Opportunity and balance: is your organization ready to provide both? Which of your valued professionals will be moving up - and which moving out?

Take this simple test. Rank these items from most to least important to the accounting profession: increased competition, rising prices, regulation, personnel issues and corporate scandals.

Did you put personnel issues in last place? With so many other pressing concerns, it's not hard to see why. But the fact remains that the ability to recruit and retain top talent is one of the greatest challenges for firms and companies that rely on a highly skilled workforce for their competitive advantage. These issues will gain even greater momentum in the next few years as management is called to formulate succession plans to replenish an aging leadership pool. The AICPA's most recent study of work/life issues is an eye-opener for any accounting professional involved in managing a firm.

The key findings of the 2004 survey deliver a wake-up call for firm and company leadership:

* Despite media coverage in major publications that focuses on women opting out of professional life, the trend appears to be the opposite.

* Women have increased their representation at all ranks but continue to be underrepresented in senior positions. Both women and men desire advancement and often believe they need to leave their organization to find it.

* Work/life balance is a major concern for the majority of accounting professionals.

* The success of recruitment and retention strategies depends in large part on an improved understanding of today's workforce and providing positive role models.

MOVING UP--OR OUT?

At first glance the data on women's advancement in public accounting looked positive; however, there were some differences across firm size that showed smaller firms were promoting women at even higher rates than larger firms. Since 2000 an increasing number of women have entered the profession, been promoted and chosen to stay in public accounting. In 2004 women represented 19% of the public accounting partners, compared with 15% in 2000, and received 30% of the partner promotions, 37% of the senior manager promotions and 45% of the manager promotions in the past three years. Exhibit 1, at right, suggests that more than 20% of women working in public accounting now hold senior positions as partner, principals, directors or senior managers. Since the turnover rate for men exceeded the rate for women at all levels and women were being promoted at higher rates than in the past, there was a marked difference in the distribution of men by rank as well. The distribution of men across positions shifted dramatically as more than half of the men at public accounting firms now hold senior positions. Survey data showed that the majority of women are working as seniors and staff while the majority of men serve in senior positions (see exhibit 1).

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Many firms had implemented professional development programs and flexible work arrangements designed to support the advancement of women; again there are some differences as larger firms tended to offer more opportunities for flexible work arrangements and more formal networking, leadership and practice development programs. Given these programs and the fact that women represented 56% of all hires in public accounting over the past three years, the improvement in promotion rates and rank of women was less impressive. Women continued to be underrepresented in the senior ranks of public accounting (see exhibit 2, page 41). The survey showed, however, that once women achieved the partner rank, they often were invited to serve in firm leadership roles. In fact, the data showed that representation of women in senior leadership roles equaled or exceeded their representation at the partner level.

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There was little evidence that women in public accounting chose to leave their careers when they had families. Firms reported that 62% of women returned to work fulltime after the birth of a child, 28% returned part-time and only 10% chose not to return at all. In firms the majority of female accounting professionals with young children (63%) expected to spend the next 10 years in public accounting, though about half (49%) did not expect to stay with their current firm. In business and industry, females with young children also said they intended to stay in the industry for the next 10 years (81%). But, again, only 49% said they intended to stay with their company. Men also reported a stronger desire to stay in their sector, (61% for public; 85% for industry), but not necessarily with their current firm.

CPAs' desire to leave their firms and organizations likely was tied to their perception of the opportunities for advancement. In public accounting, for example, 51% of women and 39% of men believed there were no or limited opportunities for advancement in their firms. This pessimistic view was even more pronounced in business and industry, with 64% of the female respondents and 58% of males reporting limited or no opportunities for upward mobility.

NO PROBLEM WITH PROMOTION

Interestingly, respondents did not view the promotion process as unfair. In fact, more than half of respondents in public accounting (56%) called their firm's promotion process extremely or very fair. When asked to identify the most important factors in the promotions process, partners in public accounting cited (1) quality work on client projects, (2) developing business with new clients and (3) developing trust among the partners; fewer senior males than females cited these views. Female professionals placed higher importance on partner trust and developing business with existing clients.

