Accounting for DEI: Active Choices Drive Results

Over the last 50 years, diversity, equity, and inclusion (DEI) has moved from a niche concept to a mainstream initiative, especially in the workplace. According to a 2021 survey by WorldatWork, 83% organizations in the United States have implemented DEI initiatives.

Yet, despite these efforts, many organizations, including CPA firms, still fall behind on real change—but why?

The leading theme to come out of the Illinois CPA Society’s (ICPAS’) 2022 Insight Special Feature, “A CPA Diversity Report: Uncovering the Barriers to Success,” is that the accounting profession’s continued lack of DEI hinders meaningful change. Simply put, the environment in the accounting profession isn’t statistically diverse or meaningfully inclusive.

In examining the racial makeup of U.S. CPA firms alone, progress has been proven slow. According to the AICPA’s “2021 Trends” report released in early 2022, CPA firms exhibited only a representation of 14% Asian or Pacific Islanders, a mere 2% attributed to the Black community, only 5% for Hispanic or Latino individuals, and another 2% for those identifying as multiethnic. In contrast, the white population comprised a significant 77% of CPAs. This distribution becomes even more skewed at the partner level within U.S. CPA firms, where 82% of partners are reported to be white.

These statistics make it clear: The accounting profession has work to do on moving the DEI needle forward. But according to DEI experts, it’s more than just getting diverse individuals through the door—it’s about taking real, meaningful action as well as expanding the conversation on what comprises diversity today.

Viewing Employees as Valued Customers

The accounting profession can sometimes be hesitant to embrace new ideas and perspectives. To overcome this barrier, organizations need to find ways to give space for new viewpoints— and perhaps, completely upend how they view their employees.

We live in a world where the customer is always right, and Dorri McWhorter, president and CEO of YMCA Metropolitan Chicago, believes that by applying this approach to employees, organizations can move beyond simply identifying diversity problems. “To drive meaningful change, organizations must view their employees with the same care and attention as their customers,” she says.

McWhorter adds that soliciting employee feedback, addressing their concerns, and taking decisive actions based on this feedback is paramount. “This approach not only enhances workplace culture but also extends to DEI efforts,” McWhorter says. “Understanding employee needs and prioritizing their well-being cultivates an environment of trust and collaboration.”

Supporting Long-Term Inclusion

One of the leading barriers to advancement of racial and ethnic minorities in the accounting profession that ICPAS uncovered was that many survey respondents believed they were receiving inadequate feedback and development. Without role models who share their backgrounds, diverse professionals may feel isolated and disheartened. While it’s vital for organizations to actively seek out diverse talent, it’s just as vital to ensure they feel supported and have the opportunities and guidance they need to thrive.

ICPAS has committed significant resources to programs aimed at helping diverse students and young professionals enter the accounting profession, only to learn many of them confront several barriers and setbacks afterward. In the report, Kari Natale, CAE, vice president of the CPA Endowment Fund of Illinois, acknowledges, “While we were so focused on increasing the pipeline of diverse talent heading into the profession, we lost sight of what was happening once these individuals were hired.”

LaToya C. McKinney, CPA, MSAA, vice president of NABA Inc. Chicago Chapter, shares Natale’s concerns: “We do a good job of getting people in the door, but what are we doing about the retention of these people? I think part of the problem is that companies seem to be focused on short-term inclusion instead of long-term inclusion.”

“It’s one thing to say that we’re going to hire more diverse talent, but what are the metrics to prove that it’s actually working? If you still have high turnover because of a lack of internal resources, then it’s not really effective,” she challenges. “You’re not doing what you claim to be doing.”

A good starting point to combating this blind spot are mentorship and sponsorship programs. Pairing diverse employees with experienced mentors can provide guidance, encouragement, and a sense of camaraderie and belonging. These relationships can prove invaluable in building confidence and resilience, which are crucial for long-term success.

To support successful mentoring, there are a number of steps organizations could consider taking. A September 2021 Journal of Accountancy article, “The impact of mentoring: How to build on success,” recommends:

• Assigning formal mentors with intention. They should be well regarded, influential, and in a position of power in the firm. The relationship should also be welcomed by both parties. Formal mentors should support mentees in developing critical job skills and provide help with technical issues.
• Mandating early sponsorship. Sponsorship should begin in the first year on the job and should open doors to high-profile and challenging assignments.
• Supporting establishment of informal mentors. Provide social networking opportunities with senior leaders so diverse professionals have opportunities to establish relationships with these groups.

Although mentoring has proven to be beneficial in retaining employees, McKinney notes it’s not a perfect system—there are still barriers to entry for mentors to participate in these programs, including their own imposter syndrome, time, and resources.

