Graduates are in shock as a prestigious list heralding the UK firms championing social mobility has included two of the companies best known for ruthlessly charging huge ‘exit fees’ to graduates who leave their schemes in less than two years.

The practice widely considered to have the worst impact on those from poorer backgrounds, who are the most likely to be desperate for a job, the least likely to feel able to question their contract, and the most likely to be dazzled by the calibre of the clients that these firms boast about having. They are also unlikely to be able to buy their way out, should they later decide they have made a mistake and want to leave their role.

Every year, the Social Mobility Foundation (SMF) publishes its Employer Index, showcasing the firms that are working hard to improve access to their organisation, and championing social mobility – along with a detailed report. Among UK employers who take social mobility seriously, it is a very big deal, and they invest significant time and resource in making their application. Appearing on this list is a source of huge pride for those who succeed in being listed.

So, it is horrifying to see two spots taken up by firms that we know are definitely NOT good places for young people from poorer backgrounds to start their career. Sparta Global appears at number 32, while FDM Group is positioned at number 57.

FDM charge £15,000 if you leave in less than two years. Sparta charge up to £8,000 (at one point it was £22,000).

Here are just six of the emails we’ve received from graduates this morning:

“WTF, SMF??! Is this a joke? You should be calling out these companies, not giving them prizes that help them promote themselves to the young people that you say you’re trying look out for!”

“SHOCKED that FDM have been listed as one of UK’s best employers. My time there was horrific, their account managers are awful people and lots of the grads are anxious and depressed, yet we have no way to escape without paying huge fees. This is ridiculous!!!”

“A company that charges exit fees should not be winning awards for social mobility. It is a horrific practice which only exits to trap graduates and bully them into staying with a company. They take advantage of young professionals looking to further their career. These practices can also have a huge effect on the mental health of employees by making them feel trapped and stuck in a job that they don’t wish to do. No company should have this power.”

“It is shocking to have the FDM and Sparta being listed as one of the UK’s best employers in the context of social mobility. These companies undertake inherently wrong practices and recognising them in such way sends an untruthful and potentially harmful in consequences message to the wider society! These people are abusing the disadvantaged and the only way forward is condemning, as opposed to rewarding them!”

“I think it’s terrible that any company that charges exit fees could win an award such as this! I was rushed into starting my career at FDM which at first glance seemed a reasonable opportunity. I quickly found the exit fees severely impacting my mental health as didn’t enjoy the work and knew that I couldn’t afford to pay my way out. It has been a horrible introduction to post university life.”

“Absolutely awful! I was at a firm that charges exit fees, and they tried to trap me in a job which would have severely disadvantaged my career growth. These firms treat you like slaves with no choice in your future career path and threaten you with huge fines if you attempt to take back control. These firms use contracts that literally cause immobility, not mobility.”

It is especially puzzling when we know that the SMF is not only aware of the controversy around exit fees, but shares our concerns about the practice, having seen the shocking evidence against these firms that we published earlier this month. As far back as June 2021, the SMF’s chief executive Sarah Atkinson told Graduate Fog:

“We are concerned that the practice of charging exit fees is likely to have a disproportionate impact on disadvantaged young people starting their early careers – first generation graduates don’t always have the knowledge and confidence to recognise when an opportunity may not be what it seems, and employers need to act responsibly.”

So how does the SMF explain Sparta and FDM appearing on this year’s list? When we asked the SMF today, they said:

“Employers ranking in the Index have shown their commitment to social mobility and their willingness to improve — the role of the Index is to highlight both good and bad practice, and to encourage progress in key areas. We will look at how the practice of charging exit fees should be incorporated into the Index benchmark in 2022.”

It is thought that the SMF may have felt it would be unfair to single out FDM and Sparta when this year’s Employer Index did not require submissions from employers to include details about whether exit fees are charged, and on what scale. For a list like this, you need to have standardised questions and methods for assessing companies against one another – but if you didn’t ask a question about something (such as exit fees), you can’t compare them properly.

But process-driven explanations along these lines underestimate the growing strength of feeling about exit fees, and won’t wash with young people, says Graduate Fog’s founder Tanya de Grunwald. This website’s campaign to #StopExitFeesByXmas is gathering momentum, with support from Seven Trent (who appeared at number 5 on the Index), The Big Issue and Good Law Project.

In response to today’s news, de Grunwald said:

“I am a huge fan of the Social Mobility Foundation, and the Employer Index is a brilliant initiative. However, I believe the organisation has made a mistake by including FDM and Sparta in this year’s Index, and I’m annoyed that these firms have wormed their way on to the otherwise excellent list, and left the SMF with a headache.

“I can see that the recent revelations around exit fees left them with no appealing options, as FDM and Sparta must have already submitted their applications to the Index by the time the SMF seriously considered its policy and position on exit fees. 

“However, given the overwhelming evidence against these firms, I think the SMF had grounds to reject these firms’ applications outright, especially when the alternative was to actually reward these firms for being champions of social mobility – which is what has happened here.

“I am pleased to hear the SMF will consider adding requirements relating to exit fees for submissions to the 2022 Index, but I am horrified at the thought that they’ve allowed these two firms to enjoy a further 12 months of claiming to be great employers of young people from disadvantaged backgrounds, when in fact they are quite the opposite. For this reason, I will continue to urge the SMF to reverse their decision and remove Sparta and FDM from this year’s list.”

Although the SMF’s decision is disappointing, Graduate Fog’s concerns are echoed by other organisations working in this space, including The 93% Foundation, a leading social mobility charity tackling the state-private education divide and levelling the playing field for students from lower socio-economic backgrounds, through programmes such as The 93% Club (which takes its name from the fact that only 7% of young people are privately educated).

Sam Turnpenny, Head of People at The 93% Foundation, told Graduate Fog that he was alarmed to see FDM and Sparta listed this morning, saying:

“The 93% Foundation are very pleased to see so many organisations strengthening their commitment to social mobility and significantly improving their position this year on the Social Mobility Employer Index.

“However, I am personally surprised to see certain ‘hire-train-deploy’ organisations perform relatively well on today’s list, given that some of these organisations have very high ‘exit fees’ to ensure graduate retention. These fees almost always disproportionately impact students from lower socio-economic backgrounds and restrict young people at a time when they are discovering the world of work for the first time.

“As somebody who has been involved in drafting employer submissions to the index in the past, I’m aware there is no mention of exit fees as part of the questions presented to employers, so I am pleased to hear that the SMF is considering adding these in 2022.”

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