Why Top Government Roles Are Getting Harder to Fill: And What To Do About It

I am hearing more and more that across Whitehall and the wider public sector, there is a quiet consensus forming: the most senior roles are getting harder to fill, and harder still to fill well.

Directors and Directors‑General in central departments, Chief Executives of agencies and regulators, and Chairs/NEDs of public bodies are all operating in a context of heightened scrutiny, constrained resources and complex delivery challenges. The remit has grown, but the pool of people who can credibly take on these roles – and are willing to – has not expanded at the same pace.

 This is not just a matter of “it feels harder than it used to”. The evidence from official and authoritative sources – the National Audit Office (NAO), Institute for Government (IfG), Office for National Statistics (ONS) and others – points to a structural shift in the senior talent market.

 In this article, I will look at why top public sector roles are becoming harder to fill, and what departments, arm’s‑length bodies (ALBs) and sponsoring teams can do differently when they go to market for SCS1–3, Chair and NED appointments.

1. The role has changed faster than the recruitment model

Senior roles in central government have always been challenging. What has changed over the last decade is the combination and intensity of demands.

1.1 A broader, more complex leadership remit

Successive NAO reports highlight the scale and complexity of the programmes senior leaders are now accountable for:

·      Major projects and programmes – from infrastructure to defence and digital transformation – regularly run into the tens of billions of pounds and span multiple departments and delivery partners.

·      The NAO’s reviews of the Government Major Projects Portfolio (GMPP) consistently underline the demands this places on leadership capability, particularly in commercial, project delivery and risk management.

 At the same time, the IfG’s Whitehall Monitor series has drawn attention to:

·      The increased churn in ministerial and senior official posts, which complicates strategic continuity.

·      The growth in cross‑cutting policy challenges – net zero, levelling up, digital regulation – that require collaboration across traditional departmental boundaries.

 For an SCS2 Director‑General or the Chair of a major ALB, this translates into a role that is:

·      Strategically broader – spanning policy, operations, digital, data, and increasingly, communications.

·      Organisationally more complex – involving ALBs, private/voluntary sector partners, devolved and local government.

·      Politically more exposed – with media and Parliamentary scrutiny as standard.

·      Yet the recruitment model has often remained oriented around a narrower conception of the role: heavy on policy experience and institutional knowledge, lighter on the functional and delivery capabilities now critical to success.

1.2 Demand for specialist skills has outpaced internal supply

This shift in role content has created specific pinch points in the senior talent market. Several NAO and IfG publications, as well as Cabinet Office capability reviews, highlight recurring capability gaps:

·      Digital, data and technology (DDaT) – including change leadership, cyber, and user‑centred design.

·      Commercial and contract management – particularly for complex outsourcing and public‑private partnerships.

·      Major project and programme delivery – the ability to manage risk and delivery at scale.

 Government has invested significantly in building internal professions in these areas – for example, through the Government Digital Service, the Infrastructure and Projects Authority, and specialist commercial and project delivery functions. The Government Skills and Curriculum Unit (GSCU) and Civil Service reform programmes have also sought to strengthen these capabilities. 

But at SCS1–3 level, the pool of leaders who combine deep functional expertise with the full range of civil service leadership skills (policy, Parliamentary handling, cross‑government working) remains relatively small. This leads to:

·      A strong temptation to appoint on the basis of policy or institutional familiarity, on the assumption that specialist capability can be “bought in” around the leader.

·      Difficulty in attracting external candidates who have functional depth but lack prior central government experience – especially when role descriptions and processes are not designed with them in mind.

·      The net effect is that many senior roles ask for a rare – sometimes unrealistic – mix of competencies. That alone makes them harder to fill.

 2. The external market has become more competitive

The challenge is not just internal capability; it is also a function of the wider labour market.

2.1 A tight market for senior specialists

The Office for National Statistics (ONS) has consistently reported high employment rates and ongoing recruitment difficulties in certain high‑skill occupations. While official statistics do not carve out “C‑suite” roles as a discrete category, the patterns are clear:

·      Persistent skills shortages in digital, engineering, data and certain professional services.

·      Strong demand in sectors that compete directly with central government for senior talent: consulting, technology, financial services, infrastructure, health and life sciences.

 For senior specialists in these fields, central government is only one of several options – and not always the most obvious or immediately attractive. Compensation constraints, perceived bureaucracy, and concerns about public scrutiny can all act as deterrents, particularly for those at the peak of private sector careers.

 2.2 Pay and reward: constraints are real, but only part of the story

Cabinet Office data on Senior Civil Service pay and reward and the IfG’s commentary on civil service pay underline the structural limitations on public pay:

·      SCS pay bands and progression are centrally constrained and heavily scrutinised.

·      The gap between public and private sector pay can be particularly stark in some specialist and executive roles.

·      However, the picture is more nuanced than “government cannot compete on pay”. Independent research (for example, from CIPD and others) suggests that senior professionals are also motivated by:

o   Intellectual challenge and autonomy

o   Organisational purpose and societal impact

o   Opportunities to shape systems and institutions

o   Flexible working and work‑life integration

 The challenge for many central government recruitment campaigns is not purely financial; it is that the non‑financial aspects of the proposition are not articulated clearly or persuasively enough to cut through in a crowded market.

 3. The process itself can deter the very people you most want

Alongside role content and market conditions, the way senior appointments are run can significantly influence the size and quality of the candidate pool.

