Toward an Equal Future
| EXECUTIVE SUMMARY |
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| MARY S. DOUCET, CPA, PhD, CIA, is professor of accounting, California State University, Bakersfield, and a member of the WFIEC. KAREN L. HOOKS, CPA, PhD, is the director of the School of Accounting and the PricewaterhouseCoopers Practice Issues Research Professor at Florida Atlantic University, Fort Lauderdale, and former chairwoman of the WFIEC. | |
oday, it is hard to picture any accounting manager being complacent about valued employees—male or female—deciding to leave because the work environment denies them growth opportunities. Firms have become more flexible and have empowered employees to manage the way they mesh their careers and personal lives. This empowerment and cooperation constitute an important tool firms use to retain both men and women. But in 1993—when the AICPA women and family issues executive committee (WFIEC) released the results of its first survey on women in the profession—many already considered the topic pass. Accounting managers said that “women in business” was yesterday’s issue. Managers suggested that they had done everything possible to assist women employees’ career growth. Many believed that job turnover for women was a result of their personal choices and therefore not part of a firm’s realm of responsibility or influence. Four years later, a follow-up survey took another look that demonstrated that more needed to be done—flexible work arrangements, for example.
TAKING SHAPE
So what has happened in firms, and how are changes reflected in the new patterns of women in public accounting, according to the WFIEC? The rapid advances in technology have driven many attitude and culture changes. Technology helps people work from their homes and cars and many other locations.
In addition to empowering workers, firms now try to enhance their reputations as desirable places to work. They compete to win awards for advancing women or for becoming the most family-friendly places to work. Firms 
What is the status of women CPAs in this current professional environment? What percentage of positions do they hold in public accounting firms? How does it compare with percentages reported when we first took stock in 1993? What do the turnover trends look like? And how have firm policies changed in recent years? Answer: Overall, we see slow but steady progress for women CPAs.
GROWING PAINS
The WFIEC survey project established baseline data in 1993 on the representation of women within professional services firms. It also addressed flexible work arrangements and family-friendly policies. The information here is based on responses from firms in 1993 and 1997. The data, updated in 1997, can be updated periodically to monitor women’s workplace issues. (See “Facts and Myths about Women CPAs,” JofA, Oct.94, page 79, for more on the 1993 survey.)
The survey looked at firms of all sizes. However, it is important to remember that promotion, turnover and family-friendly policies differ fundamentally in big and small firms. For example, large firms have traditionally used an “up-or-out” philosophy. Although this may be changing, up-or-out is still the norm and still forces many people’s large-firm career paths into reasonably predictable time patterns. Career paths in large firms are more predictable and comparable across firms than career paths of people in smaller firms, where promotion paths are less rigid and do not necessarily correlate closely with an individual’s years of experience.
Large firms also have noticeably shifted to hiring a greater number of experienced, rather than entry-level, professionals. This may cause even the large firm results to be less comparable, because there is now a greater emphasis to promote based on demonstrated competencies rather than on time spent at a particular level.
TOP RANKS
Men still outnumber women in the top ranks of CPA firms (see exhibit 1,above). The good news is that the disparity is not as great as it was in 1993. For all the top categories reported—partner, principal, director and senior manager—the ratio of women to men shows an increase in the percentage of women. It is important to remember that as a result of historical patterns the pool at the very 
The number of female promotions to top ranks between 1993 and 1997 was not good news (see exhibit 2, right); overall, the 1997 percentage dropped from 1993 figures. This outcome was consistent across partner, principal, director and senior manager categories. One of the most troubling aspects of this may be that although the firms reported that women compose 32% of senior managers, in reality women were only 19%, 20% and 24% of the additions to the partner, principal and director ranks, respectively. There could be several explanations for this: One might be that firms are disproportionately promoting men from the senior manager group to higher ranks—a troubling occurrence if it indicates a “glass ceiling” just below the entrance to top management ranks.
An alternative scenario may be that in the 1993 to 1997 period the practice of hiring experienced people into top ranks from the outside included a disproportionate number of men. If so, this raises questions about the availability of females in the pool of outside experts. If experienced outside hires are causing the observed difference, is it because more expert men than women are available? Are men simply hired more frequently than women are, or are more women than men leaving public accounting for positions in industry? Another possibility is that we are seeing a timing or sampling aberration that will eventually adjust. This pattern is a red flag indicating a need for ongoing scrutiny.
