Upon graduation, many accounting majors join public accounting firms, but relatively few stay with their initial employer. This is true of all employees, but it is especially true among women in Big 4 firms. The pressing question for many in the industry is how to retain the people who enter public accounting, either at the original firm of hire or in public accounting in general. This question has not yet been adequately answered.
We surveyed accounting professionals who graduated from La Salle University during a 15-year period (1996 to 2010) to better understand the concerns and obstacles facing men and women as they move through the profession. Of the 214 respondents, 141 (66 percent) were initially employed in public accounting, and they are the focus of this study.
The 59 females and 82 males initially entering public accounting are demographically similar. The one significant difference is that men in public accounting reported working 48.4 hours in an average, non-busy-season week, while women reported 43.7 hours per week. While seemingly small, this difference comes to six weeks more of work for men in an average year than for women.
When comparing public accounting employment in Big 4 to other public firms, additional differences emerge. Men at the Big 4 report a significantly longer average work week (49.2 hours) than women (43.3 hours), but not in the length of, or hours worked during, the busy season. In contrast, women at non-Big 4 firms report an average busy season of 21.7 weeks, nine weeks longer than the busy season reported by men at similar types of firms. Despite the longer busy season, 41 percent of women at non-Big 4 firms are with their original employer compared with only 13 percent of men at non-Big 4 firms. The opposite pattern occurs at the Big 4: only 24 percent of the women and 37 percent of the men are still employed by their first Big 4 firm of hire.
Factors in Career Development
Many studies have assessed the factors contributing to career development and retention in public accounting, including equitable pay and benefits, opportunity for advancement, leadership, and technical development opportunities, among others.
We asked those surveyed to rank a series of personal career development factors, such as quality work opportunities, acquiring technical skills, and developing personal connections with senior management. Both men and women gave similar rankings, with the highest scores assigned to experiencing quality work opportunities and to acquiring more advanced people skills and technical skills. However, women ranked working long hours significantly more important than did the men surveyed, although they also reported working fewer hours outside of busy season than the men.
Young professionals are often advised to find a mentor to assist in career development activities. Respondents, however, do not rate working with a formal or informal mentor as highly as developing personal connections with more senior managers.
Factors Affecting Turnover
Those surveyed were given a list of factors that may have motivated the decision to leave their first positions, and they were provided the opportunity to complete open-ended responses. They could check off multiple reasons for their job change, but they were not asked to rank the reasons in importance.
With retention rates and average initial tenure, there is almost no difference between women and men. But men and women are motivated by different factors when deciding to change jobs or careers. Better pay is a primary reason for changing jobs.
Despite recent efforts made by many firms to address work-life balance issues, including alternate work arrangements and flexible scheduling, those issues remain significant in women’s decisions to change positions in the Big 4. This study’s finding that women consider longer workdays to be a career success factor, yet report working fewer hours than males outside of the busy season, lends support to the importance of work-life balance to women. The top factor cited by women for leaving the Big 4 is more reasonable working conditions (59 percent), which was not ranked in the top three by any other respondent groups. Another work-life issue, the adverse effects of job demands on family, is cited as second by 44 percent of Big 4 women. Again, no other subset considered this factor as significant. Work-life balance issues scored low across the board for men in both types of public accounting firms.
Better pay and/or more reasonable working conditions are only two of several factors culminating in a decision to depart. The average tenure at the first position is about three years, implying that many respondents left after being promoted to senior. This suggests that public accounting experience, including professional development and exposure to multiple industries, increases a young professional’s human capital, which, in turn, results in increased opportunities for other employment, presumably at a higher rate of pay.
From Public to Nonpublic Accounting
Women are significantly more likely to start and stay in public accounting if their first job is not in the Big 4. The converse is true in the Big 4, where they do a better job keeping men in public accounting than women.
Respondents answered an open-ended question about why they chose to leave their public accounting firm for another sector. Of those leaving public accounting for another sector, 38 percent cite issues related to work-life balance. Here are some of the comments:
- “It became increasingly difficult to balance career progression at a Big 4 accounting firm with my desire to be actively involved in the lives of my two boys.”
- “I left public accounting after I made manager. I felt that advancement beyond manager at that point in my life required too much additional sacrifice (time, personal life, etc.), and I was ready to start a family.”
- “I left public accounting because of the travel, job demands, lack of work-life balance. … While the experience at [Big 4 firm] was great for the start of my career, I did not see myself wanting that lifestyle while married with children, and decided to leave.”
- “The culture is not for me. I tried twice. I don’t believe I [should] have to give up so much of my personal life to be successful. When looking forward at my career, I had to weigh advancing in the accounting profession against the sacrifice I would have to make in order to advance. It was not worth it for me.”
- “I didn’t view the opportunities taken by managers at my company as being worth the work-life balance sacrifice to work at [Big 4 firm]. I was forced to specialize in industries that I didn’t find compelling, and I knew I would not like a long-term career in these industries. As such, I didn’t feel that staying with [Big 4 firm] was worth the long-term work-life sacrifices.”
Responses to the open-ended question also suggest that the change is sometimes driven by a search for more meaningful work:
- “I want to own my own work and be able to drive change.”
- “I needed to be in a role where I felt I had impact and influence to drive an organization’s results vs. being on the audit side of public accounting.”
- “By working in nonprofit I could use my skills and feel personally rewarded by the work.”
