Diversity: attracting & retaining tax professionals.

It is no longer a secret. Inclusion of diverse backgrounds and opinions provides companies with a broader set of opinions and experiences, thereby allowing companies to get the right answers to tough, complex business questions in a rapidly changing business environment. More important, it allows each of us an opportunity to enrich our own lives.

Many organizations have taken concrete steps to ensure a significant diverse workplace. There still appears, however, to be a lack of diversity among tax professionals and in many tax departments. To address this shortcoming, this article discusses a number of ideas on increasing diversity. Part 1 offers some practical suggestions on how to attract minority tax professionals. Part 2 discusses how to develop minority tax professionals. And part 3 suggests steps that can be taken to retain minority tax professionals. (1)

Part 1: How to Attract Minority Tax Professionals

Attracting minorities to your organization must start with a commitment from the top of the organization to modify the hiring process. More fundamentally, companies must address the question of "Why diversify?" As previously stated, the ultimate goal of diversity cannot, or should not, be to pander or to satisfy the demands of "political correctness," but rather to enrich the overall organization and recruit, retain, and reward individuals on the basis of their skills and contributions, not their demographic characteristics.

The key issue addressed in this article is not why, but how. Our experience and observations--and quite candidly, the tax profession's history--teach that diversity does not happen automatically. It requires vision, effort, and perserverance.

Many organizations have implemented what would be considered "best practices" in recruiting and hiring qualified candidates. We have taken a number of the best practices and fine-tuned them with respect to hiring minority candidates. What follows is a non-exhaustive list of questions that every organization that is trying to diversify its tax department must address.

Evaluate Your Demographics--What are the current and historical demographics of your company's workforce and how have they changed during the last 10 years?

The commitment to diversity begins with taking a group "snapshot" of the people who work and have worked in your organization over the last 5-10 years. True change can only begin with accepting where you are and where you have been.

Evaluate Your Hiring Practices--What have been your company's hiring practices with respect to minorities?

Before an organization can develop a plan on how to attract minority tax professionals, it must address its past candidly. Many organizations publicly embrace a corporate commitment of a diverse workforce, but the "numbers" simply do not bear this out. Behind the walls of the organization there are no minorities in key positions to be found or the numbers have not significantly changed over the past few years.

Minorities need to see the genuineness of your statements. If you have not achieved your corporate objective or you are having problem achieving it, you should not hide from it. Candor about the past will build credibility with minority candidates.

Identify Where Minorities Are in Your Organization--Where are they in the organization? Where did their career with the organization begin? And for those who are no longer with the organization, why did they leave?

You can learn a lot about what would attract minorities to your organization from those currently within your organization--and even from those who have left. Not all minorities in a particular group, however, share the same values or have the same needs. To assume otherwise is a common stereotype that has it own implications.

Part 3 of this article focuses on the retention issues, but it is important to realize if you have a retention problem on the front-end of your hiring efforts.

Assess Your Attractiveness to Minorities--How many minority candidates have submitted applications? How many have interviewed? To how many have extended offers and how many have accepted the offer?

By evaluating the number of minority candidates who have applied for positions, you will be able to see how many minorities have been attracted to your organization in the past.

High numbers may show that you have been very attractive to minority candidates, but for some reason they have not made it through your interview process. Low numbers can be an indication that minorities are not aware of opportunities at your organization. It is important to evaluate how many minority candidates were extended offers and how many accepted. Again, these numbers may be able to shed light on how attractive your organization is to minorities.

Define Your Target "Pool"--What pool of tax professionals is the company targeting--gender, race, sexual orientation? Does the company know what would and would not be attractive to that target pool?

Defining the pool of candidates is crucial before you can begin attracting minority tax professionals. You may be targeting one pool--by gender, race, or sexual orientation--or several pools at once. Once you have narrowed down your pool or pools, you will need to determine what is attractive to your target pool. A one-size-fits-all approach will not work. For example if your company is targeting female candidates, a position that requires a lot of travel and non-flexible work hours may not be attractive for a parent.

Identify the "Personality"--What type of personality is the company looking for? A trailblazer, builder, or sustainer?

A "trailblazer" is someone who will break the ice and pave the way for other minorities. A "builder" is someone who can follow behind the trailblazer and raise the expectations even further about what minority candidates can accomplish in your department. A "sustainer" is someone who keeps it together. Sustainers do not raise the bar but also they don't fall behind. They are very hard workers and they meet expectations (like 50 percent of your workforce).

