Generation Z is beginning to enter the workforce, bringing with it a demographic shift that will affect every facet of American society, including the accounting profession. Attracting and retaining these diverse young workers thus represents the next great challenge for firms. The authors discuss the intersection of diversity efforts with outreach to Generation Z, present the results of a survey of minority high school students’ attitudes toward the profession, and describe strategies for attracting and retaining this next generation of workers.
As the rate of change in both workforce diversity and global competition increases, organizations must stay competitive by attracting, cultivating, and retaining a new talent pool. According to a 2018 Pew Research Center study, Generation Z is more favorably disposed to racial and ethnic diversity than any prior generation (Kim Parker, Nikki Graf, and Ruth Igielnik, “Generation Z Looks a Lot Like Millennials on Key Social and Political Issues,” Jan. 17, 2019, http://tinyurl.com/y68h37eq). This article examines the importance of diversity in the accounting workforce, explains how a diverse Gen Z perceives the profession, and recommends specific approaches to attract this group to accounting. The latter two purposes are addressed, in part, by the results of a survey of minority high school students about their attitudes towards accounting.
Why Are Diversity and Gen Z Recruitment Important?
The accounting profession is in a unique position to capture Gen Z’s attention. Accountant and auditor jobs will experience a higher-than-average growth rate of 10%, or 139,900 jobs, from 2016 to 2026 (U.S. Department of Labor, Bureau of Labor Statistics, April 2019, http://tinyurl.com/yxmzc3vr). In addition, the U.S. Census Bureau reports that the country’s demographics will continue to change significantly as a result of future population projections; the population of non-Hispanic whites will decrease by approximately 9.6%, the Hispanic population will increase by 93.2%, the African-American population will increase by 40.6%, the Asian population will increase by 100.8%, and the population of those identifying as two or more races will increase by 196.9% (Jonathan Vespa, David M. Armstrong, and Lauren Medina, “Demographic Turning Points for the United States: Population Projections for 2020 to 2060,” March 2018, https://tinyurl.com/y6gg4ybf). This forecast reflects the expected increase in the composition of the future workforce, which will be found mostly in the rising generations. The increasing job demand in accounting, coupled with these projections, creates both opportunities and challenges for firms to attract diverse newcomers to accounting.
The accounting profession, like the rest of the global business world, will soon have four distinct generations in the workplace: baby boomers (those born between 1946 and 1964, as defined by the Pew Research Center), Generation X (1965 and 1980), millennials (1981 and 1996), and Generation Z (beginning in 1997, with no consensus as yet on an ending birth year). The result is a dynamic mix of ages and ethnic, racial, and cultural backgrounds. Although previous recruitment efforts have focused on millennials, it is now necessary to pay attention to Gen Z, who are beginning to enter the workforce. With the expected increased job growth noted above, it will be crucial for firms to attract and retain a diverse talent pool of accountants from Gen Z, including the traditionally underrepresented minorities who will represent a growing proportion of the workforce.
In addition to meeting staffing demands, CPA firms will benefit in other ways from a diverse Gen Z workforce. For example, diverse firms can attract more diverse candidates from a larger talent pool and grow their client base through diverse collaboration efforts (Lucinda Harper, “The Business Case for Diversity and Inclusion at CPA Firms,” Journal of Accountancy, May 9, 2016, https://tinyurl.com/y7xkylq4), which in turn increases firm revenues. In a 2018 Harvard Business Review article, “How and Where Diversity Drives Financial Performance,” Rocio Lorenzo and Martin Reeves provided results from a survey of more than 1,700 companies from eight different countries (http://tinyurl.com/y7nlbvec). They found a significant relationship between diversity and innovation; specifically, companies with greater diversity experienced a 19% increase in innovation revenues and a 9% increase in earnings before interest and taxes (EBIT).
The accounting profession has shown progress in embracing diversity and inclusion to capture today’s top talent. For example, some firms have implemented recruiting efforts of the Gen Z talent pool as early as high school (Jason L. Ackerman, “Recruiting and Retaining Talent: One Firm’s Story,” The CPA Journal, August 2016, http://tinyurl.com/y32fqxq9). Furthermore, in DiversityInc’s 2017 Top 50 list of the most diverse companies, the Big Four international accounting firms were all ranked (http://tinyurl.com/y4j7waoh). A Deloitte survey of more than 10,000 human resource and business professionals found that 69% of executives rated diversity and inclusion as an important issue (“2017 Deloitte Global Human Capital Trend: Rewriting the Rules for the Digital Age,” 2017, http://tinyurl.com/yxnbp4e4). These perceptions and efforts, along with the associated positive recognition, could later translate into increased innovation, higher revenues, greater firm value, and better brand recognition.
