January 1999 Issue

Public accounting firms spend significant amounts of time and money recruiting college graduates for entry-level accounting positions. Human resource directors of national firms estimate turnover costs are between $50,000 and $100,000 per exiting employee. In high turnover environments, remaining staff exhibit lower morale, increased insecurity, and greater job dissatisfaction. At present, CPA firms are experiencing a shortage of accounting seniors and managers. In fact, according to the U.S. Labor Department's most recent Occupational Outlook Handbook, the demand for CPAs is likely to be strong for the next seven years. As a result, firms need to hire entry-level accountants who will stay with the firm in the long term and be promoted to these advanced positions. Firms that are better able to achieve a match with the recruits they hire may ultimately lower their employee turnover rate and improve morale and job satisfaction. Recruiting and hiring the right candidates is clearly an essential goal of CPA firm recruiters, whereas making the wrong choice has proven to be very costly. When interviewing candidates, recruiters need to ask probing questions to uncover a candidate's true potential for success.

The purpose of our study was to determine whether the perceptions of accounting students, faculty, and CPA firm recruiters are consistent with the characteristics deemed most important when candidates are selected for both a campus and follow-up office interview. If college and university accounting programs are to adequately prepare graduates to serve as CPAs, both faculty and students need to be aware of the skills and qualities that must be possessed and demonstrated during various phases of the recruitment process. Our study identifies the attributes recruiters from across the United States feel are the most important signals of success. The conflicting viewpoints that have surfaced among recruiters, faculty, and students surveyed suggest a communication gap continues to exist.

In our study, we looked for perceptions in terms of the relative importance CPA firm recruiters place on various characteristics in the following two situations:

* When they prescreen candidates for a first or on-campus interview, and

* During an initial interview to select candidates for a follow-up interview.

For both situations, we examined the extent to which the ratings of CPA firm recruiters, faculty, and students were in agreement.

The Survey

CPA firm recruiters, faculty, and students from across the United States participated in our study. A total of 1,200 questionnaires were mailed to CPA firm recruiters. We received 277 usable responses, for an overall response rate of 23%. Responses by firm size were as follows: 81 national, 115 regional, and 80 local firm recruiters.

Accounting faculty who had valid e-mail addresses in the Hasselback Accounting Faculty Directory were sent a survey electronically. Also, accounting faculty from 20 schools geographically dispersed were asked to distribute student questionnaires to senior accounting majors. Usable surveys were obtained from 445 students and 182 faculty. Of the faculty respondents, 96% indicated they were involved with advising students about job interviewing. Ninety percent of the students reported they would be graduating within six months of completing our survey.

Characteristics Used to Prescreen

Recruiters, faculty, and students rated the importance that they felt CPA firm recruiters placed on 19 characteristics when selecting candidates for an on-campus or first interview. The average importance ratings for the prescreening characteristics as perceived by the three groups are displayed in Table 1.

The scale used in the survey instrument ranged from a "1" indicating "greatest importance" to a "7" indicating "least importance." Therefore, a lower rating indicates the recruitment characteristic is perceived as more important. Also, an "other, please specify" option was included as item 20. Only 24 participants chose to list additional criteria. No one additional trait was consistently mentioned, indicating that we had included the most significant characteristics in our survey.

The top eight criteria as rated by recruiters in selecting students for a first interview were as follows:

* Accounting grade point average

* Self-starter evidence

* Leadership evidence

* Cumulative grade point average

* Writing skills

* Advancement potential

* Technical skills

* Reputation of school.

Recruiters, faculty, and students all rated accounting GPA as the most important factor at this phase of the recruitment process. However, several significant differences among the perceptions of the three groups surfaced.

Self-Starter Evidence. Faculty and students ranked self-starter evidence fifth, while recruiters ranked it second. According to the article "Core Values Linked to Education and Competencies," posted on the Horizon Perspectives website, "the self-starter CPA who takes the initiative to learn more about the business arena contributes tenfold to the fiduciary aspects of a firm or business." Today, CPA firms are seeking candidates who not only possess technical skills but also value the lifelong learning that enables continuous personal growth. Firms desire individuals who take the initiative to enrich skills acquired while attending college. Evidence of participation in noncredit workshops or campus seminars that enhance computer, leadership, or interpersonal skills might reveal this initiative.

Candidates who are self-starters believe they can control their own destinies. They understand the value of being productive. They know what needs to be done at work and after hours to accomplish their personal and professional goals. Students and faculty need to, perhaps, rethink the importance of this criterion. Through their resumes, students should be advised to call attention to circumstances that indicate they are highly motivated, goal-setting individuals who will thrive in the highly competitive environment of public accounting.

Writing Skills. The second most important difference that surfaced involved writing skills. Firms ranked this item fifth in importance, while faculty ranked it tenth and students ranked it ninth. For more than a decade, practicing professionals have indicated that excellent written and oral communication skills are essential for a successful career in accounting. Recruiters often make preliminary assessments of writing skills based on resumes and cover letters provided. Grades in English composition and business report writing classes are available when transcripts are a required component of prescreening.

