Diversity in accounting: Still under construction

June 8, 2022 9:00 AM

Engage 2022 - Diversity panel.jpg — The diversity panel at Engage 2022: Ellison-Taylor (standing) and (seated, from left to right) Ko, Sproul and Bouyer

Public accounting still has some way to go when it comes to diversity, equity and inclusion, but it’s making progress, according to experts in the field -- particularly when it comes to identifying ways accounting firms can make themselves more inclusive.

“We are not perfect — we are under construction,” Kimberly Ellison-Taylor, the CEO of KET Solutions and past chair of the American Institute of CPAs, as well as chair of its National Commission on Diversity and Inclusion, told attendees at the AICPA’s Engage conference, being held this week in Las Vegas. “But every day I am encouraged by our allies. This work cannot stop. Please, keep going. Be inspired. We can do better. How can we give you more ammunition for the work you’re doing inside your organizations?”

While moderating a panel on “How to invest in a diverse and inclusive workforce for maximum returns” at Engage, Ellison-Taylor and representatives from three firms with established DEI initiatives aimed to do just that, sharing a range of strategies and tactics to help accountants start moving the needle on diversity.

Start with numbers

As accountants, crunching the numbers is a natural beginning.

“We look at data like you would not believe,” said Ken Bouyer, Americas DEI recruiting leader at EY. “We use data to make these decisions, and we do set targets. We measure everything in our business — this is no different. It’s not a quota, it’s a target. Look at your dataset and set some targets. Look at numbers in different areas. For instance, is turnover higher within one group than another?”

KPMG audit partner Becky Sproul says her firm has found a particularly granular use of data: “We give partners demographic information on their engagement teams, so they can understand the gender and racial makeup of their teams. This isn’t to punish them; it’s so they can understand what their teams look like, and so they can monitor it.”

Success is very much a moving target, Sproul was quick to point out. “This is an iterative process,” she said. “Just because we’ve set targets doesn’t mean we won’t change them. We continue to look at the information and we continue to adapt.” For instance, KPMG had been focusing on diversity at the senior associate level, and had seen success there, but then began to see deterioration at other levels, so it began to address those as well.

“Numbers are important,” added Alfred Ko, a partner at RSM US, “but they are not the be-all end-all – the end goal is cultural change. As we implement new measures and metrics and KPIs, we don’t want to forget our original objective. If we can meet the objective, without the KPI, then we’ll do without the KPI.”

Transparency reports

All the panelists agreed that accountability was critical: Each of the three firms represented has recently issued “transparency reports” that outline their DEI goals, as well as their progress toward achieving them.

“It puts a little pressure on the firm,” said Bouyer. “I like the pressure — it’s hard, but the reality is we all need that extra push,” whether it comes from management, staff or even clients who read the reports.

Ko noted that RSM US issued its first report in 2021, and while the data is important for showing how much has been accomplished, the report itself serves a larger purpose: “It’s very easy to open that document and jump to the numbers at the report, but the strategy is to create an environment where it’s comfortable to have these conversations” around diversity and inclusion and what the firm may need to do to move forward.

Fight old habits

Lots of decisions at accounting firms aren’t made out of any conscious bias, but rather out of old or comfortable habits that reinforce the kinds of patterns firms are trying to break. Being aware of the way these habits hold back firms’ diversity efforts can lead to important changes.

KPMG, for instance, has changed how it assigns employees to engagements. “We’ve been staffing engagements blind,” said Sproul, “not because they went to your alma mater, or because you interviewed them. We assigned new individuals on a blind basis.”

Her firm has also shifted away from relying on a specific set of schools to source job candidates.

As an unexpected benefit of the COVID-mandated move to remote hiring, KPMG instituted an online open application process where candidates didn’t have to be from one of the schools the firm had traditionally targeted when it’s hiring was in-person. “We’ve seen an increase in interest and acceptance of diverse talent,” she reported.

“We have to fish where the fishes are,” said Ellison-Taylor. “I talk to firms that say they can’t find anyone, but they’re looking at schools that don’t have a history of diversity. Why are you trying to catch a plane at a marina?”

Use ERGs

Employee resources groups, which allow employees to come together to provide support, raise issues relevant to them, and otherwise foster inclusion and spread awareness, have been around in larger companies and accounting firms for some time, and are a great way to empower staff and to help management learn what works and what doesn’t from a DEI point of view.

“ERGs seem like such a basic concept that we sometimes overlook them, but they’re pretty crucial,” Ko explained. “They’re where we find those voices.”

And the groups also help firms understand that each of those voices has different concerns and perspectives. “Our African-American group might be talking about more representation at all levels,” Ko explained, “while our Asian group has pretty group representation up to partner, but there it takes a deep dive.”

It’s important to leverage ERGs to further progress, Bouyer warned: “It has to be more than just allowing people to come together for a gripe session.”

Highlight diverse hires’ accomplishments

Ellison-Taylor also recalled a story about how, as the first African-American chairman of the AICPA in 2016, she made a point every time she introduced herself in a speech or presentation to detail her long list of professional accomplishments.

“I had to read out my entire bio, because people thought they had parachuted in a Black woman,” she said. “They don’t know everything I’ve done – because the assumption would be that I hadn’t earned my seat. Until we reach the point where people don’t question that, we are going to have present our credentials. It can be a humblebrag, but don’t be afraid to celebrate your accomplishments.”

It’s equally important for managers and partners to reinforce that diverse hires are not unqualified quota-fillers.

“A lot of time, people think diversity means lowering standards,” Bouyer said. “That’s BS. If you don’t bring it or have the skills, you will not be hired at EY. If firms are doing that, they are doing themselves a disservice.”

Address ongoing resistance

The impediments to diversity often look more like indifference than outright opposition, but that doesn’t mean they don’t amount to resistance.

“We have to address what we call the ‘frozen middle’ — the neutral middle, who will come to a session like this, nod their heads, and then go back and do nothing,” said Bouyer. “You have to help those neutral folks, because there’s a lot of fear — they don’t want to say or do the wrong thing.”

Ellison-Taylor took it a step further: “It can’t be the three partners that showed up at the DEI sessions — it has to be the six who didn’t.” Convincing them of the importance of diversity, particularly the business case for it, will be crucial.

Look for the invisible, and the uncomfortable

It’s not always obvious that someone belongs to an underrepresented group, but that doesn’t mean that firms shouldn’t be trying to help them.

“When you look across the transparency reports, the LGBTQ+ numbers are around 2% — but we know there’s more than that,” said Ellison-Taylor. “What can we do to make people feel comfortable talking about who they love? We’ve also seen ERGs that were unhappy because partners didn’t necessarily disclose that they were Latino. ‘Why didn’t they disclose that?’ That’s the wrong question. It should be, ‘Why weren’t they comfortable disclosing that?’”

“We’re all diverse,” she continued. “Race, gender, religion, ethnicity, geography, neurodiversity, language, being a veteran, socio-economic status — there are so many aspects to diversity, and while it’s important to focus on the more visible ones, we’re not going to move forward if we’re not talking about all of them.”