Assimilation of New Hires in Public Accounting Free

New hires' incomplete assimilation into the culture and work ethic of a public accounting firm may have serious consequences for the firm and the newcomers, including poor commitment and early turnover decisions. Firms may incorrectly assume that (1) assimilation is only a human resource issue rather than an operations issue, (2) poor assimilation is unavoidable because of high expected turnover, and (3) little can be done to improve the early experiences of new hires because of the high stress and long hours inherent in public accounting. In fact, assuring the successful adjustment and commitment of new hires requires ongoing, firm-wide efforts. This study explores personal accounts of the assimilation process in large public accounting firms, including the underlying thoughts, emotions, perceived influences, and resulting decisions, to derive a model that may assist public accounting firms and their prospects.

Throughout my 30 years as an accounting professor, I have listened to numerous former students and employers describe the disappointment and resentment that can result on both sides of a poor assimilation process. Most striking has been the fact that so many of the new hires in these situations were excellent, highly motivated students who seemed particularly well suited for public accounting work. While long hours and high stress are possible explanations, it has not been clearly established why some new hires adjust well while others do not, due in part to employees' reluctance to share their full accounts with current or former employers.

Neither previous academic research nor practitioner resources provide in-depth analyses of early experiences in large public accounting firms. The American Institute of Certified Public Accountants (AICPA) publishes considerable literature in this area, including an orientation guide (AICPA 2013) and a “top talent” survey (AICPA 2011). While helpful for their purposes, these resources focus predominantly on institutionalized formal programs in the very first weeks of employment or on employees who have already integrated successfully into a firm.

Much academic research has focused on the assimilation process, both in general (for summaries, see Bauer, Bodner, Erdogan, Truxillo, and Tucker 2007; Kramer 2010) and in public accounting (Fogarty 2000). The assimilation process, in which new hires go from recruits to fully committed, productive employees, consists of three parts: the anticipatory phase, the engagement phase, and, finally, metamorphosis (Jablin 1982). During this time, the organization attempts to “socialize” the new hire through institutionalized and/or individualized processes (Jones 1986). Simultaneously, the new hire attempts to personalize his or her role and, possibly, alter the organization (Kramer 2010, 4).

Three dimensions of organizations' socialization tactics can be identified: content, context, and social (Jones 1986; Saks, Uggerslev, and Fassina 2007). The content dimension involves whether training takes place as a group or individually and separately or on-the-job. The context dimension has to do with the existence of a set timetable and sequence during assimilation. Finally, the social dimension deals with the use of mentors and provision of “divestiture” measures (to correct behavior) and “investiture” measures (to affirm newcomers' positive qualities) (Jones 1986; Saks et al. 2007). Consistently, researchers have found that the social dimension is more related to newcomer adjustment than are content and context, particularly for new graduates (Van Maanen and Schein 1979; Jones 1986; Chatman 1991; Bauer et al. 2007; Saks et al. 2007; Filstad 2011). Specific studies in public accounting have found that social tactics are related to organizational commitment, which in turn is related to low turnover intention (Fogarty 2000; Kalbers and Cenker 2007).

A groundbreaking public accounting study by Fogarty (2000) provides particularly relevant background information for the current study. Exploring the impact of multiple socialization dimensions, Fogarty found the use of role models and divestiture tactics to be positively related to job involvement and also divestiture tactics to be positively related to job commitment, which in turn was related negatively to turnover intention. Moreover, collective socialization, random sequencing of role transitions, and divestiture tactics were associated with high self-rated performance. However, the formality of the socialization and the certainty of the timing (fixed or variable) were not significantly related to any outcome variables. Fogarty concludes that socialization is a vital process in public accounting firms, but asserts that it should be viewed as an extended process of exposing newcomers to various role models and experiences, rather than merely as an introductory program. Traditionally, large public accounting firms have emphasized institutionalized socialization approaches to provide uniform, efficient transfer of detailed information; however, these programs may be insufficient for achieving such comprehensive goals.

To analyze assimilation in the audit division of large public accounting firms, I chose a qualitative approach with input from current and former employees. The analytical methodology for the study, grounded theory (Glaser and Strauss 1967; Glaser 1978), was deemed most appropriate because it allows the variables and model to emerge from the data, rather than only from prior literature and research. According to this methodology, responses are analyzed on a line-by-line basis, assigning codes to the subject matter (often assisted by software such as ATLAS.ti). Then, through a process of constantly comparing items, similar codes are grouped into constructs that, in turn, serve as the building blocks for a model (Glaser and Holton 2004). The final model is subjected to testing through experts' feedback.

