THE CPA MANAGER

May 2000

JOB SATISFACTION AMONG ENTRY-LEVEL ACCOUNTANTS

By Kenneth M. Hiltebeitel, Bruce A. Leauby, and Joseph M. Larkin

Few would argue that the accounting profession has stiff competition in attracting and retaining the best and brightest business school graduates. At the same time, the accounting faculties at many colleges and universities find their best students are hesitant to major in accounting. What is wrong? What can be done?

Research conducted on the job satisfaction of accountants indicates dissatisfaction with working conditions, work assignments, and supervisory relationships. A survey of newly employed accounting graduates, based on the Accounting Education Change Commission's (AECC) Issue Statement No. 4, Improving the Early Employment Experiences of Accountants, was taken to learn about their early employment experiences. The statement addresses the gap between what accounting graduates expected and what they actually found in their early employment.

The Survey

Questionnaires were sent to more than 1,200 recent graduates from three universities located in the Mid-Atlantic region of the United States. All graduates had received their accounting degree within three years of participating in the survey. The survey response rate was more than 45%. Approximately 43% of the respondents were female and 57% male, with an average age of 23.5 years.

The questionnaire included selected demographic information and 23 statements regarding the job satisfaction of entry-level accountants on their first job. Respondents answered the 23 statements using a 7-point scale, ranging from "strongly disagree" (1 or 2) to "neutral" (3, 4, or 5) and "strongly agree" (6 or 7). Nine statements pertained to leadership and mentoring, six to working conditions, six to work assignments, and one assessed overall job satisfaction.

The Results

The Exhibit shows the mean response for each of the first 22 statements and their rank based upon the statement's mean rating relative to the other statements. As can be seen, Statement No. 16 ("My supervisors attempt to minimize job-related stress.") was the statement with which the respondents disagreed most strongly.

As indicated in the Exhibit, the statements that received the most negative responses were those pertaining to working conditions. The mean average of the seven working condition statements was 4.7, with an average rank of 6.4. The two most negative statements related to job-related stress and distribution of opportunities and burdens among subordinates. At the other extreme, the statements that received the most positive responses were those pertaining to work assignments. The average of the six work-assignment statements was 5.3, with an average rank of 17.6. The two most positive statements in this category related to delegating responsibility and maximizing opportunities to use analytical techniques.

Satisfaction

The most positive responses as reported by entry-level accountants (starting with the most positive) are that supervisors--

* delegate responsibility to me as soon as I am ready to assume it.
* treat me as an individual with a career (not just a short-term employee).
* maximize my opportunities to use analytic techniques.
* maximize my opportunities to use critical thinking skills.
* convey pride in their work and its importance to clients/customers and society.
* give me frequent, honest, open, and interactive feedback on my performance.
* help me to improve my communication, critical thinking, and analytic skills.
* maximize my opportunities to use written communication skills.

Interestingly, five of these eight statements pertain to work assignments, three pertain to leadership and mentoring, and not one pertains to working conditions. In short, entry-level accountants seem to be well satisfied with their opportunities for personal growth and appreciate honest feedback.

According to one campus recruiting director, "students have a realistic picture of what professional services firms are about. Students are looking for more flexibility and mobility. At the same time, they are looking for stability in the work environment, yet they don't want work to consume their lives."

Dissatisfaction

The statements with which respondents disagreed most strongly are that supervisors--

* attempt to minimize job-related stress.
* fairly distribute the opportunities and the burdens across all of their subordinates.
* listen for indirect messages about my employment experience.
* attempt to determine the nature and causes of dissatisfaction expressed to them.
* inquire about my concerns and plans.
* supervise work to completion.
* explain assignments thoroughly.
* allocate sufficient time for me to do quality work.

Five of these eight statements pertain to working conditions; the other three pertain to leadership and mentoring. Not one of these statements pertains to work assignments. One could conclude that entry-level accountants are satisfied with their work assignments but less satisfied with working conditions and leadership. In particular, they are dissatisfied with job-related stress, perceived unfair distribution of opportunities, and communication with supervisors.

Firm Reactions

By reviewing their turnover statistics, employers can quantify the dissatisfaction of entry-level accountants. It is not uncommon for large public accounting firms to experience annual turnover of 25%. One firm indicated that it could save an estimated $100 million in recruiting and training costs by reducing turnover 4%. Another personnel manager stated, "Our retention rates have not changed significantly over the last few years. However, with the economy so strong, we sense that our clients and others are making even more offers [of employment] to our people. It's not uncommon for even our inexperienced staff to receive offers."

Many firms have started new initiatives, or altered existing ones, to address these concerns. Exit interviews with employees that have resigned are becoming quite common. As expected, two major reasons for leaving are stress and overtime.