Understanding the perspective of Gen Z is key to attracting members of this cohort to the accounting profession. One way to better understand how this group feels about the profession is to survey them at the critical age when they are considering career options. The authors administered a survey to minority high school students that asked what they think about accounting. The students were e-mailed a link to an online survey that asked identical questions before and after showing them information on accounting careers from the AICPA website (https://tinyurl.com/yy3c43ag). The accounting career information was presented to them in narrative form within the survey as they clicked through the pages.
The students surveyed all attended a high school in a major U.S. metropolitan area with a large minority population. A total of 131 students completed the survey. The summary statistics of the sample population are listed below in Exhibits 1–4: class standing, gender, racial and ethnic background, and languages spoken at home. It is important to note that this sample is somewhat representative of the diverse Gen Z population.
Racial and Ethnic Background
Languages Spoken at Home
The survey posed the same two questions to the students before and after they were presented accounting career information taken from AICPA’s website. This information included career options for accounting in entertainment, technology, sports, government, nonprofit and education, criminal investigation, the environment, travel, food and fashion, and auditing. The two questions were—
- How much knowledge do you feel you have of accounting as a career choice?
- How likely is it that you would select accounting as a major in college?
Students rated their answers to the first question on a scale of 1 (no knowledge) to 5 (maximum knowledge), and to the second question on a scale from 1 (least likely) to 7 (most likely).
The average ratings of student responses to these two questions changed significantly after learning more about the profession. For the question, “How much knowledge do you have of accounting as a career choice?” the average rating before the students viewed the accounting career information was 2.21; after they viewed the information, the average rating increased to 3.14. Before students viewed the accounting career information, the average rating to the second question, “How likely is it that you would select accounting as a major in college?” was 2.62; after they viewed the information, students’ average rating increased to 3.81. A statistical analysis indicated that the difference in both questions’ responses before and after students being exposed to the accounting career information was significant (i.e., a meaningful difference exists).
Two limitations to the study are the low number of Asian and white participants and the high number of male respondents. That said, the sample ethnic makeup does accurately capture two growing demographics (i.e., Hispanic and African American) of the future Gen Z workforce. The study therefore successfully provides a diverse Gen Z’s perceptions about the profession, and these results can help firms both understand current viewpoints and examine ways to attract and retain the next generation of accountants. Future research can explore how various ethnic groups differ in how they perceive or are attracted to the profession.
Overall, absent relevant career information, this survey reflects only limited interest in accounting as a college major and career path for diverse Gen Z high school students, but markedly higher interest after those same students were provided accurate information about accounting careers. This suggests that the profession can and should be more proactive in reaching out to the diverse Gen Z.
Implications for the Profession
The survey results highlight the importance of doing more to attract this new talent pool to the profession. Providing accounting career information to diverse Gen Z high school and college students should increase their knowledge of the profession and, as a result, encourage more students to select accounting as their career choice. This in turn should allow firms to attract a more diverse Gen Z and thus realize many of the benefits associated with diversity. Related to this, the profession should continue to promote accounting as a progressive and inclusive work environment where diversity is both valued and rewarded.
As the profession becomes more diverse, a virtuous cycle is created through networking and word-of-mouth where additional diverse Gen Z prospects become more interested in selecting accounting as a college major and career. The accounting profession is now in a position to ensure that this group does not miss out on the opportunity to select a career that benefits new hires, individual firms, and the profession as a whole. Tim Ryan, U.S. Chairman of PricewaterhouseCoopers, has called for companies to create more inclusive environments and championed for a CEO action pledge encouraging executives to create and promote diversity and inclusion in their work-places (“PwC US Inspires More Than 300 CEOs to Commit to Advance Workplace D&I,” PwC website, http://tinyurl.com/yyulm29s).
Past and current efforts to reach diverse young people, although admirable, may not be enough to address scholarship gaps and cultural differences.