Exhibit 3: Percentage of Average Annual Turnover
| 1997 Survey | Fewer Than 21 Men | Fewer Than 21 Women | 21-200 Men | 21-200 Women | More Than 200 Men | More Than 200 Women |
| Partners, directors, principals, shareholders | 2% | 2% | 3% | 3% | 5% | 4% |
| Senior managers | 11 | 10 | 10 | 11 | 19 | 17 |
| Managers | 14 | 16 | ||||
| Supervisors, seniors | 22 | 26 | ||||
| Staff | 15 | 14 | 7 | 9 | 17 | 17 |
| 1993 Survey | Fewer Than 21 Men | Fewer Than 21 Women | 21-200 Men | 21-200 Women | More Than 200 Men | More Than 200 Women |
| Partners, directors, principals, shareholders | 2% | 3% | 3% | 2% | 7% | 7% |
| Senior managers | 10 | 10 | 10 | 12 | 24 | 24 |
| Managers | 24 | 26 | ||||
| Supervisors, seniors | 34 | 41 | ||||
| Staff | 15 | 16 | 14 | 15 | 22 | 23 |
| About the Survey WFIEC mailed surveys to 5,300 firms of all sizes (except for sole practitioners) and received 795 responses. Approximately 96% of respondents were local firms, 4% were regional firms and less that 1% were national. Firms with fewer than 5 AICPA members made up 65% of all respondents; firms with 5 to 10 members made up 25%; firms with 11 to 20 members made up 7%; and 2% of respondents had 20 or more members. |
LOWER TIER TURNOVERS
Turnover patterns differed by firm size in 1997 (see exhibit 3, above). Within the largest firms the pattern of turnover among the different levels relative to each other did not change much, and the pattern of turnover based on sex did not change much. Overall turnover—at all levels and for men and women—went down. This same reduction is visible at the staff level of firms in the middle-size category.
The gap between male and female turnover closed within the large firms at the supervisor/senior and manager ranks. At the senior manager rank, turnover of women was actually lower than that of men. If the direction of these percentages becomes a trend, the absolute number and percentage of the pool of women at each rank will increase. The impact already shows up in the 1997 information that reveals women make up 32% of the senior manager pool, a rise from 26% in 1993.
It appeared women’s low representation in the senior manager pool was the chief factor limiting women’s growth at the partnership level in 1993. With female turnover reduced in 1997, it is reasonable to expect that women’s representation in the senior manager pool will continue to grow, and their representation as new partners should increase. The ratio of women to men in the senior manager pool and their respective partner admissions will be the critical statistic to monitor in the near future.
The big picture on women’s status is perhaps best seen when comparing the 1993 and 1997 results of women CPAs at various ranks (see exhibit 4, below). Although at one time the profession focused on attracting women, in recent years it has shifted to retaining women and supporting their upward movement. The sex dispersion at the staff level continues to hover at close to a 50-50 split, except for the smallest firms, which have greater representation of women at the staff level. Attracting women to the profession no longer seems to be a big problem.
The profession’s effort of supporting women’s movement to upper ranks is modest but shows progress. A comparison of 1997 and 1993 surveys shows women in the top three ranks have increased by 5%, 2% and 3% (exhibit 3). Perhaps the demographics of partner- and near-partner-level entrants from outside expert labor pools would be an interesting topic for future research.
Exhibit 4: Percentage of Women/Men in Each Employment Level
| 1997 Survey | Fewer Than 21 Men | Fewer Than 21 Women | 21-200 Men | 21-200 Women | More Than 200 Men | More Than 200 Women |
| Partners, directors, principals, shareholders | 80 % | 20 % | 91 % | 9 % | 91 % | 9 % |
| Senior managers | 49 | 51 | 58 | 42 | 74 | 26 |
| Managers | 66 | 34 | ||||
| Supervisors, seniors | 58 | 42 | ||||
| Staff | 40 | 60 | 51 | 49 | 52 | 48 |
| 1993 Survey | Fewer Than 21 Men | Fewer Than 21 Women | 21-200 Men | 21-200 Women | More Than 200 Men | More Than 200 Women |
| Partners, directors, principals, shareholders | 85 % | 15 % | 93 % | 7 % | 94 % | 6 % |
| Senior managers | 52 | 48 | 58 | 42 | 79 | 21 |
| Managers | 69 | 31 | ||||
| Supervisors, seniors | 57 | 43 | ||||
| Staff | 43 | 57 | 50 | 50 | 53 | 47 |
FAMILY ISSUES
The 1993 survey asked how many women in the responding firms had had a child in the last three years and how many of those women had returned to work. Firms reported that 89% of new mothers returned. The percentage of new mothers returning did not change in the years between the surveys, but their returning work schedules did change (see exhibit 5, below). The percentage of mothers who reported returning to work on a part-time schedule increased from 27% to 38% while those who reported returning full-time decreased from 62% to 51% in our more recent study.
