Are there changes in the work-life balance and attractiveness of public accounting?
January 15, 2017
Work-life balance and attractiveness of public accounting have been big topics. A lot of people and companies are talking about them. Has there been any improvement in these areas in audit firms? A recent research article looks at this question.
Public accounting is one of several choices (and often, the first choice) for college graduates with accounting degrees. Anybody who has experience working in public accounting (or who knows somebody who has been in public accounting) knows that there are significant pros and cons in this industry. These are usually well understood, but unfortunately, there is no dramatic change (yet) to eliminate cons and elevate pros. In an attempt to understand this area even more, several researchers conducted a survey and published their results (“The Work Environment in Large Audit Firms: Current Perceptions and Possible Improvements” Current Issues in Auditing 2016).
The authors conducted a survey to understand what attracts people to public accounting and what employment issues this industry may have. They surveyed 18 people: eight partners and ten staff from the large public accounting firms. Keep in mind that 18 is a statistically small sample, so the authors indicate they are not trying to imply the results of their survey should be applied (generalizable) to the entire industry.
The survey findings are presented below.
- Partners feel like they are business owners with the diversity of interesting tasks they perform on a daily basis (e.g., HR related questions).
- Partners praised flexibility in their job (while staff didn’t indicate flexibility as one of the pros which makes sense because staff are usually told where they need to be and what they need to work on).
- Partners and staff valued the people they work with on a daily basis (within their firms or at their clients).
- Partners and staff indicated they work in an intellectually stimulating environment. There is indeed a lot of work that requires use of your brain, but there is also a lot of work which might make you feel like you are not intellectually stimulated. Therefore, public accounting is a good job for only a certain personality type (or types).
- Partners and staff indicate they find a career in public accounting unpredictable. This refers to what partners and staff may do on a daily basis and how regulations, etc. can impact their work.
- Partners believe that the worst parts of their job are regulations (e.g., PCAOB) and stress. Regulations in particular (e.g., PCAOB inspections) were noted as one of the reason highly performing staff leave public accounting (which in turn shifts work to staff who stay in firms – this results in even more workload on them).
- Staff believe that the worst parts of their job are long hours and stress. Audit staff may work 60-80 hours a week during the “busy season.” Some of this is attributed to the “team” mentally (whether viewed as good or bad) where a staff feels uncomfortable leaving work while others are still there crunching numbers.
- None of the interviewed staff plan to stay in public accounting. Partners also indicated that they see public accounting as a starting point in a staff’s career, but not necessarily a life-long one.
- Some staff expected more use of technology than merely MS Office (a lot of work is done MS Excel and MS Word).
- Some partners indicated their compensation wasn’t as fair as they would have expected and most staff noted that their compensation was fair for public accounting, but low compared to other industries.
These findings seem to go back to the work-life balance issue. The worse it is, the more consequences there are to staff, audit firms, and the public in general. As an example, the authors cite prior research showing that the poor work-life balance (resulting from unusually heavy work load, etc.) may result in (a) greater earnings management by audit clients and (b) poorer health of staff.
What can be done to improve the work-life balance in audit firms? The authors present a few ideas. Some of them seem possible while others are probably harder to implement:
- Extending deadlines for public company report filing. This one seems to be a hard one to implement.
- Introducing more flexible work arrangements. This is already taking place in audit firms. Some firms hire temporary “busy season” professionals to smooth out the workload for permanent staff, allow working from home to eliminate commute, etc.
- Making cultural changes in allowing staff to leave at the end of a day before a supervisor and managers do. The whole concept of “team work” may interfere with this, but firms are trying to work with staff to allow them to leave earlier on certain days, for example. This will likely take a while especially if there is some “old school” thinking in audit firms.
- Having a compensation package which would be comparable to other industries for the same skill set requirements (and not just comparable to other public accounting firms).
In the nutshell, all these findings were “known” before and there are no big surprises. What would be nice to know is more detailed step by step instructions, supported by research (not only accounting research, but also cross-disciplinary research) about how to improve the work-life balance in public accounting. This is a topic for another discussion.
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