It is crucial that you make it clear what type of personality you are hiring. If you hire a trailblazer and treat her like a "builder" (or even worse a "sustainer"), she will leave very quickly.

Locate Sources for the Target "Pool"--Has the company identified sources of the target pools?

There are professional organizations and publications that cater to specific minority groups. If your target pool is African-American, for example, several organizations may be good sources, including the National Association of Black Accountants, the National Bar Association, Black Enterprise Magazine, and historically black colleges and universities such as Howard University and North Carolina Central University.

Whatever your target pool, take the time and effort to identify the organizations and publications to which members of the target pool may subscribe. But be aware that not all individuals of a particular pool have a membership in organizations that serve their minority group or have attended certain schools.

In truth, locating a qualified applicant from a target group, may be simple as asking someone in that group, "Do you know someone who may be interested in ...?"

Advertise to the Target Pool--Will the company's advertisements and presentations highlight opportunities that would be attractive to the target pools?

A company's advertising has to be directed to target pool, either through publications or networking at functions. All advertisements should be tasteful and "politically correct." It may be helpful to include other minorities in your advertisements. Make sure that your advertisement reflects the personality type that you are interested in recruiting. Doing this at the start can go a long way in helping with retention issues (which is discussed in more detail in Part 3).

Establish Mentors Early On--Who will mentor the new additions to the tax department?

Everyone needs a mentor, regardless of race, color or creed, but for many minorities such mentor relationships are hard to find.

Companies should strive to line up potential mentors as early as the recruitment stage of the process. Mentors should be available to talk to candidates during the interview process. By having a solid mentorship base in place, minority candidates will more likely be drawn to your company.

If your company is trying to diversify its tax department, "trying" must start at the top of the organization, and the message must be clearly communicated throughout on a consistent basis.

Organizations that have implemented best practices for finding and hiring qualified candidates can use these same practices (with some fine-tuning) to hire qualified minorities. The issues are the same in attracting minorities as any other candidates. Indeed, if you want to attract minorities you need to make it abundantly clear that you are willing to do the same for minorities as you are doing for non-minorities.

Part 2: How to Develop Minority Tax Professionals

Attracting diverse talent to your department, however, is simply not enough. The complete package requires development and retention. This part of the article offers some practical suggestions on how to develop minority talent.

Picture this: Jane Doe was hired several years ago from a top business program. She has a great work ethic; she gets the best projects (although her role is limited); and she has outstanding annual evaluations. Many of her colleagues feel that Jane is good management material. Yet Jane feels unchallenged and leaves the organization before the end of her third year, because while Jane seemed to be excelling, she was not properly developed.

To successfully develop talent, organizations have to do more than simply assign "good" projects to an employee. They must take steps to ensure that their employees have access to resources that will develop both their technical and "soft" skills.

Here are some practical suggestions that can get you on your way.

Mentoring Programs

A mentoring program is a critical tool in developing any professional.

Over the last few years, many organizations have implemented mentoring programs. While they may differ from company to company, most programs share similar objectives--to expose employees to top-level leadership, corporate culture, corporate values, and the opinions and experiences of others.

A minority employee may or may not have unique mentoring needs. What may occur to the employee is that his or her needs and concerns might be unique precisely because he or she is a minority. This is where an experienced mentor can provide a broader perspective and direct the minority toward the resources necessary to resolve his or her issues. More important, such programs give many minorities the knowledge that the organization is serious about developing people from different backgrounds, cultures, races, and religions.

The mentor does not have to be from the tax department. It is more important that the mentor be someone who will take a genuine interest in the minority's career development by offering opportunities to be exposed to key decision makers and critical information about the company and the industry. The mentor should be at the senior management level and be knowledgeable about the company and the industry.

Returning to the example above, in Jane's case a mentor should have been assigned to her within the first year of employment. Although Jane was getting good assignments, she may well have felt that she was not getting overall exposure and was doubtful about her contributions to the company. A mentor familiar with the organization and its structure would have been able to confirm or refute her thoughts and feelings, and reassure her about her position within the company--which could well have influenced her decision to stay or leave.