 3.1 Long, opaque and high‑risk processes

A recurring theme in both NAO reviews and informal feedback from candidates is that central government recruitment processes can be:

1.     Lengthy – spanning many months from advertisement to decision.

2.     Opaque – with limited communication between stages and uncertainty about timelines.

3.     High‑risk – with final outcomes subject to multiple layers of approval or external scrutiny. 

For internal candidates, these features are frustrating but familiar. For external candidates – particularly those in senior private sector roles – they can be prohibitive. The opportunity cost of entering a process that is time‑consuming, unpredictable and potentially very public is high.

For Chair and NED roles, the Governance Code on Public Appointments and annual reports from the Commissioner for Public Appointments have brought greater transparency and accountability to the process. But they also highlight:

·      Variable practice between departments in planning, stakeholder engagement and candidate care.

·      Instances where competitions have been launched without sufficient upfront clarity on role, person specification and panel expectations – leading to abortive or extended processes.

3.2 Perceptions of “closed shops” and cultural misalignment

Even when processes are technically open and fair, the way they are perceived can put off capable candidates:

·      Perception of “insider advantage”. External candidates often believe – sometimes with justification – that internal or “usual suspect” candidates are favoured, especially where job descriptions strongly emphasise prior central government experience.

·      Cultural uncertainty. Candidates from outside the public sector can find it hard to decode the cultural signals in role packs and conversations. References to “policy‑led environments”, “ministerial priorities” and “Whitehall experience” can be off‑putting if not explained.

·      In an environment where government is actively seeking more external appointments to bring in fresh perspectives and specialist skills, these perception issues are not trivial. They go directly to the size and diversity of the candidate field.

4. What boards and departments can do differently

If the drivers of difficulty are structural, the response has to be strategic. Here are five practical shifts that can make top roles easier – not easy, but easier – to fill well. 

4.1 Redesign roles from first principles

Rather than starting with the last job description, start with:

·      Future challenges. What will this role need to deliver in three to five years, not just over the next 12 months? What NAO, IfG or departmental reviews tell you about current weaknesses or risks.

·      Non‑negotiable outcomes. What must change or improve under this leader’s watch?

·      Essential versus desirable experience. Distinguish clearly between core criteria and proxies for comfort (e.g. “has worked in central government before”).

This often leads to roles that are:

·      Clearer in purpose and impact (which helps attract mission‑driven candidates).

·      More open to candidates from diverse backgrounds who can demonstrate relevant outcomes, even if their career paths look different.

·      Executive search partners can add value at this stage by bringing evidence from comparable roles and markets, including what is realistically available and through the creation of a clear and attractive Employer Value Proposition (EVP).

4.2 Calibrate the market before you launch

Before launching a high‑stakes SCS or Chair/NED competition:

·      Test the proposition with the market. Discreetly sense‑check with a sample of potential candidates (internal and external) to understand what would attract or deter them.

·      Stress‑test the criteria. Ask your search partner to review the person specification against live talent maps. Are you over‑specifying? Are there fields where you will clearly not be competitive?

·      Align stakeholders on risk appetite. Be explicit about whether you are prepared to appoint someone without prior central government experience, or someone with deep functional expertise but a steeper learning curve on political context.

·      This upfront calibration can prevent the all‑too‑common scenario where a competition closes with a weak or homogeneous shortlist and the panel feels forced to choose from a limited field.

4.3 Design processes that respect senior candidates’ reality

Acknowledging what senior candidates can realistically commit to makes your process more attractive without compromising rigour:

·      Set and publish realistic timelines. Build in the necessary governance steps, but keep the overall end‑to‑end duration proportionate. Where approvals or external clearances are needed, be transparent about that from the outset.

·      Streamline contact points. Use your search partner to manage candidate communication actively – regular updates, clarity on next steps, and fair warning of any slippage.

·      Use assessment methods that add value. Senior candidates will typically accept intensive assessment if it is clearly linked to the role and handled professionally. They are less tolerant of repetitive interviews or generic exercises that feel like “process for process’s sake”.

For Chair and NED roles, close adherence to the Governance Code on Public Appointments remains critical. But within that framework, there is significant scope to improve candidate experience – and thereby widen the field.

4.4 Be explicit about the non‑financial offer

Given the constraints on pay, it is essential to articulate – concretely, not abstractly – what makes the role compelling. That means moving beyond generic references to “public service” and “making a difference” to specific, evidence‑backed propositions:

·      System‑level impact. For example: “You will be responsible for overseeing a regulatory regime that affects X million people and £Y billion of economic activity.”

·      Complexity and challenge. Senior candidates in the private sector often relish complexity; framing the role as an opportunity to tackle one of the state’s most intractable challenges can be a draw.

·      Influence and profile. Within appropriate bounds, be honest about the opportunity to shape national policy, institutional strategy or sector‑wide standards.

·      Flexibility and development. Where possible, highlight flexible working, portfolio career opportunities (for NEDs), and access to cross‑government networks and leadership development.

·      Role packs, early conversations and interview narratives should all reinforce this proposition consistently.

4.5 Use executive search as a strategic enabler, not a last resort

Finally, the way you deploy executive search matters. The most successful SCS and board‑level appointments tend to share three characteristics:

·      Early engagement. Search is involved before the role is frozen, shaping the brief and advising on market realities.