As the foundation for my study, I began the data collection with a focus group (three staff members and two seniors from the same Big 4 office). With virtually all of their comments focusing on daily activities, rather than formal programs, they expressed frustration about long hours, supervisors' inefficiency, and the need for more effective communication between supervisors and staff members. The uncertainty of their schedule, along with the resulting inconvenience for family and friends, was a primary concern. Also, they described techniques used to cope with their job stress, ranging from work pacing and escape tactics to lighthearted rituals and “inside jokes,” including a tongue-in-cheek document detailing rules about how the audit team “must” select lunch locations.

Next, through LinkedIn, I obtained input from a broad array of 53 professionals, from within and outside of my own LinkedIn network, including the head of an international standard-setting board, new staff members, and former public accounting employees, about their perceptions concerning assimilation. While some respondents succinctly blamed long hours and strict time budgets for alienating new hires, others offered detailed perceptions about important factors in the assimilation process, including partners' involvement, well-trained seniors, and attention to group dynamics. Finally, I interviewed 44 current or former employees from Big 4 and large regional firms in four Southeastern U.S. cities. I primarily allowed the participants to steer the interviews; but, in keeping with grounded theory, I interjected questions about theoretical constructs that had emerged from earlier responses, such as the theme of coping techniques, which first emerged in the focus group. I also included selective sampling to pinpoint certain issues; for example, after the focus group mentioned their firm's “re-recruiting” efforts to retain their own employees, I interviewed key people involved in this program. While participants were drawn primarily from my own contacts, there is no evidence to suggest that their observations would differ from a larger sample drawn from other parts of the country.

As appropriate for grounded theory research, data collection and analysis continued until reaching a point of saturation (Glaser and Strauss 1967) in which new data provided little additional information for the emerging model. The final assimilation model used Glaser's “6 C's” family of theoretical constructs (causes, contexts, contingencies, consequences, covariance, and conditions) to represent relationships among the identified variables (Glaser 1978). To assure completeness and validity, I discussed the findings with managers and partners who confirmed the logic of the model. Several also asked that I share the results with their firms.

Participants described their first few months on the job as particularly difficult due to the stark transition from the college and recruiting environments to the public accounting work environment. Their responses pinpointed four contrasts that complicate graduates' assimilation (Figure 1):

1. (1) 

   New hires' qualities and prior experiences versus the nature of first-year work,

2. (2) 

   College schedules versus work schedules,

3. (3) 

   College reward systems versus public accounting reward systems, and

4. (4) 

   The recruiting environment versus the work environment.

The very qualities that public accounting firms target in new recruits (independence, involvement, and high achievement) may make them poor candidates for the routine tasks and close supervision of their early months. These top recruits go from self-directed, diverse schedules to a highly structured work environment. Moreover, during college, students' hard work leads to rewards in the form of high grades and distinction; however, as one of many gifted new hires, they have little opportunity to distinguish themselves and receive only infrequent formal feedback, much of which is understandably negative in the early months. Also, with formal evaluation systems that assess all staff members (with up to three years of experience) on the same scale, even successful new hires may receive no top scores in their first year. Finally, recruits go from a fun-filled recruiting environment with considerable attention, praise, and contact with top partners to the serious reality of task-oriented days surrounded only by peers and direct supervisors.

As shown in the assimilation model that emerged from participants' responses (Figure 2), a complex interplay of factors can create negative emotions and dysfunctional outcomes in new employees. However, efforts on the part of new hires and firm management can effectively moderate this process. Many of these steps merely involve enhanced awareness, rather than elaborate new programs.

Managers and partners attributed much of the stress for new recruits to the overall public accounting environment. One former senior manager summarized new hires' plight as follows: “Their job is indeed unreasonable because ours is an unreasonable task,” referring to the rapidity with which firms must produce work within a strictly regulated setting. Partners also pointed to enhanced regulations and negative economic circumstances as sources of severe time crunches, as clients are reluctant to pay higher fees to cover the additional staff and hours needed to address stringent audit requirements. Also, many said that their own responsibilities, partly as the result of the PCAOB mandatory rotation of partners, leave them little time to interact with newcomers.

Respondents pointed to the structure of public accounting firms as presenting unique challenges for new hires. Ranks are clearly differentiated, promotions are on an “up or out” basis, and early raises are relatively standard. While these factors create a clear timeline of potential career progression, the conformity and indisputable reminders of a rank at the bottom of the firm are unnerving to some newcomers. Furthermore, being in an environment of high turnover provides a sense of uncertainty. Finally, the widespread geographic distribution of work across audit teams, along with employees' frequent shifts from one team to another, complicates attempts at cultural acclimation.

