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Celebrating our increasingly diverse industry; working to address pay, C-suite inequities

Each October, we celebrate National Women’s Small Business Month. This initiative is meaningful to our firm for more than a few reasons. We are proud to celebrate alongside our many female business owner and business leader clients. Likewise, we appreciate that this month (and the tremendous meaning behind it) is an opportunity for introspection. We are privileged to look within to see how we as a firm are elevating women’s representation in our organization. And we are also gauging the progress that has been made within our industry as a whole and, moreover, the ongoing challenges that require continued work on the part of accounting professionals and our allies.

First, let’s talk about the “positives.” The U.S. Bureau of Labor Statistics, in its “Women in the labor force” databook, reports that women held more than half (52%) of all management, professional, and related occupations. Specifically, women account for more than half of all workers within numerous industry sectors, including:

  • Education and health care (74%)

  • Leisure and hospitality (52%)

  • Financial services (53%)

  • “Other” services (repair, maintenance, personal and laundry, member organizations) (54%)

We are happy to work within a segment that is among those whereby women’s representation is favorable and actually outpaces what the BLS characterizes as the total share of employment for females (47%). We are most certainly not in those sectors that are considerably lagging; women accounted for anywhere from 10% to 29% of the workforce within ag, mining, manufacturing, construction and transportation. Specific to accounting and auditing, Catalyst reports that almost 62% of accountants and auditors in the U.S. are women. This is world’s apart from the early 20th century when there were only a few female accountants. In fact, it took Christine Ross more than 18 months to get her CPA licensure from the New York Board of Regents after she passed the CPA exam in 1898 (to become the first female accountant), as there was so much reluctance on the part of the state to allow women access to the profession and occupation.

While we acknowledge the significant strides that have been made by so many “pioneers,” not all is “hunky-dory.” While female accountants and auditors outnumber men, they make up for fewer than 27% of all partners and principals. In 2014, women accounted for 19% of management committee representation. Today, that figure is 33%. So, even on this front, strides are being made, albeit slowly.

The American Institute of CPAs®, in its 2019 CPA Firm Gender Survey, noted that smaller firms were more likely to have parity on this front; for instance, women made up 53% and 35% of executive committee composition in the smallest firms boasting two to 10 CPAs and 11 to 20 CPAs, respectively. Among the larger firms, the numbers are more pessimistic; 29% and 16% for women’s executive-level representation in the biggest firms, boasting up to 99 CPAs and more than 100 CPAs, respectively.

Additionally, accounting is no different than other industry sectors when it comes to grappling with the notion of some types of women doing better than others. Women of color continue to lag far behind white women in terms of talent on track to lead the industry; for instance, black women made up just 4.2% of bachelor’s degree graduates in the accounting and “related services” fields. Asian and Latina women accounted for 4.7% and 6.9% of graduates, respectively, as compared to nearly 30% of white graduate counterparts. In all, Catalyst reports that black, Latina and Asian women represented just 5.5%, 5.3% and 8% of accountant and auditor employment in 2019.

There is also the issue of women’s compensation in the accounting field. As this Department of Labor chart indicates, women’s earnings lag substantially behind the median annual earnings for men in the profession (at around $64,000 versus $80,000). While there may be some question as to how disparities in elevating women to the C-Suite/senior roles affect these figures, Catalyst compared women’s earnings in the same positions within accounting to men’s earnings and found a weekly median salary of $1,141 for female professionals versus $1,419 for their male counterparts.

It was further noted by the Thomsen Reuters Institute that COVID-19 has disproportionately affected women in accounting; 56% of women (versus 45% of men) reported that the pandemic had a negative impact on their wellness. Professionals of color (at 54%) also reported increased work hours compared to their white peers (at 46%), and 41% of professionals of color in the Reuters pandemic nation report noted they were taking on more responsibilities, without pay, compared to their white counterparts (30% of those respondents indicated they were getting paid less to do more).

Many of the challenges noted here are not limited to accounting and related fields. In fact, when talking about women and ethnic representation, our sector seemingly reflects broader “trends.” For instance, earlier this year, the National Women’s Law Center reported that women accounted for almost 80% of the labor force losses in January. Between February 2020 and January 2021, more than 2.3 million women had reportedly left the labor force – putting the women’s participation rate at a 33-year low.

Steps to move firms, the industry forward

It is not all doom and gloom, of course. The Reuters report also isolated a few bright spots; for instance, 36% of women accountants reported receiving pandemic bonuses and promotions to senior roles, as compared to 12% of men. Additionally, as the report authors put it: “Tax & accounting employers did a good job demonstrating their concern for employees’ well-being, learning, and career development.” Within the same breath, though: “However, longer term concerns around diversity, equity & inclusion (DEI) issues continue with the majority of those respondents of color and women citing the ‘inconsistency between what the organization says and what it does’ as their second highest concern. The top concern was recruiting.”

The report further outlined steps employers in these fields could take to target increased diversity in representation at the senior levels, and to instill a “DEI growth mindset” among managers. So, they can better lead teams within hybrid work environments.

Both Catalyst and AICPA took a closer look at exactly what firms were doing to create better, more diverse workplaces, and they isolated those types of firms that were undertaking such actions. For instance, Catalyst noted that 94% of firms offered Modified Work Arrangements (flextime is the most popular MWA). Flexible work approaches were defined as methods to increase retention and attract top talent. Among those firms with at least 100 CPAs, male partners were more likely to use MWAs than female partners. As it relates to disparity in compensation, Catalyst reports that 39% of firms assess equity by race and gender; however, 64% assess pay by department, and 52% by regions and offices.

The AICPA survey, too, isolated MWAs. The organization noted that these arrangements can “offer significant staffing advantages to firms that use them, especially when it comes to retention.” Mentoring, sponsorship and other “formal advancement programs” were also offset as having substantial recruiting, retention and professional development benefits to firms. AICPA further reports 85% of those firms that monitored pay parity among genders acted to close identified gaps.

We at OFWF celebrate the diversity of opinions, backgrounds and experiences, day in and day out, knowing that varied perspectives only make us stronger as a team and better equipped to serve our diverse clients. We look forward to introducing you firsthand to what makes us tick, both as an employer that truly values and respects its talent, and as partners that value and respect you and your team.

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