·      Genuine outreach. The search process is used to widen the field beyond usual suspects – mapping diverse talent pools across sectors and regions, and engaging candidates who would not otherwise consider a public sector move.

·      Robust, contextual assessment. Search consultants who understand the public context can probe not just for skills, but for values, resilience and appetite for scrutiny – testing alignment with the Civil Service Code, Nolan Principles and the specific governance environment of the role.

·      Used this way, executive search is not simply a way to “fix” difficult competitions; it is a tool to align recruitment practice with the capability, diversity and leadership needs highlighted by NAO, IfG and other analyses.

5. Questions for sponsors of senior appointments

If you are about to launch, or are in the middle of, a senior competition, it is worth pausing to consider:

·      Are we designing this role around our future challenges – or our past structures?

·      Have we calibrated the market and our own risk appetite – or are we hoping the right candidates will simply appear?

·      Does our process, in practice, encourage or discourage the senior talent we most want to attract?

·      The increasing difficulty of filling top public sector roles is not a passing phase. It reflects deep shifts in what these roles entail and how the wider labour market operates. The good news is that with deliberate design, evidence‑led role definition and a more strategic use of executive search, departments and boards can still secure the leadership they need.

The Changing Face of Senior Leadership in UK Central Government: What the Data Tell Us

If you look only at the headlines about the UK public sector, you might think the story of senior leadership is one of constant churn, constrained pay and ongoing reform fatigue.

But the data paints a more nuanced picture.  Recent Civil Service statistics show a workforce that is, in many ways, more diverse and more geographically dispersed than ever before. At the same time, the requirements of Senior Civil Service (SCS) and public body board roles are evolving rapidly driven by fiscal pressure, technological change, and increasingly intense public scrutiny.  For those of us involved in senior appointments at SCS Pay Bands 1–4, Chairs and Non‑Executive Directors these trends are not background noise; they define the talent market we are operating in.

This article looks at what the latest official numbers tell us about the changing face of senior leadership in central government, and what that means for how we design and run executive search.

What the latest data say about the Civil Service workforce

The Cabinet Office’s Civil Service Statistics 2024 release is the most comprehensive official snapshot of the workforce as at 31 March 2024, covering headcount, pay, grade, location and diversity across departments and agencies. It is complemented by other government and quasi‑government sources such as the Institute for Government’s Whitehall Monitor and annual diversity statistics on public appointments from the Commissioner for Public Appointments.  While much of the public commentary focuses on overall headcount, there are three trends particularly relevant to SCS and board‑level recruitment:

·      Overall growth and reshaping of the workforce  

·      Shifts in diversity, including at senior levels  

·      A gradual re‑balancing of civil servants’ locations

Overall workforce and SCS context

The Civil Service today is significantly larger than it was in the mid‑2010s, driven largely by EU exit, the pandemic response and a busy domestic policy agenda. The Civil Service Statistics 2024 release sets out the total number of civil servants and tracks grade composition, including the Senior Civil Service.  Alongside this, the Cabinet Office publishes the Senior Civil Service roles and salaries list, which provides an annual view of SCS posts, pay bands and departmental distribution. When you compare snapshots over several years, three patterns emerge:

·      The SCS has grown in size, but still represents a small fraction of the total workforce.  

·      New types of senior roles have appeared or expanded particularly in digital, data and technology (DDaT), commercial and major project delivery.  

·      Departments are experimenting more with external recruitment at senior levels, especially where they are seeking specialist expertise.

Taken together, this means the senior talent market in government is both tight and increasingly specialised. Many of the most challenging SCS1–3 and board roles combine:

·      Traditional civil service leadership (policy, assurance, Parliamentary accountability)  

·      Deep functional expertise (e.g. digital, cyber, commercial, infrastructure, health)  

·      The ability to operate across complex delivery systems involving arm’s‑length bodies, local government, private and third sector partners.

That is not a profile readily available “off the shelf” – either from within the Civil Service or externally.

Diversity: progress and persistent gaps

On diversity, the picture is mixed but moving in a broadly positive direction.

A Civil Service World analysis of the 2025 Civil Service statistics reports that the proportion of civil servants declaring they have a disability has reached a record high, now matching representation in the economically active working‑age population for the first time. Since 2015, there have been year‑on‑year increases in the percentage of civil servants who declare themselves as disabled. For more context, I’ve written about private sector diversity here.

The same analysis notes that the proportion of civil servants from an ethnic minority background has also reached a record high, though it still lags behind the proportion in the economically active working‑age population. Importantly, it highlights that:

·      Ethnic minority representation has increased across all grades below the Senior Civil Service.  

·      There are still gaps to close at the most senior levels.

For senior appointments more broadly, including Chairs and NEDs of public bodies, the Office of the Commissioner for Public Appointments’ (OCPA) annual diversity statistics provide additional insight. Recent reports have shown:

·      Continued progress on gender representation in public appointments, with women now close to or exceeding parity among new appointees in many years.  

·      Ongoing under‑representation of some ethnic minority groups and disabled people in Chair and NED roles.  

·      Variation between departments and sectors, indicating that practice and culture at the sponsoring department level matters.

The headline message for executive search is clear: the pipeline is diversifying, particularly at feeder grades below the SCS, but there is still a drop‑off at the very top. That has implications for how we design selection criteria, run campaigns and support candidates.

