After asking 2,000 firm employees to describe culture at their workplaces, a few generalizations emerged: partners view their culture more positively than most everyone else; respondents expressed low opinions about firm agility; and as firms grew, staff engagement decreased.
These were some of the findings from INSIDE Public Accounting’s 2019 annual culture assessment of 21 firms, ranging in net revenue from under $10 million to $100 million. Results, broken out by gender, years of service, department and job title, were outlined by IPA publisher Kelly Platt in a Nov. webinar.
While culture seems intangible, like an invisible glue that holds firms together – 12 core measurable qualities drive and define culture, according to IPA’s partner in the culture assessment effort, CultureIQ. The core qualities of culture are Agility, Alignment, Collaboration, Customer Centricity, Empowerment, Engagement, Growth Development, Innovation, Quality, Recognition Rewards, Trust and Integrity and Work-life Balance.
Culture may be best summed up by the answer to this question: “What does it feel like to work here,” Platt says, advising webinar attendees to ask staff to give a one-word answer to the question. IPA’s 2020 assessment, set for May and November, can help uncover the answers. The data can help firm leaders bring culture top-of-mind, develop a well-defined, positive culture, boost brand awareness and increase retention.
Platt focused her discussion on three of the cultural core qualities that are directly tied to profitability: agility, alignment and engagement.
Agility, the ability to sense and plan for change, scored low overall, Platt says, particularly among women and the administrative/support staff. Employees with more than 20 years of tenure at firms between $20 million and $30 million ranked agility lower than other employee groups, she says. The survey did not ask respondents why they scored any of the cultural qualities the way they did, Platt says, but firm leaders can use the data to uncover what is driving the lower scores.
Respondents generally gave alignment high scores, she says. “What does it mean to have alignment? In a nutshell it’s the bridge between the employees and the firm.” When firms are aligned, everyone is working together on firmwide goals, not just individual advancement. Equity partners as a group scored alignment “off the charts,” with 91% scoring alignment positively, but tax staff ranked alignment lower.
Using this data, partners can ask themselves, and their firms: “Why the disconnect?”
Engagement may be one of the most important aspects of company culture. Platt cites Gallup research that found 70% of U.S. employees are not coming to work fully committed to performing their best. “That’s a very powerful statement,” she says. She adds that 85% of employees quit because of their relationship with their direct manager.
Overall, the nearly 2,000 survey respondents scored engagement relatively high, and higher than data collected from other financial services firms by CultureIQ. Engagement dips in the largest firms, the assessment uncovered, particularly among firm professional staff and the 3- to 5-year tenured group, a vulnerable group that needs attention because they’re asking themselves hard questions about whether they want to stay in public accounting or move on, Platt says.
Some similarities emerged when it came to scoring empowerment. Again, all partners scored this quality higher than all other demographics. Women and the 3- to 5-year group, on average, scored empowerment the lowest of all 12 culture qualities. Women feel most empowered in the smallest firms and least empowered in the largest firms. Women are 11 percentage points behind male respondents in firms of more than $30 million.
Platt also touched on how employees feel about growth and development. The 3- to 5-year and 11- to 20-year group scored this quality lower than all other demographics in the 2019 assessment. Women scored the quality lower than men, and the administrative/support staff ranked growth and development the lowest of all employees. “This is an area of concern for the profession as a whole,” Platt says.
Innovation was scored far higher than Platt expected, with 76% responding positively. “I was shocked by that, that’s a huge positive change in the profession,” she says. However, as seen in other areas, the 3- to 5-year employees lag behind.
Leaders would do well to pay more attention to recognition and rewards, since it was the lowest-scoring core quality for all respondents, Platt says. Consistent with other qualities, the administrative and support staff, the 3- to 5-year employees, women and tax professionals all scored this area lower than others.
Surprisingly, work-life balance scored consistently among all assessment demographics, with 3 in 4 respondents scoring this quality positively. Platt attributes this to the investment in alternative work arrangements over the last several years is paying off. “We’re vying for good talent and to retain it, and we’re finding innovative ways to adjust to the needs of employees and clients.”
The data uncovered in the IPA Culture Assessment provides a basis for determining where firms are excelling and where they are falling short. She advises firms to survey their staff annually and create employee-led committees to make recommendations on how to improve on the existing culture. Although the tone comes from the top, initiatives that come from management are less likely to succeed than those that provide employees at all levels with a sense of engagement and empowerment.
In a tight labor market, the ‘you’re lucky to have a job’ management style is no longer working. Employees must look forward to going to work or they will work elsewhere, she says.
“Bring out the best in your staff, and you’ll bring out the best in your brand.” To understand the assessment results in more detail, download a complimentary executive summary.
The Excellence in Firm Culture Assessment dates for 2020
are for May 1-15 or Nov. 2-16.