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Jan 18, 2016

Why You Can’t Afford to Ignore Diversity

Julius GreenBy Guest Blogger Julius Green, CPA, JD, 2015-2016 PICPA President


Diversity continues to be top of mind for business and accounting leaders across the country. In 2011, the PICPA released Increasing Talent, Clients, and Revenue at Your Organization to highlight the need for diversity in accounting and suggest strategies to change the trend. Since then, some firms have conducted roundtable discussions, challenged HR professionals to find qualified diverse candidates, and renewed commitments to foster a diverse environment.

So, how have we done? What progress has been made across our industry? Unfortunately the answer remains, not much. Certainly not enough.

According to the AICPA, minorities represent only one in six among professional staff in accounting firms nationwide. Eighty-eight percent of CPAs on staff are white.

This becomes more unsettling when you look at the country’s changing demographics:

Diversity in accounting is critically important. It allows firms to compete in the ever-changing business-owner demographic. It enables us to expand our perspectives by maximizing the unique insight of each individual. This is far easier to accomplish when you work with employees from a variety of cultures and backgrounds.

Throughout my career, this has held true time and time again. Clients seem to agree as well. More are probing Baker Tilly’s commitment to diversity in business discussions.

DiversityWp_blogpicBut don’t take my word for it…

Sociologist Cedric Herring finds that companies with the “highest levels of racial diversity” earn “nearly 15 times more sales revenue on average than those with the lowest.” A 2015 McKinsey study reinforces these results, revealing that “companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry means.”

You can’t afford to ignore diversity. It is increasingly becoming a business imperative – our team members and our clients value it, and we must be prepared to deliver on it if we want to be competitive in the all-important battle for talent and profits.

How do you get it done?

Read our follow-up to the 2011 whitepaper, More Clients, More Talent, More Revenue: The Business Case and Toolkit for Diversity in Accounting which reflects the state of this discussion in 2015.

In the coming weeks, PICPA will dig deeper into the facts and share more strategies that will help you build and sustain diversity at your firm.

If you’re a leader and would like to capitalize on a tremendous business opportunity, you need to read this paper and take action.

I strongly encourage your feedback and comments below. 


Julius C. Green, a partner with Baker Tilly Virchow Krause LLP in Philadelphia, is practice leader of exempt organization tax services. As PICPA president he will focus on increasing member engagement and satisfaction in the organization; support development of professional education programs to help CPAs meet Pennsylvania licensing requirements; and address recruitment and retention issues, specifically as it relates to diversity in the profession.

7 comments

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  • John Galt | Mar 30, 2016

    Esteemed economics professor, author and syndicated columnist Walter E. Williams has been explaining for decades why discrimination and lack of diversity has no correlation with success in business, but rather it is the behavior and characteristics of ethnic groups themselves that determine their own success:

    https://www.youtube.com/watch?v=KKgHc6bWqZ4

    The PICPA’s Diversity Committee is exhibiting their ignorance of this well-established fact by continuing a misdirected and inappropriate effort to force the acceptance of their personal political agendas onto the membership of this professional association.  Walter William’s site, http://walterewilliams.com/ is a great place for each of the Diversity Committee members to begin their education on this subject.

    Fortunately, most business owners correctly pre-judge the fact that applicant pools simply do not exhibit homogeneous capabilities, education, training, experience and ambition. Since there is a very real cost to undertake a new-hire selection process, to remain competitive employers must focus their efforts on candidate pools that exhibit easily detected characteristics that are consistent with those of successful employees.  Those that are indiscriminate in their hiring practices incur even higher costs that persist beyond the interview period throughout the employment period of an underperforming employee to include significant termination costs when it is finally discovered that the ‘assumed to be equal” new hire doesn’t perform up to competitive standards. 

    So the answer to your question Radeisha is that if you want to excel you should model the behavior of the most successful candidate groups in the field of accounting.  That is, preserve your human capital by remaining unmarried, work continually from the ages of 18 to 37 (and certainly don’t become a single mother), obtain a genuine education that enables you to pass the CPA exam and communicate effectively with clients (not a fraudulent education from an unaccredited college or one that is staffed with inexperienced education majors instead of true accounting professionals).

  • Radiesha Leocadio | Mar 16, 2016

    A lack of diversity and inclusion in Accounting is not a opinion it is a fact, and it is not only in the accounting profession but in other professions equally.

    If you are not looking for inclusion and diversity then this is of no concern to you. 

    So I say to you Mr. Anonymous Coward I do not believe Mr Green was trying to make you feel guilty about being a Caucasian male. He is simply trying to inform those that have unconscious bias of the need of diversity within the accounting profession. As you have stated you do not devalue any person because of their race or sex but unfortunately many people do and some of those people work in accounting firms HR.