Location: a more dispersed leadership footprint

The previous government’s “levelling up” and Places for Growth agendas have translated into a gradual re‑balancing of where civil servants are based.  The Civil Service World coverage of the latest statistics notes that London remains the region with the largest number of civil servants (over 107,000), followed by the North West of England and Scotland. While the proportion of London‑based civil servants has decreased slightly over time, the absolute number has still risen.

For senior leadership, this is starting to look like:

·      More SCS and public body board roles based outside London, or designed as multi‑location/hybrid.  

·      Greater emphasis on understanding regional economies, local government, and place‑based delivery.  

·      A more competitive landscape in some regional hubs, where multiple departments and agencies are co‑locating.

From an executive search perspective, location is no longer a binary “London vs the rest” question; it is a strategic design choice that shapes your candidate pool and diversity outcomes. 

 What this means for SCS and public body board recruitment

Translating data into decisions is where many recruitment processes fall down. Here are five practical implications of the trends above for those leading or advising on SCS1–3 and Chair/NED appointments. 

1.        Use evidence to design roles for the future, not just backfill the past.  Civil Service statistics and related analyses (for example, the Institute for Government’s Whitehall Monitor series) consistently highlight the areas where government most struggles: major project delivery, digital transformation, data and analysis, and complex cross‑cutting policy.  When you design a senior role, the default can be to reproduce the last job description with minor edits. The data suggest a different approach:

·       Start with capability gaps, not organisational charts. Look at the major risks and priorities facing your department or body – for instance, delivery of major capital programmes, data‑driven policy, or regulatory change.  

·       Benchmark against emerging roles. The growing number of Chief Digital Officers, Chief Data Officers and senior commercial leaders in government is a signal that the leadership model is shifting. Ask: which aspects of those roles do you need, even if your title is traditional (Director‑General, Director, Chair, NED)?  

·       Be explicit about the future state. If your strategy will require a step‑change in digital, or a fundamental re‑set of stakeholder relationships, write that into the role purpose and selection criteria. Vague references to “transformation” are not enough.

Evidence‑led role design tends to expand, not shrink, the viable candidate pool: you move from looking for “someone who has already done this exact job in government” to “someone who has demonstrably built similar capabilities in a complex, accountable environment”.

2.        Treat diversity data as a design constraint, not an afterthought.  The fact that disability representation in the Civil Service now matches the economically active population is a genuine milestone. But the persisting gaps at senior levels and in public appointments more broadly show that “more of the same” will not close the gap.  Three practical implications for senior recruitment:

·       Interrogate your criteria.  

·       Ask bluntly: which elements of the person specification are genuinely essential, and which are proxies for comfort? For many SCS and board roles, an insistence on prior central government experience can unintentionally exclude capable external candidates, including from under‑represented groups.

·       Design inclusive processes upfront.  

Drawing on Cabinet Office guidance and the Public Appointments diversity data, there is good evidence that drop‑off for under‑represented groups often happens between long‑list and final interviews. That points to the importance of:

·      Clear, jargon‑free role packs  

·      Accessible timelines and formats  

·      Mixed and trained selection panels  

·      Structured, criteria‑based assessment rather than unstructured discussion

Invest in proactive outreach, not just open competition.  

For Chairs and NEDs in particular, relying solely on open advertising will replicate existing networks. Using executive search to map and engage talent beyond the “usual suspects” – for example, senior leaders in local government, the NHS, social enterprise, or regional business – is a practical way to align practice with diversity ambitions.

Recognise that location can be a strategic lever in your talent strategy

The changing regional footprint of the Civil Service is not just a logistical matter; it is a talent and diversity opportunity.  When designing SCS and board roles, you have choices about:

·      Base location versus working pattern. Could a Director‑level role nominally based in a regional hub be offered on a multi‑location or predominantly hybrid basis, expanding the pool beyond those willing to relocate?  

·      Engagement with local ecosystems. For public bodies headquartered outside London, there is often untapped potential to bring in NEDs from local universities, anchor institutions and regional businesses; strengthening both governance and place‑based insight.  

·      Avoiding unintended exclusion. Over‑specifying location (for example, requiring three days per week in a single office) can have disproportionate impacts on candidates with caring responsibilities or disabilities. Given the Civil Service’s own journey towards more flexible working, senior recruitment should reflect that reality.

An evidence‑based discussion about location, informed by Civil Service statistics on regional staffing and realistic assessments of role demands, will usually lead to better‑balanced decisions than defaulting to historic patterns.

Plan for a tight external market at senior levels

ONS labour market data continues to show a competitive landscape for senior professionals, particularly in digital, data, engineering, commercial and specialist regulatory fields. When you overlay that with the specific demands of public service leadership – accountability to Parliament, media scrutiny, complex stakeholder environments – the pool of candidates who can credibly step into SCS1–3 or Chair/NED roles becomes quite narrow.

In this context, three things become essential:

·      Clarity of offer beyond pay.  Public sector pay constraints are well‑documented in Cabinet Office and Institute for Government analyses. You cannot win a bidding war with the private sector. You can, however, craft compelling value propositions around impact, complexity of challenge, mission, flexibility and development.

·      Realistic timelines and sequencing.  Senior candidates in high‑demand fields often have multiple options. Long, opaque processes – a repeated theme in both NAO reviews and anecdotal feedback from candidates – simply push them elsewhere. Building in decision‑making discipline and clear communication is not just good manners; it is a competitive necessity.

