An increasing number of ethnic minority students are enrolling in and graduating from accounting programs, according to the AICPA’s 2019 Trends in the Supply of Accounting Graduates and The Demand for Public Accounting Recruits report.
The biennial report identifies key trends in U.S. accounting enrollments and graduations. It also tracks hiring of new graduates in the public accounting sector. Published since 1971, Trends provides statistical projections and respondent expectations based upon university responses. The latest report covers the 2017-2018 academic year and firm responses for the 2018 calendar year. It is intended to help the accounting profession — from educators to firms to state associations and the AICPA — tailor programs and outreach efforts.
The new report showed that 44% of undergraduate students and 42% of accounting graduates were Black, Latino, American Indian or Alaskan Native, Asian or a Pacific Islander, multiethnic or other. This reflects a significant boost from ten years ago, when the numbers were 31% and 30%, respectively.
But despite the increase in minority students seeking to enter the profession, total minority hiring by U.S. CPA firms has remained flat since 2012.
To better understand how the profession can capitalize on the growing supply of minority accounting students and graduates, we spoke with Kim Drumgo, Association International of Certified Public Accountants’ Director of Diversity and Inclusion.
What is driving the increase in minority enrollments and graduates?
Well, the first thing is that accounting is one of the most attractive professions for students of all backgrounds. It offers great earning potential and a broad array of career opportunities. And historically, the demand for accountants has remained relatively constant, even during down economies.
Right now, many Latino, Black and American Indian students are first-generation college students. According to the National Center for Education Statistics, about half of all first generation college students are minorities, compared to 30% of the non-first-generation students.
The overall Latino student population is growing at a particularly quick rate. Nearly 1 in 5 college students (19%) are now Latino, up from 14% in 2010.
So, it makes sense that these students want to pursue a career in a stable and well-regarded profession like accounting.
Unfortunately, Black student enrollment and graduation rates have not grown. What we’re hearing anecdotally is that there’s been a shift from accounting to other business majors, most significantly in the Science, Engineering, Technology and Math (STEM) fields. Like accounting, these areas offer a wide array of career opportunities and solid earning potential. And nationally, there’s huge push — and financial support — for more students to enroll in STEM-based majors.
Given the increased demand for technical proficiency and data analytics in accounting, we’ve suggested that accounting should be included within the STEM umbrella.
It’s also worth noting that this shift in demographics isn’t necessarily bad for the profession. Over the past several years, the hiring model for public accounting firms has shifted. We’ve seen reduced hiring of accounting graduates and increased hiring of individuals skilled in STEM fields like data analytics and technology.
With the supply of minority accounting students and graduates growing, this is a great opportunity for firms to broaden the makeup of their workforces, right?
Yes, it is. Surprisingly, though, minority hiring has stayed relatively flat. We are seeing some movement within the sector, notably an increase in hiring of Latino graduates, but that was offset by a decline in hiring of Asian/Pacific Islander graduates.
In 2018, 10% of new hires were Latino. That’s up from 7% in our last report, in 2016, and 4% ten years ago. That’s fantastic to see. We know the Latino population is growing nationally, so it’s terrific news that the profession is reflecting that demographic trend.
At the same time, though, hiring of Asian graduates has slowed, falling to 14% of all hires. We attribute this to changing immigration policies that have made it harder for foreign students, specifically Asians, to attend U.S. colleges and universities. This has also led to fewer public accounting firms opting to sponsor Asian hires. Despite this, the Association International of Certified Professional Accountants has continued our commitment to engage with Asian accounting students on a global level through the Chartered Global Management Accountant® (CGMA®) credential.
Unfortunately, Black hiring has remained flat at 4% since 2008. It’s not clear why this is. It may be that some Black graduates are opting to accept positions in non-public accounting firms. And in many cases, student hiring can be affected by what careers a college or university emphasizes or recruiting efforts on campus. We will continue working with our partners and peer institutions, like the National Association of Black Accountants, to encourage increased recruiting on HBCUs to bolster hiring of Black accounting graduates.
So, while we are certainly very happy to see the advancement in Latino hiring, a lot of work remains to be done for CPA firms looking to better reflect the communities and clients they serve.
Where do we go from here?
We have to keep in mind that this report is just a snapshot in time, and the long-term trend is that diversity in the profession is increasing.
In 2017, for example, leaders from the Big Four accounting firms, along with several other organizations, launched the CEO Action for Diversity & Inclusion initiative. This pledged their support for increasing diversity and inclusion in the workplace. To date, more than 800 CEOs have enlisted. By signing the pledge, these CEOs commit to holding difficult conversations about diversity and inclusion, sharing lessons and experiences, employing strategic D&I plans and implementing unconscious bias training.
What’s most notable about this effort is the focus on inclusion. Diversity is who we are and the unique characteristics each individual represents. Inclusion is how we utilize diversity at all levels of the organization and intentionally create a sense of belonging and respect. It’s not enough to just hire for diversity, we must consciously work to ensure that people from all backgrounds truly feel included. Don’t just give them a seat at the table, give them a voice.
Having hard conversations and working to address unconscious bias are great steps toward building a culture of inclusion and belongingness.
Clearly, we still have a long way to go. But this is a huge shift in how companies are approaching diversity and inclusion. We know significant change is not going to happen overnight, so we look forward to seeing the progress in future AICPA Trends reports.
Learn more about the AICPA’s efforts to bolster diversity and inclusion within the profession:
The Accounting Inclusion Maturity Model aids organizations in assessing their diversity and inclusion efforts.
The Accounting Scholars Leadership Workshop helps racial and ethnic minority students strengthen their professional and networking skills and prepare for a career in accounting.
The AICPA Scholarship for Minority Accounting Students funds the education of outstanding minority students who are studying accounting.