Diversity in the workplace offers many benefits to accounting firms in the United States. To take advantage of the benefits and support diversity in accounting, managers and leaders need to overcome roadblocks, such as cognitive bias, poor communication and resistance to change.
To learn more, check out the infographic below created by the University of North Dakota’s Master of Accountancy program.
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A Picture of Diversity in Accounting
Accounting is a diverse field in terms of gender. When considering race and ethnicity, however, accounting professionals in the U.S. are still predominantly white.
Accountants In the U.S.
While 60.4% of the 1,219,000 accounting, tax preparation, bookkeeping and payroll services professionals employed in the U.S. in 2019 were women, 79.7% of the employee base was white. There is also a noticeable racial and ethnic gap among women graduates in accounting and related services. A study on the 2017-18 academic year noted while women earned 52.8% of the bachelor’s degrees and 55.7% of the master’s degrees, white women earned 29.3% of the bachelor’s degrees and 24.4% of the master’s degrees. Black, Asian and Latina women all earned less than 7% of bachelor’s degrees, and less than 6% of the master’s degrees.
While women as a whole make up a good percentage of the accounting field, their numbers decrease as the job levels rise. According to the 2019 Accounting MOVE Project, 53% of managers and 50% of supervisors/seniors staff are women, yet women only occupy 33% of management committees. Twenty-seven percent of women are partners and principles.
The Benefits and Challenges of Achieving Diversity in the Workplace
Accounting organizations that promote diversity in the workplace reap lucrative, quantifiable benefits.
The Benefits of Diversity in Accounting
There are several advantages associated with incorporating diversity into an organization’s accounting team. For instance, doing so opens a company up to a broader pool of applicants and talent, as 90% of millennial and Generation X job seekers say that a company’s commitment to workplace diversity affects their decision to work there. Furthermore, employees working for organizations with high levels of diversity are 7% more likely to stay with their employers than employees working for organizations with low diversity levels.
Surveys also indicate that diversity in accounting can lead to higher innovation revenue. A Boston Consulting Group survey shows that companies with more diverse leadership teams report 19% higher innovation revenue when compared to companies with below-average leadership diversity. Studies indicate that the diversity of thinking stemming from diversity in accounting can enhance innovation by roughly 20% and reduce risk by around 30%. Additionally, having a diverse accounting team can help improve decision making.
Other studies show the decisions coming from diverse teams deliver 60% better results. Breaking this down further reveals mixed-gender groups make better decisions 73% of the time, and teams consisting of a broad spectrum of ages and different geographic locations make better business decisions 87% of the time. By contrast, all-male groups make better decisions just 58% of the time.
These advantages coincide with another massive company benefit: increased profitability. McKinsey reports companies in the top 25% for executive gender diversity are 21% more likely to experience above-average profitability compared to those in the bottom 25%. The report also notes companies with ethnically diverse leadership are 33% more likely to be more profitable than their peers.
Roadblocks to Diversity in Accounting
There are several barriers that affect accounting organizations’ ability to achieve diversity in the workplace. For example, research has shown that job candidates whose names “sound” Black are 14% less likely to get a call than candidates with whose names “sound” white. Another roadblock to diversity is the idea that perceptual, cultural and language barriers can lead to confusion, lack of teamwork, and low morale.
Additionally, research indicates that the positive effects of mandatory diversity training typically last no more than one to two days and could lead to backlash. Another barrier to diversity is the high cost of implementing diversity programs. According to Market Watch, diversity training accounts for about $8 million in yearly spending for U.S. companies.
Cultural differences surrounding different behavioral traits may also cause a roadblock. Finally, some managers and employees may assume that diversity will cause interpersonal conflicts and believe that single-race groups are more harmonious than mixed-race groups.
How to Increase Diversity in Accounting Firms
Accounting employers can take clear steps to increase diversity and create environments that empower and support diverse individuals.
The Key Elements of a Diversity Plan
One of the essential steps to building an effective diversity plan is to define and communicate diversity and quantifiable short- and long-term goals. It’s important to make assessments through data collection and analysis to measure progress. Also, companies can educate managers on the benefits of diversity and train them on processes that support diversity.
Additionally, it’s important for a company to expose managers to diverse groups of individuals through tactics such as mentorship programs and promote social accountability for change among the workforce. Employers also can gather employee feedback on diversity initiatives to measure employee satisfaction, and adjust company branding to represent diverse individuals.
Tips for Promoting Diversity
Once a plan is established, there are several tips a company can do to ensure the plan’s promoted properly. Companies can create diverse self-managed teams to encourage collaboration among diverse individuals. Another tip involves setting up a diversity task force, which would be tasked with tracking diversity numbers within a company and its departments.
Companies can establish a diversity manager, which can increase accountability concerning hiring and promoting decisions. A fourth tactic companies can deploy is to rotate management trainees through departments. Finally, companies can loosen control over managers and trust them to implement diversity initiatives on their own.
A Rewarding Team Effort
Achieving diversity in accounting requires the participation of managers who understand its value and benefits. The rewards of diversity are reaped by all.