News and Announcements

Accounting Firms Face Significant Risk of Turnover by Women and Men of Color, According to Latest Catalyst Report

First Report in Series Focuses on Challenges Surrounding the Retention of People of Color

Approximately 50 percent of people of color in the accounting industry who were surveyed do not feel obligated to stay with their current firm, and nearly one-third of women of color in the study were at risk of leaving within the year, according to Retaining People of Color: What Accounting Firms Need to Know, being released today. This latest research is the first report in Catalyst’s Women of Color in Professional Services Series and provides context for the succeeding large-scale studies on women of color in professional services that Catalyst will release over the next two years. This report offers insights into the unique barriers facing women of color in the workplace and suggests action steps for senior leaders, human resources and diversity professionals, and managers to build awareness and more understanding regarding the experiences and perceptions of women and men of color.

The retention of top talent is particularly important to accounting firms. “To stay competitive, these firms can’t afford to train employees only to see many of their best and brightest leave to pursue other options,” said Ilene H. Lang, President of Catalyst. “Organizations that work to break down the ‘concrete ceiling’ that impedes the advancement of people of color will benefit by capitalizing on the full talent pool.”

In order to address why people of color are at risk of leaving accounting firms, this report examined key factors that “push” people of color, particularly women of color, out of their firms. One primary issue cited includes the imperfect execution of a firm’s commitment to diversity. The study found that there is a perceived disconnect between a firm’s commitment to diversity and the execution of the practices that support that commitment. This disconnect is clearly noticed by women and men of color, and it is clear that diversity policies aren’t filtering down to racial and ethnic minority groups as effectively as they should.

Other push factors include:

  • A lack of access to informal networks
  • Stereotyping/double-standards
  • A lack of development opportunities

Although employers have little impact on pull factors that lead individuals to leave organizations, such as offers of high-paying jobs at other firms, employers can help retain their workforce by focusing on the push factors that frequently stimulate employees to leave.

The study suggests the following actions steps:

  • Assess the work environment to determine the systemic and cultural factors that impede the progress of people of color
  • Examine your own opinions, assumptions, and behavior
  • Develop closer relationships with women and men of color by learning about their perspectives
  • Communicate and demonstrate your firm’s commitment to diversity
  • Hold managers accountable for retention and advancement of women and men of color

This study and Catalyst’s previous groundbreaking series, Women of Color in Corporate Management, support Catalyst’s mission to work with businesses and the professions to build inclusive environments and expand opportunities for women at work.

About this Study
This report is a collection of findings from survey and qualitative data. The survey targeted 300 women of color and 300 men of color, with equal representation from Asian, Latina/o, and African-American women and men. In terms of response rate, we exceeded our target for African-American and Latina/o representation. Unfortunately, there was low participation from Asian women and men. In this report, we present findings combined for African-Americans and Latinas/os, to represent women-of-color and men-of-color groups. In our subsequent reports we will expand on each racial/ethnic subgroup, including Asians, and examine their unique experiences and challenges in accounting firms. Survey data highlight career movement for women and men of color and provide insights into their current “job satisfaction” and “intent to leave” current job.

We also conducted exit interviews with former employees of a sub-sample of large accounting firms. The final sample included two men of color (both African-American) and three women of color (one Asian, one African-American, one Latina). In terms of level, the sample ranged from analyst to director/partner. To ensure perceptions and experiences of Asians are presented in this report, we conducted three Asian focus groups—two female and one male—with current Asian employees of large accounting firms. The final sample included 14 individuals, ten women and four men, ranging from the associate to the manager levels. Out of the ten women participants, four were “single/never married” and six were “married/living with partner.” In comparison, the male participants had an equal split—two were “single/never married” and two were “married/living with partner.” Interviews and focus groups depict the work environment in large accounting firms. Specifically, findings highlight the perceptions of women and men of color regarding their work environment, organizational commitment to diversity, and the barriers to advancement in large accounting firms.

About Catalyst
Founded in 1962, Catalyst is the leading nonprofit corporate membership research and advisory organization working globally with businesses and the professions to build inclusive environments and expand opportunities for women and business. With offices in New York, San Jose, Toronto, and Zug, and the support and confidence of more than 340 leading corporations, firms, business schools, and associations, Catalyst is connected to business and its changing needs and is the premier resource for information and data about women in the workplace. In addition, Catalyst honors exemplary business initiatives that promote women’s leadership with the annual Catalyst Award.