The confined nature of audit work creates an artificial life environment in which members interact with only one another for extended periods, sharing up to two meals a day and sometimes socializing together after work, particularly on travel engagements, leaving little free time to interact with friends and family or engage in outside activities. The work ranges from mundane to challenging, with a lack of personal space, a common work area on clients' premises, and close oversight. Newcomers and partners alike acknowledged the inconsistent management skills of seniors; common complaints included a lack of experience and confidence, inefficiency, limited attention to group dynamics, and resistance to questions and “dissenting voices.”

New employees' expectations of high achievement, rewards, and feedback may clash with seniors' tight schedules and inexperience. Also, recruits may have entered public accounting with plans for only a short stay, choosing the job due to the good salary, pressure from professors, or enhanced prospects for future employment. Participants of all ranks noted the frustration of working with people who had “one foot out the door,” with low commitment and little tolerance for discomfort.

Many of these participants described their first weeks and months on the job as a time of “reality shock” (Van Maanen and Schein 1979), because of the contrast between their expectations and the actual work environment, resulting in a sense of uncertainty (Berger 1986; Bauer et al. 2007). Particularly adverse emotions surrounded the work schedules, with some participants calling the unpredictability “degrading” and “disrespectful.” They especially resented seniors and managers whose own inefficiencies, in their opinions, contributed to longer hours. Also, they were disappointed by the lack of gratitude and feedback, both positive and negative, from seniors and managers. Many experienced loneliness as the result of confining hours, isolated locations, and closed work cliques. Also, some new hires described confusion due to unfamiliar work and occasional ethical dilemmas, including pressure to work without charging the hours to the budget, a situation commonly known as “eating time.”

Newcomers described counterproductive outcomes that may stem from negative experiences and emotions. Many acknowledged pacing their work on extremely long days, claiming they actually accomplished more on days when they could predict an earlier quitting time. Some admitted spending considerable time texting one another to vent frustrations or determine information about quitting time. Participants also described methods they used to “escape” in order to be alone or have a change in environment, such as pretending to have appointments just so that they could eat lunch alone, even in a fast-food parking lot. One said that he and a colleague pretended to have appointments on the same days so that they could meet and talk freely about their experiences. A new hire on a particularly demanding audit said that her team never left the workspace, ordering lunch from a restaurant; she started taking her lunch so that she could get a break by slowly walking the three flights of stairs to the refrigerator. Participants also acknowledged altering their behavior contingent upon management styles, putting forth more effort for seniors and managers who treated them with respect. Unfortunately, most participants stated that they did not discuss their frustrations with senior management for fear of negative consequences, but did consider resigning when their frustrations became severe.

Based on participants' input, potential moderators of the assimilation process fall into four categories: (1) new hires' job selection and commitment, (2) daily attention to supervisory and team-building duties, (3) predictable periods of normalcy, and (4) partners' involvement with staff members and setting an appropriate “tone at the top.”

Participants advised that recruits choose their first position carefully and avoid constant reconsideration of their decision by adopting a three- to five-year commitment. One successful senior manager said that he assimilated quickly by “seeing the firm as my own” and getting involved early in the firm's service and recruiting efforts. Developing personal friendships, identifying role models, and pursuing informal mentoring relationships were other common suggestions. Managers and partners recommended that new hires notice positive aspects of the job and consider the first year within the context of long-term career goals, noting that the first year differs significantly from later ones. As one senior manager stated, “When I became frustrated, I would stop and analyze how this job fit into my long-term plans.” Another manager told the story of a disgruntled junior staff member whose attitude and performance improved drastically after returning from a temporary corporate consulting assignment, having realized that he much preferred the challenges and environment of public accounting.

Interactions with peers and supervisors constituted the bulk of respondents' comments. New hires noticed and appreciated seniors and managers who took the time to get to know them, fully explain their role in the audit, create open channels of communication, provide positive and negative feedback, and express gratitude for their work. After hearing several staff members praise one manager's supervisory skills, I asked to interview him. He attributed his management success to two ideals: an individualized management style tailored to the traits of each team member and the use of visual representations of the audit, citing the book The Back of the Napkin: Solving Problems and Selling Ideas with Pictures (Roam 2013). Calling himself “a real fan of the white board in the audit room,” he uses diagrams to explain parts of the audit and track daily progress. Another manager, who described himself as “passionate” about newcomers' assimilation, said that he had initiated a multi-level committee to address anonymous input from staff members, giving them a rare voice in the firm.

