The diversity problem in accounting: Can smart tech help?

Issues of racism and discrimination have been at the forefront of public consciousness in recent months, and some of the giants of accounting have openly admitted the industry isn’t doing enough & there is a diversity problem in Accounting.

A recent report by The Daily Telegraph revealed that of the largest UK accounting firms, Deloitte has only one Black equity partner, while EY and KPMG have two each, and PwC six.

Accountancy is not the industry with the worst diversity problem, but when only 11 of the Big Four’s 3,000 UK partners are Black, there is clearly a ways to go. Each firm has pledged to quicken the pace of change, and has released a detailed breakdown of their efforts: Deloitte, PwC, EY, KPMG.

These figures support what Boston Consulting Group told the World Economic Forum last year: corporate diversity programmes aren't working. Companies are pessimistic about their chances of improving on these lousy results.

The Big Four have renewed their pledges to increase their proportion of Black, Asian, and minority ethnic partners (BAME) as their resource management functions face mounting scrutiny. PwC has said it will introduce mandatory unconscious bias training for all staff, while EY intends to double its number of BAME partners by 2025.

What’s going wrong?

These promises align with the traditional thinking amongst leadership teams that recruiting is the biggest obstacle to a more diverse workforce. But unfortunately, it’s not that simple. 

Hiring people from diverse backgrounds is relatively easy compared with addressing the deep-rooted cultural and organisational issues that those groups then face in the accounting environment.

According to ICAEW research,  it’s the day-to-day biases that stop BAME individuals from sticking around at organisations and rising through the ranks, and it is no coincidence that accountancy also has one of the highest turnover rates of any industry, with churn particularly high amongst new starters.

Retention and advancement are two systemic barriers that can’t be fixed with quotas, and go to the heart of why the profession has found itself with this problem.

Anyone who’s worked in accounting knows there’s no shortcut to the top: it’s a demanding career, and only a small percent will make partner.

Project and budget overruns are all too common in an era of hyper-competitiveness, and as a result, the search for extra hands to execute large and complex jobs is often fast and shallow. Senior staff under immense time and financial pressure often take the easiest route and dip into their closest contacts for help, which, given the historical make-up of the profession, tends to be the usual suspects who are known and familiar quantities. 

Reasons to be cheerful

It’s no longer solely a compliance issue to ensure a workplace is more diverse, but a necessity to represent the increasingly multicultural corporate world around us, and to improve profitability and performance.

Research shows a truly multicultural workforce is more productive, with lower rates of absenteeism. It’s clear that firms which are more diverse and inclusive perform stronger in the market, are generally more innovative, and have a better reputation in the eyes of clients and the public. 

The good news is accountancy has acknowledged this and is actively embracing new solutions that will enable it to become the true agent of change it wants to be in the world, hopefully consigning the embarrassing statistics and negative headlines to history.

Leaders are now pushing to improve inclusion through technologies which can help reveal the hidden gems in their teams who may have been previously overlooked by the time-pressures and budgeting worries that can lead to managerial blind-spots.

Firms who use technology to remove bias from project planning understand that doing so promotes inclusion and brings different ideas to the business, helping the company connect with all kinds of markets and giving them a competitive advantage. And may even help towards solving the diversity problem in Accounting. Never has the maxim been truer that a happy workplace is a productive one.