According to sources, rising competition is making it harder for tax directors to recruit and keep professionals because of global financial challenges.
Strong economic headwinds, according to tax experts, have made it challenging to retain key personnel as business competition for the best candidates has increased.
According to Gorka Echevarria, global VAT leader at Geneva-based laser printer manufacturer Lexmark, the effects of global inflation have spread to the job market for tax professionals, making it harder to retain staff.
He warns, "tax professionals that want to move exclusively for the inflation-related rise in salary need to watch out for the upcoming [economic] crisis because that can have disastrous consequences for job uncertainty."
Echevarria claims that as a tax leader, he wants to make sure that his team receives the compensation they deserve, even if that means going above and beyond what the organization has budgeted for them given the current state of the economy.
According to Marta Pankiv, senior director and head of group tax at software company Tricentis in Austria, the US tax talent market has been particularly competitive in comparison to other international regions.
According to Pankiv, "in the US, we’ve seen that companies really have to do something more than just the traditional ways to keep talent."
This has involved giving employees the chance to participate in more strategic or "big picture" tasks so they can understand the significance of their roles and the direction the business is taking.
She claims that the "big four" firms have also had trouble keeping staff, proving that the problem is not limited to in-house tax teams.
Certain roles are proving difficult to fill, adding to the list of market challenges that go beyond regions and industries.
It is a competitive market, according to David Peeters, senior director of global indirect tax at international energy company World Fuel Services in the US, for employers looking to fill strategic positions like tax data and technology experts.
There is fierce competition for tax staff in the market today, as evidenced by the large consulting firms' frequent hiring of tax specialists and the large organizations' internal hiring of tax specialists.
He continues, "it’s driven by economic principles with a lot of demand but limited supply."
Employee salaries have increased as a result of inflation, and the company has made an effort to match market rates.
"As the market trend in salaries has gone up, our salaries are also being monitored and re-assessed," says Peeters.
Even though the market for hiring tax professionals is competitive, according to Pramod Jain, group head of tax at Indian e-commerce site Flipkart, things may be looking up.
Although it is still challenging to retain tax staff, he notes that things are beginning to slow down a bit.
Businesses appear to be adopting various strategies to retain tax staff in their organizations in the face of challenging market conditions.
According to Jain, his business makes an effort to give employees a variety of tasks to keep them interested. Employees are moved within teams in order to experience various jobs.
"It’s important to give people opportunities to work in different functions, so moving someone who’s been working in direct tax for a long time to work on GST or international taxation [is one option]," according to Jain.
"These [varied roles] are the kinds of things that actually help in career development and interest staff much more than anything else."
According to Sabine Studer, head of group tax at the metal-processing company Bystronic in Zürich, it is critical for businesses to provide new hires with a variety of jobs that allow for skill development. This might entail broadening an employee's job responsibilities or providing them with training.
However, she cautions that giving someone new responsibilities without also providing them with new skills and a pay raise will not keep them around for very long.
Work-life balance and promotions are two additional aspects that are very important to staff, particularly in the wake of the COVID-19 pandemic, when many workers started to place a greater emphasis on non-financial aspects of their jobs.
"Expectations are high; the outlook to promotion [for employees] is not mid term, but short term," according to Studer.
Policies regarding flexible hours, according to Joanna Davies, senior group VAT manager at UK-based telecommunications company Vodafone, are essential for retaining employees.
Additionally, according to Davies, "parent-friendly policies" like paid time off for unanticipated childcare or child health issues are crucial.
However, she cautions that if good management support is not given to help staff concentrate on tasks, increased workloads as a result of staff reductions may lead to people quitting their jobs.
To ensure that staff needs are met, management support is crucial, and this includes taking into account remote working. Despite the fact that flexibility or remote work can be advantageous, according to Peeters, it can be challenging to establish a positive team culture.
"We have hired people recently and it is important to remember that it’s human to want to stay connected to each other through [physical] contact," he says.
He continues by saying that employees are not always drawn to a company for financial reasons, especially for younger tax professionals.
"For the new generation of employees, it’s often about fulfilment, a good fit with the organisation’s culture and giving people opportunities to grow both in their positions as well as in the work they do."
Some businesses have reacted by outsourcing specific tax functions to outside providers as a result of the difficult time finding employees due to the lengthy lead times to fill positions and train recruits.
Jain cautions against over-outsourcing, though, because external advisers are frequently unfamiliar with the subtleties of a company's strategic direction and in-house tax staff typically have good general business knowledge.
According to some tax directors, the seniority of employees has a different impact on businesses than does staff changes. According to Studer, a gap between senior staff and their junior counterparts appears to be growing during the hiring process.
She continues by saying that because of their expertise and strategic knowledge, senior staff are very challenging to replace. Junior positions, on the other hand, that involve more commonplace tax compliance tasks, such as VAT/GST filings, can be outsourced and are typically simpler to replace.
"If you have a large team or you’re a large multinational, it’s a good idea to have a number of roles with limited scope [functions] so that you can spread tasks between different staff," according to Studer.
According to her, narrowly focused execution-related roles frequently become commodities, which causes them to have a high turnover rate.
Project deadlines and the implementation of tax technology initiatives can be negatively impacted by lengthy hiring cycles and short notice periods for departing employees.
Businesses would do well to review their talent retention strategies, especially for key tax staff, as global unrest continues to cloud the economic outlook.
This will call for some flexibility on the part of employers, who will need to reevaluate compensation and create clear career development plans in order to retain workers in a highly competitive market.
By fLEXI tEAM