Ajust and inclusive society has long been a strength of European countries. The continent is a world leader in advancing social imperatives such as gender equality and, historically, socioeconomic mobility. Yet progress on the latter has stalled in recent years, limiting the economic growth that is vital for Europe’s competitiveness. Research shows that social mobility can accelerate productivity—including through greater workforce participation, better skills matching, higher consumer spending, fewer talent constraints on corporate growth, and lower healthcare costs.
More than one-third of Europeans face significant barriers today, with lower employment, less-productive jobs, and slower career progress than people from higher socioeconomic backgrounds (SEBs). Ultimately, these individuals’ futures are constrained by their parents’ economic past. Both they and society suffer as a result.
This is a challenge, and not just for governments. Businesses have a critical role to play in fostering a more inclusive, meritocratic, and productive workplace—and a great deal to gain from the more dynamic economy that results. As Europe’s population ages and businesses need new skills, the pools of available skilled employees are rapidly becoming insufficient. Companies that act now can capture significant advantages, our research suggests, including not only better access to talent but higher value creation per worker, stronger employee retention, and improved decision-making. By setting strategic objectives, leveraging data-driven insights, and implementing targeted initiatives related to recruitment, retention, and career progression, companies of all sizes and in all sectors can contribute to Europe’s social mobility.
The societal impact could be profound: a boost to the continent’s GDP of as much as 9 percent. In addition, if Europe became more socially mobile, it has the theoretical potential to close the 2030 skills gap without any new training or reskilling. This could be the next frontier of European productivity growth.
While social mobility has national and sector nuances that businesses should heed, particularly when choosing interventions, our research shows that the underuse of talent from lower SEBs and those employees’ poorer workplace experiences are consistent across European countries and across businesses of different sizes and skill levels.
Our report analyzes social mobility through the lenses of three stakeholder groups: society, employers, and employees (see sidebar “Methodology”). We outline the challenges that exist today, demonstrate the potential economic benefits of improving social mobility, and suggest actions that different types of European businesses could take to boost productivity through social mobility.