Equity with a Capital E: The impact of social capital on improving equity in Higher Education (HE) and employment

Social capital is one form of internal capital, and a component of employability. Social capital is influenced by one’s background, affecting access to opportunities, representation, and inclusion within organisations and society at large. Social capital positively impacts organisational performance, productivity, and employee job satisfaction and retention rates, but it is important that businesses focus on supporting the development of social capital amongst disadvantaged groups, providing equitable access to networks and professional resources. However, the work to build social capital can begin in education. Higher Education (HE) needs to increase their efforts in widening participation, specifically increasing students’ social capital. There are disparities in the ethnic, regional, gender, and socioeconomic composition of students across the Russell Group universities, where universities including Oxford, Cambridge, and Exeter have significantly higher proportions of privately educated and white students than other Russell Group universities (UCAS, The Tab, UCAS). 

This is part one in a series of articles exploring how individual capital impacts employability.

Firstly, what is social capital?

Social capital is a resource that comes from having strong social connections. These connections help people use their skills and knowledge effectively within their community or society (Lin, 2001). Social capital encompasses “connections among individuals—social networks and the norms of reciprocity and trustworthiness that arise from them” (Putnam, 2000). This concept is crucial for employers, as high levels of social capital within an organisation can enhance cooperation, reduce transaction costs, and foster a culture of mutual support and trust.

Research indicates that social capital can significantly impact organisational performance. For example, a study by the World Bank found that organisations with high social capital experience 30% higher productivity rates compared to those with low social capital (World Bank). Additionally, strong social networks within a company can lead to higher employee satisfaction and retention rates, with LinkedIn reporting that employees with robust workplace relationships are 60% less likely to leave their jobs (LinkedIn Talent Solutions, 2019).

Employers who invest in building social capital through team-building activities, open communication channels, and inclusive workplace policies not only enhance the well-being of their employees but also drive organisational success. Understanding and leveraging social capital can therefore be a strategic advantage in today’s competitive business environment.

Social capital also benefits universities by fostering enhanced student engagement and retention, as strong community bonds and support networks encourage students to stay enrolled and succeed academically. This supportive environment not only improves graduation rates but also cultivates a strong alumni network, which can be instrumental in securing funding. Additionally, social capital enhances collaboration and innovation within the academic community, attracting top talent and fostering partnerships with external organisations.

How is social capital impacted by a person’s background?

Social Capital:

Social capital is significantly impacted by one’s background, including:

1. Socio-Economic Status:

Individuals from higher socio-economic backgrounds often have greater access to influential networks. This includes family connections to professionals and executives, which can provide advantageous job referrals and mentorship opportunities​ (GOV.UK)​. A report by the Social Mobility Commission found that those from affluent backgrounds are more likely to have access to informal networks that can provide career support and opportunities not available to those from less privileged backgrounds​ (GOV.UK)​.

2. Education:

Attending prestigious schools and universities can significantly enhance social capital. These institutions often have extensive alumni networks that can provide valuable connections and career opportunities. For instance, graduates from top universities such as Oxford and Cambridge benefit from exclusive networks that facilitate career progression​ (Oxford Academic, GOV.UK)​. The disparity in educational attainment between disadvantaged and advantaged students means that those from lower socio-economic backgrounds are less likely to attend these prestigious institutions, thereby missing out on the associated social capital​ (GOV.UK)​.

3. Family Connections:

Family background plays a crucial role in shaping one’s social capital. Families with established professional networks can offer children access to internships, job placements, and career advice, which are critical for career development. In contrast, individuals from families without such connections face significant barriers to accessing similar opportunities​ (GOV.UK). 

Research indicates that children from higher socio-economic backgrounds benefit from parents’ professional networks, which can lead to better job opportunities and career advancement compared to their peers from lower socio-economic backgrounds​ (GOV.UK)​ .

4. Cultural Norms and Expectations:

Social capital is also influenced by cultural norms and expectations within different socio-economic groups. For instance, individuals from professional backgrounds are often encouraged to pursue higher education and careers in high-status professions, while those from working-class backgrounds may face different expectations and support systems​ (GOV.UK)​. These cultural norms can affect one’s ability to build and leverage social capital, influencing career trajectories and opportunities for advancement​ (GOV.UK)​.

Social capital is deeply intertwined with socio-economic background, education, and family connections. These factors collectively shape the networks and opportunities available to individuals, reinforcing existing inequalities and affecting career mobility and economic resilience.

Recommendations to increase social capital in diverse emerging talent for improved equity:

1. Networks and Connections:

Social capital, encompassing networks of relationships, provides critical access to job opportunities, mentorship, and career advancement. Individuals with strong social capital often access insider information about job openings or career pathways not publicly advertised. With an estimated 50-70% of job vacancies filled through networks and up to 70% of jobs not listed on public job search sites (CNBC), those with smaller networks may have limited opportunities, impacting the diversity of organisations using network-based hiring strategies like employee referral schemes.

Networks can informally influence hiring decisions, potentially perpetuating homogeneous teams if the networks lack diversity. Inclusive recruitment practices, as emphasised by the CIPD, are essential for attracting diverse talent, reducing bias, and supporting equitable outcomes through structured and transparent processes. Diverse teams are 87% better at decision-making (InStride) and significantly more innovative, with inclusive companies showing higher financial performance and innovation rates (InStride, Leoforce). Investing in improving social capital for underrepresented groups can thus enhance team decision-making, innovation, and financial performance.

