As the conversation around diversity, equity and inclusion continues to evolve, many accounting firms find themselves in a complex dance where the music occasionally skips a beat due to recent legislative actions in states like Florida, Texas and Utah. While these states have opted to cut back on DEI education, the corporate world has been slow to raise its voice, leaving DEI leaders to juggle the impacts of landmark rulings, like the U.S. Supreme Court’s take on affirmative action.
In today’s often-mercurial environment, DEI professionals can face apathy or active resistance, a reality highlighted by a Harvard Business Review article that discusses the burnout rates and high turnover affecting DEI professionals. The emotional toll of maintaining a positive stance in the face of challenges can be profound. Research often suggests that working in DEI roles is not for the faint of heart. These advocates are expected to maintain positive emotions and atmosphere, even when they encounter negativity. This challenge can be especially intense for women and people of color, who already deal with extra layers of expectations and pressures due to societal biases.
The costs of DEI burnout
Most leaders in the DEI space only last about three years. This short tenure highlights just how taxing the emotional and physical demands can be in this line of work. According to the Journal of Organizational Behavior, emotional labor, or the need to fabricate positive feelings and suppress negative ones, can lead to burnout and reduced job satisfaction, especially in roles where employees must continually advocate for underrepresented groups. This is exacerbated by corporate display rules, which dictate how emotions should be shown, placing an additional burden on DEI leaders to manage their feelings while promoting inclusivity. This “surface acting” — masking your true emotions — often leads to emotional exhaustion and eventually, burnout.
The odds are often stacked against our DEI leaders, making retention a significant challenge and hurdle for sustainable policies. To help these teams overcome internal obstacles like stereotypes, resistance and other societal pressures, firms should invest in frameworks that align with their DEI goals and provide support to their leaders.
Essential support strategies for DEI leaders
Here are three key pillars that accounting firm leaders can use to effectively support and retain DEI professionals:
Strong advocacy and resource allocation: To support DEI efforts meaningfully, firms should cultivate strong internal advocates who understand the long-term nature of this work. They must also invest in resources — financial and otherwise — that allow DEI leaders to implement effective programs. Engaging firm leadership as champions of these initiatives can amplify DEI efforts across all levels of the organization.
The learning and effectiveness paradigm: Research from Harvard Business School suggests that organizations with a “learning-and-effectiveness” DEI approach see better results than those that merely check boxes. This model values employees for their unique identities and encourages the integration of DEI values into all processes, from hiring to decision-making. For accounting firms, this approach can help shift the focus from compliance to true inclusivity, which is essential for long-term growth and employee satisfaction.
Supportive flexibility: Providing flexibility, such as offering paid time off for DEI-related responsibilities or recognition for their contributions in performance reviews, can go a long way in helping these leaders focus on creating and implementing broader goals.
Practical strategies for alleviating DEI stress
DEI professionals are often an “army of one,” responsible for maintaining firmwide inclusivity goals. To manage the emotional weight of this work, consider these quick strategies to improve morale and reduce burnout.
Celebrate milestones and wins: Recognizing even small achievements can boost morale. Studies show that marking milestones can have a significant impact on motivation and job satisfaction. Regularly reviewing DEI metrics to track and celebrate progress helps to maintain momentum and commitment, creating a cycle of positive reinforcement for DEI efforts.
Encourage participation in DEI events: A strong network is essential for any professional, and this is especially true for DEI leaders. Events and industry connections provide fresh perspectives and insights that can inform DEI strategies. They also offer valuable opportunities to connect with others who understand the unique challenges of DEI work, helping professionals feel less isolated in their roles.
Encourage emotional health: DEI work is emotionally taxing, and professionals need to establish boundaries for their mental well-being. Accounting firms can actively support DEI leaders by fostering a workplace culture that respects boundaries, promotes self-care and provides opportunities for delegation. A well-resourced DEI team can better handle the pressures of the role, ensuring a sustainable impact on firm culture.
Moving forward: A balanced approach to DEI
The journey toward inclusivity may be challenging, but the benefits are clear: a robust DEI strategy isn’t just good for employee morale — it’s essential for attracting and retaining talent. In fact, the vast majority of job seekers consider diversity an important factor when evaluating companies and job offers. A recent Glassdoor survey asked more than 4,000 employees or job seekers how important corporate investment in diversity, equity and inclusion is to them when considering a new job. Not surprisingly, 77% of Gen Z men and 76% of Gen Z women said it was somewhat or very important. But older workers felt similarly. In fact, both millennial men and women felt even more strongly about it, at 79%. Even Gen X (69% of men and 76% of women) and Boomers (56% of men and 70% of women) felt it was either somewhat or very important. So while news reports may posit that people care less about DEI in the workplace, the vast majority consider it important.
Creating a work environment that genuinely promotes diversity, equity and inclusion not only improves employee engagement but also contributes to innovation, job satisfaction and, ultimately, a stronger bottom line. Accounting firms that invest in DEI — especially in supportive structures for DEI professionals — are more likely to create a workplace where employees feel safe, respected and empowered, which is critical when competing for talent in today’s shrinking pool.
By acknowledging the challenges DEI leaders face and providing them with the resources, autonomy and support they need, accounting firms can cultivate an inclusive culture that attracts and retains diverse talent. As external pressures continue to shape the DEI landscape, firms that proactively support DEI efforts — and the employees leading the charge — will be better equipped to navigate these challenges, building a resilient, adaptable workplace where employees thrive.
