Considerable research has identified work engagement as a critical factor in retaining employees. The rationale for this relationship is rather intuitive: employees who feel mentally and emotionally connected to the work they do are less likely to voluntarily leave their current firms in search of alternative, external employment opportunities. Nevertheless, the fact that high levels of turnover continue to plague public accounting suggests that additional research is needed to articulate the firm’s role in cultivating an engaged workforce. To this end, Johnson and Pike (2018) recently presented a unique perspective that identified value congruence as an important component of work engagement and ultimately retention (Steven Johnson and Byron Pike, “Employee Retention: The State of Engagement in Public Accounting Firms and Why It Matters,” The CPA Journal, December 2018). “Value congruence” is a term commonly used in research to quantify how well employees’ values correspond to the values found in their work environment. Although recent evidence suggests that value congruence may be a missing ingredient in managing employee retention, most employee surveys and academic studies involving turnover have largely overlooked its importance, and therefore questions remain. For example:
- Do certain values have a stronger impact on retention?
- How do firms integrate values into their retention strategies to shape the values of existing employees?
This article seeks to provide insight into these questions. Survey data collected from nearly 400 employees across 19 regional public accounting firms reveals that value congruence significantly contributes to employees’ intentions to leave, but only when specific combinations of values are shared between the employee and firm. Specific values that firms cannot afford to overlook are identified below. In addition to recruiting for these specific values, the authors discuss ways that firms can increase value congruence among existing employees across these key values.
The Importance of Values
Value congruence is paramount to understanding turnover because values provide the foundation for the employee-CPA firm relationship. Traditionally, value congruence has been measured in a way that does not take into account which specific values are shared between the two parties. For example, employees are often asked a single question to assess their overall value congruence in a very general sense (i.e., on a scale of 1 through 5, to which extent do your personal values align with your firm’s values?). Although such a generalized approach has enabled researchers and employers to recognize the importance of value congruence, it is equally important to articulate the composition of what is shared (Lauren Rich, James Rich, and Joe Hair, “The Influence of Organizational Culture on How We Define and Pursue Goals: The Value of Regulatory Focus,” Journal of Organizational Effectiveness: People and Performance 5, no. 3, 2018, 259–277). Although employees and employers may align across any combination of values, some values are inherently more central than others to a given company or industry. Yet, research to date has not identified which values are crucial to maintaining stable, long-term employee-employer relationships in public accounting.
To investigate the influence of value congruency on turnover, the authors analyzed survey data from 396 employees in 19 regional public accounting firms across the United States. Most of the participants were junior-level accountants working in either the tax department (48%) or audit department (42%). In addition, 100% of participants held bachelor’s degrees, 51% held advanced degrees, and 50% were licensed CPAs.
Value congruence was assessed across seven distinct dimensions: innovation, outcome orientation, aggressiveness, attention to detail, stability, respect for people, and team orientation. To measure value congruence for each dimension, the authors adapted a subset of value statements that originated from the Organizational Culture Profile (Charles O’Reilly, Jennifer Chatman, and David Caldwell, “People and Organizational Culture: A Profile Comparison Approach to Assessing Person-organization Fit,” Academy of Management Journal, vol. 34, no. 3, 1991, pp. 487–516) and was recently confirmed to be reliable and valid measures for the seven dimensions of interest (Lauren Rich, James Rich, and Joe Hair, “The Influence of Organizational Culture on How We Define and Pursue Goals: The Value of Regulatory Focus,” Journal of Organizational Effectiveness: People and Performance, vol. 5, no. 3, 2018, pp. 259–277).
Turnover intentions were measured by four items adapted from an established scale (Brian Rutherford, Jung Kun Park, and Sang-Lin Han, “Increasing Job Performance and Decreasing Salesperson Propensity to Leave: An Examination of an Asian Sales Force,” Journal of Personal Selling & Sales Management, vol. 31, no. 2, 2011, pp.171–183). Exhibit 1 lists the items used to measure the seven dimensions of value congruence and turnover intentions.
Items Used to Measure Value Congruence and Intentions to Leave
Do Certain Values Have a Stronger Impact on Retention?
Regression analysis indicates that some values, when shared between an employee and a CPA firm, have a meaningful impact on reducing employees’ intentions to leave (turnover). To this point, turnover intentions were significantly lower for employees who exhibited higher levels of value congruence—but only when the values shared were attributed to attention to detail or outcome orientation. The dimension of value congruence representing attention to detail contributed to a 14.5% reduction in turnover intentions, whereas value congruence relating to outcome orientation contributed to a 15.7% decrease in turnover intentions. Moreover, the lowest turnover intentions were observed by those employees who exhibited value congruence across both attention to detail and outcome orientation; specifically, this combination of congruence predicted an additional 19.8% reduction in turnover intentions than either dimension independently. In contrast, shared values across the other five dimensions—innovation, aggressiveness, stability, respect for people, and team orientation—were not found to have a significant influence on employees’ intentions to leave.
Considering the fundamental nature and purpose of public accounting, it is not surprising that outcome orientation and attention to detail emerged as the most salient dimensions for predicting turnover intentions. Outcome-oriented cultures emphasize values such as being results oriented and having high performance expectations. On the other hand, detail-oriented cultures accentuate distinct values, including being highly organized, paying attention to detail, and emphasizing quality. A CPA firm emphasizing both outcome orientation and attention to detail is likely to not only set high performance expectations in terms of output volume but also expect high levels of organization, quality, and accuracy. Above all, it is the combination of outcome orientation and attention to detail that are important within public accounting, not only to foster firm vitality but also to reduce voluntary turnover.
