The Turnover, Retention, and Career Advancement of Female and Racial Minority Auditors : Evidence from Individual LinkedIn Data

We use large detailed data on individual auditor employment to examine the antecedents of turnover decisions and subsequent career paths of diverse individuals in public accounting – namely women and racial minority groups (Asian, Black, and Hispanic). Consistent with the principle of homophily, we find that same-group representation is crucial in retaining diverse auditors. These individuals are less likely to leave when surrounded by peers and leaders of the same group. Furthermore, they are more likely to join an organization with greater same-group representation. We rule out the possibility that time for promotion drives higher turnover rates among racial minority groups. We also find that the vast majority of individuals leave the profession, but those who stay longer have higher seniority later in their careers - suggesting that extended tenure could mutually benefit firms and individuals. Our findings offer valuable insight for firms seeking to promote DEI while improving retention rates