As demands for 2:1 degrees are dropped, is the City dumbing down?
Firms have started to lower academic entry barriers in a bid to widen their pool of recruits,
Chris Rokos, the billionaire hedge fund manager, values academic achievement – even for people doing more mundane roles at his company.
In November, when Rokos Capital Management advertised for a job managing the Apple devices of a board member – a role described as an “iPad Butler” for a senior staff member and his family – the company specified that applicants needed a minimum 2:1 degree from a Russell Group university.
The job advert for a “VIP support engineer” stated: “In order for you to get the most out of this role, you will need to have: comprehensive understanding of Apple media products and features such as Apple TV, HomePod, iPad, iPhone, Family Sharing, iTunes, Photos; experience supporting executives and/or VIP families; and a strong academic background (minimum 2:1 degree from a Russell Group university and A-levels at grade A*/A/B – or international equivalents).”
The high academic bar contrasts with the increasingly laissez-faire attitude to degrees in the City. A growing number of finance and professional services companies have scrapped demands for a 2:1 degree for their graduate recruits, lowering the bar for applicants.
In recent months, PwC, Santander and Schroders were among companies to abolish this long-standing recruitment norm in the Square Mile in what they say is a bid to enhance the diversity of their workforces.
However, as these firms open up their programmes to anyone with a third class degree, critics argue that the City risks dumbing itself down by diminishing the importance of academic achievement.
Ian Elliott, chief people officer at PwC UK, says when the “big four” accounting firm announced its decision in August, there were “a few people internally asking whether we were lowering the bar”.
But Elliott is convinced that he made the correct decision.
“Our principal reason for scrapping the 2:1 requirement is shifting the focus to potential rather than pedigree,” he says. “That’s not to say that academics are irrelevant, but exam results are not indicative of someone’s potential.”
PwC will assess candidates’ potential through a series of verbal, numerical and reasoning tests, as well as formal interviews. Not everyone agrees that scrapping the 2:1 threshold is a good idea, however.
Hendrik du Toit, chief executive of FTSE 250 money manager Ninety One, says: “This is woke nonsense. We believe in excellence but also opportunity for those less fortunate. We have never had formulaic guidelines for hiring. We believe in the power of a diverse workforce. Having said that, academic achievement is a useful indicator of intellectual capability.”
Other professions in the City continue to strongly link academic excellence with career potential. Slaughter and May, the elite “magic circle” law firm, demands that candidates have a “sharp intellect” and a “good 2:1 degree” before applying. Even after contracts are signed and graduates have started their traineeships, Slaughter and May has traditionally shown little leeway toward those failing even one of their qualification LPC exams. Failure to pass leads to trainees generally having their jobs rescinded, though it is understood that the firm takes personal circumstances into consideration.
The decision to relax hiring requirements in some corners of the City comes amid a tight squeeze in Britain’s labour market, with many firms struggling to attract staff.
Both Santander and PwC stressed that their respective decisions were not linked to job market pressures.
However, moving away from strict university requirements has boosted interest in graduate programmes: PwC and Santander say they have seen an uptick in applicants since the change.
Anouska Ramsay, HR director at Santander, which became the first major UK bank to hire graduates with a third class degree, says the demand for its 2023 programme has been “really positive”, while PwC’s Elliott says applications are up by a fifth.
Santander said the move would open its programme to 64,000 more people every year, adding that performance at university does not guarantee success in the workplace.
Ramsay rejects criticism that the bank risks lowering standards. She says: “There is no evidence to say the quality of candidates is declining by any stretch of the imagination.”
The companies say that by abolishing degree requirements, it will allow them to attract more new starters from “lower income households”.
Research from the Institute for Fiscal Studies (IFS) shows that students from lower socioeconomic backgrounds are on average less likely to achieve a first or 2:1 degree than their peers from better-off families, while they are also comparatively more likely to drop out.
The shift away from stringent academic requirements brings into focus the difficulty in comparing degrees from different institutions, as well as the level of skill of students who obtain certain university degrees.
Octavius Black, chief executive of consultancy MindGym, says: “Degree level tends to be a poor indication of future performance and it’s almost impossible to compare between different institutions. A-level grades are better – but best of all, conduct your own assessments. This way you’ll be more likely to remove bias.”
Asset manager Schroders, which ended its 2:1 requirement last year, has also removed CVs from the early stages of its graduate recruitment process to “reduce unconscious bias”.
Emma Holden, global head of HR at Schroders, says: “Removing the requirement for a 2:1 degree classification allows us to start breaking down the societal and systemic barriers preventing diverse talent from fulfilling their potential.”
While a number of firms have decided to open their doors to students who fail to achieve top grades at university, most have stuck with the 2:1 requirement for now.
Ninety One’s Du Toit says: “Given the universe of talent wanting to join our industry and Ninety One, we have never had to think about lowering entry standards. We work with other people’s money and they expect the very best.”