The pandemic has fundamentally changed the way many businesses operate, and CPA and accounting firms are no exception. As more and more employees were forced to work from home due to lockdowns and social distancing measures, firms had to embrace the new norm.
The challenging situation may cause the task of encouraging diversity and inclusion (D&I) to be neglected. But that shouldn’t be so. Diversity in accounting can bring humongous benefits.
As per McKinsey’s findings, businesses ranking in the top quartile for diversity have a 35% higher chance of outperforming those with lower diversity. Additionally, drawing in diverse talent can enhance a firm’s profitability and market competitiveness. Hence D&I becomes very critical for your capacity planning.
The significance of diversity and inclusion (D&I) extends beyond internal teams and larger CPA or Accounting firms; smaller firms with offshore teams can also benefit from implementing these values.
Drawing on our experience working with CPA & Accounting firms, it’s evident that prioritizing diversity and inclusion (D&I) can give accounting organizations a competitive edge. So, it’s important to take action right now, or else you might fall behind.
Why Diversity and Inclusion Matter in Accounting
- Enhanced Decision-Making: Diverse teams bring broader perspectives, leading to well-rounded decision-making processes.
- Market Relevance: An accounting firm that reflects its clients’ diverse demographics is better equipped to understand and meet their needs.
- Talent Pool Access: Proactively seeking diverse talent expands the hiring pool, addressing the talent shortages in the accounting profession.
- Innovation and Growth: Diversity fosters creativity and drives business innovation.
- Regulatory Compliance and Reputation: Diverse and inclusive practices align with anti-discrimination laws and position firms as ethical, progressive, and socially responsible organizations.
Challenges in Building Diverse and Inclusive Accounting Teams
- Pipeline Diversity: The accounting profession historically struggles with a lack of diversity in candidates entering the workforce.
- Unconscious Bias: Prejudices that decision-makers may not even realize they hold can negatively impact hiring, promotion, and team integration.
- Retention Issues: Diverse employees might face microaggressions, isolation, or barriers that prompt them to leave.
- Lack of Role Models: Limited representation of diverse leaders creates fewer mentors and less guidance for underrepresented groups.
- Cultural Fit vs. Culture Add: Overemphasis on “cultural fit” can lead to hiring individuals with similar backgrounds instead of prioritizing diversity.
Strategies to Build a Diverse and Inclusive Accounting Team
1. Start with Leadership Commitment
Diversity and inclusion must be integral to a firm’s vision and strategy. Leaders should:
- Explicitly state their commitment through public messaging and internal policies.
- Allocate resources for diversity initiatives.
- Participate in diversity training programs to set an example.
- Hold themselves accountable for diversity and inclusion metrics.
2. Reevaluate Recruitment Strategies
Redesign Job Descriptions:
- Use inclusive language in job ads. Avoid gendered terms and jargon that might discourage underrepresented groups.
- Focus on essential qualifications rather than criteria that unnecessarily narrow the pool of applicants.
Expand Sourcing:
- Partner with Historically Black Colleges and Universities (HBCUs) and organizations like the National Association of Black Accountants (NABA) and Association of Latino Professionals For America (ALPFA).
- Leverage social media and specialized job boards to reach diverse candidates.
- Consider internships or scholarships targeting underrepresented groups to develop a strong pipeline of future talent.
Standardize Hiring Processes:
- Employ structured interviews with standardized questions to reduce bias.
- Use diverse hiring panels to provide broader perspectives during candidate evaluations.
- Leverage technology like AI-driven recruiting tools that minimize unconscious bias.
3. Build Inclusive Onboarding and Work Culture
Onboarding Practices:
- Develop mentorship programs where diverse hires are paired with supportive senior employees.
- Foster a sense of belonging from day one through orientation sessions emphasizing the firm’s commitment to inclusion.
Cultivate Inclusivity:
- Provide regular training on unconscious bias and cultural competency.
- Create employee resource groups (ERGs) for networking and support, e.g., women’s networks or groups for employees of color.
