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Facts and myths about women CPAs.

Does it seem that every newspaper or magazine contains another article on women in business? Do accounting publications all seem to be reporting research findings about women CPAs, especially their "upward mobility" and how they can enhance their chances of being successful at work? Do you sometimes think "women in accounting" is an old issue and it's time to move on?

If so, you share the thoughts expressed by many CPA firm managing partners in discussion groups that were a part of a research study conducted by the American Institute of CPAs women and family issues executive committee. Some partners perceived that because women have made up about half of the new hires in public accounting for a number of years, the problems that can be influenced by individual firm behavior have been resolved. Many partners believed the primary remaining issue--turnover and retention--was beyond their influence because it resulted from women's personal choices about their careers and families. However, survey data collected in another phase of the study suggested this and other misperceptions actually might contribute to the remaining upward mobility problems. The data are important because firm leaders who are misinformed about the status and attitudes of half of those entering the profession may not always be able to attract and retain some of the profession's most talented people.

TRUE AND FALSE

Some of the common beliefs about the difficulties the CPA firm environment creates for women undoubtedly are true. For example, work-load compression means long hours during busy season. The growth of specialization means increased travel, which makes life complicated for employees with family obligations. Profitability issues are important to all firms, especially in light of reduced growth rates and legal liability pressures. This environment nurtures a work ethic for which workaholics traditionally have set the standard. The discussion group partners had mixed beliefs about whether this ethic was changing. Thus, many had concluded that turnover among women continued to be a result of women's personal decisions to exit a demanding career environment.

But survey results suggested personal choices made by men and women really might not be that different. Overall female turnover in lower ranks was a little higher than that of males, especially in larger firms. It seemed to balance out, though, by the time all employees attained the rank of senior manager. However, by that time the absolute numbers of women available for promotion had been depleted. Because there were fewer women to promote, fewer reached the top. There also were proportionately fewer women in the top ranks of smaller firms, even though the turnover patterns were less distinct.

Is there nothing firms can do to prevent women from leaving before they attain the top jobs? The experiences of firms that have used creative human resource programs suggest firms can make a difference.

One common belief is that firms have no control over turnover among women because many women leave for purely personal reasons once they have children. The survey showed this simply is wrong: A high percentage of women returned after maternity leave. This misperception is especially troublesome since many partners admitted they might not invest as much in developing female employees' career potential because they subscribed to the notion that "after the baby, they're gone."

JUST THE FACTS

Slightly more than half of all professional staff hired in the last three years by responding firms were males. Firms with 20 or fewer AICPA members hired a greater proportion of females (see exhibit 1 on page 80). These results are consistent with the annual AICPA Supply of Accounting Graduates and Demand for Accounting Recruits studies, which found that since the mid-1980s, more than half of the accounting graduates--and since the late 1980s, about half of public accounting entry-level hires--have been women. These results support the perception that gender parity seems solid at the entry level.

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In contrast, the women and family issues study found noticeable gender disparity at the top. The ranks of partners, principals, directors and senior managers were filled by a far greater percentage of men than women (see exhibit 2 on page 80). This finding is not surprising and has been discussed widely in the media and within the profession. Our discussion of turnover that follows addresses some of the underlying reasons for the disparity. The good news is that partner admissions as reported in the survey seemed to reflect an equitable gender distribution based on the proportion of males and females in the senior manager ranks from which partners are selected. Twenty-six percent of the partners admitted within the last three years have been women, which is the same as the proportion of female senior managers, directors and principals (see exhibit 3 on this page).

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Turnover patterns differed by firm size, so percentage results are shown in different categories (see exhibit 4 on this page). Also, in firms with 200 or fewer AICPA members, the senior, supervisor, manager and seniro manager ranks are grouped together since these firms are not necessarily consistent. Survey results found gender-related turnover differences were most noticeable in the senior-supervisor and manager ranks of the larger firms. As can be seen, although the percentage differences were not large--the greatest was 7 percentage points--larger firms experienced higher turnover of female employees at this career stage. The relatively small differences showed up in the cumulative effect on the percentages of male and female employees in upper ranks (see exhibit 5 on page 82). This finding illustrates why, although partner admissions might be equitable, turnover at the levels below partner left fewer women from which to select the best candidates to promote.

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The results for smaller firms are more difficult to interpret because they failed to show a pattern that explained the small percentage of women in top ranks. Although their data are not shown here, smaller firms reported minimal turnover differences between men and women in middle management levels. Why, then, were there so few women partners, shareholders, principals and directors in small firms? If middle management ranks are composed of fairly equal proportions of males and females and turnover rates are similar, it seems logical to expect that more women would hold these positions. The survey did not address criteria for partnership admission among smaller firms. The results may simply reflect that small firms do not mandate an "up or out" promotion policy, so employees stay at middle management ranks. The findings raise important questions that deserve further investigation.

The survey asked how many women in the responding firms had a child in the last three years and how many of them returned to work. In firms of all sizes, 89% of new mothers returned, a finding that is consistent with professionals' stated plans to return after childbirth in a 1990 survey by the AICPA management of an accounting practice division.

