Is Unionization Inevitable?
Will CPAs get fed up with working conditions and form unions?
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Introduction
5 months ago, I read an article that stuck with me. The article was in a publication called Accounting Today, and it talked about unionization for Certified Public Accountants (CPAs).
Even though Edward Mendlowitz - the author of the Accounting Today article that inspired this post - never explicitly said who the article was for, I could tell it was focused on helping employers of CPAs avoid the unionization of their employees.
Why was it obvious the article was meant for employers? He urged employers to consider what a union would demand and jump the gun. Beat the imaginary union to the punch. Nip union talks at the bud before employees even get the idea to make one.1
He ended the article by saying that he doesn’t believe unionization is a threat to employers but thinks that employers of CPAs should fix work conditions to reduce turnover and stop good people from leaving public accounting.
Problem solved.
Respectfully, I think his article is framed wrong - or at least I would have liked the frame to be broader - because freedom of association is not only exercised within the employment relationship.2
Second, the CPA license is not attached to an employer.3
Third, unions imply that interests are nested in vertical silos labeled “employer”. Of course, in the union context, the employment relationship is the basis for a bargaining unit but common interests can exist horizontally. Independent of firm size.
You’ve heard of the phrase “birds of a feather flock together”, it’s based on the sociological concept of homophily. We bond with people who have similar traits. CPAs who are employees of large CPA firms have more in common with sole practitioners; employees of small CPA firms; and CPAs working for startups, small to medium-sized businesses (SMBs), and large companies than they might have with people in other departments at their company.
The employment relationship muddies the water. Unionization is just a fad in the profession, like so many other patinas we’ve seen that forming around repetitive debates about the issues in the profession. These fads spring up because the same explanations are recycled to explain phenomena in our profession.
The 600k+ CPAs in America may not take part in formalized horizontal association now, but they could. After all isn’t this what the AICPA, NASBA, and state societies facilitate?
In a country where employment is at will, and where CPAs constantly face unique situations with the companies they work for and clients they serve, interests can align at the drop of a dime.
We know this! We go to conferences and meet CPAs outside of our firms all of the time. Whether that’s in the hopes of getting a new perspective or to feel like we aren’t going crazy for holding a view that peers at our firms disagree with.
Due to labor laws, this horizontal association is similar to but qualitatively different from a union.4
Solutions That Don’t Involve Unions
The author implied that CPAs have to settle for their work conditions, that is until they find another opportunity. Which is true. However, there are several ways that employees can get some of this agency back.
The quick resolution is to form additional voluntary associations, with lower costs of membership and higher value propositions than the ones currently available. Sure each state has a society of CPAs, but what is the real benefit that early to mid-career CPAs get from joining?
Don’t worry I’ll wait.
Larger networks? No, we need more.
The difficult answer is to get rid of barriers to competition. Is an oligopoly of 4 Large CPA Firms really a sufficient amount of competition? Working conditions are only a problem because…there are limited options.
Firms need leverage. That’s not a secret, it’s basic combinatorial mathematics. The need for organization and coordination increases exponentially with every new client, new service, and compliance requirement.
There are human limits and infrastructure limits to CPA Firms. One of the biggest risks is the human limits. Do you have enough people to get the work done? Can you mobilize them quickly enough to take on new projects? Not surprisingly, this is where large firms excel.
At the same time, CPAs find it risky to start their own thing. Let’s look at the data that shows CPAs want to start their own practices and are taking steps to minimize this risk. . .