Bias prevents diversification of professional services partnerships

A new study has highlighted the continued need for change when it comes to diversity and inclusion at the top of Britain’s largest accounting and consulting firms. According to the report, there are still only 17 Black partners among the thousands of partners of the eight biggest professional services firms in the UK.

The professional services industry is currently part of a major corporate drive to play a bigger role in combating systemic racism across the UK. However, while the thought leadership offered up by audit and advisory firms might talk a good game, closer examinations of these companies’ track records often suggest that they are struggling to walk the walk. Earlier in 2020, for example, reports in the British press showed that of the Big Four professional services firms’ 3,000 UK partners, only 11 were Black.

Now, a further report from global advisory and accounting firm network HLB International has further illustrated the lack of representation at top UK firms, finding that only 0.4% of the 4,266 partners in the country’s eight largest professional services firms were Black. The 17 Black partners of 2019 represent only a minor improvement on 2018’s figures, when the top eight had just 12.

While the statistic is still heavily weighted by the dominance of the Big Four of Deloitte, PwC, KPMG and EY, the additional figures of BDO, Grant Thornton, RSM, and Mazars are hardly representative either. The size of the Black, Asian or Minority Ethnic (BAME) population in the UK is considerably larger than the portion which has been able to rise to the top of the country’s largest audit and advisory companies – accounting for 13% of the population at the last census in 2011.

According to HLB’s researchers, the lack of diversity in leadership positions comes largely as a direct result of practices and unconscious bias which exist at the grassroots level within the industry. It has long been said by industry leaders that the key for them to addressing diversity gaps is to first retool their recruitment strategy. However, that may be easier said than done if the minority demographics already within the firm are not supported. Among HLB Managing Partners, 67% agreed that prospective employees look at the demographic make-up of the firm and leadership team when assessing a potential employer.

Even if a firm can overcome this to get new candidates to join the firm, meanwhile, unconscious bias among lower level management can also inhibit progression. With a compromised career curve, fewer female and non-white candidates manage to make their way to leadership positions, with many giving up on either their professional growth or the industry.

In turn, the lower attractiveness of the profession means accounting and consulting firms are likely missing out on key talent – something which will cost them precious productivity in the long-term. Research suggests for example that female, non-Big Four auditors, under 30, with high educational attainment are more likely to leave public accounting in lieu of an alternative career path due to the glass ceiling they may face further down the line.

HLB asserted that the consequences of mass-departures from the profession cast a tangible impact on the firms and result in increased labour costs, lower productivity as human capital and fee discounting for clients whose auditor left, among others.

Commenting on the findings, Marco Donzelli, HLB’s Global CEO, remarked, “Our industry is facing immense challenges, especially when it comes to attracting and retaining talent. For the industry to thrive, we need to explore what issues are currently holding it back. Addressing unconscious bias is a hard job but it’s a conversation we need to have now if we ever want to achieve greater diversity and inclusion.”