·      Active talent mapping and relationship‑building.  For the most critical SCS and Chair/NED roles, starting from a blank sheet of paper when a vacancy arises is a luxury government can ill afford. Ongoing market mapping, informal conversations and “warm” networks, this is where a good executive search partner comes into their own, facilitated by specialist search make it far easier to move quickly when appointments are needed.

Anchor selection in public value and ethical leadership

 Finally, the data on workforce composition and capability tells only part of the story. NAO reports and Parliamentary committee inquiries into high‑profile programme failures frequently point to culture, behaviours and leadership values as root causes.

The Civil Service Code and the Nolan Principles of Public Life provide a clear articulation of the ethical framework within which all public servants operate. The Code of Conduct for Board Members of Public Bodies does the same for NEDs and Chairs.

For SCS and board‑level appointments, this has two consequences:

·      Values and behaviours must be explicitly assessed, not assumed.  At senior levels, almost all candidates will present a credible CV. Differentiation comes from how they have exercised judgment, managed conflicts of interest, handled scrutiny and led through ambiguity. That requires structured questions, realistic scenarios and – where appropriate – stakeholder input as part of the assessment.

·      Search partners need to understand the broader context.  Executive search in central government is not simply about identifying people with the right technical skills. It is about testing appetite and suitability for a unique leadership context: political neutrality, Parliamentary accountability, media interest and complex governance frameworks. The most effective searches integrate this lens from the first conversation with potential candidates.

Questions for senior leaders and hiring sponsors

The data are important, but only useful where they can prompt different decisions.

If you are a Permanent Secretary, Director‑General, Public Body Chair or Senior Sponsor of appointments, three questions are worth reflecting on now:

1.        Does your current approach to senior recruitment reflect the reality of the Civil Service workforce in 2026?  Or is it still designed for a smaller, more London‑centric, less diverse civil service?

2.        Are your role designs and selection criteria genuinely aligned with your future capability needs?   Or are you backfilling historical patterns because that feels safer?  Many Directors and Directors General are guilty of this particular sin.

3.        How deliberately are you using executive search as a strategic tool?   Is search engaged early to shape the market and support diversity and capability goals, or brought in late to “fix” a process that has already drifted off course?

Does the Private Sector “Truly Care” – Or Only When It Pays?

In 2026, the UK private sector is fluent in the language of “purpose”, “social value” and “DEI” (diversity, equity and inclusion). Corporate reports highlight commitments to inclusive workplaces, responsible supply chains and community investment. Major businesses have joined initiatives such as the new Social Value Commission, established by leading firms including Barratt Redrow, E.ON UK, Heathrow, Knight Dragon, Mitie, Pension Insurance Corporation and VodafoneThree to help ensure that local communities share in the benefits of private investment.

 The question is whether this activity reflects a genuine re‑ordering of corporate priorities, or whether profit still dominates with DEI and social value deployed when – and only when – they support the bottom line. A second Trump presidency in the United States and the continued rise of populism across Europe add further complexity, shaping how corporate leaders assess the risks and rewards of visible commitments to diversity and social value.

 Let’s look at the following key issues:

1.        How seriously the UK private sector is taking diversity and social value in 2026.

2.        Whether profit still dominates decision‑making when values and returns come into tension: is profit still King?

3.        How Trump‑era politics and European populism have influenced the DEI agenda in the UK.

4.        We will then look at three indicative case studies in the finance, construction and tech sectors.

 1. The State of DEI and Social Value in the UK Private Sector

Over the past decade, progress on headline indicators of diversity has been significant:

·      Gender representation at board level

·      The FTSE Women Leaders Review reported in 2023 that women held 40.2% of board roles across the FTSE 350, up from 9.5% in 2011.

·      This surpassed the voluntary 40% target ahead of schedule and placed the UK among global leaders on female board representation.

Ethnic diversity at senior levels

The Parker Review reported in 2023 that 96% of FTSE 100 companies had at least one director from a minority ethnic background, compared with 52% in 2017.  The target of at least one minority ethnic director on each FTSE 100 board by 2021 has effectively been met.

 Gender pay gap

Mandatory gender pay reporting for employers with 250+ staff, introduced in 2017, has created transparency but change has been far from stellar. The UK median gender pay gap was 9.1% in 2023, compared with 9.7% in 2017.⁴ Many large employers still report double‑digit gaps, especially in finance and professional services.

 Ethnicity pay gap

Ethnicity pay gap reporting remains voluntary at UK level, though the Mayor of London requires it for Greater London Authority Group organisations. A growing number of large employers, including major banks and consultancies, have begun publishing their data, which generally reveals material gaps, particularly for Black employees. Coverage, however, is still patchy and one feels this should be made mandatory like gender pay gap reporting.

 In 2026, the broad direction of travel is clear:

·      Board‑level diversity has improved markedly in numerical terms.

·      Nonetheless, intersectional gaps (for example, women of colour in the most senior roles, disabled leaders, socio‑economic background) remain substantial and under‑reported.

·      Many organisations have moved from “awareness‑raising” towards more structural interventions in recruitment and progression, but depth and consistency vary significantly by sector and size.

Social Value: From Contractual Obligation to Strategic Concern

“Social value” – the broader social, economic and environmental benefits created by an organisation – has become an entrenched concept in UK public procurement and is increasingly shaping private‑sector strategy:

 The UK Government’s Social Value Model requires central government procurement to explicitly evaluate social value, typically at a minimum of 10% of the tender score.⁵ This has compelled private contractors to develop structured social value plans around local employment, skills, supply chain diversity and environmental impact.

