Forward-thinking accountancy firms are demonstrating diversity and inclusion can drive business.
Accountancy firms are traditionally not known for being the most diverse places on the planet to work. The commonly held view is a profession still dominated by older white men, especially in senior positions.
But things are changing. In the United States in particular, accounting firms are making strides in developing more diverse and inclusive working environments.
Leading examples of the growing trend towards diversity, and more importantly inclusion, are to be found within participant firms of Praxity, the world’s largest alliance of independent accounting firms.
Among the front-runners in this area are US-based firms Plante Moran and Dixon Hughes Goodman (DHG), both of which are making diversity fundamental to the way they operate.
These firms not only encourage diversity, they promote inclusion for all staff members irrespective of age, gender, sexual orientation, ethnicity or other defining characteristics, without the use of controversial quotas.
Plante Moran has developed a Diversity Council to focus on increasing the recruitment and retention of diverse staff as well as encouraging “diversity of thought”. The Council was recently rebranded to develop a more enterprise-wide approach to inclusion.
Plante Moran has also developed an affinity network of Staff Resource Groups (SRGs). These SRGs are grass-roots efforts to create safe environments for staff to be vulnerable and talk about what they are experiencing. SRG membership is open to all staff that support the group(s) mission and vision, even if the member does not self-identify with the group.
Similarly, DHG’s Inclusion and Diversity (I&D) council has developed a three-year inclusion and diversity strategy, which includes actively supporting multiple common interest groups, including a group for military veterans. The firm runs regular campaigns and produces blog posts, podcasts and an annual I&D Magazine to help engage staff members and celebrate diversity. They believe inclusion & diversity is “critical” to their mission of building valuable careers with their people and helping clients achieve their goals.
Nicole Andrews, Manager of HR Programs at DHG, leads the firm’s inclusion & diversity and employee engagement strategic focus areas and says inclusion & diversity “has driven so much” positive change. She explains: “We lead with inclusion because it’s about fostering a sense of belonging. It drives engagement and the feeling that people can contribute no matter what their education or learning style or anything else. If people feel included, they will be more engaged. They go hand in hand.”
Regan Hall, Plante Moran’s first ever Diversity and Inclusion Leader, says: “Besides it being the right thing to do, there is a strong business case for diversity and inclusion.”
Strong business case
She points to research by prominent US sociologist Cedric Herring which suggests a 1% increase in diversity can lead to as much as a 9% increase in performance. In a paper published in the American Sociological Review in 2009, Herring found:
- Racial and gender diversity are each associated with increased sales revenue, more customers, greater market share, and greater relative profits;
- Racial is also associated with greater market share.
The sociologist argued “diversity is related to business success because it allows companies to ‘think outside the box’ by bringing previously excluded groups inside the box”.
Plante Moran demonstrated this idea when its Chicago team bid on a large project for a Beijing-based company doing business in the United States. The firm realised its staff in China could provide valuable input, not just in helping their Chicago colleagues understand Chinese culture and customs, but also by helping prepare the proposal in Mandarin. It worked and they won the contract.
The business case is further supported in a report from the Institute of Chartered Accountants in England and Wales (ICAEW) which claims the rationales to tackle exclusionary practices are “compelling”.
The Diversity in the Accounting Profession report argues diversity is not only about legality and ethics, it’s about economics. It states “the business case for diversity suggests that creating a fair place to work has commercial benefits, too”.
The value of diversity and inclusion isn’t simply derived from being more representative of the population, it comes from encouraging people from different ages, ethnicity, gender, sexual orientation, income and background, and personality to work together more effectively. In other words, fostering inclusion for all.
Nicole explains: “It’s not only about gender or race. Inclusion and diversity is so much broader than that. For example, if you look at it in terms of different generations within the workplace or individuals who are differently abled, we have to be aware that their unique needs may be completely different. That is why a one-size-fits-all approach doesn’t work with inclusion & diversity.”