Respondents in business and industry said much the same thing. Almost half of that group called the promotion process very or completely fair and said that developing trust (and, by extension, gaining visibility and appreciation for the quality of their work) among senior management was the most important factor in promotion (84% rated it extremely or very important). They also cited improving the efficiency of internal business processes and personal connections with senior management as very important. Given the perceived importance of relationships with senior management and partners, it is clear that providing professionals with access to the top is critical to career advancement.

STRIVING FOR BALANCE

Focused as accounting professionals were on upward mobility, they were even more interested in work/life balance. Professionals in both business and industry and public accounting expressed similar levels of concern about balance--87% of women and 78% of men. The numbers were even higher among parents with younger children--91% of women and 83% of men in public accounting expressed great concern.

The ability to achieve balance has an impact on employee retention. The data showed the three main reasons for professionals' leaving public accounting were (1) working conditions (schedule, hours and assignments), (2) work/life balance and (3) desire for change. For professionals under age 35, working conditions (81%) and work/life balance (68%) played major roles.

To meet this demand for balance, firms and companies alike have implemented flexible work arrangements (see exhibit 3 and exhibit 4, page 42). Respondents reported they frequently worked from home in the evenings or on the weekends. Data showed that senior professionals (partners and corporate executives) accessed voice mail, e-mail and the company network frequently from home. These same professionals also reported being able to leave work more frequently to attend family extracurricular events. It appears that while senior professionals frequently report working from home at nights and on the weekends, they take advantage of their employer's flexibility during the workday as well.

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ROLE MODELS

Professionals have contact with role models when they interact on the job and when they participate in professional development programs. The survey showed that public accounting firms offered more mentoring programs (17%) and networking opportunities (46%), while business and industry provided more leadership development programs (36%). Management in both sectors reported benefits accruing from interactions between firm leaders and less experienced professionals in the top talent pool. Beyond achieving the stated objectives, these programs, meetings, social events and mentoring relationships also allowed people to share information and learn more about each other and their organizations.

Given that most senior professionals face an increasing challenge separating their work and home lives and younger workers are particularly concerned about advancement and balance, leaders in every organization should examine the influence that role models have on less senior members.

A BASIC ACTION PLAN

The survey findings brought the challenge into focus: Organizations that seek to recruit talented professionals must provide opportunities for advancement and balance in order to retain them. Respondents made it clear that successful organizations must

* Understand the top talent pool

* An increasing number of accounting professionals strive to balance their professional and personal lives. The strategies that support the recruitment and retention of top talent are often incompatible with the traditional "giving more to the company is better" business models of professional services.

* Fewer men and women believe advancement to partnership in public accounting is desirable. Data from the 2004 public accounting survey suggested the percentage of women desiring partnership had fallen to 33% from 41% while the percentage of men seeking this level had fallen to 59% from 66%.

* Talented professionals often believe the best opportunities for advancement lie outside their organizations.

* Talented professionals and managers want communication with top management, so companies and firms must develop avenues to achieve this. Good results come when these two groups meet, talk and learn more about the challenges they each face. (See "Are Your People Getting the Message?" page 44.)

* Provide professional and leadership development opportunities for women, who represent an increasing percentage of the workforce.

* Networking, interaction, leadership and mentoring programs provide valuable benefits for both CPAs and their organizations.

* Women progress more effectively when they have a clear understanding of the promotion process and what it takes to succeed in their organization. Employers that provided access to resources and support for their top talent reported improved rates of advancement for women.

* Recognize the value of positive role models.

* Broadcast the message generated by the leading role models in your organization--the hours they keep, the values they hold and the examples they set--and don't underestimate how these role models influence the career paths of less senior members of the talent pool.

* Provide access to mentoring programs within the organization.

* Establish and support flexible work arrangements and alternative career paths.

* Reap the benefits of flexible work arrangements. In conversations with human resources directors as part of their research, the survey's authors learned that when employers offered various work scheduling arrangements, they saw improvements in retention rates and morale of their professional staff--bonuses that helped offset the cost of the programs.

* Offer alternative career tracks, such as part-time or nonequity partners, as retention incentives and to provide role models for younger staff.

* Communicate. Organizations with successful flexible work programs credited the leadership team with reinforcing the value of such programs to their strategic plan. Human resources directors acknowledge the role of positive messages from senior leadership--not only explicit messages about how work/life balance advances the goals of the firm but also more personal messages about how senior leaders manage balance in their own careers.