Social value has become standard language in sectors closely linked to public spending – including construction, facilities management, defence, healthcare and infrastructure – and is now moving into finance and tech via ESG, community investment and digital inclusion agendas.

The Social Value Leaders’ Summit and associated networks highlight growing cross‑sector collaboration, with businesses, social enterprises and public bodies sharing practices and frameworks for measurement.

 Companies such as ESS (part of Compass Group) have articulated future strategies centred on “diversity within our supply chain” and increasing spend with social enterprises to deliver measurable social impact.

Across the economy:

Large, procurement‑heavy organisations tend to lead on social value integration, while many mid‑sized firms still approach it as a tender requirement rather than a core strategic lens.

Measurement is inconsistent. Firms draw on a mix of the Social Value Portal’s TOMs (Themes, Outcomes and Measures), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and bespoke indicators, leaving limited comparability and opportunities for selective reporting.

 2. Is Profit Still King?

The key issue is not whether companies communicate about DEI and social value; it is what happens when those commitments collide with short‑term financial or political pressures.

 When DEI and Social Value Align with Profit

There is robust evidence linking aspects of diversity and social value to long‑term financial performance:

·      McKinsey’s 2020 “Diversity Wins” report found that companies in the top quartile for gender diversity on executive teams were 25% more likely to outperform on profitability than those in the bottom quartile; for ethnic diversity, the outperformance was 36%.

·      Behavioural research in the UK and elsewhere shows that structured, evidence‑based recruitment processes (e.g. anonymised CV screening, standardised interviews) improve selection quality, not only diversity.

·      Social value can be directly revenue‑generating: under the UK Social Value Model, credible social value proposals are often the differentiator in winning large public contracts, particularly in construction, facilities management and outsourcing.

In these areas, the “business case” for inclusion and social value is well‑established. Many organisations have integrated DEI and social value because they support:

·      Talent attraction and retention in a tight labour market.

·      Innovation and market insight across diverse customer bases.

·      Risk management, including reputational and regulatory risk.

·      Access to public sector and ESG‑sensitive capital.

 When Values Compete With Short‑Term Gains

However, when DEI and social value require structural change, challenge profitable business models, or risk political backlash, profit and risk‑aversion often reassert themselves:

 Budget cuts and consolidation

In periods of economic pressure – the post‑pandemic recovery, inflation and the cost‑of‑living crisis – DEI and community investment budgets are frequently among the first to be scrutinised. In many organisations, standalone DEI roles have been absorbed into broader HR or ESG portfolios, sometimes reducing dedicated capacity.

·      Slow progress on costly reforms

·      Reforms with significant financial implications – for example, overhauling pay structures, altering bonus schemes that favour certain working patterns, or investing in large‑scale accessibility improvements – tend to progress more slowly than low‑cost interventions like awareness campaigns and one‑off training.

 Cautious public positioning

Many organisations adopt visible stances on broadly supported topics (e.g. mental health, high‑level commitments to gender equality), though in reality these can be poorly delivered, but are more cautious on politically contested issues such as migration, policing, or trans inclusion. Visible activism is often limited by concerns about media backlash, customer reactions, and internal polarisation.

 Persistent supply chain tensions

Despite the UK Modern Slavery Act (2015), independent reviews have repeatedly found that many company statements remain generic and low‑substance. When cost and speed pressures conflict with labour standards, particularly in long international supply chains, commercial imperatives still frequently dominate.

 The underlying conclusion is that profit remains the dominant driver. However, the boundaries of what is considered an acceptable route to profit – in terms of workforce equity, community impact and environmental responsibility – are gradually shifting, and this shift is partly enforced by regulators, investors and corporate customers.

 3. The Trump Presidency, European Populism and UK DEI

DEI and social value in UK business do not exist in a vacuum. They are shaped by a global political environment characterised by polarisation, culture wars and challenges to multilateralism.

 The “Trump Effect”: Culture Wars and Corporate Caution

The cumulative effect of Trump‑era politics in the US, including his second term, is visible in the UK corporate context in several ways:

 Import of US cultural narratives

UK discourse around “woke capitalism”, “critical race theory” and “gender ideology” often echoes US talking points. UK‑based multinationals with US operations have witnessed boycotts and political attacks on brands perceived as overly “woke”, and this informs a more cautious global communications strategy.

 Shift in language and framing

Many UK corporates have adopted more neutral or universalist language – emphasising “belonging”, “respect” and “fairness for all” – over overtly justice‑oriented framing. References to structural racism, patriarchy or colonial legacies are more likely to appear in internal documents than external statements.

 Balancing internal constituencies

Workforces are increasingly ideologically diverse. Some employees expect strong corporate leadership on racial and social justice; others view DEI as overreach. Leaders attuned to US dynamics are often reluctant to take firm public positions that could inflame internal or external conflict.

 European Populism: National Identity, Migration and Legitimacy

Across Europe, populist parties have gained prominence, often foregrounding national identity, scepticism towards immigration, and resistance to perceived “elite” or “globalist” agendas. This intersects with UK dynamics post‑Brexit:

 Narratives of “left behind” communities

UK political debate continues to focus on regional inequality and communities that feel marginalised by economic change. Corporate DEI is sometimes portrayed in populist narratives as preoccupied with metropolitan identities rather than regional economic justice.