The Public Company Accounting Oversight Board today settled a disciplinary order sanctioning a Chinese firm for repeatedly violating PCAOB rules and failing to cooperate with the board’s investigation.
The PCAOB found that JTC Fair Song CPA Firm, located in Shenzhen, China, repeatedly failed to make required filings. First, the firm repeatedly failed to timely report the participants in its issuer audits on PCAOB Form AP, violating PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. Second, the firm failed to timely file its annual reports on PCAOB Form 2 in 2021, 2022 and 2023, violating Rule 2201, Time for Filing of Annual Report.
The firm also failed to cooperate with the PCAOB’s Division of Enforcement and Investigations by refusing to produce documents and information.
“All registered firms must comply with PCAOB reporting requirements, which are designed to provide the PCAOB, investors and other stakeholders with important information,” PCAOB chair Erica Williams said in a statement. “When firms don’t comply, the PCAOB will use the tools at our disposal to hold them accountable to fulfill our investor-protector mission.”
Without admitting or denying the findings, JTC Fair Song CPA Firm settled with the PCAOB and consented to a disciplinary order censuring the firm and revoking the firm’s registration. The board accepted the firm’s settlement offer, which does not require it to pay a civil money penalty. The PCAOB would have imposed a $50,000 penalty if it had not taken the firm’s financial resources into consideration.
“Today’s order should serve as a stark reminder that firms must cooperate with the Board’s investigatory process,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement. “Cooperation with the Board’s processes is a bedrock principle under our rules and standards and is not optional.”
President-elect Donald Trump will be empowered by Republican gains on Capitol Hill to pull back portions of the Democrats’ signature climate law he calls “the green new scam,” which devoted hundreds of billions of dollars to subsidizing emission-free energy.
Just don’t expect a wholesale repeal of the Inflation Reduction Act.
“We are not looking at immediate, drastic, apocalyptic changes overnight,” said James Lucier, managing director at research group Capital Alpha Partners. “But there is always a strong likelihood that some parts of the IRA are going to be capped or phased out.”
The IRA fused climate policy with industrial policy, subsidizing electric vehicle, battery and solar manufacturing and other enterprises that will help the U.S. decarbonize. Trump’s return will put the resiliency of this approach to the test.
The law is driving a wave of investment in red districts. Some GOP lawmakers, loath to give that up, have already said they don’t support making significant changes to the law. And although no Republicans voted for the measure two years ago, some of its incentives, such as credits for producing hydrogen and capturing carbon dioxide, are very popular with oil companies and other core GOP constituencies.
Gina McCarthy, a former White House climate adviser and managing co-chair of the climate coalition America Is All In, called any attempt to roll back the IRA “a fool’s agenda.”
“Republican members of Congress have been joining hundreds of business leaders at ribbon cuttings and groundbreaking ceremonies” for IRA-supported projects, McCarthy said. (America Is All In is supported by Bloomberg Philanthropies, the philanthropic organization of Michael Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP.)
But Trump’s presidency is almost certain to usher in new restrictions, expiration dates and caps that narrow its scope. That could help offset the costs of extending Trump’s 2017 tax cuts before they expire next year, a top priority of the president-elect and other Republicans.
The IRA “is the doomsday machine for the budget,” Scott Bessent, a top Trump economic adviser and potential Treasury Secretary pick, who serves as chief executive at the hedge fund Key Square Group, told CNBC. “I think the priority is going to be turning off the IRA.”
ClearView Energy Partners said in a note Thursday that top targets for elimination in the law include credits for used and commercial EVs; a fee on methane emissions levied on oil and gas producers; and billions of dollars in authority given to an Energy Department loan program. A clawback of unused funds for federal climate programs is possible, as is “an attempt to claw back obligated-but-undistributed balances,” the Washington-based consulting firm said.
The success of such efforts is likely contingent on the size of the expected Republican majority in the House. While many races have yet to be called, Republicans appear on track to hold at least a slim majority. They would likely need a much larger one to make major cuts to the law.
Changes could happen administratively, too. Even without action from Congress, IRA opponents say, the Treasury Department could tighten rules around who can claim tax credits. For instance, strict rules on the sourcing of materials from China and other foreign adversaries, put in place for electric vehicle tax credits, could be applied more broadly to other incentives, such as the advanced manufacturing credit for solar panels and other clean-energy technologies.
A policy that allows leased electric vehicles to evade those requirements, derided by critics as the “leasing loophole,” is almost certainly done for, analysts say.
Other rules requiring the use of domestically sourced contents will likely be made more stringent, while bonus credits, such as those for projects built in “energy communities,” could be narrowed.
Taking a scalpel — not a sledgehammer — to the IRA would still generate revenue to help pay for a tax cut extension. Some lawmakers have already advanced plans to bar companies tied to China and other so-called “foreign entities of concern” from collecting tax credits under the law. That would scale back the expected payouts and align with Republican interests in separating U.S. supply chains from China.
A Republican Congress is also likely to phase out a pair of technology-neutral clean electricity generation credits that go into effect next year. Those credits alone, expected to benefit utility-scale solar and onshore wind, could be a ripe target for lawmakers looking for budget cuts, since they aren’t set to end until the later part of 2032 or until carbon dioxide emissions from the U.S. electricity sector decline to at least 75% below 2022 levels. Some analysts have predicted that won’t happen for another 30 to 40 years.
“We are talking decades, and definitely trillions of dollars,” said Ryan Sweezey, a director at energy research firm Wood Mackenzie Ltd.