“For the people who actually are ready and willing to be the mentor, to help with the development, it’s basically taking on another job—an unpaid one,” McKinney stresses. “It’s often not that someone doesn’t want to be a mentor, it’s that their job values production over this type of relationship building. If organizations can put metrics and internal value on employees using time this way, it can create more opportunities for mentors and mentees.”

Leaders Must Lead the Charge, Influence Behavior

For DEI initiatives to truly make meaningful change, leadership—from top to bottom—must foster an environment that values and encourages inclusivity. Without leadership recognizing the importance of DEI, an environment of bad behavior that hinders progress can cultivate.

McWhorter warns about the power of bad leadership on teams: “On the individual front, we tend as a society to put influencers in leadership positions and then call them leaders. So, when these ‘leaders’ showcase bad behavior, it indicates to individuals that they can do the same thing.”

Leaders should vocalize the steps they’re taking internally on DEI. “They should be intentional about the actions they’re taking and the policies they’re implementing, and they should publicize them to their teams. Make sure your employees know what you’re doing to address and increase DEI at your organization and ask them to be a part of it,” McWhorter suggests.

When employees are aware of their employer’s efforts, they’re more likely to engage and contribute. By fostering open dialogue, organizations can encourage employees to become active participants in the DEI journey.

While solving insular problems in the workplace should be worked on individually, it’s a problem the whole industry must act on together, McWhorter says: “The DEI challenges facing organizations symbolize the challenges facing society as a whole. This isn’t a challenge any single company created or that any single company can solve. We have to start at a broader level, at a societal level, to begin making real progress.”

Expanding the DEI Conversation

Until recently, the conversation surrounding DEI has primarily been focused on race and gender. Now, organizations are looking at diversity from a much larger lens, expanding the DEI pie to sexual orientation, gender identity, age, disability, neurodivergence, mental health, socio-economic status, religion, educational background, and more.

“Accounting firms have been talking about how to increase diversity and bring people from more backgrounds to the table since before I started my career. That’s not new,” McWhorter says. “But what has evolved is the number of dimensions of diversity we recognize. It’s important to welcome people and include people for all aspects of who they are.”

ICPAS President and CEO Geoffrey Brown, CAE, echoed this sentiment during the society’s SUMMIT23 conference in August, encouraging the profession to look at a broader spectrum of diversity issues, including opportunities for neurodivergent accountants.

According to a 2021 review from The McKenzie Delis Foundation, organizations that take a holistic approach to diversity and inclusion often have success on expanding their DEI efforts—they understand that a human being’s identity is made up of different, intersecting aspects. By taking a more holistic approach, it sends a message to everyone in the organization that all unique differences are seen, valued, and appreciated.

McKinney suggests that confronting our own unconscious biases can also help open the doors to expanding the DEI conversation. She notes that unconscious biases can make organizations unintentionally miss out on great talents.

“From a recruitment standpoint, I hear from students that they’re being overlooked because they’re coming from smaller schools,” McKinney says. “So, when you’re interviewing someone, are you discounting them because you don’t think their curriculum was good enough? Because of their background? Because they didn’t go to the same college that you did? Because you don’t have an affinity with them? I think this happens a lot where we’re putting our own judgments on someone before they can speak for themselves and prove that they’re worthy.”

Breaking the Mold of Complacency

True DEI requires action. It requires leaders and employees to treat each other with kindness and explore solutions with an open mind.

“We’ll never policy our way out of this situation—or any situation. Policies are certainly a tool to help drive outcomes, but you can’t create policies to change mindsets or behaviors,” McWhorter stresses.

Listening is where it all starts, McKinney says. She suggests taking an extra step to find out how someone is feeling about their day or current events helps individuals start to understand each other—because above all, we’re all connected by the human experience.

“Listen to comprehend and not just talk back. As a society, we don’t do a really good job at checking in with each other,” McKinney says. “To me, being open to hearing what someone is saying is the best way to be open-minded. Take the initiative and be genuine.”

While there’s no easy process to solving the DEI challenges that we’ve identified as problems, McWhorter says it’s up to every person and organization to make intentional changes to provide an equitable and inclusive workplace for everyone: “I fundamentally believe that humans are kind and compassionate by nature. Kindness is the default, and everything else is learned, which means it can be unlearned.”

Related Content:

• DEI Is Evolving: Is Your Firm Keeping Up? To attract and connect with a new generation of CPAs, firms must renew their commitments to creating a more equitable—and transparent—workplace.
• Deciphering the State of Diversity in the Accounting Profession: As demographics change across the United States, there’s both business imperatives and moral reasons for why the accounting profession must keep up.