Recommendation: Build diverse talent pools between universities and employers.

Companies must ensure all vacancies are advertised externally. Employee referral schemes should be redesigned to avoid nepotism by only offering referral rewards to employees who collaborate with charities focused on increasing employment for underrepresented groups. Referrals should come exclusively from these charitable interactions. Create talent pools based on a shared interest or passion where employees could share their career stories for a reward. 

Universities can support better connections to smaller employers and reduce oversaturation of large corporations attending graduate fairs. Internship schemes or graduate fairs should be accessible to all types of employers, not just those who can afford high prices. They should also develop and promote inclusive extracurricular activities and student organisations that cater to diverse interests and backgrounds, which creates inclusive spaces for more communities to grow on-campus.

2. Professional Development:

Social capital facilitates mentorship from experienced professionals, providing guidance and support crucial for career progression and job satisfaction. Employees with mentors report higher job satisfaction, with 71% expressing contentment and 96% finding mentoring very useful (Mentorloop Mentoring Software, Think Learning)​. Mentoring programs improve minority representation at management levels by up to 24% and significantly enhance promotion and retention rates for women and minorities, with improvements ranging from 15% to 38% compared to non-mentored employees (Mentorloop Mentoring Software). Investing in mentoring programs promotes career growth, job satisfaction, and a more inclusive workplace.

Informal networks play a vital role in professional development and leadership readiness by sharing knowledge and skills. Employees with access to professional development opportunities, often through informal networks, are 34% more likely to stay with their current employer (ClearCompany). Additionally, 76% of employees seek career advancement opportunities, highlighting the importance of developmental support in retaining talent. Companies focusing on employee development saw a 24% increase in productivity, indicating that continuous learning through informal networks prepares employees for leadership roles (Springer, Talent Management Blog by ClearCompany). Fostering informal networks within organisations supports professional growth and leadership development, benefiting individuals with constrained networks.

Recommendation: Create multi-directional mentorship and learning schemes focused on supporting underrepresented groups.

Underrepresented individuals can learn from experienced mentors, gaining insights and guidance to navigate academic and professional landscapes. Experienced individuals, including mentors, can learn from the unique perspectives and experiences of underrepresented emerging talent, fostering a more inclusive and understanding environment. Universities can support this by implementing targeted mentorship programs that pair diverse students with experienced professionals and alumni. 

Participants gain access to a wider network of professionals and peers, helping underrepresented groups build valuable connections that can lead to academic and career opportunities. This expanded network can provide support, resources, and opportunities that might not have been accessible otherwise. Having mentors and mentees from underrepresented groups increases their visibility and representation within the institution or organisation. This visibility can inspire and motivate others from similar backgrounds, demonstrating that success is attainable and valued.

3. Community Engagement:

Social capital plays a crucial role in addressing disparities in employment rates among ethnic minorities. Despite comprising a significant portion of the working-age population, these groups are notably underrepresented in both the workforce and leadership roles. For instance, while the employment rate for ethnic minorities stands at 62.8%, it’s markedly lower than the 75.6% rate for white workers, emphasising a substantial gap that initiatives focused on social capital could help narrow (Diversity UK)​. Strengthening social capital within communities can empower marginalised groups, advocating for greater diversity and inclusion in workplaces, thereby enhancing ethnic minority representation in employment.

Effective community ties also significantly shape organisational culture, fostering inclusive practices and policies. Research underscores that organisations with robust Employee Resource Groups (ERGs) report higher levels of inclusion and employee engagement. McKinsey’s findings illustrate that 83% of employees in effective ERGs feel included at work, compared to 59% in less effective groups, highlighting how community-driven initiatives within ERGs bolster feelings of belonging and contribute to positive organisational cultures (McKinsey & Company, McKinsey & Company). Moreover, these networks within companies facilitate mentorship and career development opportunities (McKinsey & Company)​, underscoring their role in supporting individual growth and cultivating a supportive work environment overall.

Recommendation: Establish effective ERG’s, communities of practice and local community involvement.

Ensure ERG’s have all levels of seniority engaged in the group to help members improve their social capital through connecting with people across organisational hierarchies. Consider forming ‘communities of practice’ where groups are created based on shared knowledge or expertise incorporating advice on career progression within their given field. These groups could span organisational boundaries to connect with similar student groups within universities. Universities can also create more partnerships with community organisations and local businesses to create internship and volunteer opportunities for students from underrepresented backgrounds. 

Social capital plays a crucial role in shaping diversity by influencing access, representation, and inclusion within organisations and broader society. Recognizing and addressing disparities in this form of capital is essential for fostering truly inclusive environments where everyone has equal opportunities to succeed. To improve equity in higher education and employment, universities and employers should consider redesigning employee referral schemes, introducing multi-directional learning and mentorship and ensuring internal communities are effective and diverse with leadership-level engagement. 

If our systems always prioritise those with higher social capital, then we will always struggle to achieve equity unless we create systems that help increase underrepresented individual’s social capital. It is not enough to hire diverse talent without any change to our current systems. 

By Sorrel Knott, Research Executive at GotDis

References:

LinkedIn Talent Solutions, 2019. The Relationship Between Social Capital and Employee Retention.

Lin, N. 2001. Social Capital: theory and research. New Bruswick: Transaction Publishers

Putnam, R. D., 2000. Bowling Alone: The Collapse and Revival of American Community. Simon & Schuster.