Now more than ever, public accounting firms are striving to break away from the profession’s traditional stereotypes by cultivating unique brand identities and offering competitive compensation packages with many attractive perks, including unlimited paid time off, floating holidays, and child care benefits. Although uniqueness is appreciated by job seekers, especially those of younger generations, this study provides evidence that firms should not rely exclusively on “bells and whistles” to recruit and retain employees. Generally speaking, an employee who fits with the firm’s cultural values should be significantly easier (and less expensive) to engage and ultimately retain. Thus, accounting firms should strive to recruit candidates who inherently value both outcome orientation and attention to detail.
How Do Firms Integrate Values into their Retention Strategies to Shape the Values of Existing Employees?
CPA firms should expect to benefit over time from recruiting employees who are inherently outcome- and detail-oriented, but the profession must also focus on retaining its existing work-force—even employees who do not currently express congruent values. The current findings indicate that only 37% of junior-level accountants exhibited strong value preferences toward both outcome orientation and attention to detail. Although this particular combination of values may not be inherently common among individuals entering the workforce, research has shown that employees’ values are relatively malleable during at least their first year of employment (Jennifer Chatman, “Matching People and Organizations: Selection and Socialization in Public Accounting Firms,” Administrative Quarterly, vol. 36, no. 1, 1991, pp. 459-484). During the initial period of employment, new employees look for organizational cues to cognitively restructure their own values—a process referred to as “value internalization” (Timothy Fogerty, Alan Reinstein, Rebekah Heath, and David Sinason, “Why Mentoring Does Not Always Reduce Turnover: The Intervening Roles of Value Congruence, Organizational Knowledge and Supervisory Satisfaction,” Advances in Accounting, vol. 38, 2017; pp. 63-74).
Effective mentorship programs have the potential to contribute substantially to the value internalization process, and most public accounting firms have invested heavily in these programs with hopes of reducing turnover among junior-level employees. Indeed, 81% of non-Big Four firms have implemented formal mentoring programs (Inside Public Accounting National Benchmarking Report, Platt Consulting Group, 2020). Despite the popularity of mentoring programs, mentoring does not always produce the intended benefits. Although the AICPA announced in 2007 that mentoring programs improve employee retention in public accounting firms, a substantial amount of data also supports that mentoring programs are ineffective or even counterproductive when it comes to reducing employee turnover (Matthew Hall and David Smith, “Mentoring and Turnover Intentions in Public Accounting Firms: A Research Note,” Accounting, Organizations and Society, vol. 34, no. 6-7, 2009, 695-704). Such contradictory findings reveal that it is not the mere establishment of a mentoring relationship that reduces turnover, but rather specific characteristics and criteria that allow mentoring programs to reduce turnover when they are present (Timothy Fogerty, Alan Reinstein, Rebekah Heath, and David Sinason, “Why Mentoring Does Not Always Reduce Turnover: The Intervening Roles of Value Congruence, Organizational Knowledge and Supervisory Satisfaction,” Advances in Accounting, vol. 38, 2017, pp. 63–74). Ultimately, Fogerty et al. demonstrate that mentoring programs are most effective when mentors focus on promoting value congruence between mentees and their firms; in other words, mentors have the ability to influence the value internalization process by connecting a firm’s general values with more concrete, meaningful cues within each mentee’s immediate work environment. By doing so, mentors help align mentees’ efforts with firm goals; in turn, mentored employees are able to associate more meaning to their individual contributions as they understand how their work contributes to the firm’s overall goals. Although there are opportunities for employees to learn about their firm’s values apart from being formally mentored, a strong mentoring program is likely what makes the difference between employees knowing their firm values and internalizing those values.
Based on the current findings, mentoring programs are likely to have the strongest impact on reducing turnover when mentors promote values associated with outcome orientation and attention to detail. To this end, mentors should not only explain how the firm operationalizes these critical values; they must also help mentees define their individual goals and articulate goal-seeking strategies in a way that expresses both outcome orientation and attention to detail.
The current research highlights the critical role that values play in retaining employees. The two questions at issue highlight how CPA firms can retain junior staff members more effectively by incorporating key values into their recruiting and mentoring activities.
First, do certain values have a stronger impact on retention? Yes, only specific combinations of shared values were found to have a meaningful impact on the turnover intentions of junior staff members. The lowest turnover intentions were observed by those employees who exhibited value congruence across both attention to detail and outcome orientation. In contrast, shared values across the other five dimensions studied—innovation, aggressiveness, stability, respect for people, team orientation—were not found to have a significant influence on employees’ intentions to leave. As a recommended application, public accounting firms should strive to recruit candidates who inherently value both outcome orientation and attention to detail.
Second, how do firms integrate values into their retention strategies to shape the values of existing employees? Answering this question is critical, because the winning combination of values (i.e., outcome orientation and attention to detail) is not likely to be common among individuals entering the work-force. Notably, mentoring programs have the potential to re-shape mentees’ values during the initial period of employment. Thus, mentoring programs should emphasize values that reflect outcome orientation and attention to detail.