Lack of diversity at tax and accounting companies is hurting their ability to recruit and retain a diversified workforce, tax professionals told Bloomberg Tax.
A recent Deloitte survey of more than 10,000 millennials across the globe indicated that diversity and inclusion are important to attracting and keeping millennials and Gen Z happy at work.
“Millennials and Gen Z respondents believe most business leaders, rhetoric notwithstanding, are not truly committed to creating inclusive cultures,” the survey said.
Karen Hawkins, chair of the American Bar Association Section of Taxation, said diversity has come a long way since she attended her first tax section meeting in 1981. Existing diversity policies have been updated, but Hawkins says the field still has a long way to go.
Diversity is about creating an environment where people of every background can thrive, said Cristina Hernandez, vice president of client relations at Verna Myers Consulting Group LLC in Baltimore, Md. "If you have a diverse pool, you're going to have a more talented pool," she said.
Tax professionals agree that diversity boosts business.
"Whether it's revenue, coming up with better solutions, coming up with more creative ideas, or broadening the pool of candidates, organizations are increasingly recognizing that diversity and inclusion is a critical 'must have,' not a 'nice to have,'" said Roy Weathers, vice chairman and U.S. tax leader at PricewaterhouseCoopers LLP in New York.
But how does one create this idyllic environment? Bloomberg Tax talked to several practitioners, students, professors, and diversity consultants to come up with three best practices for creating a diverse and inclusive workplace environment.
Diversity in the field of tax goes beyond appearing diverse for the company photo. For many tax professionals, diversity centers on embracing the differences in backgrounds and perspectives.
“Tax is really complicated, and solving client’s problems requires a lot of creative thought and we find that tackling this with a lot of creative minds is helpful,” said Kate Barton, Ernst & Young LLP global vice chair, tax services-elect, and vice chair of tax services at EY Americas.
Clients also want to see diversity throughout the firm they hire.
"Clients want to see themselves in the people with whom they seek legal advice," said Caroline Ciraolo, a partner with Kostelanetz & Fink LLP in Washington and a former acting assistant attorney general of the Department of Justice Tax Division.
This can be good for business. A 2015 report by McKinsey & Co. examining diversity in the workplace found that “companies in the top quartile of racial/ethnic diversity were 35 percent more likely to have financial returns above their national industry median.”
"If you effectively leverage differences, you drive innovation, create a sense of belonging and inclusion, and deliver different perspectives and approaches to clients and consumers," said Kim Goings, talent leader for EY’s National Tax Department in Washington.
Reginald Lamar Streater experienced this as a summer associate at Archer & Greiner, P.C. in Philadelphia. The third-year law student from Temple University’s Beasley School of Law in Philadelphia said that his diversity was leveraged when asked for his perspectives on issues of race. He said also appreciated everyone's acceptance of his dreadlocks.
“No one’s ever come to me and said, ‘cut your hair’ or ‘you look crazy.’ It’s almost like they want my diversity," Streater said.
Practitioners told Bloomberg Tax that despite wanting to hire more diverse employees, they encounter a pipeline issue—meaning there aren’t enough minority candidates to hire.
Professors said it’s important to expose students at a young age to the fields of tax and accounting to combat the common misperception that tax is often associated with the rich and white.
One way to do this is by providing panels with diverse professionals who can help break down barriers and talk to students about opportunities in the field.
Recruiters should go to schools with larger minority populations instead of going to the best schools that don’t have high numbers of minorities, said Juan Vasquez Jr., a shareholder and co-chair for the tax controversy section at Chamberlain, Hrdlicka, White, Williams & Aughtry in Houston.
"A very important part of the pipeline is having diverse leaders out there and continuing to advance the cause and open the door for the next generation of all attorneys, including diverse attorneys," Vasquez said.
Diverse candidates expect people like themselves to be represented in the companies where they seek employment, starting with the interview process. Otherwise, it may appear that the company isn’t promoting a diverse and inclusive work culture, said Sharon Jones, CEO of Jones Diversity Inc. in Chicago.
Companies looking to hire a diverse workforce should revamp their hiring practices to include diverse panels to interview candidates and provide unconscious-bias training for managers, tax professionals said.
While many firms are making significant efforts in recruitment, retention continues to lag.
For diverse employees starting out, not seeing diverse people throughout the company and in management positions indicates the company isn’t promoting a diverse and inclusive work culture, Jones said.
"If there aren’t other diverse faces and mentors and people who've come from similar backgrounds, it makes it very difficult for the new young law student coming out," Vasquez said. "They get disenchanted, they will start looking around year two for better opportunities. It's a very unfortunate but continuous cycle."
Vasquez also pointed out that people with working-class parents may not be as prepared to enter the corporate environment. This includes networking, getting clients, and even navigating everyday interactions within a corporation. New diverse employees need mentorship and sponsorship to help them acclimate and thrive professionally.
"It's important that companies look beyond that initial entry step and staying close to them and marching them along," Vasquez said.
It takes a lot to create a truly diverse and inclusive environment apart from mandatory training, sponsorship, and mentorship for new diverse employees, Jones said.
“D&I can be challenging to execute because it is not always easy or comfortable to be part of diverse teams," Goings said.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)