- Establish open-door policies and encourage feedback through anonymous surveys.
4. Focus on Retention and Advancement
Career Development Opportunities:
- Implement transparent criteria for promotions to mitigate bias.
- Offer continuous professional development tailored to diverse employees’ unique needs.
- Support certification endeavors like CPA exams through financial assistance and study resources.
Flexible Work Arrangements:
- Provide work-life balance through remote work, flexible hours, or part-time options, especially benefiting working parents and caregivers.
Recognize and Celebrate Diversity:
- Celebrate cultural events, heritage months, or other occasions that recognize and value employees’ unique backgrounds.
- Develop firm-wide initiatives showcasing the importance of diversity in accounting.
5. Create Accountability Structures
- Establish measurable goals for diversity and inclusion, tracking metrics such as hiring, retention, and representation.
- Regularly report progress to stakeholders and celebrate achievements publicly.
- Appoint a Chief Diversity Officer (CDO) or a dedicated diversity and inclusion committee.
6. Leverage Outsourcing to Enhance Diversity and Inclusion
Outsourcing can play a strategic role in enhancing diversity and inclusion in accounting firms by:
- Accessing Global Talent: Collaborating with outsourcing partners allows firms to leverage a more diverse talent pool from various cultural and professional backgrounds, enhancing team perspectives.
- Reducing Barriers: Outsourcing routine accounting functions creates opportunities for internal teams to focus on strategic roles, allowing more equitable career progression for underrepresented groups.
- Fostering Collaboration: Partnering with diverse outsourcing providers instills cross-cultural collaboration skills within the internal workforce, enriching the firm’s inclusive culture.
- Expanding Community Impact: By working with socially responsible outsourcing firms committed to diverse hiring practices, accounting firms can extend their commitment to diversity beyond their internal teams.
Industry-Specific Initiatives
- Supporting Early Exposure Programs: Engage with high schools and colleges to increase awareness about careers in accounting, especially targeting underrepresented communities.
- Engaging in Community Outreach: Collaborate with community organizations to break barriers and support aspiring accountants.
- Partnering with Professional Organizations: Seek alliances with organizations that promote diversity in accounting, such as NABA or Women’s Leadership Initiative.
- Promoting Financial Literacy: Assist underprivileged communities in understanding financial planning, increasing community engagement while inspiring diverse students to consider accounting careers.
Technological Aids to Drive Inclusion
Modern accounting firms increasingly leverage technology to promote diversity and inclusion, including:
- AI for Bias-Free Recruitment: Tools like Textio and Blendoor analyze and improve job descriptions and recruitment workflows.
- DEI Analytics Platforms: Software like DEI Compass provides insights into organizational diversity metrics and areas for improvement.
- Collaboration Platforms: Tools like Slack or Microsoft Teams facilitate diverse teamwork and foster inclusive virtual workplaces.
- Training Portals: Platforms offering e-learning on diversity-related topics enable scalable employee development.
Highlighting Success Stories
Leaders and organizations already championing diversity can inspire accounting firms. Share case studies or host guest speakers who have successfully implemented inclusive practices within their organizations. This builds momentum and provides tangible blueprints for change.
The Way Forward
Building a diverse and inclusive accounting team requires an intentional, multi-faceted approach involving leadership commitment, innovative recruitment, robust retention policies, and sustained accountability. Outsourcing also plays a pivotal role here. Firms like Finsmart Accounting bring added value by offering English-speaking professionals adept in US GAAP and other international accounting standards. Our team isn’t just technically skilled but also proficient in modern accounting software and technologies.
Partnering with an outsourcing provider like Finsmart Accounting empowers firms
- To broaden their diversity horizons,
- Focus on strategic initiatives, and
- Adapt to an increasingly tech-driven accounting landscape.
By leveraging our expertise, CPA and accounting firms are well-positioned to lead in equity, inclusivity, and innovation.
Book a Meeting: https://calendly.com/maanoj-shah/calendar
Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