    I can share from my own personal experience of a HR department, I was told if HR cannot pronounce your name "easily" on a resume it is immediately trashed. So that tells me it does not matter what my qualifications are because if you cannot pronounce my name, my qualifications are irrelevant (I know not All HR have these practices, but I bet this is not a HR phenomenon either). Could this practice and/or similar practices are the reason that the accounting profession has been able to keep and maintain this "69%" match of white population to white accounting firms hires, I have no idea.

    But I strongly agree with Mr. Green, there is a lack of diversity and inconclusiveness and it is not because they are not qualified. 

  • The Silent Majority | Mar 05, 2016

    Julius, your opinion piece fails to offer any data that would convince any rational independent critical thinker to take the “action” you insist is necessary for the readers' practice to survive.  Your implication that the AICPA study’s estimate that an 83% white accounting staff is unacceptable,  you fail to point out that this is consistent with the fact that 83.1% of the population was white as recently as 1980 (and was still over 80% in 1990).  26-36 years later that same population cohort became the highly educated staff that now comprises the workforce of accounting firms. This is not unacceptable, it is normal and expected. 

    You conveniently ignore the fact that while 69% of the U.S. population was white in 2014, exactly the same fraction, 69%, of 2014 accounting firm hires were white in 2014 according to the AICPA study you cite.  And yet you continue to make false accusations by leveling an obsolete complaint against what has proven to be the most non-prejudicial industry in the history of the world.  At best your article is offensive, and more likely will be considered by the majority of the PICPA membership to be a veiled threat.

    Your bias is also evident in your selection of a single article authored by Herring, a well-known political activist, and published by an organization that routinely promotes legal codification of racial and gender discrimination as a tool for coercing private industry and government to displace the more competent to make room for the incompetent. Before you again abuse this forum in an attempt to lecture the PICPA membership on why we should adopt your personal agenda and discriminatory hiring practices, I suggest that you first educate yourself by reading the six independent, long term studies conducted by decidedly non-political researchers, the results of which were summarized in the paper cited in Herring’s article and authored by nine university professors from MIT, Harvard, Rutgers, University of Pennsylvania, University of Illinois, and University of California Berkley (see http://smlr.rutgers.edu/effects-of-diversity-on-business-performance-report-of-feasibility-study-susan-jackson)

    In the article you cite, Herring himself reports the conclusion of the nine university professors and these six studies: “They find no significant direct effects of either racial or gender diversity on business performance. Gender diversity has positive effects on group processes while racial diversity has negative effects.”

    Editor's Note: Final paragraph deleted at the discretion of the PICPA in accordance with policies established for social media and membership list serves, “Do not challenge or attack others. The discussions are meant to stimulate conversation not to create contention.” Personal attacks on members of the PICPA community are not supported by this blog or this organization. If you have an official complaint against the leadership of the PICPA contact Maureen Renzi, Vice President-Communications mrenzi@picpa.org or Mike Colgan, CEO mcolgan@picpa.org.

     

  • Julius C. Green, CPA, JD, | Mar 04, 2016

    Dear Anonymous Coward:  

    Thank you for your response to our blog.    

    Unfortunately not all people, consciously or unconsciously, judge all people equally. There is great deal of literature on the topic of diversity that recognizes it is imperative to the growth and success of our profession that our professionals embrace and engage in diverse thought and experience.  We do not support efforts that devalue or exclude anyone, but rather encourage thought and discussion that promotes inclusion for all.  

    So, I am sorry if you misunderstood our intent. To be clear, our intent is to unapologetically lead on this and all issues that we believe are critical to the success of our members.  

  • Stephen | Feb 26, 2016
    When I consider notions of diversity, I also wonder about LGBT member CPAs and how they may fit into these scheme of things.
  • Anonymous Coward | Feb 24, 2016

    This is insulting, and I'm tired of being considered less valuable-indeed a liability- because I'm a male Caucasian. I feel like I'm living in Orwell's Animal Farm, where "all animals are equal, but some animals are more equal than others". 

    I don't devalue any person because of their race or sex, and I expect the same in return.

    I get very little value for my "membership" in the PICPA (which as far as I can tell provides a journal with decreasingly rigorous content, and a mailbox full of solicitations for classes, affinity products and other things that are essentially junk mail.  I sure don't expect to PAY to have somebody tell me that I'm expendable or undesirable because of my race or sex. 

    Maybe all of us expendables should cancel our memberships. 

  • Paul Matson | Jan 25, 2016
    I am closing in on retirement, so when I look back at college, there was one woman in my graduating class and no blacks, and I can't place one minority.  Now the hiring of women has changed as it seems more than 50% of the graduates are women.  My question is what are the minority percentages of the current graduation classes in accounting?  It seems we can't solve the issue without graduates.  So should our focus back up to high schools to get minorities to go into accounting in college?  I have no idea what precipitated the rise of women in accounting and if the same solution could be applied to minorities.

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