Perhaps faculty and students did not rate this item higher because the resumes students provide to recruiters for prescreening purposes are limited to a one-page summary, largely controlled in format by campus placement centers. From a recruiter's standpoint, perhaps, not all initial interviews are conducted on campus, but may be the result of a contact made from receiving a letter of inquiry and extended resume. It is possible students gave a higher rating to appearance of resume, interpreting the item as including content.

Reputation of School. Not surprisingly, faculty overrated the importance of this factor, ranking it third compared to eighth by recruiters. A school's reputation may impact which schools the firms will actually visit for campus interviews as well as the number of students hired from a specific university. However, a university's reputation does not appear to significantly affect a recruiter's evaluation of particular students. Incidentally, students' perceptions were in agreement with those of the recruiters for this criterion.

Work Experience. The next most notable difference involved work experience. Students overrated the importance of work experience while faculty underrated its importance. No doubt, students should have some relevant work experience by the time they graduate from college. However, our findings seem to imply that students should be selective if they choose to work while classes are in session. Perhaps some students should consider limiting work experience to internships, co-ops, and summer jobs. Since accounting GPA was the most important factor rated during the prescreening phase of recruitment, students need to realize their grades should not be sacrificed just to build work experience for a resume.

Characteristics Used to Select
Students for a Second Interview

How will CPA firm recruiters, faculty, and students view the importance of employment characteristics assessed during an initial interview to select candidates for a follow-up or office interview? To answer this question, CPA firm recruiters, faculty, and students rated a second list of 26 characteristics. The average ratings for these criteria are displayed in Table 2.

This time six of the top eight criteria were items demonstrated through recruiter/candidate interaction. The top eight factors were as follows:

* Interpersonal skills

* Compatibility with the firm

* Oral communication skills

* Enthusiasm

* Maturity

* Ethical standards

* Self-starter evidence

* Leadership evidence.

Self-starter evidence and leadership evidence, ranked second and third at the prescreening phase, now place seventh and eighth, respectively. Overall, faculty and student perceptions appear to be much more in line with those of recruiters at this stage of the interview process. This time, faculty, students, and CPA firm recruiters attributed the same importance to writing skills. However, neither faculty nor students viewed self-starter evidence as important as did the recruiters.

Ethical Standards. The most noticeable difference that surfaced at the second phase of the candidate selection process was the importance of ethical standards. Faculty and students rated this characteristic considerably lower (16th and 12th, respectively) than did CPA firm recruiters, who ranked it sixth. We find this result rather surprising given the focus on professional ethics in recent years, not only in accounting, but also throughout every field of business. One of the top five values identified by delegates to the National Future Forum, sponsored by the CPA Vision Project, is integrity. Embodied in this value is the ability to conduct oneself with honesty and professional ethics.

Advancement Potential. Faculty ranked advancement potential higher (fifth) than the other two groups-- recruiters (ninth), and students (10th). Although public accounting has been considered an "up or out" profession, the trend has started to change. Some firms are beginning to allow valuable staff to cut back their hours and get off the fast track. This may be especially appealing for CPAs who want to spend time raising a family.

Cost-cutting strategies implemented during the early 1990s that resulted in employee displacement and cutbacks in college recruitment are being felt today. Attracting and retaining suitable employees may be overshadowing the importance of advancement potential, given today's market conditions. According to a recent AICPA report, women comprise only 31% of the CPAs employed by CPA firms. To attract top performers, CPA firms are beginning to realize that benefits, company culture, flextime, quick promotions, and quality of life are issues important to individuals in today's labor market.

Achieving a Better Match

In recent years, some recruiters have been using the focused selection approach to interviewing. Students are asked to describe a project team situation in which difficulties were encountered. Candidates are being evaluated based on examples provided that demonstrate behaviors and skills used to resolve the difficulties. By asking semi-structured, probing questions during this phase of the selection process, recruiters are better able to identify talents and traits that signal potential for success. Participating in mock interviews can help students become familiar with these new interviewing approaches.

Students who wish to work for CPA firms upon graduation need to plan their college careers with a knowledge of the employment characteristics most valued by CPA firm recruiters. Students need to know which characteristics to emphasize on a resume to obtain a campus or initial interview. Furthermore, when interviewing, students need to know which characteristics to stress to enhance their chances of receiving a follow-up office interview.

The results of our study seem to suggest, however, that firms need to continue stressing the profession's need for highly motivated students with strong communication skills and high ethical standards. The current profession-wide initiative embodied by the CPA Vision Project is an ideal vehicle through which to facilitate this dialogue. *

Susan M. Moncada, PhD, CPA, and Joseph C. Sanders, PhD, CPA, are associate professors at Indiana State University. Funding for this project was provided by an Indiana State University research grant.

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