Current Strategies and Challenges
Strategies and resources related to attracting a diverse Gen Z exist. For example, the AICPA has created a strategic multifaceted approach to increase the number of future CPAs. The organization offers curriculum resources for professors and career counselors, (https://tinyurl.com/y54jk9eu), curriculum training for high school teachers (https://tinyurl.com/y2foor54), career advice for interested newcomers (https://tinyurl.com/y6pmqxj3), scholarships (https://tinyurl.com/y4q26cf4), and even an online mentoring program (https://tinyurl.com/y2q5efgn).
In addition, many CPA state societies are also actively promoting accounting as a career choice. For example, the NYSSCPA publishes NextGen, a professional development guide (https://tinyurl.com/y37keenk) where high school students, college recruiters, and guidance counselors can learn more about the accounting profession and career advice. Finally, accounting firms themselves have implemented various education projects to encourage students to choose accounting as a major and career. One example is PricewaterhouseCoopers, which launched its Earn Your Future initiative in 2012 to develop the financial skills of young people. So far, this initiative has reached over 3.5 million students and educators (https://tinyurl.com/y2l8k747).
Although there have been some great strides in formulating and implementing solutions to attract young people to the profession, several challenges persist. First, many scholarships are not large enough to cover the rising costs of tuition, fees, and books necessary for an undergraduate or graduate degree, or for CPA exam preparation. For many minority candidates, a significant financial burden remains even after scholarships are applied. Second, efforts to attract diverse high school students to accounting often require some initial interest to be effective. Without that interest at the outset, many of these students may not even make any effort to avail themselves of available resources.
For many minority candidates, a significant financial burden remains even after scholarships are applied.
Furthermore, there may be cultural differences or biases related to choosing other professions, such as engineering or medicine, over accounting, as well as perceived barriers of entry to the accounting profession in general. As an example, some cultures value humility, deference, and avoiding confrontation, which can create conflict for individuals from these cultures who may feel uncomfortable disagreeing with others or sharing personal achievements. This could be a challenge in public accounting, where professionals are often required to openly discuss contrary opinions and list career accomplishments to gain the respect of colleagues or to get promoted. These realities may discourage someone from such a cultural background from entering the profession. Past and current efforts to reach diverse young people, although admirable, may not be enough to address scholarship gaps and cultural differences. Therefore, additional outreach may be necessary.
Strategies to Attract a Diverse Gen Z
Based on the results of the survey and the challenges discussed above, the authors propose the following specific suggestions and strategies, which may help the accounting profession attract a diverse Gen Z:
- Know the business environment. Conduct an anonymous assessment survey of the business environment to establish a baseline from which to measure future progress. Retaining the services of outside consultants can provide transparency and an unbiased assessment of the work environment. When employers clearly understand their strengths and weaknesses as they relate to an engaging and inclusive work environment, they are in a much better position to make improvements.
- Understand the status on diversity within the firm. What are the thoughts about diversity and inclusion at the top? Are there blind spots and unconscious biases? It may help management identify any deficiencies by taking a quiz to discuss cultural intelligence (CQ), conducting an unconscious bias seminar, or reviewing cultural competency videos such as those produced by the Cultural Intelligence Center (http://tinyurl.com/yygl9ncv). Gen Z is a diverse group, so understanding one’s own cultural competency is a critical first step.
- Establish employee resource groups or a diversity and inclusion committee. Once the firm’s diversity status is understood, cultural barriers can be addressed by establishing employee resource groups, which can help with recruiting and retaining diverse employees. For example, Grant Thornton sponsors eight different business resource groups: African Americans, employees with diverse abilities, employees promoting equality, Latinos, millennials, pan-Asians, veterans, and women (http://tinyurl.com/y5v44vcq). Group members can share concerns and ways to successfully conquer cultural barriers and effectively work with people from different backgrounds. These groups are most successful when they have adequate funding, support from leadership, a formal charter, and mentoring available to employees from different backgrounds. A diversity and inclusion committee is also helpful; it should ensure that all members of various groups are mentored and their perspectives are valued. Diversity works best with inclusion.