Again, this is where engagement comes in, Regan points out, adding: “It’s great to recruit diverse populations but the important thing is that they feel included and supported in the culture of the firm.”
She suggests the real value lies with firms that understand the need to bring individuals from different groups together.
Globally, many accounting firms have been slow on the uptake, perhaps wary of doing things differently and unsure how to transition.
Leaving your comfort zone
The challenge facing these firms is how to adapt to changing populations and trends without alienating existing employees, especially older partners who may be unfamiliar with more diverse working environments.
It’s not easy, Regan admits, adding: “When we are talking about this, we start by saying ‘we have to be comfortable with discomfort’ which means we have to be OK with being taken out of our comfort zones.”
Commenting on traditional stereotypes of accounting firms run almost exclusively by older white males, she says many in this group “exist in their own experiences”, adding: “It’s difficult to stop and recognize that ‘I need to think from a different perspective than I am used to’, but there is a need to have conversations with more diverse groups. The whole point of being inclusive is everyone is along on the journey. We have to include older white males too.”
Changing perceptions of young people
Conversations are also being held with the next generation of accountants. To encourage greater diversity, US public accounting firms are targeting students before they get to college in a bid to attract a broader range of young people into the profession.
These firms are promoting the idea that accountancy is open to all and can offer a diverse and inclusive working environment, as well as an interesting and rewarding career path.
“Accounting firms have a potential opportunity to increase the pipeline to public accounting by reaching out to diverse students before they reach college, which broadens the career options available to these students,” Regan says.
How to make it happen
Firms can’t become more diverse and inclusive overnight, especially if they want to avoid negative press associated with their culture.
Nicole stresses: “We really feel it should be organic. It’s something people have to feel and may take a little bit longer to achieve, but continued progress is the ultimate goal.”
However, there are measures accounting firms worldwide may wish to consider now if they want to experience the benefits of diversity and inclusion for all.
In December 2018, a forum for business leaders organised by Plante Moran, discussed how to be more inclusive. They identified the following tips:
- Remove barriers at the entry level through mentoring and role models;
- Don’t just tick a box – remember everyone has a different backgrounds, voices and mindsets
- Make sure top management is involved with, and committed to, diversity;
- Encourage everyone to contribute ideas, from administration assistants to the CEO.
On the Plante Moran blog describing the forum, Chris McCoy, Plante Moran’s group managing partner of firm administration, is quoted: “Maybe as a middle-aged, white man, I don’t look like a great diversity example, but you can’t tell my story simply by looking at me. I’m a first-generation college graduate. My wife and I have had to blend significant religious differences. I have gay relatives, and I’m a proud ally. All of these dynamics influence and affect me. I’m in the majority but it’s important that I think inclusively.”
This way of thinking is light years ahead of accounting professionals in some countries. Indeed, the profession “has some way to go” to become more diverse and inclusive, according to the ICAEW.
In its diversity report on practices in the UK, the ICAEW says firms lagging behind need to focus on:
- Structural and cultural barriers to career progression for minority groups;
- Clearly articulating what diversity means and priorities in codes of practice;
- Developing comprehensive policies with ongoing training;
- A more collaborative approach.
Smaller firms in particular can find it challenging making the transition, and those in countries where diversity and inclusion has a lower profile. The ICAEW calls for knowledge and expertise to be shared across organisations.
This is the collaborative approach pioneered by Praxity Global Alliance. By sharing best practice across the profession and across borders, the transition towards more diverse and inclusive accounting firms worldwide will be that much easier to achieve.
As the ICAEW report concludes: “The grand challenge for the profession is generating a co-ordinated response to tackling the vestiges of social privilege and of discrimination that still reside within understandings of professional identity.”
It may take a while to achieve globally but the social and economic benefits of diversity and inclusion are worth striving for.
For more information on Plante Moran and DHG’s diversity and inclusion, please visit:
This article was written for Praxity Global Alliance, the world’s largest alliance of independent accounting and consulting firms.