 Scepticism about ESG and DEI

Some populist politicians and commentators frame ESG, net zero and DEI as elite priorities that impose costs on ordinary people. Businesses responding to these pressures often emphasise tangible benefits – such as jobs, apprenticeships and local investment – over abstract value statements.

 For UK companies, this environment:

·      Increases the reputational risk of being perceived as “out of touch” or “lecturing” customers and communities.

·      Simultaneously increases the strategic value of genuinely grounded social value that can demonstrate local economic and social benefits.

 Net Effect: Quiet Resilience Rather Than Retreat

Despite these political headwinds, DEI and social value have not collapsed in the UK private sector. Instead, there is a shift in how they are articulated and embedded:

·      Increased focus on governance and reporting – board oversight, data disclosure, and links between executive remuneration and social or diversity metrics.

·      Movement from symbolic interventions to systemic changes in recruitment, promotion, reward and supply chains, albeit unevenly.

·      Framing DEI and social value as components of risk management and long‑term value creation, rather than as standalone moral imperatives.

 4. UK Case Studies: Finance, Construction and Tech

To move beyond generalities, it is useful to examine how different sectors are operationalising DEI and social value under these conditions. The following case studies are illustrative rather than exhaustive; they draw on public disclosures, independent reviews and sectoral trends.

Case Study 1: Finance – A Major UK Bank Confronting Pay and Progression

Large UK‑headquartered banks have been under scrutiny for their record on gender and ethnicity, particularly given historically high pay and significant influence over the wider economy.

A typical illustration is a FTSE‑listed universal bank that:

·      Publishes detailed pay gap data

·      The bank voluntarily reports on both gender and ethnicity pay gaps, broken down by business unit and job level. Public data from leading UK banks has shown:

·      Median gender pay gaps often in the 25–35% range, reflecting under‑representation of women in front‑office, high‑bonus roles.

·      Ethnicity pay gaps that are smaller at aggregate level but more pronounced for Black employees in particular.

·      These disclosures exceed legal requirements but also expose reputational vulnerability.

Links DEI performance to remuneration

·      The bank has introduced a DEI scorecard, covering metrics such as representation targets at senior levels, inclusive leadership behaviours, and employee survey results on inclusion. A proportion of senior executives’ variable pay is now contingent on performance against this scorecard.

Invests in targeted progression

·      Sponsorship and leadership development for women and ethnic minority colleagues at mid‑senior levels.

·      Reverse mentoring of executives by staff from under‑represented groups.

·      Partnerships with universities and charities to create early‑career pathways for students from lower socio‑economic backgrounds (e.g. foundation apprenticeships, contextual recruitment).

Aligns social value with financial inclusion

The bank’s social value strategy emphasises access to finance for underserved communities and SMEs, support for social enterprises, and digital skills programmes. It collaborates with community finance institutions and social lenders to reach customers who may otherwise rely on high‑cost credit.

Tension with profit

While reporting and programmes are robust, the structural drivers of pay gaps – notably the distribution of high‑remuneration front‑office roles – remain largely. Addressing these would require reconfiguring business models, reward structures and working cultures at scale. Progress therefore remains steady but incremental, reflecting the continuing primacy of revenue‑generating activities.

Case Study 2: Construction – Social Value as a Route to Market

The UK construction sector sits at the centre of the social value agenda due to its dependence on public contracts and its visible impact on local communities.  Consider a large contractor or housebuilder operating across major public infrastructure projects:

Embedding social value in bids and delivery

The firm systematically integrates social value commitments into bids in line with the UK Government’s Social Value Model. These may include:

·      Local employment and apprenticeships, often with quantifiable targets (e.g. a set proportion of project hours delivered by residents of specified postcodes).

·      Training and upskilling programmes, including collaboration with FE colleges and local schools.

·      Targets for spend with SMEs, voluntary organisations and social enterprises.

·      Community facilities or public realm improvements linked to developments.

Measuring and reporting impact

The contractor uses recognised frameworks (e.g. Social Value Portal’s TOMs) to quantify social value delivered in monetary terms (e.g. value of apprenticeships, local wages, community investments). This data is reported to public‑sector clients and featured in annual reports.

Diversity and inclusion on site

The firm runs targeted initiatives to increase representation of women, ethnic minorities and younger workers in construction trades and site management. Examples include:

·      Pre‑employment training for under‑represented demographics.

·      Flexible working pilots to support parents and carers.

·      Zero‑tolerance policies on harassment and racist or sexist abuse on site.

Local legitimacy and planning

For major regeneration schemes, the company participates in or convenes community forums, co‑design workshops, and tenant/resident groups to secure buy‑in, mitigate opposition and co‑create community benefits.

Tension with profit

Social value is clearly a route to market in this sector; failing on social value criteria can mean losing high‑value public contracts. However, margins in construction are often thin, and there is ongoing pressure to standardise and, at times, minimise commitments to what is necessary to win bids. True transformation – for example, significantly shifting workforce composition or radically rethinking apprenticeships to widen access – competes for investment with other priorities such as digitalisation and off‑site manufacturing.  There is a danger that social value is prominent in bids and tenders but in reality is not visible at through contract delivery.

