Louise Single

Gender, Family and Work-Life Issues in Public Accounting

What CPA firms can do to retain talented women.

June 16, 2011
by Louise Single, CPA, PhD

The AICPA’s studies of Workforce Trends and Human Capital Practices have motivated a wealth of research about the current status of gender, family and work-life issues in public accounting. In 1993, the AICPA’s first Survey on Women’s Status and Work/Family Issues in Public Accounting revealed that women hired into public accounting were not progressing up the ranks as expected, in part due to disproportionate turnover. Subsequent research found that women who left were less likely to be re-employed in public accounting and if they were, tended to work for smaller firms, due mainly to work/family conflict.

Since that first survey, the vast majority of firms of all sizes have made retention of women a priority and adopted a variety of women’s initiatives. Flexible schedules, one of the most common initiatives, result in lower burnout and intended turnover, but may cast doubts on the professional’s career commitment and prospects for success and, thus, may hinder advancement.

Women are still not progressing up through the higher ranks at the same rate at which they had been hired. Firms may not be maximizing their investment in these professionals and may be creating a less desirable “mommy track.” Although the number of women equity partners is increasing, it is still a fraction of the total new partners at all but the very smallest firms. In addition, a large wage gap between male and female public accounting professionals occurs as careers progress.

Firms are seeing the issues in practice. When Lisa Fitzgerald became director of HR at the CPA and advisory firm, Eide Bailly, for example, “they asked me to help them identify what, if anything, our firm should be doing as it related to attracting, retaining and advancing women to leadership ranks,” she says. “So I ran the numbers on the current state of our personnel, based on rank and gender percentages and it became clear that there was a cause for concern and room for improvement.”

Evidence Needed

It would be valuable to gather new evidence on the attributes of women who have advanced to leadership positions. Have these women followed a traditional career path or used alternative options? It is also important to understand to what extent career tracks may be a function of personal choice and gender-related life circumstances. The point at which women are most likely to scale back or leave the workforce is likely to coincide with the point at which professionals and their employers have already made a significant investment in their development.

AICPA data reveal that, even at the senior-manager level, a high proportion of women do not aspire to be partners (2006: “AICPA Work/Life and Women’s Initiatives 2004 Research. A decade of changes in the accounting profession: Workforce trends and human capital practices.” New York, NY: AICPA). Other studies have shown that in the corporate world, w do aspire to the CEO position in equal numbers to males. What is so different in the public accounting domain? According to Mary Bennett, AICPA Women’s Initiatives Executive Committee (WIEC) chair and owner of MLBennett Consulting, “One of the key issues that comes up at the AICPA Workshop (PDF) designed to provide organizational strategies for the retention and advancement of women — is understanding how the culture of the profession and societal culture in general — have impacted the aspirations of women in the past. One of the takeaways from the workshop is the realization that it is not the case that women do not aspire to the partnership level, but that they perceive a lack of opportunity to be successful based on what these women see in their current environment.”

To address such questions it is important to identify the causes as well as the point at which ambition stalls in the public-accounting setting. Mastery and recognition are two of the components that fuel women’s ambitions. Suggestions for nurturing ambition have included mentoring and networking programs for women. An AICPA study indicates that women view mentoring relationships differently from their male peers. In addition, minority professional women emphasize the need for a mentor with a similar ethnic/cultural background who understands the obstacles they face. The 2004 WIEC survey found that women view mentors as potential “models” and “observers” to a greater extent than do men. A 2010 report by Catalyst based on data from business and industry and Big Four public accounting points out the importance of gaining not just a “mentor” but a “sponsor,” a senior member of leadership who will use their influence to advocate for the woman professional. The report cites research that indicates that women are not as aggressive in pursuing sponsors as are men and provides resources aimed at helping women understand how to create these opportunities for themselves.

According to Erin Booth, WIEC member and assistant director at Ernst &Young, LLP, “Some of the more successful initiatives that the Big Four have implemented to increase the likelihood for women and minority candidates to ascend to partnership rank in the firms have been those focused on advocacy. The objective is to align those high-performing candidates with key leaders in the firm as they move closer toward promotion to partner. These programs were launched when it became clear that many women and minorities did not naturally seek sponsorship in this way and it was a missing key component to the ‘promotion to partner’ process.”

Although the AICPA 2004 WIEC survey revealed that alternative work schedules and career paths were helping to retain women, turnover for both men and women have been increasing and professionals at all but the smallest firms are often leaving for “work/life balance issues.” One obvious solution is to consider the relationship between monetary compensation and retention. The survey reported that one in three CPA firms’ professionals cite monetary compensation as a factor in exit interviews. Research also indicated a gap in perceived fairness in the promotion process between partners and those not yet at partner rank. This is important to retention since perceived fairness is linked to job satisfaction and turnover and is also linked to perceived fairness of associated compensation.

The Impact on Culture

How have firms’ efforts to retain more women affected the culture in public accounting? According to a 2010 Benchmarking Survey by the AICPA WIEC, women are disproportionately represented among the ranks of part-time and non-partner track professionals in public accounting. The proportion of part-time professionals who are women ranges from 78 percent at the smallest firms (with revenue of less than $1 million), 79 percent at firms in the $1 million to $5 million group, 87 percent for firms in the $5 million to $25 million group and 84 percent at the largest firms. The proportion of seasonal employees who are women ranges from 67 percent at the smallest firms, 79 percent at those in the $1 million to $5million range, 68 percent in the $5 million to $25 million group and 61 percent for the largest firms.

While these options may be good for women individually, this system may foster a two-class system. Research may yield insights into how firms can restructure the work environment, expectations and demands to keep more talented professionals for the long-term and help them achieve their potential in terms of advancement. One key question is how many firms have actually created part-time equity partner positions. This key question resonates among many women such as Mary Bennett, WIEC chair and owner of MLBennett Consulting. Bennett worked flexible hours for many years when her children were young, adding that “without this option during those years, I would not have stayed with the firm and gone on to be a client service partner leading a book of business for my firm.”

Clearly the AICPA WIEC studies have motivated a wealth of research and raise additional important questions. The committee will continue to develop benchmarking data on the advancement of women in the profession, to encourage research in this area and to provide forums for debate and discussion. Recently the committee announced an academic research grant and launched a LinkedIn Group for AICPA members with an interest in issues relating to women in the profession. The 2010 benchmarking survey results will be published in the near future. All of these activities will be a rich resource for practitioners and researchers who are interested in increasing the visibility and advancement of women in the profession.

A Priority for the Profession

According to the AICPA 2009 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits (PDF), 55 percent of entry-level accounting professionals are women. As firms recognize that the lack of women advancement affects future success, they will need to gain an understanding of how to better promote women to positions of leadership. Clearly there are many different issues to be addressed and not all of them will apply within every firm. Firms that are committed to change can use this article as a starting point in thinking about their current culture in order to identify the structural impediments and unintended biases that may impede women advancement.

This is an executive summary of the latest Women’s Initiatives Executive Committee’s whitepaper Research on Women’s Advancement in Accounting (PDF).

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Louise Single, CPA, PhD, is an associate professor and accounting programs director at Austin, Texas-based St. Edward's University. She has published extensively in the area of women's advancement in public accounting and is the Research Task Force chair for the AICPA Women's Initiatives Executive Committee.