Career Planning and Cross Training

Every successful career has a plan that generally does not happen by chance, but instead is driven by a series of deliberate and steps. The critical component in any career plan is providing the resources that will allow the professional to get to the next step. At a minimum, this should include continuing education, opportunities to work in different areas, "cross training," time lines for achievements and next level positions, and finally measurement tools.

Employers need to have a greater sensitivity that diverse employees may develop a belief that they are being pigeon-holed or that they are just there to do the work and not an integral part of the organization. Along-term career plan and cross training would reinforce the message that management does not view the minority as just another sprocket in the overall machine.

Providing opportunities outside the tax department can be extremely beneficial in developing the minority tax professional. Opportunities in related business functions--for example, finance, treasury, legal, operations - can enhance the minority tax professional's understanding of the company and industry.

Some companies have realized this and have formal rotation programs. Even if your company has not done this, it might consider an informal "loan program" that gives broad exposure to the business and the people who run it.

In our example, assume that Jane was hired to do domestic planning but has a strong interest in international planning. Assume further that after three years of domestic planning, she has mastered that position. Without a career plan that includes helping her reach a position in international planning or something comparable, Jane may choose to leave the organization, and all the skills the organization has invested in her will be lost.

Jane's manager should have worked with her in developing a career plan and reviewing the plan at least annually. If an opportunity in international planning was not likely to become available, the manager should have been upfront, and try to come up with other areas that might be of interest or suitable to Jane's development.

Development of "Soft" Skills

"Soft" skills (or people skills) could be generally described as skills, which are beneficial and necessary in effectively interacting in both business and social settings. For tax professionals, soft skills may be the most different ones to acquire because tax professionals tend to be very technical; they excel at "hard skills." But as one moves further up the business structure (whether at a corporation, law firm, accounting firm, or government), relatively less emphasis is put on technical expertise and more emphasis is put on people skills.

Most people inherently feel a greater connection to people with whom they share a similar background. Thus, an employee may experience some anxiety in making presentations to an executive team that does not reflect his or her own ethnic background.

Repeated exposure, both as presenter and a participant, will provide the employee with a certain level of comfort and provide them with an opportunity to develop and enhance his or her own presentation style. This, in turn, will help to reduce the anxiety associated with addressing senior management.

Soft skills can be developed through taking courses on presentation. For example, many companies have Toastmasters clubs that provide employees opportunities to practice their public speaking. In addition, allowing professionals the opportunity to make presentations inside the company to executives, and outside the organization to other practitioners in industry seminars, is a good vehicle for developing soft skills.

In our example, Jane worked on important and complex tax projects for the company, but she never had the opportunity to present to management. She was a member of her local professional association, but her company did not support her participating in substantive panels. Stated bluntly, the company did not help Jane develop the soft skills necessary for continued growth.

Continuing Education

Involvement with professional organizations through continuing education activities is essential to developing and maintaining technical skills, but even more beneficial as a tool in the overall development of the minority professional.

Through professional organizations, not only are technical skills gleaned and enhanced, but critical relationships, industry knowledge, and soft skills are fostered. It is the combination of both technical and soft skills that is crucial to developing the minority tax professional.

In our example, Jane was a member of her local professional organization, but she was not encouraged or permitted to develop her technical skills by fully participating in panels and presentations. The company missed an opportunity.

Part 3--Retaining Minority Tax Professionals

If a tax department follows the suggestions set forth in Parts 1 and 2, its staff will be more "diverse." The big question then becomes "Are there special things we need to do to retain a minority tax professional?" The answer is yes.

Most minority tax searches require the help of a recruiting firm due to the extremely low supply and high demand for these professionals. The average cost for such search? Between 25 percent to 33 percent of the professional's first year salary and bonus. For example, a position that pays $100,000 total cash compensation, the recruiting fees would be between $25,000 to $33,000, not including the cost of relocating the new employee and his or her family. When you add in employee development costs, one can see that retention is critical.

This part of the article discusses six areas requiring attention to increase the probability that minority tax professionals in your department will want to stay in your department or, at a minimum, with your organization.

Compensation

Employees want to be fairly compensated for their work. This is especially true for minority professionals who historically may have been paid less for similar positions. To ensure fair treatment of minority professionals compared with peers within and outside the organization, a company should consider performing a compensation analysis. Compensation levels should be commensurate with performance and experience, and should not be tied to arbitrarily set merit increases, which might be compounded by a poorly negotiated initial salary.