Case Study 3: Tech – Inclusion in a High‑Growth, High‑Profile Sector

The UK tech sector, particularly in London, Manchester, Cambridge and other hubs, has become emblematic of both opportunity and inequality:

·      High‑growth firms and large global platforms have faced criticism for under‑representation of women, Black and minority ethnic employees, and workers from lower socio‑economic backgrounds, particularly in technical and leadership roles.

·      At the same time, tech’s role in automation, AI and platform economies raises questions about the distribution of work, surveillance and digital exclusion.

A UK‑based technology company (for example, a FTSE‑listed software or fintech provider) might:

·      Set explicit representation goals

·      The company publishes targets for gender and ethnic diversity in technical roles and management, with annual disclosure on progress. Some leading firms have, for example, set goals to achieve gender parity in entry‑level technical hiring by mid‑decade.

Redesign recruitment and early‑career pathways

·      Removing degree requirements for more roles and focusing on demonstrable skills via coding challenges or portfolio review.

·      Running apprenticeships and bootcamp partnerships targeting candidates from non‑traditional or under‑represented backgrounds.

·      Broadening university outreach beyond the “Golden Triangle” to include regional institutions and colleges.

Focus on inclusive product design and digital inclusion

As part of its social value commitment, the firm:

·      Invests in digital literacy programmes in partnership with schools, charities and local authorities.

·      Conducts inclusive design reviews to ensure products are accessible and do not embed bias (e.g. in AI‑driven decision tools).

·      Supports employee volunteering in coding clubs or mentoring schemes for under‑represented young people.

Navigating global culture wars

The company operates in multiple jurisdictions, including the US and EU. It maintains internal DEI programmes and employee resource groups but is careful in external communications to emphasise “inclusive innovation”, equal opportunity and compliance with local law, rather than overt social activism.

Tension with profit:

High‑growth tech environments place a premium on speed and flexibility. Inclusive hiring and product design can be perceived internally as slowing delivery or increasing costs, even when they prevent costly problems later. The firm’s commitment is therefore strongest where DEI and social value are clearly connected to talent attraction (particularly among engineers) and regulatory risk mitigation (for AI and data‑driven products).

Does the Private Sector “Truly Care” – Or Only When It Pays?

Assessing whether the UK private sector “truly cares” about diversity and social value involves examining the depth of integration, not just surface‑level commitments.

There are clear signals of substantive engagement:

·      Governance: many large companies now have board‑level responsibility for DEI and/or ESG, with regular reporting to audit or sustainability committees.

·      Accountability: elements of executive remuneration are increasingly linked to diversity or social value outcomes (e.g. representation targets; employee engagement on inclusion; delivery of social value commitments in key contracts).

·      Integration into strategy: DEI and social value considerations appear in capital allocation decisions, location strategies, product development and supply chain management.

·      External collaboration: firms join cross‑sector bodies such as the Social Value Commission, sector charters and employer coalitions (e.g. the Race at Work Charter, Disability Confident) and participate actively rather than tokenistically.

Where such features are present and sustained over multiple reporting cycles, the case for genuine institutional commitment is stronger.

Reasons for Persistent Scepticism

Public and workforce scepticism remains justified in many instances:

·      Representation without power: increased diversity at non‑executive and middle‑management levels does not always translate into shared decision‑making power in the C‑suite or on investment committees.

·      Incrementalism: progress on certain metrics (especially pay gaps) remains slow, with limited evidence of willingness to take more radical steps when incremental change stalls.

·      Selective storytelling: companies naturally foreground successes and pilot programmes, while less attention is given to failures, trade‑offs or projects where commercial choices limited social ambition.

·      Whilst working in the Big 4 in around 2012, I was personally involved in a conversation with a partner who made several misogynistic comments only to discover years later that the same individual, had a new role connected with diversity and was waxing lyrical about his “commitment to inclusivity.”

 The most accurate description of the current landscape is uneven. A subset of UK companies – across finance, construction, tech and beyond – are actively working to make DEI and social value part of their core operating model. Others are primarily responding to external pressures (procurement scoring, regulatory scrutiny, investor expectations) at the minimum level required.

 Looking Ahead: Redefining the Terms of Profit

In 2026, profit clearly remains king in the UK private sector. Company law and mainstream capital market expectations have not been fundamentally rewritten. However, the terms on which profit is pursued, and judged legitimate, are evolving in important ways:

·      Diversity and inclusion have become baseline expectations for many regulators, investors, employees and customers, particularly younger generations.

·      Social value is now embedded in public procurement and is becoming an element of corporate reputation and community relations that boards cannot ignore.

·      Trump‑era politics and European populism have made overtly activist corporate stances more fraught, but they have also clarified that businesses operate within contested social spaces and cannot remain entirely neutral.

·      For leaders and practitioners, the strategic task is not to wish away profit as a motive. Rather, it is to tighten the alignment between inclusive, socially valuable business practices and long‑term financial performance. That means:

o   Designing governance and incentives so that DEI and social value are integral to success, not discretionary add‑ons.

o   Building credible measurement and independent assurance for social metrics.

o   Grounding DEI and social value in tangible outcomes for employees, customers and communities, rather than in abstract messaging.

o   Recognising that in an era of political polarisation, quiet, systemic progress may be more resilient than high‑profile symbolic gestures alone.

 In that sense, while profit is still king, the constraints, expectations and obligations surrounding it are being renegotiated. The organisations that will be most resilient into the 2030s are those that treat that renegotiation not as a compliance burden, but as the central strategic challenge – and opportunity – of our time.