DEI Reversals at Accounting Firms Will Worsen Talent Pipelines

Accounting firms and companies across the US have rolled back diversity, equity, and inclusion initiatives and reporting since the presidential inauguration, with notable exceptions being EY and, to some extent, PwC.

The firms that are rescinding DEI are sending a clear message to the future generation of accountants and those currently employed: It was all for show and our values are flexible.

Those retreating would have been better off to never launch DEI-based programs if they weren’t committed and willing to defend them when times got tough. The stain of their removal will last long past the good press when they launched.

DEI in accounting doesn’t mean making racial preferences or hiring unqualified accountants. It means making a profession a place where those who aren’t white and male feel seen and included, especially when Black CPAs have made less than 3% of the partnership ranks and 5% of professional staffs.

It means looking for new accountants in places where firms haven’t historically focused or recruited—such as majority Black and Latino high schools and community colleges—and offering mentors who look like them.

DEI means helping minority accountants feel like they have a seat at the table and giving each employee a fair shot at success. Accounting firms need students today more than students need them. DEI practices allow firms to find students they may otherwise miss.

Surveys have shown, and leaders in the industry routinely say, the accounting profession has an image problem that is hurting the pipeline. I would agree. But the image problem is way bigger than the critique that it’s boring.

It’s that the profession doesn’t offer a welcoming place for everyone. All firms should aim to be more inclusive and make their offices, firms, and practice lines more welcoming by offering mentoring opportunities, unconscious bias training, transparency in their demographic trends, and diversifying the talent pipeline, among other initiatives. It’s how we recruit and retain the best accountants.

Ending diversity efforts likely will have a marginal impact on retention and recruitment strictly because the percentage of minority accountants is already low—the numbers don’t have much farther to fall. Accounting has lagged other white-collar professions such as law and medicine in Black representation at almost all ranks. Phasing out diversity initiatives could worsen that standing.

In an industry that prides itself on diversity, equity, and inclusion, retreating from related initiatives seems to reflect a retreat from those principles. Changing values due to outside pressure doesn’t represent integrity, and neither does the lack of explanation for doing so.

If the firms no longer value DEI, they should say so. If they are changing their core values due to political pressure, they should admit that, too. Anyone can do what’s right when times are easy. The accounting profession instills in staff that integrity is doing what’s right when the situation is difficult, as it is now.

The scale of the DEI retreat is disconcerting. It’s one thing to end a program that may not be able to withstand scrutiny after the ruling in Students for Fair Admissions v. Harvard. But firms should defend the practices that can be defended. Many have instead gone to the extreme and removed any reference to DEI and related reports on such factors from their websites.

If killing these efforts reduces diversity in the pipeline, we likely won’t have the data to know.

Students, current firm employees, and job seekers should follow their conscience and vote with their feet. If a firm doesn’t appear to value them as an individual, they shouldn’t intern or work there. There are plenty of others, such as PwC and EY, still sticking to their values and standing up for the accountants who feel included because of DEI initiatives.

The firms that stand by their initiatives despite pressure are poised to benefit most from the diverse and inclusive workforce all firms once said they sought to provide.

My students are watching. The next generation of accountants are watching. And it doesn’t seem likely they will like what they see. Firms shouldn’t be surprised if the field’s brightest prospects vote their displeasure by choosing another career path—they would only have themselves to blame.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jack Castonguay is a CPA, associate professor of accounting at Hofstra University, and vice president of content development at KnowFully Learning Group.

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