The accounting field confronts workplace diversity - data and reflections from Xerocon

After years of well-intentioned "diversity workshops," we now have something new and crucial: the data to make a business case for diversity (though more data is needed). But even with proof points, diversity initiatives get stuck. Leadership teams remain stagnant.

Gender pay discrepancy stories are ubiquitous. And the persistence of sexual harassment, in the tech field and elsewhere, is one of the year's biggest stories.

The business case for diversity - data points

These were some of the issues touched on by XeroCon 2017's diversity panel. The panel, facilitated by Amy Vetter, Chief Relationship Officer – Partner Channel, Xero Americas, coincided with the release of the 2017 CPA Firm Diversity & Inclusion Report, sponsored by Xero (get PDF report). The other panelists included Tariq Khan, Jina Etienne, and Carlos C. Lopez.

The report hits on the big picture before delving into the accounting profession. Some big picture data:

• A 2015 McKinsey report found that companies in the top quartile of racial and ethnic diversity were 35% more likely to have financial returns above the median for their industries; gender diversity delivered a 15% boost.
• The Conference Board found that companies with a “track record of continual innovation” were four times more likely than those with sporadic innovation to describe their companies as “highly inclusive.

Workplace diversity in accounting - new data

The Xero report draws data from the Accounting MOVE project report, which focuses on women in accounting. What we've learned is sobering. As per the report:

• Little has changed since 2010, when the Accounting MOVE Project launched. Then, whites comprised 83% of all employees. Ethnic diversity has vacillated a little through the decade, peaking in 2013, 2014 and 2015 with whites comprising 88% of employees.
• However, over the same period, partner ranks remained primarily Caucasian. In 2010, whites comprised 95% of partners, and that proportion increased to 97% in 2013, 2014, and 2015 before reverting back to 95% in 2016.
• In 2017, Caucasians represented 83% of all employees and 95% of all partners - that means there's a bit of progress here. The proportion of Caucasian staff has come down from 88 percent in 2013 to 83 percent in 2017. But with Caucasians comprising 89 percent of managers and 97 percent of partners and principals, that means overall "progress" is modest at best.

More data points:

• Fewer firms now offer affinity groups for women (21%) but more offer groups for African-Americans (71%); Hispanics (21%) and Asians (15%).
• Retirement transition is the fastest-growing ‘life situation’ affinity group, offered at 35% of firms, followed by working parents (18%) and disabled employees (15%).
• Only 3% of firms offer affinity groups for LGBTQ employees and only 6% for millennials.

Education is becoming more inclusive, but not necessarily hiring:

• Diversity is edging up in bachelor’s and master’s programs, hiring is not diversifying in lockstep. Asians and Pacific Islanders accounted for 16% of the latest crop of new hires; Hispanics, 7%; African-Americans, 4%; Native Americans, less than one percent; and whites, 70%..

As per the Bureau of Labor Statistics, accounting firms are behind the finance industry in general:

Shifting diversity from a problem to a solution

Yes, some of these stats are uninspiring, if not downright concerning. However, there are other areas where I see progress:

• There is a clearer understanding of how living an "open" (as opposed to closeted) identity at work can improve productivity.
• Expanding the discussion/practice of diversity beyond the gender, ethnic and sexual orientation categories can cross barriers of resistance. An expanded definition of diversity helps people to surface their own differences in ways that build empathy - and provoke new viewpoints.

These two points, executed properly, can change "inclusion" from an obligatory topic to an innovation sparker. From the Xero-sponsored report:

The essential difference is to pursue inclusion as a solution to problems—not as a problem to be solved, says panelist Jina Etienne, principal with EtiennePartners and former president and CEO of the National Association of Black Accountants, Inc. “When ‘diversity’ is the topic, people tend to think in terms of ‘them,’ and to define minority groups as an HR sub-group to problem-solve for,” says Etienne.

“The beauty of innovation as the framework is that it allows us—in fact almost requires us—to bring our unique selves as a core value. As a result, ‘diversity’ becomes an intuitive asset, and ‘inclusion’ is required to foster an innovative culture where everybody’s unique ideas, perspectives, and style both are celebrated and necessary to achieve the results we all want for our clients.”

The idea that we are more productive when we can be open at work is not fantasyland. As my colleague Jessica Twentyman recently wrote in GE Digital’s Deborah Sherry - why diversity and equality add up to productivity:

There’s an overwhelming body of evidence out there that shows that, when you’re able to bring your whole self to work and be open about who you are, you’re much more productive. For people to be successful in their jobs, they need to be themselves. Openness, happiness and output are strongly aligned - GE Digital's Deborah Sherry.

The Xero panelists hit on an important caveat: there is a big difference between hiring a diverse workforce and a genuinely inclusive culture. Etienne warned that without such a culture, well-intentioned hiring can fall flat. You'll have a retention problem.

The impact of bias can be difficult to root out

After the panel, I had a frank talk with Etienne. I asked her what she thought about the panel. She liked the mix of practical tips accountants could use, and honest stories - even if those stories might have been hard to share - or hear:

Amy sharing that story about having to sit in the room to be told not to say anything even though you are currently being disrespected... I'm surprised I didn't cry, actually. It's heartbreaking.

Some situations, however, are more nuanced. Getting over your own bias can be a subtle thing. Etienne used an example of a young woman of color who might go out to lunch with peers outside her largely-white organization to decompress. But does that hurt her when it comes time for a performance review, and another co-worker hired at the same time spent their lunches with team members and management, forging deeper on-site relationships?

One solution is mentoring from leaders who can bring you along - sometimes with a thoughtful nudge. Etienne:

When I was in the big eight, I used to go to lunch with some of the secretaries. My senior pulled me aside and said, "Don't do that." It was a very well-intentioned thing, because the pattern had nothing to do with race. It had to do with culture...  I think we all need to be mentored by somebody that doesn't look like us.

My take - panels are just a start

I'm always glad when a conference dedicates time for a panel like this. It's also good to hear that Xero's gender balance in executive roles is in the 50 percent range, much higher than the tech norm. Xero Americas President Keri Gohman had a high profile role in the keynotes, and I liked the dynamic between Gohman and Xero CEO Rod Drury. It came off like a partnership of mutual respect.

I'm not a big fan of the panel format. I suspect those who attended the panel got something out of it, but I prefer an interactive format that puts audience members into sharing and problem-solving mode. I'd like to see Xero expand this in future conferences to bring in a workgroup atmosphere, where small groups can brainstorm and report back with action steps for their practice - and the Xero community.

But at a time when we're reading about a potential workplace diversity backlash - not to mention the divisive political backdrop, with issues like immigration controls causing talent loss concerns - it's refreshing to see these topics discussed openly. Even if many of the problems are far from solved.