- Brainstorm strategies for newcomers. According to Jodi Chavez, strategies like “returnships,” which focus on hiring people who are returning to the workforce after time away, and training opportunities such as job shadowing and internships are helpful in decreasing any implicit biases (“The Diversity and Inclusion Imperative for CPA Firms,” cpajournal.com, February 2019, http://tinyurl.com/yxvnpgsm). Furthermore, in order to eliminate or reduce biases and promote greater diversity and inclusion, she advocates that job interview requirements be the same for all candidates (i.e., conduct structured interviews). Hosting conversations with other companies within and outside the profession and conducting focus groups composed of diverse employees to brainstorm ideas to promote workplace diversity and inclusion are two additional approaches. Ultimately, other creative strategies may be needed.
- Increase presence at educational institutions and other events. Some examples include mentoring a student, speaking to college students at career fairs and in introductory accounting classes, working in conjunction with college recruiters to visit high schools, and inviting middle and high school students to visit academic departments and local CPA firms for social events. Furthermore, more accounting professionals (including minorities) can volunteer to present at career days at elementary, middle, secondary, and post-secondary schools to provide students with opportunities to get to know the profession. For example, firm owner Bambo Sonaike (https://www.cpa-service.com) speaks at schools at all levels “to contribute to the development of the next generation and invest in the future of the profession” (interview with authors). Meanwhile, accounting professionals are encouraged to collaborate with accounting educators to make those on-campus events more attractive and effective.
- Host a ‘day in the life’ event. Accounting firms can collaborate with high schools to give students the opportunity to shadow CPAs at work. This is a win-win situation; the students gain experiential learning and an increased awareness of career options, and employers benefit from the development of a potential future pipeline of talent.
- Establish scholarships to attract a diverse Gen Z to the profession. Scholarships can be quite effective in attracting, and potentially retaining, a more diverse Gen Z. Some approaches include funding and promoting a scholarship for minority high school students interested in accounting, offering more accounting undergraduate and graduate college students substantial scholarships, or donating money toward CPA exam preparation. This generation of students seeks to incur less student debt (Andrew Josuweit, “5 Reasons Generation Z Will Be ‘Generation Smart’ about College, Forbes, Mar. 21, 2018, https://tinyurl.com/y57m37be), and offering substantial scholarships to qualified students may enhance the attractiveness of the accounting major. Scholarships and accounting career information can be advertised in student and parent high school newsletters and offered by individuals, accounting firms and organizations, and accounting departments within colleges and universities.
- Highlight the intrinsic value of the profession to stakeholders. Most young people are unaware of the accounting profession’s focus on ethics and the tremendous value of the profession’s activities for multiple stakeholders. From chasing white-collar criminals using forensic accounting and providing cutting-edge data analytics to conducting audits of public companies and promoting greater financial literacy, CPAs are engaged in valuable work that benefits essentially everyone in a market economy. Gen Zers, like millennials, are highly interested in finding work that contributes to corporate social responsibility and the betterment of society (AJ Agrawal, “How to Use Social Responsibility to Appeal to Generation Z,” Forbes, Apr. 23, 2017, https://tinyurl.com/yxtjonsa). Minorities, often marginalized, may be even more passionate here. To attract these young people to accounting, the profession can make a more intentional and substantial effort to highlight the unique intrinsic value provided by accountants.
- Gain and strengthen trust between employee and employer. An EY study surveyed over 3,200 teenagers and identified equal opportunity for pay and promotion as the key factor to employees’ trust in their employers (http://tinyurl.com/y3k6p23m). CPA firms should periodically review their pay structures and promotion opportunities to ensure equality across the board.
- When in doubt, hire an expert. Consider hiring a diversity consultant to assist with infusing a diversity strategy into the organization. For example, Shelton J. Goode, CEO/president of Icarus Consulting (http://www.icarusconsult.net), consulted with the authors on the preparation of this article. Diversity and inclusion strategies can be critical to acquiring Gen Z talent.
Most young people are unaware of the accounting profession’s focus on ethics and the tremendous value of the profession’s activities for multiple stakeholders.
Gen Zers, like millennials, are highly interested in finding work that contributes to corporate social responsibility and the betterment of society.
Adapting to Survive
The survey results demonstrate that there is great potential to attract a diverse Gen Z to accounting; however, success depends in part on the profession. Adopting an open perspective and multiple strategies of diversity engagement is necessary to attract new talent, ensure future growth, and solidify succession planning. The accounting profession must adapt to engage, attract, and retain a diverse Gen Z in order to remain innovative and competitive in the dynamic global economy.