In addition, the industry is developing programs for the retention of its diverse workforce. Details differ, but the types of work-life support and family-friendly programs offered are similar and address some of the concerns of this survey. Programs include the following:

* Enhanced co-op and internship programs,
* Special mentoring programs,
* Reduced workload and flexible work arrangements,
* Telecommuting and parental leave, and
* Improved performance feedback.

Enhanced Co-op and Internship Programs. These programs are an accepted method for reducing job dissatisfaction and matching the right person with the right job. Firms have found that entry-level accountants often face "reality shock." When their first job is their initial encounter with a professional firm and certain expectations are not met, dissatisfaction often results.

Some firms try to engender familiarity through co-op and internship programs. The percentage of full-time employment opportunities using this established approach has increased dramatically in the last few years. Historically, public accounting firms hire approximately 20% from co-op programs. But this rate has grown to 40%, with some private companies even approaching 75% via these programs.

To make these programs more attractive, many of the larger public accounting firms offer summer internships, diverging from their traditional "busy-season-only" policy. Many private firms have extended the co-op experience to six months, far longer than the traditional 12­15 week experience. With a longer time frame, firms can better judge the "fit" between employer and prospective employee.

Students should be encouraged to participate in co-op programs to gain a true understanding of what will be expected of them. Many schools offer co-ops and internships, and perhaps these programs should become a requirement of the curriculum. At the same time, firms need to provide a realistic experience for the student. Too often, a firm will provide an "ideal" co-op experience to entice top students. This may mislead the student as to what is required to succeed in the profession.

Special Mentoring Programs. A common complaint of entry-level accountants, as noted in the survey, is that they want to be heard, they want their dissatisfactions to be addressed, and they want their supervisors to inquire about their concerns and plans. To address these issues, some firms use formal networking programs to help with career development issues and link experienced professionals with newer staff to facilitate their progress through the firm.

Networking is not limited to internal practices. Some firms emphasize external networking through the local business community. Both internal and external networking enable the upcoming professionals to benefit from the experiences and guidance of the seasoned veteran.

Recently, several large public accounting firms held a "Women's Forum," where five women partners addressed an audience of 44 women. One attendee commented, "At last there is a forum where I can get the answers I need doing my job as a female. The forum is reassurance that it can be done, and well! So yes, this forum has had a direct impact on whether I stay with my current employer. I now have specific role models to keep in mind when I experience a problem, annoyance, or idiosyncrasy."

Reduced Workload and Flexible Work Arrangements. A common complaint of the survey respondents was time constraints. In essence, employees lack the day-to-day control of their lives that they desire. While absolute control is impractical, some alternatives would allow a measure of control over work arrangements.

One such arrangement is a reduced workload, which could, for example, allow employees to spend more time with their families following the birth of a child, to care for elderly family members, or to pursue advanced degrees. "We've tried to be flexible with our employees' schedules," commented one personnel partner of a large regional firm. "For example, we have several employees in our tax department that work full-time but only during the tax season."

Flextime is another work arrangement that provides options to the traditional workweek. Flextime may encompass varying starting and ending times each day, longer days in a shorter week (e.g., four 10-hour days), or reduced hours during the off-season to balance increased hours at peak times. Under flextime, the total annual work-hours and the workload assigned are the same as for normal positions in the firm.

Telecommuting and Parental Leave. Some companies are experimenting with allowing employees to work from home, due to technological advancements that make telecommuting easier, even if only for one or two days a week. Other companies allow new parents time to adjust to the birth or adoption of a child.

Under the Family and Medical Leave Act of 1993, employees that have been with a firm for a certain time (e.g., three years) receive two weeks of paid vacation after the birth or adoption of a child and 12 weeks of unpaid leave. While a company's workload still needs to be completed, flexibility with time and schedules can alleviate employee stress related to other life demands.

Improved Performance Feedback. In response to supervisory style concerns, such as in this survey, many employers have expanded their performance review process to be both an evaluative and developmental tool. Developmental goals include--

* facilitating the process of documenting professional goals and expectations;
* recording performance observations, areas for development, and action steps;
* providing a list of competencies to help develop appropriate professional goals; and
* providing input into the annual review process.

Most annual reviews are geared toward future goals rather than reiterating what has already been communicated in after-job performance evaluations. In most firms, a supervisor is under more pressure than an entry-level accountant, leading to poor performance feedback. A well-designed feedback system will give the entry-level accountant a constructive evaluation, as well as a development program for improving performance.

Last, some firms facilitate "upward feedback" to supervisors in the form of anonymous comments from their subordinates. When properly administered, this process allows supervisors to improve their skills and management style. *