DEI Is Evolving: Is Your Firm Keeping Up?
Like many other industries, the accounting profession has had to navigate a lot of challenges in recent years. The most obvious being the COVID-19 pandemic and the resulting hiring and retention difficulties. Though, in my opinion, maybe one of the more threatening issues, and more specific to the accounting profession, is the stagnating CPA pipeline — a troubling trend that industry stakeholders have been warning us about for many years. The resulting talent shortage we’re now seeing is, in part, a result of national college and university accounting degree programs continuing to see declining enrollments, compounded by a decline in new candidates pursuing the CPA credential.
According to a May 26, 2022, report from the National Student Clearinghouse Research Center, undergraduate enrollment declined 4.7% from spring 2021 to spring 2022, which follows a 4.9% decline from spring 2020 to spring 2021. This means undergraduate enrollment has now fallen by nearly 1.4 million students since the COVID-19 pandemic started (i.e., spring 2020 to spring 2022), compared to 2.6 million students over the past decade.
With the profession’s candidate pool shrinking more every day, it’s imperative for firms to use every recruiting tool available to them to attract the next generation of CPAs. More importantly, if firms wish to remain relevant, they need to rethink how they connect with this incoming labor force.
Connecting with a New Generation of CPAs
One powerful way to make connections with any job candidate is to show them how the values of your organization mirror those they’re seeking. For students and young professionals, this increasingly means showing a commitment to diversity, equity, and inclusion (DEI) in the workplace.
According to a recent Monster survey, 83% of Gen Z individuals stated that an employer’s commitment to DEI plays a significant role in their decision-making process when choosing where to work. Another survey by Staffing Industry Analysts found that 75% of candidates would reconsider applying to a company if they were unsatisfied with the organization’s DEI efforts.
I think it goes without saying that firms need to consider these stats and pivot their recruiting strategies if they plan to have any sway in ushering in a new generation of CPAs. Also, it’s important to understand that Gen Z candidates don’t operate within the same rules of the generations before them. Decisions about where to work, what kind of work to pursue, and what kind of colleagues they choose to surround themselves with are largely influenced by their values around culture and diversity. Not only is Gen Z the most diverse generation within themselves, but they expect their future employers to increase the diversity of their organizations to reflect society more accurately.
Equity Calls for Pay Transparency
For Gen Z, a clear indication that DEI is an organizational value is a commitment to making their culture more equitable. Over the past three years, in particular, there’s been a significant increase in companies promoting their DEI and sustainability targets, goals, and initiatives. It’s now common to see organizations supporting open forums, bias training, and the formation of DEI committees, among other actions, to show their employees they’re committed to cultural change and are making strides to achieve equity.
One area of historical inequity that’s garnering greater attention today is pay. Pay transparency laws have cropped up in many states, including Illinois. One major step taken to enhance equity throughout Illinois was amending the Equal Pay Act, making it unlawful for any employer with 15 or more employees to not include a pay scale for any job posted in the state. In this case, pay scale is defined as the salary or hourly wage range that the employer reasonably expects to pay for the posted position. Notably, studies have indicated that including a pay range within a job posting has had a positive impact on reducing the gender pay gap and inequity for other marginalized groups.
While pay transparency isn’t without its challenges, firms should view it as an additional tool in their recruiting toolbox. Whether you agree with it or not, this change is coming. Firms need to adjust their perspectives and think of pay transparency not as another challenge to overcome but rather as a way to differentiate themselves and illustrate renewed commitment to the DEI initiatives they may have committed to years ago.
Simply put, employees’ DEI expectations are evolving and are playing increasingly bigger roles in guiding them toward employers. DEI is no longer simply about supporting minority employees and having conversations that provide new perspectives. Now, employers must be prepared to show top-down commitment to stated DEI and sustainability policies, with demonstrated buy-in at every level, to attract top talent.
If we’re going to help improve the CPA pipeline, it’s in our profession’s best interest to embrace incoming policy changes and use them as a catalyst for forging connections with the talent we want and need. Now more than ever, prospective employees want you to put your money where your mouth is — right now, that’s in your job descriptions.
Reprinted courtesy of Insight, the magazine of the Illinois CPA Society. For the latest issue, visit www.icpas.org/insight.