The survey results clearly suggest that women want to work after having a child. This is important news for firms that assume they have no control over retention of talented women employees who choose to have children. If women aren't leaving immediately after having a child, the profession and firms need to know more about whether the difficulty of balancing career and family is the cause of the disproportionate female turnover in the middle ranks. If it is, firms have an incentive to explore family-friendly policies that make women's returns successful and enable them to continue to be productive employees.

FIRM POLICIES

Firms took a variety of approaches to address the kinds of issues that affect women in the profession (see exhibit 6 at left). Very few had alternative partnership arrangements, which would include compensation and ownership agreements such as salary only, graduated benefits and part-time partnership. Slightly more firms had nonpartnership career paths that allowed employees to remain in the firm if they didn't advance to partnership. Many small firms don't have up-or-out policies, which effectively provide these career paths.

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A majority of firms reported firmwide maternity leave policies, although not necessarily in writing. Most also offered an employee who has had a child flexible work options that keep the employee on the partner career track. Decision mechanisms varied, and included formal and informal policies and case-by-case consideration.

Many firms had part- and flex-time options; most employees on part-time schedules were women. Fewer firms had other kinds of family-friendly policies, although it's important to remember that firms often offered options such as time off to care for a sick child or elderly parent on an individual basis without having a formal policy. Few firms had formal policies on other gender-related issues, and few planned to implement them in the future.

WHY IT MATTERS

Many managing partners in our discussion groups concluded that only time would smooth out the parity problems in the top ranks of CPA firms. The survey data showed that women in the lower ranks were more likely to leave than men and that this affected the percentage of women at the top. The data also suggest that additional time will not correct these problems. If equitable promotion patterns continue, there will continue to be a limited number of women in the highest ranks unless turnover at the lower levels is reduced.

Some may ask why disproportionate turnover among lower level women is a problem as long as there continue to be more candidates for upper management and partnership than there are positions available. To answer, we must look to expected labor force demographics and the changing business environment.

Half of all recruits into the profession are women; this trend is not expected to change dramatically. Among the female recruits will be many of the best and brightest whom the profession should retain. Further, based on current economic realities, most of these women will be in dual-career marriages and will have to cope with the demands of work and family. If the profession does not enable these women to balance their careers and personal lives, it may lose many talented employees.

The public accounting profession is experiencing significant changes. Among them is adapting to the ramifications of being a mature profession in which firms no longer are growing at the rates once taken for granted. CPAs are specializing to provide the expert levels of knowledge clients expect. These developments mean that in the future, CPA firm employees no longer will be easily interchangeable. There may not be a sufficient supply of adequately trained employees to replace those who leave. Those who are available may not possess the departing employee's specific expertise. In this environment, it will be important for CPA firms to retain employees who are critical to continuing client service. If half of new hires are women, it is logical to conclude that many of these critical employees will be women.

Another issue is changing attitudes in the labor force and the evolving CPA firm environment. Some of the discussion group managing partners believed younger employees of both sexes expected more balance in their lives and more flexibility on the job. If this is true, perhaps the workaholics should not be setting performance standards. There always will be workaholics, but if social attitudes are changing, there may not always be enough of them with specific expertise to fill all client service needs. Successful firms in the future may be those that choose a more flexible standard of employee performance.

Firms that have not yet considered the impact of turnover, organizational culture and firm policies need to do the kind of strategic planning that will prevent these issues from affecting future profitability. Yet even those that make the effort face challenges. Many people believe firms should offer a level playing field and allow employees to choose whether they want to play. Unfortunately, this will not stop talented people from leaving if they find it too difficult to fulfill family responsibilities while working in a traditional CPA firm environment. Another view is that "special treatment" is really just consideration of different individual circumstances. In other words, treating everyone fairly doesn't mean treating everyone the same. Creative and carefully constructed human resource policies can help achieve fair treatment. (See the resource list in the sidebar on page 85.)

PRACTITIONERS SPEAK OUT

Here are some of the comments made by practitioners in the survey conducted by the American Institute of CPAs women and family issues executive committee.

Equality

* "Each sex in any society carries its own burden or blessing. In determining what's fair, consideration must be given to such differences. Inevitably, fairness will not mean absolute and unconditional 'equality.'"

* "Gender issues are sorting themselves out through the sheer presence of talented and competitive women in the work force."

* "There is no issue involved! Each person makes his or her own commitment to the work, and gender does not enter into any hiring, promoting or firing decisions."

* "Male issues must be considered as important to employee satisfaction as female issues."

* "Both sexes should be treated equally with no special accommodations to either. Those willing to commit and sacrifice will become partners regardless of gender. Others will leave the profession."

* "We don't see why this is an issue, except for firms that have a long-term culture of essentially abusing their staffs. Our experience on a local level is that women and family discrimination matters are mostly a myth or blown out of proportion."

Family-friendly policies

* "In our firm, family is extremely important. Everyone is allowed the flexibility needed to deal with family issues, such as sick children and other emergencies. We don't make a big deal out of all this."

* "Instead of setting a lot of formal policies, we try to work with employees. If they help us out when needed, we'll help them out."

* "The only problem we have is when maternity leave occurs during tax season. This creates a hardship for the other employees."