Managing group dynamics was seen as crucial to assimilation. Surprisingly strong emotions revolved around the inability to break into the inner core of audit teams. In fact, all of the participants who left public accounting within the first year talked about the strong clique behavior of their audit teams, organized around such factors as undergraduate schools, religion, politics, and personality types. Participants saw “quasi-business” events, including lunch and social hours, as key times that reinforced or undermined group interactions. Most often, participants mentioned lunch as a highly anticipated time of respite; but some staff members dreaded any social interactions because of a feeling that they did not fit. Staff members complained about seniors who ignored negative group dynamics or identified with a dominant subgroup, looking to staff members for personal affirmation. While some seniors and managers viewed social interactions as beyond their purview, others carefully guided team lunches, bringing new hires into conversations, finding common areas of interest, and using the time to address team members' questions.

Participants clearly indicated that they desired more predictability and better control over their time, valuing periods of relief in their daily and long-term schedules. Somewhat surprisingly, members of the focus group stated (and later participants confirmed) that they would gladly trade extra hours for the benefit of knowing approximately when they could leave each night (even if it was 9:00 every evening). They desired a more predictable schedule to facilitate interactions with family and friends, seeing time with familiar people, even for short periods, as enhancing their sense of “normalcy.” Predictable weeks of time with shorter work hours, as well as extended vacations, were also highly valued for this same reason and as periods of rest. A partner and a manager who had initiated a “re-recruiting” effort to retain top people said that they help employees design their days efficiently and plan extended vacations when they fully separate from the work environment, including emails and texts. A seasoned international Big 4 partner summarized this view: “While long hours are sometimes an issue, I think most people understand that and accept it during certain periods. When it becomes a constant issue, people wear out. So, attention to letting people have periods of normal hours is very important.”

The responses emphasized the power of interactions between experienced partners and new hires in forming an appropriate perspective. Partners were seen as influential role models, both in a positive and negative sense. While time with partners often made new hires feel like valuable parts of the firm, partners who appeared excessively stressed or focused predominantly on monetary rewards made them less eager to stay in public accounting. Many new hires expressed disappointment and resentment when the same partners who had recruited them enthusiastically showed little interest in them after they began work.

The shift from an affirming school and recruitment environment into an unfamiliar public accounting work setting can be quite disconcerting. To facilitate new hires' adjustment, firms need to minimize surprises by carefully planning and coordinating their recruitment and socialization efforts. Previous research has repeatedly shown that, during this crucial time, social tactics that provide role models and behavioral guidance enhance successful assimilation (Van Maanen and Schein 1979; Bauer et al. 2007; Simosi 2010; Saks et al. 2007). However, while earlier studies focused predominantly on the role of institutionalized tactics in socializing new employees (Jones 1986; Bauer et al. 2007; Fogarty 2000; Filstad 2011), the current study primarily affirms the importance of individualized interactions in acclimating new hires to large public accounting firms.

These findings do not rule out significant contributions from formal, institutionalized assimilation tactics. In fact, all participants had been part of standardized group orientation programs, and most were part of assigned mentorship programs. However, informal “localized” influences (Ashforth, Sluss, and Harrison 2007) emerged as the dominant assimilation aids, particularly approachable team members and supportive seniors who provided both “divestiture” and “investiture” input to correct wrong assumptions and affirm individual traits (Van Maanen and Schein 1979; Fogarty 2000; Bauer et al. 2007; Filstad 2011; Cable, Gino, and Staats 2013). Also, many participants praised informal mentoring relationships that developed naturally, but downplayed the effectiveness of formal mentorship programs, due to infrequent contact and a lack of personal connection (Reinstein, Sinason, and Fogarty 2013). Participants' strong desire for personal relationships with other employees (from fellow team members to partners) meshes with new studies showing that authentic self-expression is vital during the socialization period (Cable et al. 2013). These results suggest that firms should consider all employees, not just defined mentors, as potentially powerful socialization factors.

In summary, the participants in this study asserted that dedicated new hires can adapt to the demands of the audit job, including long hours, tight budgets, and high stress. However, in order to do so, they need supportive peers, effective supervisors who steer individual behavior and group dynamics, interactions with interested partners who serve as positive role models, and predictable time away from the job, both at the end of the day and for long-term breaks. Simply increasing existing employees' awareness of their roles in newcomers' successful assimilation into the firm may be a low-cost, effective method of assisting new hires in their adjustment to large public accounting firms.