Maintaining pay equity in the department is a great first step to retaining minority tax professionals.

Performance Management

A key to retaining minority employees is by showing them that they are valued, both as an individual and as part of the minority group. A consistent track record of promoting across the employee spectrum and a fair and honest approach in dealing with the individual during reviews will go a long way in "proving" the commitment to a diverse tax department.

Any performance management tool put in place should at a minimum meet the following several targeted areas:

* Align individual performance expectations with overall strategic business plans and objectives.

* Any performance objective must be measurable (what, when, and how much).

* Objectives should be prioritized in order of business need and importance.

* Identify skills and knowledge areas needed to enhance performance.

* Allow for feedback throughout the year.

Mentoring

Most successful executives will tell you that they owe a large part of their success to their mentors. Thus, it should come as no surprise that mentorship is a crucial component to retaining any employee, in particular minority employees. As previously discussed, a minority employee may or may not have unique mentoring needs. What may occur to the employee is that his or her needs and concerns might be unique because they are a minority.

Establishing a mentoring program or, at a minimum, providing a mechanism to address concerns in a timely manner will increase the probability of retention. This mentoring program should address both internal and external retention issues. "Internal" issues include ensuring that employees are actively engaged in projects and assignments such that these experiences will lead to growth within their current position and make them competitive candidates for future positions. Thus, the goal must be to ensure that the employee does not feel as if he or she is "just working a 9 to 5 job."

As to the "external" issues, the mentoring program should address reasons that might cause the employee to leave the organization (i.e., other organizations are better for minorities because they not only hire qualified minorities, they also have a good track record of promoting them). Both issues can be easily integrated into the same mentoring program.

Growth Opportunity

As previously discussed, there are three types of employees - trailblazers, builders, and sustainers. No matter which group an employee falls in, most will like to know "what is the next step?" "Where do I see myself in the next two to three years, and more important, where does this organization see me?"

This can and should be accomplished as part of the company's performance management process. In some cases it may be that the best opportunity for the minority professional is outside of the tax department, particularly where upward mobility within the tax department may not be available. For example, there may be opportunities in the general legal department or in a business unit. These opportunities will only strengthen the professionals understanding of your organization and industry. The professional should not be penalized for (or discouraged from) making such a move. Instead, a career plan should focus on how and when the professional will be able to use these experiences outside of the tax department to (possibly) return to the department at a later time.

Professional Networking

There are many professional organizations that tax professionals can join. Some of these organizations cater specifically to minority groups, such as the National Association of Accounting of Black Accountants, and the Association of Latino Professionals in Finance & Accounting. In many cases, minority professionals belong to both the "traditional" organizations (such as Tax Executives Institute) as well as minority organizations.

Where possible, a company should encourage the minority employee's participation in both minority organizations and traditional organizations. It will provide growth and networking opportunities for the employee and the organization, as well as expand the talent pool from which the company may recruit.

Department Integration

A new employee wants to feel like part of the team from day one. This is especially true for minority tax professionals who may be skeptical about whether they are being truly accepted as part of the team.

Your job is to put in place and strongly support group activities and functions that will help facilitate the integration of the newly hired minority tax professional into department life. Suggested activities to start the bonding include (1) attending a sporting event, (2) picnicking at a local park with team building activities, and (3) hold regular department lunches where people can talk about current projects.

Conclusion

In summary, a tax department's retention success will be greatly improved with a program that focuses on:

* Fair compensation

* Performance management

* Mentoring

* Growth opportunities

* Professional networking

* Department integration.

Moreover, your efforts during the attraction and development phase will contribute to making sure that minority professionals are retained--the end goal of any overall recruiting program.

SHANNON KING NASH is a graduate of the University of Virginia School of Law. She is a certified public accountant and currently works as a senior tax attorney. WAYNE A.S. HAMILTON is a graduate of North Carolina Central University School of Law and holds an LL.M. degree from the University of Florida. He is a corporate tax counsel. This article was originally published in a different format by TaxTalent.com, an Internet-based tax community with more than 12,000 registered members. Ms. Nash and Mr. Hamilton serve on TaxTalent.com's Diversity Board of Directors. Copyright 2003 by TaxTalent.com.

(1) Diversity differs in substance and form. For the purposes of this article, the word "minority" includes gender, race, and sexual orientation.