Cloud technology is increasing diversity in the accounting industry. Learn how that trend can benefit your business and help you attract diverse job applicants.
Technology has historically been regarded as a leading driver of social mobility and change. The tech industry has also garnered a bad reputation with regards to diversity and inclusivity. Highly skilled, digitally fluent people of color are finding other industries in line with their quantitative interests where technology allows them to excel.
This trend is particularly apparent in the accounting industry, and creates opportunities for small and mid-sized firms to hire top tech talent if they have the right digital infrastructure. Cloud-based advances in accounting technology have been quietly reshaping the industry and creating new opportunities for the next generation of accountants.
Current trends show that the next generation of tech-savvy accountants will be much more diverse, upending the status quo in accounting to date and enabling minorities to gain more access to leadership positions. By switching to the cloud, small to mid-sized accounting firms have the opportunity to lead the way when it comes to demonstrating successful best practices regarding diversity in technology-driven industries.
Let's take a look at what businesses can learn from the recent and projected strides made by the accounting industry.
Why tech-savvy minorities are looking to accounting to achieve success
American tech companies have struggled with diversity and creating a positive, inclusive environment for decades. According to the U.S. Equal Employment Opportunity Commission, 83 percent of tech executives are white and favored for promotions at all levels. This prejudicial trend has not gone unnoticed by non-white employees. According to a Kapor Center study, nearly 40 percent of exiting employees left their jobs because of unfairness and 85 percent observed unfair treatment among others. Culture concerns of this magnitude are an especially important indicator for current students and aspiring employees, who are still deciding how to shape their futures.
The accounting industry is much more representative of the population; according to a 2017 study by the American Institute of Certified Public Accountants (AICPA), white staff comprise 78 percent of staff at CPA firms while minority staff represent 22 percent. Seventy-seven percent of the United States population is white and 23 percent are minorities – only a one percent difference, meaning the accounting industry is 30 percent more diverse than tech. While diversity ratios decrease into upper management, strong diversity in the pipeline is a promising starting point for the next generation of accounting leadership, starting with small to mid-sized firms.
How cloud is making the difference, and what companies can do about it
How is the cloud involved? Cloud-based accounting technology is creating new opportunities for success, attracting a diverse group of new accountants put off by the tech industry. Accounting was largely a transactional role, historically, with accountants hired to manually manage payroll, pay bills and file taxes. Advances in cloud-based technology have commoditized most of those routine repetitive processes. This has created time for accountants to add value where computers cannot.
Future CPAs will function in more strategic capacities, with room for growth and the ability to form meaningful connections – which research says supports greater employee success and happiness. The next generation of accountants will therefore act more like financial advisors, or “virtual CFOs” to their clients, providing strategic insight and advice based on a 360-degree view of their clients’ finances. This value building structure is effectively repositioning accounting as a consulting industry, which plays a key role in attracting aspiring CPAs.
Many CPA firms are already adopting this technology to grow their practices and retain top talent, reshaping the career horizons for incoming and future CPAs.
This opportunity is particularly important for small to mid-sized firms that are more nimble, and can digitally transition their infrastructure to cloud-based systems faster and with greater ease than larger firms. This gives smaller firms an edge over their larger competitors when it comes to recruiting the best minority talent, provided they can equip these incoming CPAs with the digital infrastructure they need to succeed. Firms that don’t make that transition are already suffering from decreased employee engagement, a trend that will continue as more of their competitors make the transition to the cloud.
The diverse future of accounting
As technology shapes accounting into a more advisory, strategic role, students of color are recognizing opportunities within the industry to leverage cloud technology as the key to their success. These highly-skilled, quantitative students see CPA-centric technology as the key to a successful future in a diverse, welcoming environment, unlike that offered by the tech industry.
Small to mid-sized firms have a unique opportunity to capitalize on this growing, diverse base of top talent by upgrading their digital infrastructure and transitioning to the cloud faster than their competitors.
This rapidly ballooning group is showing no signs of slowing down, and the tools and technology that they build into their careers now will support their future success. As more minority CPAs succeed, this in turn will lead to more minority representation in accounting leadership roles, especially at smaller, more nimble firms, making accounting the bellwether for successful integration of diversity and technology.