10 key benefits of hiring employees with disabilities

September 15, 2021 10:58 AM

With tax season mercifully behind us, now is the time of year when many of us can finally start doing some mid-year planning. Conference room whiteboards will be chock full of ideas about upgrading technology and adapting to the many new tax rules on the horizon. But what about your hiring practices?

Thanks to globalization, demographic shifts, high turnover and technological changes, the battle for accounting talent is only getting more intense. I can’t tell you how many partners and hiring managers have told me they can’t find the right talent they need at their firms. But then I wonder if they’re looking in the right places.

When I mention looking at accounting professionals who have disabilities, I can tell it usually hasn’t occurred to them as a hiring strategy.

As you may imagine, people with disabilities have long been excluded from or underrepresented in the workforce based on low expectations and preconceived notions about their capabilities.

They shouldn’t be.

When President Bush signed the Americans with Disabilities Act in 1990, it opened the doors for millions of people with disabilities to be included and employed in the mainstream workforce. But a culture of stigma and misunderstanding persisted for many years thereafter. Only recently has there been a significant increase in providing equal opportunity for people with disabilities in the workforce. The working world is changing for the better as a result — and not just in terms of inclusion.

By the way, hiring talented workers with disabilities is not a “pity” hire. It’s smart business.

Talented candidates with disabilities can have a significant multiplier on a business. Here are 10 key drivers we’ve seen in our work with all types of businesses:

Higher profit margins

Disabilities - female wheelchair user on ramp

2018 study by Accenture

in partnership with the

American Association of People with Disabilities

and

Disability:IN

found businesses that actively seek to employ people with disabilities outperform businesses that do not. Researchers found the enlightened employers had 28% higher revenue, double the net income, and 30% higher profit margins.

Diversifying company culture

The value that disabled workers can bring to your or a client’s workplace goes far beyond numbers. Their unique perspectives help to create diverse company cultures and improve innovation. People (including corporate leaders) recognize that intentionally extending employment to people with disabilities has a positive impact on society at large, as well as individually.

Increasing employee motivation

Disability - deaf people using sign language

Research shows that hiring people with disabilities reduces absenteeism and increases motivation. The aforementioned Accenture study highlights six main areas of "inclusion incentives:"
1. Increased innovation;
2. Improved shareholder value;
3. Improved productivity;
4. Access to the supplier ecosystem;
5. Improved market share; and,
6. Enhanced reputation.

Improving stability, decreasing turnover

According to a joint study by

UPS and the Coalition for Workforce Diversity

, companies reported improvements in retention ranging from 14% to 130% after making a commitment to hiring disabled workers. Further researchers found that having a stable department demonstrated up to 15% better productivity. Additionally, the Department of Labor found that employers who embraced disability saw a 90% increase in employee retention.

A vast, untapped labor pool

Disabilities - blind man in office elevator

The U.S. Bureau of Labor Statistics reporting of available labor does not include at least 10 million Americans.

According to the Accenture study, only three in 10 disabled Americans of prime working age (16 to 64) were employed. By contrast, three in four able-bodied Americans aged 16 to 64 were employed. That means nearly 11 million people with diverse strengths, leadership styles and ways of thinking could be utilized at your clients’ firms — and perhaps yours. The Accenture study also found that GDP would be boosted by an estimated $25 billion if just 1% more people with disabilities joined the workforce.

Federal and state tax incentives

The government realizes the benefits of business owners hiring employees with disabilities (as well as the costs of making workplace accommodations), so they financially incentivize this process through tax benefits. Federal financial incentives include the Work Opportunity Tax Credit, the Architectural Barrier Removal Tax Deduction and the Disabled Access Credit. Employers can also take advantage of state tax credits, although these vary by state.

As accountants, we like to analyze data and use it to support our decisions and recommendations. In addition to all the data supporting the hiring of workers with disabilities, there can be significant tax benefits as well.

Disabled Access Credit. This credit provides a non-refundable credit of up to $5,090 for small businesses that incur expenditures for the purpose of providing access to persons with disabilities. An eligible small business is one that has earned $1 million or less or had no more than 30 full-time employees in the previous year. They may take the credit each and every year they incur access expenditures. Refer to Form 8826, Disabled Access Credit for information about eligible expenditures.

Architectural Barrier Removal Tax Deduction. This encourages businesses of any size to remove architectural and transportation barriers to the mobility of persons with disabilities and the elderly. Businesses may claim a deduction of up to $15,000 a year for qualified expenses for items that normally must be capitalized. Businesses claim the deduction by listing it as a separate expense on their income tax return. Also, businesses may use the Disabled Tax Credit and the architectural/transportation tax deduction together in the same tax year, if the expenses meet the requirements of both sections. To use both, the deduction should be equal to the difference between the total expenditures and the amount of the credit claimed.

Work Opportunity Tax Credit. The credit provides employers incentives to hire qualified individuals from these target groups. The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired and the length of employment. The credit is available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. This includes people with disabilities and veterans

For more information on claiming this credit, go to the Work Opportunity Tax Credit page and the changes to the credit from the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). For the latest information about Form 5884, Work Opportunity Credit, see its instructions, and Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit.

Additional information about these business topics concerning accommodations for individuals with disabilities are in:

There are also many tax benefits available to persons with disabilities, ranging from standard deductions and exemptions to business and itemized deductions to credits. Information about these issues is in Publication 3966, Living and Working with Disabilities.

Many of your clients are likely unaware that they may qualify for these tax incentives for hiring people with disabilities. Or they may assume the program is too complex or difficult to use — making it a waste of time to attempt to capture the available credits. Here’s where you can add tremendous value to your client relationships from both a financial and EQ perspective.

10 key benefits of hiring employees with disabilities

Higher profit margins

Diversifying company culture

Increasing employee motivation

Improving stability, decreasing turnover

A vast, untapped labor pool

Improving safety and security

Improving the brand

Compliance

Management efficiency

Federal and state tax incentives