- “I understand that my accounting knowledge would never have reached such levels without my public accounting experience, but I enjoy so much more of my work experience in private industry rather than public accounting.”
- “I left public accounting due to unreasonable hours, then I left accounting completely to manage voluntary committees to work more closely with people.”
Have Factors Changed Over Time?
Many firms have engaged in work-life balance initiatives, but are they making a difference? The survey sample was reanalyzed according to college graduation date. Respondents were divided into those having graduated in 2002 or earlier (52 percent), which is prior to the implementation of Sarbanes-Oxley, and 2003 and later (48 percent), and then looked at by gender and employer type. The assumption is that work-life balance issues will decrease in importance over time, given the efforts on improving working conditions made by the major accounting firms. This was not the case, however, particularly among more recent female graduates. The number citing the work-life balance issue as a factor motivating initial job change actually increased among women starting in Big 4 firms (53 percent among 2002 and earlier, 69 percent after 2002), and was the most important factor overall. Among female respondents at smaller firms, no post-2002 graduates cite that issue. When pre- and post-2002 male graduates are compared, there is an increase in the percentage citing more reasonable working conditions (17 percent and 31 percent respectively), but overall the factor is not cited by many men and is not ranked high in importance.
There are several possible explanations for these results. Those graduating after 2002 entered the profession just as Sarbanes-Oxley was going into effect, and, anecdotally, Sarbanes-Oxley implementation created additional stress. Also, recent graduates are part of Generation Y, usually defined as those born between 1980 and 2000, which places higher importance on autonomy and work-life balance than prior generations.
Who Stays in Public Accounting?
Many accountants do stay and thrive in public accounting. The survey included an open-ended question asking respondents who stayed in public accounting to share why they did so. Nine respondents indicated they were still in the position as a “means to an end,” such as obtaining a CPA license or gaining sufficient experience to move to another position. Other responses can be categorized as follows:
- Job security/stability – “Working for any company outside of a public accounting firm presents greater risk for job loss due to acquisition, cost reductions, etc. [Big 4 firm] is very good about hiring the right people and standing behind them.”
- Opportunities for professional development, including diversity of experiences – “That desire to learn more and develop as a professional, along with the people I work with at [Big 4 firm], keep me in the public accounting industry.”
- Quality of coworkers – “Every person I work with is a top-of-the-class, driven, hardworking, dedicated team player.”
- Opportunities for advancement – “In public accounting you have a timeline for promotions. ... In the private sector, I will have to wait for a vacancy in the role above me to move up.”
- Flexibility/work-life balance – Five women who stayed cite flexibility and the ability to work at home as a factor.
Although work-life balance is an issue for many who left a firm, some who stayed cite flexibility and the ability to work at home as a factor in the decision to remain in the firm.
A traditional student graduates from a four- or five-year program before the age of 25, and some will discover another “passion” after working for some time in public accounting. Several of those surveyed mentioned that their work in public accounting exposed them to a particular sector or industry that they ultimately found more rewarding. It is unlikely that structural changes in the profession could change their decisions.
For some, better pay will always be a prime motivator for job change, regardless of the industry or sector. In public accounting, however, once compensation is taken out of the mix, work-life balance issues still appear paramount for many women in the profession. Demands for both more reasonable and more flexible working conditions, and complaints about the current work schedule adversely affecting family life, are the primary explanatory factors for women leaving their initial jobs with the Big 4. Men leave public accounting for more diverse reasons that are less focused on work-life balance issues. While a flexible schedule is important, compensation and professional opportunities are the most significant drivers for men.
Of course, given the nature of public accounting and client demands, a rigorous work schedule is to be expected. But hearing about a 55-hour workweek while a junior or senior in college does not prepare one for actually working five or six extended weeks back-to-back. Being told about pulling an all-nighter on a weekend does not equate with two consecutive weeks without a day off. The industry should continue its focus on a two-pronged approach: a realistic preparatory education program before a new hire ever sets foot in the office and better ways to increase schedule flexibility.
The preparatory education component should begin while potential hires are enrolled in their intermediate accounting courses. These courses help students decide (or their grades decide for them) whether public accounting is theoretically the right track for them. Public accounting provides great training and professional opportunities, but students need to have realistic expectations about the demands of the profession. An annual seminar should be held with participants from public accounting firms to expose accounting majors to the realities of the profession. It is especially important for female students to hear from women in the profession about how they met those challenges. Employment expectation seminars for students could be presented by members of the local Big 4 offices or regional firms in conjunction with a faculty member, which should include the realities of job tenure. This would bring substance to the discussion and hard facts for students to consider when weighing employment options. To the firms’ benefit, if a student fully understands what a position at a pubic accounting firm entails, from both the professional and personal viewpoints, and still wants to pursue that career path, firms will know that they have a serious candidate who should be prepared for the demands of the profession.
By Susan C. Borkowski, PhD, and Mary Jeanne Welsh, CPA, PhD
Susan C. Borkowski, PhD, is a professor of accounting at La Salle University in Philadelphia. She can be reached at email@example.com.
Mary Jeanne Welsh, PhD, CPA, is chair of accounting at La Salle University and a member of the Pennsylvania CPA Journal Editorial Board. She can be reached at firstname.lastname@example.org.
The authors thank the PricewaterhouseCoopers Charitable Foundation for its research support.