Diversity and inclusion in the profession: The results of R3’s members’ survey

22 October 2021

For a profession that plays a critically important, if not always fully appreciated and understood, role in the economy, remarkably little is known about the people who make-up the insolvency and restructuring profession and carry out the work required to help businesses and individuals to resolve financial distress.

Indeed, little information has been gathered centrally to provide an accurate demographic breakdown of the people who work in the profession. This lack of an accurate demographic picture has so far prevented R3 and others from understanding just how diverse the sector’s workforce is and whether there are any barriers to entering and progressing within it.

As part of our joint project with the Insolvency Service to improve diversity and inclusion within the profession, we launched a survey of R3 members in June 2021 with the aim of mapping out just how diverse the insolvency and restructuring profession is. The survey gathered a sizeable response from R3’s members and generated some interesting insights about the make-up of the profession’s talent pool. A full breakdown of the results is available on R3’s website.

A gender balanced profession?

At a very top-line level, the results of the survey suggests that the insolvency and restructuring profession as a relatively gender-balanced sector overall, with roughly 52% of respondents identifying themselves as male, 48% as female.

The profession’s workforce is mostly female among respondents who have between 1 and 29 years of experience working in insolvency and restructuring. For instance, 65% of respondents who have worked in the profession for less than 9 years are female, along with almost 58% of professionals with 10-19 years and 53% with 20-29 years of work experience.

However, while these results seem to challenge the widely held perception of the profession as overwhelmingly male, further study of the breakdown of the data suggests that the gender split is not as balanced as might appear on the surface.

Room for improvement

While the gender balance in the profession’s overall workforce is positive, delving deeper into the survey results shows that there is considerable room for improvement when it comes to improving the level of diversity more generally throughout insolvency and restructuring. Indeed, the breakdown of the results show some striking differences in terms of both gender and ethnic backgrounds.

Firstly, the insolvency and restructuring profession remains overwhelmingly male at the most experienced level and in the upper rungs of the career ladder. Little more than 38% of people with 30-39 years of experience working in the profession are female, and this number dips to just 10% if we look at professionals who have worked in the profession for more than 40 years. While females make up for the totality of ‘assistants/juniors’, over 93% of associates in the profession and 70% of managers, they only account for little over 30% of partners. Given this discrepancy – where females make up a lower proportion of the profession at the more senior levels and a greater proportion at the more junior levels – the Steering Group be investigating the potential factors behind this issue further.

Secondly, the number of insolvency and restructuring professionals coming from an ethnic minority background is lower than the percentage of the UK’s ethnic minority population. The survey shows that only 9% of the profession’s workforce identify as having an ethnic minority background, despite accounting for over 14% of the UK’s population. On top of that, individuals from non-white backgrounds appear to be under-represented in the higher ranks of the profession, but appear to be better represented at lower levels. Only 6.9% of professionals at ‘senior manager/manager’ level and 7.1% at ‘partner’ level come from an ethnic minority background, compared to 18.7% at ‘associate’ level and 37.5% at ‘assistant/junior’ level.

A generational shift towards a more diverse profession?

Overall, the survey results provide a helpful first indication as to the current level of diversity within the insolvency and restructuring profession.

On one hand, the profession’s overall workforce is quite balanced in terms of gender, with female workers making up for a significant majority of the workforce among professionals with under 30 years of experience in the sector. On the other hand, female workers are much less likely to occupy the most senior roles, as well as the more experienced cohorts of the profession. The results suggest this is true also for those from ethnic minority backgrounds.

This raises some interesting questions about the future of the profession from a diversity and inclusion perspective. Will we witness a generational shift towards a greater balance of gender across all cohorts of the profession over the next decade, assuming the current gender balance for this younger group is maintained as they progress through time?

Or will the picture across the board remain static, with other barriers or issues preventing more women and those from ethnic minority backgrounds from reaching partner level, or occupying a fuller range of job levels within the profession? R3 and the Insolvency Service want to be able to answer these questions and take action, wherever possible, to address the issues and barriers that might prevent individuals from succeeding in the profession and to ensure that we can see the widest pool of talent available to the profession.

To help us answer these questions, we will need more data but also feedback from individuals about their own experiences in this context. Over the coming months, the Diversity and Inclusion Steering Group will focus on attempting to better understand the context behind these results by holding a series of one-to-one interviews with members of the profession.

The results of this survey are just the start of a longer journey to help ensure that the sector is a truly diverse and inclusive one, without unnecessary barriers to entry or progression. R3 will continue this important work with our members, the Insolvency Service and other industry stakeholders.

If you have any thoughts on these issues that you would like to share with the Group, or if you would like to take part in any interviews that take place, please contact Jennifer Morgan at [email protected].