Diversity, equity, and inclusion are important topics that must be addressed. Matters of diversity affect the accounting industry in far-reaching ways, including how welcome people feel on the job, how leaders make industry-shaping decisions, and how firms navigate changes rocking the industry.
Inclusion is also incredibly important to keep in mind when connecting to customers. As service professionals, accountants need to provide the same treatment and level of service to everyone, no matter who they are and where they come from.
Even well-intentioned leaders can fall short simply because they don’t understand the intricacies of workplace inclusivity, what equitable treatment on the job looks like, or because they hold unconscious bias towards some customers.
Gusto is committed to helping create great places to work for everyone. We presented another episode of On the Margins: LIVE with hosts Caleb Newquist, Gusto’s Editor-at-Large and the founding editor of Going Concern, and Will Lopez, head of Gusto’s accountant community. Together they covered the broad topic of diversity in accounting. The two talked about key diversity-related issues, including how to be inclusive.
What do diversity, equity, and inclusion look like?
It’s easy to say you’re committed to diversity and inclusion in the workplace, but following through is a different matter. Diversity in accounting requires a consistent effort to shift how firms recruit, hire, and support their teams. Workplace culture and adequate benefits also play a role.
For example, women may be dissuaded from taking opportunities if they’re not given adequate maternity leave, health benefits, and scheduling flexibility. Additionally, while recruiters may not discriminate against women during the hiring stage, women can still experience discrimination on the job. Managers may consciously or unconsciously view women as less capable of leadership positions, colleagues may shut women out of important conversations, or there may simply be an insensitive work culture.
Less than half of accountants feel the industry is equitable
In 2021, the California Society of CPAs and Institute of Management for Accountants laid out compelling evidence that the industry is falling short with its attempts at inclusion. An article in Accounting Today supports the study as it revealed that only 48% of accountants feel the industry is equitable. This data demonstrates that CPA firms have room to grow.
In response to these findings, Caleb sent out a newsletter in which he shared his thoughts on the industry’s recent attempts at diversity.
“I wrote this newsletter … [about how] accounting is still on the diversity struggle bus. [Throughout my] Going Concern days, we covered diversity and accounting’s failure at it. There’s no shortage of reports and surveys and studies that have been done about this. I was writing in response to … a survey from CalCPA, the California Society of CPAs, and the IMA, the Institute of Management Accountants. … They surveyed 3,000 current and former accounting professionals, and nearly half of all of these professionals, about 48%, consider the profession to be equitable, which is another way of saying more than half think it’s not equitable.”
– Caleb Newquist
While he acknowledged that change takes time, Caleb explained that the industry hasn’t only failed at this for a few years. It’s been behind for decades.
Why does the industry lack diversity?
One of the biggest reasons why the accounting industry is behind is that when firms do hire diverse candidates, those candidates end up leaving.
Why? They don’t feel supported in their workplaces.
“43% to 55% of female, non-white, and LGBTQIA respondents polled have left a U.S. accounting firm due to a perceived lack of equitable treatment, with at least 30% of them leaving due to a perceived lack of inclusion.”
– Caleb Newquist
According to Caleb, this indicates that while firms may hire diverse candidates, they don’t necessarily support them once they’ve taken them on board.
“What the findings suggest is that the accounting profession is repelling people. [It’s] basically sending people away, and it is because there is a perceived lack of equitable treatment or a perceived lack of inclusion, and if you care about the accounting world, that should concern you.”
– Caleb Newquist
Caleb went on to discuss how the article broke down the failure at diversity. It noted that the industry needs improvement for the following reasons:
- Diverse talent doesn’t have equitable access to resources that help them advance their careers
- Diverse talent face biases at multiple stages of their careers
- Diverse talent leaves the profession at a more rapid rate than white male and non-LGBTQIA professionals
- Senior accountants with diverse backgrounds aren’t sufficiently represented and therefore cannot effectively advocate for diversity
- There aren’t systems to hold firms accountable for diversity and inclusion
A key takeaway is that enhancing diversity must happen at multiple levels and stages in the professional development process. It’s not something you tackle and then forget about—you must create an action plan that will work long-term. This means that tackling diversity and inclusion will require commitment on many levels and by many people.
Will that take work? Yes, but it’s worth it.