Accountants hoping to balance career opportunity with private lives will find some positive messages in the surveys conducted by the AICPA's Work/Life and Women's Initiatives Executive Committee: The profession is providing more opportunities; progress has been slow, but steady; women benefit from increased access to partners and firm leaders in order to establish relationships and thus gain a better understanding of the factors involved in promotion; and successful professionals and their organizations know they must communicate with their staffs and work together to achieve the best solutions.

The AICPA's Work/Life and Women's Initiatives Executive Committee in 2004 conducted national surveys of CPAs and other accounting professionals in public accounting and in business and industry. (Similar surveys were conducted in 1997 and 2000.) The 2004 surveys yielded responses from 681 public accounting firms of all sizes, 674 CPAs in public accounting and 779 CPAs in business and industry. The objective was to determine the availability, operation and acceptance of work/life and professional development programs.

AICPA RESOURCES

JofA articles

* "How to Keep Them Once You've Got Them," (JofA, Dec.04, page 57; www.aicpa.orK/pubs/jofa/dec2004/bufe.htm).

* "Road to the Future" (JofA, Jul.04, page 41; www.aicpa.org/pubs/jofa/jul2004/lauber.htm).

* "Having It All: How a Shift Toward Balance Affected CPAs and Firms" (JofA, May01, page 20; www.aicpa.org/pubs/jofa/may2001/ news_sr.htm).

* "Toward an Equal Future" (JofA, Jun.99, page 71; www.aicpa.org/pubs/jofa/Jun1999/ women.htm).

* "Facts and Myths About Women CPAs" (JofA, Oct.94, page 79).

Book

Promoting Your Talent: A Guidebook for Women and Their Firms (2nd edition), commissioned by the AICPA Work/Life and Women's Initiatives Executive Committee offers practical advice for women, human resources directors and firm management. For more information or to order, go to www.cpa2biz.com or call the Institute at 888-777-7077. (AICPA members receive a discounted rate of $25.)

Conference

2005 AICPA National Conference on Employee Benefit Plans May 16-18 Bellagio Hotel and Casino, Las Vegas 

Web site

Visit www.aicpa.org/worklife for additional resources on work/life balance and advancement in the profession.

RELATED ARTICLE: Are your people getting the message?

Every day, people in your organization are bombarded with messages--through official communications, electronic messages, printed materials, meetings, conversations or ordinary observation. But what kind of message is it? Are firm role models, partners and senior leadership sending meaningful--or mixed--messages to your professionals about your work/life programs?

Human resources directors and managing partners at firms that successfully address the difficult issues of recruitment and retention stress the critical importance of managing your message. Leaders in the profession agree that recruiting and retaining top talent are critical to the strategic mission of their organizations. If work/ life balance programs, women's initiatives and professional development programs are part of your strategic plan, let your professionals hear about it often? Here are some suggestions to get the word out:

* Agree on a message and share it. Once your leadership team has identified the programs that are mission-critical, share this information with your staff. Successful firms use Web sites, e-mail and newsletters to inform employees about professional development and work/life balance programs. Some have created databases that allow employees to share success stories or to contact colleagues for support on issues of balance and advancement. Providing access to networking events and mentors also reinforces the message that management values the whole person.

* Involve senior leadership. Is your organization relying on human resources representatives to be the primary messenger on issues of workplace flexibility and professional development? If so, your firm may be overlooking a very effective messenger--senior leadership. Having senior leaders encourage participation in these programs increases involvement and may change the perceived importance of these programs. Hold conferences on these issues, make them part of the annual professional review and address them in meetings to keep the message at the forefront. Leaders who themselves use these programs serve as valuable role models to younger professionals.

* Keep focused. It's easy for messages on work/life balance and advancement to get less emphasis as accounting professionals cope with the challenges of their daily work. But it is often just when those challenges become most intense that professionals need the balance and advancement programs the most. Let your employees know that since they are a priority, these programs are, too.

NANCY R. BALDIGA, CPA, is an associate professor and chair of the economics department at the College of the Holy Cross in Worcester, Massachusetts. She coordinates the research efforts of the AICPA Work/Life and Women's Initiatives Executive Committee. Ms. Baldiga is also author of the book, Promoting Your Talera: A Guidebook for Women and Their Firms, an updated edition of which was recently published by the AICPA.