* "We are a small local firm. When one of our staff had a child, we let her bring the child to work for a year. We also allow staff to bring children to work if they are sick and can't go to day care or if the parent is working late and can't get a baby sitter. This policy has been very favorably accepted by staff and clients."

* "This is a major issue for the future. We've struggled with it. The conflict is more between the different expectations of the older and younger generations than between sexes. I don't see any right answers and feel hopelessly caught between the generations. It's perceived as a battle between client service and personal desires. It's a major conflict area for us."

* "One issue we struggle with is how to advance a part-timer to keep her happy without angering the full-timers."

* "No one is penalized for having to stay home due to family illness. We have permanent part-time senior manager positions available for our professional part-time moms. We even provide occasional baby-sitting services for any staff member in an emergency."

* "We're open from 7 A.M. to 7 P.M. Professionals must fulfill required chargeable hours per week in any combination of work days."

* "We allow professionals to designate their desired schedules after the birth of a child. We then staff around the decision. Our only requirement is that they abide by their original decision since it's difficult to change our staffing later."

* "We plan to install computer modems for all employees who want them so they can work at home, especially in busy season."

* "We have part-time hours for one partner; his home computer is on the network, allowing him to work at home."

* "Why aren't we asking questions about productivity, flexibility, willingness to work with out-of-town clients? Our society seems to want to change the job to fit the people, not have people adapt to create a successful work environment."

* "I am interested in each employee's personal problems because they affect productivity."

WHAT FIRMS CAN DO

One thing is clear: These issues will not be resolved by an outside force. Individuals and firms can make a difference. They can begin by gathering information about retention and turnover of women within their own practices. If firm leaders contact former female employees and ask what they're doing and why they left, they probably will receive surprising and valuable insights. The next step is to consider how to change. Are there family-friendly policies that would make the firm a more enjoyable but just as productive place to work? Mentoring and leadership programs also help create change. The key is to nurture an attitude and culture that encourages flexibility.

EXECUTIVE SUMMARY

* SOME CPA FIRM managing partners thought the influx of women into the profession would solve problems of gender disparity in CPA firms, according to discussion groups that were part of a recent research study. They also believed that turnover among women was a result of personal choices and couldn't be affected by firm policy.

* THE SURVEY suggests that many of these beliefs are untrue. Eighty-nine percent of female practitioners returned after having a baby and yet gradual increments of greater turnover among female middle managers left fewer women available to promote to the higher ranks. Firm policies and culture may be able to influence whether talented female professionals remain on staff.

* CPA FIRMS NEED to retain employees who are critical to maintaining client service. If half of new hires are women, it is logical to conclude that many of these critical employees will be women.

* CREATIVE family-friendly policies can help. Firm leaders should determine what programs and approaches can make their practices more enjoyable but no less productive places to work.

WHERE TO TURN FOR HELP

The following resources are available to firms that want to learn more about policies that encourage women's advancement and about family-friently programs:

* The American Institute of CPAs resource database on women and family issues in the accounting work place, AICPA Library, 1211 Avenue of the Americas, New York, New York 10036-8775; (800) 862-4272 (or (212) 596-6025 if dialing from outside the United States). Established by the AICPA women and family issues executive committee, the database includes articles, reports, policies and other materials to assist firms and other employers of CPAs to implement programs on women and family issues.

* Catalyst, 250 Park Avenue South, New York, New York 10003-1459; (212) 777-8900. This research and advisory organization works with businesses to effect change for women. It offers conferences, publications, services and an information center (similar to the AICPA database) that contains articles, studies and other materials on women and family issues.

* The Families and Work Institute, 330 Seventh Avenue, New York, New York 10001; (212) 465-2044. This not-for-profit research and planning organization helps companies with work-family strategic planning. Many publications are available.

* Work and Family Clearinghouse, Women's Bureau, U.S. Department of Labor, Room S.3306, 200 Constitution Avenue, N.W., Washington, DC 20210; (800) 827-5335. The clearinghouse provides information on policies to help with employees' and their dependents' needs.

ABOUT THE SURVEY

In addition to conducting managing partner discussion groups, the American Institute of CPAs women and family issues committee mailed surveys asking about family-friendly policies and women's upward mobility to 5,300 firms of all sizes (except sole practitioners) across the country in December 1993. It received 1,710 responses, resulting in a 32% response rate. Ninety-four percent of the respondents were local firms, 5% were regional and 1% were national. Firms with 5 or fewer AICPA members made up 57% of respondents, 26% were from firms with 5 to 10 Institute members, 9% came from firms with 11 to 20 and 8% were from firms with over 20 AICPA members.

Survey on Women's Status and Work/Family Initiatives in Public Accounting is available from the AICPA order department; telephone (800) 862-4272 (ask for product no. 876800). Survey on Women's Status and Work/Family Initiatives in Public Accounting: Executive Summary--AICPA Research Findings (product no. 876799) also is available.
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Title Annotation:includes related article containing comments by CPAs on gender equality and family issues
Author:Cheramy, Shirley J.
Publication:Journal of Accountancy
Date:Oct 1, 1994
Words:3315
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