colleges and universities (HBCUs) are unusually diverse in terms of their students' social class origins, half of their students come from the middle class or higher. A company recruiting on those campuses might make no hires from among students with lower social-class origins unless they deliberately attend to social class bias in their recruiting interviews.

The most effective recruitment programs focus on race and social class simultaneously. That's what JPMorgan Chase does in its Advancing Black Pathways (ABP) program, which gives special attention to first-generation and low-income students in the recruiting it does at HBCUs—an approach it calls recruiting for "diversity within diversity." ABP also supports a financial-hardship fund for students at HBCUs, providing money for transportation, technology and food, the goal being to enable students under financial duress to stay in school and earn their degrees. After participants in the program graduate, ABP maintains contact with them and invites them to apply for internships and jobs.

Build a cohesive organizational culture. Companies that hire with cultural fit in mind can significantly improve employee commitment, satisfaction and motivation, and in doing so can reduce turnover and boost overall performance. Building a cohesive culture is also a means of social class inclusion, because workers from lower social classes are more likely than those from higher ones to understand that their outcomes and responsibilities in the organization are interdependent with those of the people around them. Hiring for cultural fit, however, too often consists of hiring employees who share managers' hobbies, personal interests or backgrounds—a practice that HR directors increasingly denounce because it can be used to exclude disadvantaged groups, especially those from lower social-class origins.

Airbnb has shown that a rigorous evaluation of fit can produce a strong organizational culture without allowing discriminatory biases to hold sway. It has established guardrails against personal bias in its hiring process, for example, by clearly and explicitly identifying the competencies and attributes required for each position. Organizations can also use machine-learning techniques to avoid the superficial noise that sometimes distracts interviewers. For example, my colleagues and I have used machine learning in reviewing MBA applications. It has helped us identify students who are diverse on many dimensions but hold similar values and are therefore likely to perform better together.

By demanding an educational credential that was not necessary for performing the job, recruiters were exacerbating social class disadvantage.

Organizational culture can be strengthened among current employees by implementing strategies of active social inclusion. Consider the case of Televerde, an Arizona-based marketing company at which incarcerated women make up half the workforce. The company introduces new employees to the organization through an intense socialization process it calls boot camp. The process promotes such values as "caring for people," "trust" and "courage to change"; this resonates with people of lower social-class origins, who understand that their outcomes are dependent on those around them. The approach pays dividends for Televerde's incarcerated employees, who after release are employed at rates double the average for formerly incarcerated women—and whose recidivism rates are 90% lower. It works also for Televerde's clients, who, thanks to the dedication and professionalism of the company's employees, benefit in the form of increased sales. Televerde today has 600 employees, and in 2019 it grew at a rate greater than 10%, a testament to the economic viability of its social inclusion strategy.

Role modeling presents another opportunity to build organizational cultures that support and integrate workers from lower social-class origins. It's been shown to work, for example, in programs aimed at assisting first-generation college students, who typically don't perform as well academically as students from higher social classes. That performance gap can be closed, it turns out, if those students participate in workshops on navigating social class disadvantage in higher education—especially workshops run by older students with similar origins.

Role modeling helps in the workplace, too. When social transitioners offer guidance to new employees from lower social classes, they can effectively make up the know-how deficit. That's the case at PwC UK, where Laura Hinton, the company's chief people officer, speaks regularly to employees and potential recruits about her upbringing in public housing and how she avoided the path expected for her by high school counselors.

In recent decades, companies have focused on building programs that improve the representation of women and racial minorities in management. That work is far from over, but it demonstrates that the barriers to inclusion and equity are surmountable. As research reveals the powerful negative effects of the social class disadvantage, we must expand our DE&I efforts to improve the representation in management of workers from lower social-class origins. A few organizations are showing the way forward—by explicitly recognizing social class as an important and measurable target of DE&I efforts, by addressing the causes of social class disadvantage, and by confronting the relationship between social class and race. But we have much more work to do. Given the significant number of people from lower social classes in the American workforce, I estimate that if we were to resolve the problem, we might increase the supply of capable managers by a third.

Imagine that. The potential rewards—for individuals, organizations and society—are enormous.

Paul Ingram is the Kravis Professor of Business at Columbia Business School. He consults on leadership, organizational design and strategy to companies around the world.

This article is reprinted from Harvard Business Review with permission. ©2021. All rights reserved.

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