Why the changes? Firms might be doing a better job of capturing the information. At one time, firms often did not include in their count of part-time employees those women who returned on a part-time basis and eventually switched to full-time. However, if the change captured by the 1997 survey is real, it may indicate firms’ greater flexibility. Alternatively, attitudes within the work environment may have become more tolerant, leading to a greater percentage of new mothers asking for part-time schedules. More mothers may be better able to manage work and personal responsibilities and choose to stay in their career positions.
FIRM ATTITUDES
One word describes the change in firm policies on flexibility and support for employees: more. A greater percentage of firms offer all the flexible work options included in the survey (see exhibit 6, below). In the 1997 survey, 69% of firms reported offering flex time and part-time, and 50% offered special summer schedules. 
Policies vary according to firm size. As in other large organizations, large partnerships employing many people have a greater need for uniform standards to ensure that benefits are consistent throughout the firm. Consistent application is probably easier to accomplish in a small organization, even without formal written policies. Although large firms can tailor their policies to the individual circumstances, they do not have the luxury that smaller firms may have: creating a policy for each circumstance that arises.
A formal policy may mean all employees are treated the same, with little or no regard for individual circumstances. Without a uniform policy, the individual employee is vulnerable to the personal attitude of a supervisor and the employee’s ability to negotiate the deal. Anecdotal evidence indicates supervisor support to be the most important factor for successful implementation of family-friendly policies. We do not know whether having a written uniform policy helps in the face of an unsupportive superior; perhaps a formal policy governing supervisor support would help.
In firms without formal policies, employees may be afraid to ask for changes, and supervisors may not know what is appropriate to offer. If some employees negotiate a family-friendly arrangement, others may be bolder about asking for an arrangement themselves. However, if no one in the work environment is using such an arrangement, employees do not receive a strong positive signal and formal policies may be necessary.
WHERE NEXT?
Women within professional services firms are making progress, but at a slower pace than many hoped for. However, firms are growing and the need for experienced professionals is great. Firms are structuring compensation packages competitively as a consequence.
In this market, with CPAs switching from firm to firm—perhaps going to the highest bidder—the frequency with which firms hire experienced people increases. While such a free agent market may result in some instability for firms and professionals, it may also create opportunities for people to move up. For professionals who feel a lack of opportunity at their current firm, the increased mobility of this market could provide more chances for career growth. Although the possibility of losing experienced professionals is a concern for the firms, 
Another consideration is demographic trends and the behaviors that are characteristic of different generations. Workers—particularly younger ones—expect options in their personal and career paths as they deal with challenges such as the tradeoff between parenting goals and career opportunities and balancing a personal life with a job’s travel demands.
So what can firms do? They should move away from the “up-or-out” scenario. If women have more options, they may make it to partner level more consistently. Firms should continue to hire experienced women in addition to younger ones. Later in their careers, women may have passed through some life stages—such as parenting young children—that make it more difficult to deal with the demands of a client service environment. Firms should be more flexible: for example, distributing the workload among more workers if current employees want careers but not excessive hours. It may mean dealing with individual willingness to travel and adjusting compensation packages accordingly.
But women don’t have to wait until a firm acts. They can take charge of their careers. First, if you’re a woman act like an executive from day one. Second, find a mentor. Most women with mentors who have reached executive ranks attribute much of their success to mentoring. Third, women should speak up—failure to communicate what is wanted or needed can create barriers to success. A common mistake many women make is assuming a supervisor knows their preferences. Fourth, expecting a no is a big impediment. Don’t be a defeatist. Act like a winner. Finally, do the homework and be prepared to negotiate.
Women CPAs are making progress, if slowly. Family-friendly policies, flexible work arrangements and the use of technology, enabling people to telecommute, have helped reduce the turnover rate among women to about the same rate as men and can possibly make the CPA profession more attractive to both.
The shortage of CPAs since 1993 has created a free agent market for skilled professionals, which can only provide opportunities for experienced women CPAs. While this market could cause tension at times between firms and staff, it can also be the impetus for firms and staff to work together. Together, they can continue the process—at a faster pace—for the benefit of women CPAs, the firms they work for and will eventually help run, and the profession as a whole.
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