Does the accounting industry have a diversity problem?

As with many long-standing professions and institutions, the short answer is “yes.” The accounting industry currently and historically does have a diversity problem.  According to the most recent AICPA Trends Report (2021), 41% of accounting graduates are nonwhite while only 23% of professional staff identify as nonwhite. Moving up the ladder, among partners, only 18% are nonwhite. This unfortunate trend persists throughout the report citing similar gaps for bachelors, masters and doctoral candidates of varying groups as well as the existing demographics of CPA firms nationwide.

Primed for change

That being said, many Firms in the accounting industry have taken up diversity initiatives in recent years and we are seeing positive trends. While the progress is painfully slow, changes between the 2018 and 2020 AICPA Report show that diverse hiring of graduates has increased from 28% to 32%

In a time when the industry is seeing decreasing interest and high turnover, it might be time to rethink how things have always been done. Increasing diversity in the workplace can have a monumental impact on how employees show up at work, collaborate with each other, and interact with clients.

According to the CPA Journal, a recent report found that “workplace belonging” leads to a 56% increase in job performance and a 50% reduction in turnover risk. The more diverse your organization, the more employees feel comfortable showing up as themselves and putting in their best work.

Diversity creates a stronger organization

Starting a journey to truly engage in this work and build a diverse organization that is respected by employees, clients and the industry is no small task, but the rewards can be great at all levels from leadership, to client engagement, to employee wellness and satisfaction. An organization with a strong DEI commitment can see many benefits. According to The Nova Collective, “Organizations who invest in DEI not only stand to gain a loyal workforce, they also have the opportunity to increase its bottom line and attract more customers.” Other ways diversity can strengthen an organization:

• Internal enrichment and satisfaction when employees feel they are a part of a group, rather than an outsider. Seeing themselves in others, employees increase drive and initiative to excel.
• Diverse employees expands access to diverse clients, talent pools, lines of business and partnerships that you may have been unaware of before.
• Innovation and DEI are intricately linked, opening up more room for ideas, collaborations, challenges, and voices, according to the Harvard Business Review.
• Diverse workforces create a more equitable distribution of wealth.
• Enhanced customer service across industries as employees and the organization as a whole have a wider perspective and understanding of the global world

Where to start?

Building a diverse workforce doesn’t come easily and isn’t something that can be done by posting a statement and changing a few images. According to a workplace report by Glassdoor, 66% of employees and job seekers trust employees the most when it comes to understanding what diversity and inclusion really looks like at a company. Especially in an industry with historically low nonwhite employees, the work needs to be done.

• Encourage mentorship and engagement of young accountants and CPAs of all backgrounds. As the statistics above show, there are a large number of nonwhite graduates looking to break into the industry. Support them by providing guidance, tips, and introductions along the way.
• Evaluate where your organization currently stands and where you need to improve. Be honest about the results and the work that needs to be done.
• Create a plan to build a supportive and trusting workplace by intentionally cultivating DEI in the workplace
• Understand that there is no one size fits all approach and you will constantly need to adjust and change your plans as you move forward and discover what works for your organization and its employees.

Building momentum is the hardest part. But once you begin to implement these practices, you can really start to see the impact within your organization. The Move Project Metrics Report notes that academic studies and management consultants agree that “when people with a shared identity become at least a third of a group, the group has a dynamic shift. Each person with that identity, once the 33% is achieved, is seen less as representing that identity, and more as speaking on the basis of their own expertise and experience.”

Representation matters, and real change and growth takes time. So laying the foundation now for an inclusive, welcoming and strong organization is imperative to the future success of an organization in an ever changing and ever global environment.

The future of the industry

The accounting industry will always be needed, yet it’s continuously losing more and more people due to its bad reputation. By being at the forefront of changing an antiquated industry, from recent graduates all the way up to senior leadership and the Board of Directors, by committing to diversity with intention, impact and financial resources, an organization can be in a prime position to attract high quality professionals, grow their firm, and become a leader and an example of how great the accounting profession really can be.

Charity CFO is passionate about representation and providing opportunities to underrepresented sectors. We are helping to create an environment and culture where people have opportunities. And we’re hiring! Check out our list of open positions