A deal is the perfect time to think about social mobility

In PwC’s latest UK CEO survey, business leaders have again named finding and keeping the right skills, especially in technology, as a top concern. We’ve seen this become a significant driver of transactions, whether it’s acquisitions of new capabilities, merging workforces, or divesting business units whose skills are less aligned to future strategic direction.

So a nagging thought lingers: if companies are looking to deals to solve their talent supply challenges, doesn’t this suggest that their talent management strategy might not be adequate for their needs?

And if that’s the case, a deal could only be a short-term fix – while our Doing the Right Deals research shows that deals that enhance capabilities deliver the greatest value^[2], that value is at risk if good people leave after the deal, or if you can’t maintain a good pipeline of talent in the future.

The perils of fishing from a small pond

There is a real argument that talent supply in many businesses is restricted because they keep fishing from the same pool. The world’s top football clubs pour huge amounts of resources into spotting future talent from a young age, in all communities. Some of the world’s best future footballers have been found playing in the poorest parts of the world. Why are businesses so reluctant to think the same way?

Many businesses consciously or unconsciously still see universities as their primary source of talent – a huge, self-inflicted limitation on talent supply. In the 2020-21 academic year, there were 2.66m students studying at UK universities^[3], including just under 2m undergraduates. What about clever, ambitious youngsters who cannot afford (or who would never consider) further education? Or those that have made it through university, but lack the resources to move to a city? What about those who have taken a different route after school?

While a quarter of the 2020/21 intake of undergraduates were students from ‘low participation neighbourhoods’, businesses themselves can do a lot more to encourage social mobility – for their own benefit, as well as for the benefit of society as a whole. We are also seeing a growing trend of teenagers ditching degrees for apprenticeships^[4] because they want better value for money.

Organisational and societal benefits

A strong social mobility strategy not only widens the available talent pool for an organisation; it also makes it more attractive to potential recruits, particularly the critical Gen Z who will dominate the workforce within a few years.

Our global Hopes and Fears survey shows that employees expect their employer to have strong ESG credentials; three-quarters say that they want to work for an organisation that makes a positive contribution to society, and 54% say that transparency around diversity in their employer is extremely or very important to them. They want to work for companies that are kind, that are giving back, that are sustainable. Social mobility and diversity is a visible indication that a company is living its values.

Social mobility is also vital to the health of the economy. A recent report by the Law Society^[5], for example, argued that a lack of social mobility in the professional services sector was a major threat to Britain’s competitiveness and productivity.

At PwC we know we can play a positive role in increasing social mobility through our recruitment, development and progression, as well as our community and advocacy activities. In 2019 we opened an assurance centre in Bradford, recruiting more than 200 roles in the local area. We actively recruit from disadvantaged backgrounds, provide paid work experience roles for students from lower socioeconomic backgrounds, and publish our social mobility pay and bonus gaps so our progress is public and transparent.

Kevin Ellis, PwC’s UK chair, recently said that addressing the class pay gap was vital for the bottom line^.[6] “We’ve got 46,000 clients from all kinds of backgrounds, geographies, and unless we represent our clients we’re irrelevant,” he said.

So what does this have to do with M&A?

There is no simple route to a valuable social mobility strategy. It requires a change in mindset, where the entire organisation looks at talent and recruitment in a different way. This is why a transaction is an ideal launching pad. A deal – whether you are a buyer or seller – is a powerful catalyst for change. It is a moment of intense disruption, inevitably involving a change in organisational design, and cultural upheaval. The perfect opportunity, in other words, to introduce a different way of thinking and introduce change that will bring real and lasting value.

Thinking about social mobility before, during and after a deal strengthens an organisation in multiple ways; it reinforces its recruitment strategy, and helps to build a culture that both attracts and retains talent, and protects the future talent pipeline. A business with a solid and embedded social mobility culture and strategy is stronger in every way; a more attractive employer, a more attractive target for a future deal, and better positioned to create value through and after a deal.

Social mobility is a complex issue but it’s clear that business can and should be part of the solution. We have the power to bring about positive change, if we ourselves are prepared to change. And what better time to do it than at the point of a deal, when everything is up for discussion?