“This is a tried and true industry. This is a tried and true career. This is a tried and true profession, and we should make it accessible and available to all. … We should not be discouraging others [from] joining it.”
– Will Lopez
The data is overwhelming that creating diverse and inclusive workspaces is good for business. The accounting industry must begin adopting these best-practice approaches or risk being left behind in the broader marketplace.
The costs of neglecting diversity
The industry should welcome people of all backgrounds, and that is enough reason to strive for a diverse workplace. However, there are also many other compelling reasons to increase inclusion. Opening up to diverse candidates can help firms tackle a shortage in talent and navigate the big changes rocking the industry.
“The theme of the profession for about 20 years [has been] talent shortage. There’s also … the great reassessment—the [change to the] way work is being done. … Firms are hemming and hawing about the talent needed to meet client demands [and] the talent needed to meet the moment and offer new services, and yet if you need people and you’re not inviting people in, I just don’t know how those two things line up.”
– Will Lopez
The shortage of knowledge workers has affected almost every industry, including the accounting industry. In an effort to retain top talent, firms have shifted the kinds of benefits they offer, transforming their work culture to create more work-life balance, and are being more flexible with remote work and scheduling than ever before. If they’re employing these tactics, they should consider diversity initiatives as a way to attract and retain valuable candidates.
Firms are also in totally new terrain as a result of the automation revolution and the shift toward more advisory and consulting work. The shift toward automation means that firms are hiring candidates with nonconventional work experiences. In redefining the industry, firms need new voices, new ideas, and new visions to take them into the future.
“82% of accounting firms globally are … hiring from a non-accounting background, … and that just opens up the talent pool. It opens up the window and the doors for diversity and inclusion to get talent that doesn’t think like the norm … or just has different perspectives, and that’s so important with a firm’s team and everything in between.”
– Will Lopez
Whether firms are hiring talent with a traditional accounting education, a tech background, or consulting experience, they stand to benefit from opening up to the new. While accounting is largely a numbers game, there is a place for personal experience to guide decision-making and advisory, and the more diverse the experience the better.
How can firms become more diverse?
As CPAs open up to more roles in advisory and consulting, they’ll need to lean into their soft skills much more. The human connection is increasingly important as are empathy and communication. Having a diverse team means having a wider variety of people skills and life experiences to leverage. With more perspectives to lean on, firms can also connect to more clients and reach new markets.
“The bottom line is for this profession to be successful long term, it needs to be an inclusive profession and it needs to be a more equitable and diverse profession. If it isn’t, then the questions about relevance that people keep asking … about the CPA profession … will continue to persist unless it becomes a more inviting, inclusive, and equitable place.”
– Caleb Newquist
So with all of this in mind, what can you do to not only recruit and hire but retain diverse talent?
The first step is to do some research to learn more about diversity in accounting. Seek out examples of successful initiatives, read about the challenges diverse candidates face, and reflect on how you might help support them.
Then it’s just a matter of taking some simple, straightforward steps toward inclusion. You might try to:
- Seek out diverse professional associations
- Find recruiters that specialize in diverse candidates
- Partner with diverse institutions of higher learning
- Working with historically black universities and colleges (HBCU)
Diverse recruitment is pretty straightforward once you get started. All it takes is commitment and a bit of research.
Learn more about diversity initiatives
Diversity in accounting must happen on many levels, not just at the hiring stage. Firms need to support their entire staff to ensure that everyone has the access and ability to thrive. While firms are effectively recruiting more diverse hires, they’re not doing enough to create inclusion on the job.
Diverse talent doesn’t stick around in noninclusive environments, let alone rise to leadership positions. The cost of neglecting workplace equity is significant. Firms miss out on the very talent they claim to want in this competitive hiring landscape.
There is so much more to learn about diversity in the accounting industry. For more insights, don’t forget to check out our other article from the same episode: “The Role of Intersectionality in Accounting and Why It Matters.”
Becoming a Gusto Partner can make your life easier. Get payroll and HR support for your team and our new advisory revenue stream for your practice through our people advisory platform. As a Gusto partner, you’ll also get tools to help you expand your accounting practice and offer your clients new insights, plus a free payroll subscription for your own accounting firm. Sign up today!
